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HomeMy WebLinkAboutOrdinance #3891 ORDINANCE NO. 3891 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH GRANTING A NON-EXCLUSIVE PIPELINE FRANCHISE TO POSEIDON RESOURCES (SURFSIDE) LLC FOR TRANSMITTING WATER The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. The City of Huntington Beach hereby grants a water transmitting franchise to Poseidon Resources (Surfside), LLC. SECTION 2. The franchise is granted in accordance with the terms and conditions set forth in the attached Franchise Agreement between the City of Huntington Beach and Poseidon Resources (Surfside) LLC for Transmitting Water in the City of Huntington Beach, which agreement is incorporated herein by this reference. SECTION 3. Charter Sections 500(a) and 615 requires that a franchise shall be granted by ordinance. SECTION 4. This ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 4th day of October , 2010. ay ATTEST: (D INITIATED AND APPROVED: 74J 4. City Clerk Director of Public Works REVI AND APPROVED: i Ay dministrator APPROVED AS TO FORM: i City Attorney Ov q7 q-10 06-622/52472 A NON-EXCLUSIVE PIPELINE FRANCHISE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND POSEIDON RESOURCES (SURFSIDE) LLC FOR TRANSMITTING WATER IN, UNDER, ALONG AND ACROSS STREETS IN THE CITY OF HUNTINGTON BEACH This non-exclusive Franchise Agreement is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "City" and Poseidon Resources (Surfside) LLC, a Delaware limited liability company, hereinafter referred to as "Franchisee" or "Poseidon." The Agreement may reference both City and Poseidon or Franchisee as"Parties." RECITALS In August of 2002, the California Department of Public Health Services conceptually approved a project that included the construction of a seawater desalination facility with the capacity to provide 50 million gallons of potable water per day and a transmission pipeline in the City of Huntington Beach"Franchisee's Project". The original EIR No. 00-02 was certified by the Planning Commission Aug. 12, 2003 but was denied by the Council on Dec. 15, 2003 on appeal. The Council asked staff to re-examine several issues in the EIR. The Re-circulated EIR No. 00-02 was subsequently certified by City Council Sept. 6, 2005. The Subsequent EIR No. 10-01 was certified by the City Council on 079 2010. In August 2006, the Santa Ana Regional Water Quality Control Board (RWQCB) approved Franchisee's National Pollution Discharge Elimination System (NPDES) discharge permit. The RWQCB action was appealed to the State Water Resources Control Board (SWRCB). The SWRCB denied the appeal in August 2007 and upheld Franchisee's NPDES permit. On February 27, 2006, City approved the findings and conditions of approval for Conditional Use Permit No. 02-04 and Coastal Development Permit No. 02-05 for Franchisee's Project. The Coastal Development Permit has been appealed and will go before the California Coastal Commission. Ong, 2010, the City approved findings and conditions of approval for Entitlement Plan Amendment No. 10-001. On May 16, 2006, the Redevelopment Agency of the City signed the Owner Participation Agreement (OPA) with the Franchisee for the proposed desalination plant. 2010, an Amended and Restated OPA was approved by the Redevelopment Agency. Pursuant to the Huntington Beach City Charter it is the desire of City,.Council to grant a Franchise in accordance with the terms and conditions specified in this Franchise Agreement and pursuant to Ordinance No. 3o" . This agreement shall not take effect until the Ordinance granting a non-exclusive franchise has been duly adopted. NOW, THEREFORE, the City of Huntington Beach and Poseidon hereby agree as follows: 1 SECTION 1. Definitions. Whenever the words or phrases set forth in this Non-Exclusive Franchise are used, they shall have the respective meanings ascribed to them in the following definitions(unless, in the given instance, the context clearly indicates a different meaning): (a) "Applicable Law" shall mean all present or future Federal, State, City, or other local laws, rules, regulations, franchises, codes, orders, permit requirements, judgments, injunctions, or decrees, or any judgment or order or decree by a court applicable to Franchisee or any of Franchisee's Facilities or activities under this Franchise. Whenever the term "Applicable Law" is used, it shall be understood that Franchisee shall not be required to comply with any laws which are unconstitutional or which conflict with or which are inconsistent with the paramount authority of the State of California. (b) "City" shall mean the City of Huntington Beach, a charter city, in its present incorporated form or in any later reorganized, consolidated or reincorporated form; (c) "City Property" shall mean the property or facilities owned by the City of Huntington Beach, or the Redevelopment Agency of the City of Huntington Beach. (d) "Contaminant" shall mean any hazardous substance or waste, as those terms are defined by any Applicable Law. (e) "Damages" shall mean all claims, losses, liabilities, causes of action, damages, judgments, debts, costs, contribution or indemnity, expenses (including but not limited to attorney's fees and costs) fines, penalties,judgments, orders, injunctions and liens of every kind and nature, including, but not limited to, claims relating to any environmental condition or any Release of any Contaminant, claims for personal or bodily injury, wrongful death, injury to real or personal property, and including claims based on active or passive negligence, gross negligence, contractual, statutory or strict liability, or otherwise, and any claims seeking judicial or administrative relief, or relating to any administrative proceedings by any governmental agency, whether or not any such claim is ultimately defeated. (f) "Director" shall mean the Public Works Director of the City; (g) "Facilit " or "Facilities" shall mean the water pipeline, together with such related equipment including but not limited to valves, vents, traps, fittings, manholes, vaults, pumps and other appliances, appurtenances, or attachments located within the City, as Franchisee may deem necessary or convenient for the purpose of conducting, transporting, conveying and carrying water under, along, across and upon the public Streets. (h) "Franchise" shall mean this non-exclusive Franchise Agreement and the Ordinance granting a non-exclusive Franchise to Poseidon. 0) "Franchisee" shall mean Poseidon Resources (Surfside) LLC, a Delaware limited liability company and its lawful successors or assigns. 2 0) "Lay and use" shall mean to lay, construct, erect, install, operate, maintain, use, repair, replace or remove. (k) "Municipal Code" shall mean the Municipal Code of the City of Huntington Beach. (1) "Person" shall mean any individual, person, firm, partnership or corporation. (m) "Release" shall mean any release (as that term is defined in Section 101(22) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (42 U.S.C. §9601(22)), or disposal (as that term is defined in Section 1004(3) of the Resource Conservation and Recovery Act(RCRA) (42 U.S.C. §6903(3)). (n) "Remediation Costs" shall mean all costs and expenses, including the City's current rate of overhead, incurred by the City in performing and monitoring any Remedial Work. (o) "Remedial Work" means all "Remedial Action", as that term is defined in Section 101(24) of CERCLA [42 U.S.C. §9601(24)], and all other actions necessary to Respond to, Remove, or Remedy, as those terms are defined in Sections 101(23), 101(24) and 101(25) of CERCLA [42 U.S.C. §9601(23)(24) and(25)], a Release of a Contaminant. (p) "Streets" shall mean the public streets, ways, alleys and places as the same may now or hereafter exist within the City. SECTION 2. Grant of Franchise. Pursuant to Section 615 of the City Charter of the City of Huntington Beach, the City hereby grants a non-exclusive water pipeline franchise to Franchisee to construct and use a water pipeline together with such related equipment and Facilities as Franchisee may deem necessary or convenient for the purpose of conducting, transporting, conveying and carrying water, under, along, across or upon the Streets and extending generally along the primary or optional routes more particularly depicted in Exhibit A (Attached hereto and incorporated herein by reference). This Franchise Agreement only authorizes the transportation of potable water in an underground pipeline. This Franchise Agreement does not authorize the transportation of any other hazardous or non-hazardous substances or any other use of the water pipeline that is not specified herein. City understands and agrees that this Franchise specifically includes the right of Franchisee to use the Facilities to transport potable water to other governmental and private entities. All street coverings or openings of traps, vaults, and manholes shall be constructed flush with the surface of the Streets; provided, however, that vents for underground traps, vaults and manholes may extend above the surface of the Streets when said vents are located in parkways between the curb and the property line subject to the prior approval of the Director, which approval shall not be unreasonably withheld. 3 This Franchise agreement is not intended to provide any additional rights and/or remedies regarding any Federal, State, or Local permits other than those set forth in Section 14. In the event Poseidon is either unable to obtain any necessary permits and/or regulatory authority, or said permits and/or authority is revoked or otherwise lost, the Franchise granted herein and Ordinance may be revoked/terminated by the City after providing Franchisee with notice and an opportunity to be heard before the City Council with no liability to the City for present or future damages or otherwise regarding the terms contemplated herein. SECTION 3. Term. The term of this Franchise shall commence thirty (30) days after the Ordinance granting the Franchise is adopted, and shall continue for a period of thirty-five (35) years from the date that Franchisee first uses the Facilities to transport water unless: (1) shortened by the voluntary surrender or abandonment by Franchisee, (2) the State of California or some municipal or public corporation duly authorized by law shall condemn and take under the power of eminent domain this Franchise or all property actually used and useful in the exercise of this Franchise, and situated within the territorial limits of this state, municipal or public corporation condemning such property, (3) this Franchise is forfeited for non-compliance with its terms and provisions, (4) any federal or state regulatory agency revokes or terminates Franchisee's rights to operate as provided herein, or (5)the Franchise is otherwise terminated by City as provided herein. This agreement may renew for an additional twenty-five years upon mutual consent of the Parties which may be withheld at the absolute discretion of either party. SECTION 4. Franchise Fee. A. Amount of Franchise Fee. The Franchisee Fee shall be $8.00 per linear foot of pipeline installed by Franchisee within the City. Franchise Fee shall be adjusted annually based on adjustments in the Los Angeles- Anaheim-Riverside All Urban Consumer Price Index (CPI) or any relevant successor for the Orange County area from March to March of the preceding twelve (12) months. Franchisee and the City agree that this Fee has been determined based on the expectation that Franchisee will install a 54-inch (maximum diameter) pipeline in the Streets. Franchisee and the City agree to modify the Franchise Fee in the event that the Franchisee installs a smaller or larger diameter pipeline in the Streets. B. Payment Date for Franchise Fee; First Payment. The Franchisee shall pay an annual Franchise Fee to the City on or before December 31 of each year at P.O. Box 711, Huntington Beach, CA 92648-0711 in lawful money of the United States. The first payment of the annual Franchise Fee shall be made in arrears by Franchisee on or before December 31 of the year that Franchisee begins installation of the Facilities in the City. The amount payable in any particular year shall be based on the number of linear feet of pipeline installed in the City Streets. 4 C. Late Franchise Fee Payments. Franchise Fees due from Franchisee are delinquent if not received by the City Treasurer on or before the due date during normal business hours. Should the due date occur on a weekend or legal holiday, the Franchise Fee must be received by the Treasurer during normal business hours on the first regular working day following the weekend or legal holiday. If Franchisee fails to remit any fee or rate on or before the due date, Franchisee shall pay interest at the rate of one and one-half percent (1-1/2%)per month, or any fraction thereof, on the amount of the fee, exclusive of penalties, from the date on which the fee first became delinquent, until paid. SECTION 5. Written Acceptance; Annexation/Consolidation. The Franchise granted hereunder shall not become effective until the Ordinance granting the Franchise has been fully adopted and written acceptance has been filed by Franchisee with the City Clerk of City. When so filed, such acceptance shall constitute a continuing agreement of Franchisee that if and when City shall thereafter annex or consolidate with additional territory, any and all franchise rights and franchise privileges owned by Franchisee therein, except a franchise derived under Section 19 of Article XI of the California Constitution as that section existed prior to the amendment thereof adopted on October 11, 1911, shall be deemed abandoned in additional territory. SECTION 6. Eminent Domain. The Franchise granted hereunder shall not in any way or to any extent impair or affect the right of City to acquire the property of Franchisee hereof either by purchase or through the exercise of the right of eminent domain, and nothing herein contained shall be construed to contract away or to modify or to abridge, either for the term hereof, or in perpetuity, City's right of eminent domain in respect to Franchisee or any public utility, nor shall this Franchise ever be given any value before any court or other public authority in any proceeding of any character in excess of the cost to Franchisee of the necessary publication and other sum paid by it to City at the time of acquisition thereof. Should City acquire this Franchise either by purchase or through the exercise of the right to eminent domain, City shall offer to Franchisee a similar franchise with terms comparable to this Franchise. SECTION 7. Franchisee's Construction and Indemnity Obligations. A. Construction. Franchisee shall construct, install, replace, relocate, abandon, remove, operate repair and maintain all Facilities, in accordance and in conformity with the Owner Participation Agreement between the City of Huntington Beach and Franchisee and Applicable Law, including but not limited to the National Pollutant Discharge Elimination System (NPDES) and governing Air Quality Management District (AQMD) requirements, and all federal and state laws and local ordinances, rules and regulations heretofore, or hereafter adopted by the City Council of City. 5 B. Environmental Indemnity. Franchisee agrees to clean-up and remediate any hazardous substance released by Franchisee or its agents, and to hold City harmless from and indemnify City against, any release of any such hazardous substance and any damage, loss, or expense or liability to the extent caused thereby (including all attorneys' fees, costs and penalties). "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term by any federal, state or local environmental law, regulation or rule presently in effect or promulgated in the future, as such laws, regulations or rules may be amended from time to time; and it shall be interpreted to include, but not be limited to, any substance which after reticence into the environment will or may reasonably be anticipated to cause sickness, death or disease. C. Indemnification and Hold Harmless. Franchisee hereby agrees to indemnify, defend, and hold and save harmless City, its officers and employees from any and all liability, including any claim of liability and any and all losses or costs arising out of the negligent performance of this Franchise Agreement by Franchisee, its officers or employees. Franchisee shall be solely responsible for complying with all Applicable Law in connection with the installation, repair, relocation or removal by Franchisee of any of its Facilities or by any person engaged by Franchisee to install, repair, relocate or remove any such Facilities. Franchisee's obligations under this Section 7 shall survive termination of this Franchise. SECTION 8. Relocation. Franchisee shall, at the request of the City and at Franchisee's sole cost and expense, remove or relocate any Facilities installed, used or maintained under this Franchise if and when made necessary by any change in grade, alignment or width of any public street, way, alley or place, or the construction of any subway or viaduct, or any other street improvement of any kind required by the City or the City Redevelopment Agency. Franchisee shall relocate its Facilities to the nearest alternative location as reasonably established by the Director, and within such time as the Director reasonably establishes. If Franchisee finds that the alternative location established by the Director is unreasonable, Franchisee shall have the right to propose additional alternative locations for the Facilities. Franchisee shall reimburse City for the reasonable costs incurred by City in reviewing alternative locations proposed by Franchisee. If Franchisee fails to relocate its Facility within the required time, the City may cause the work to be done and shall keep an itemized account of the entire cost thereof, and Franchisee shall reimburse the City or other public entity for its reasonable costs, including the City's current rate of overhead, within ninety (90) days after presentation to Franchisee of an itemized account of such costs. 6 SECTION 9. Emergency Response Plans. Franchisee shall, at all times during the term of this Franchise, maintain emergency response plans as required by regulatory agencies having jurisdiction. SECTION 10. Authority of Director. Franchisee shall not perform any work pursuant to the Franchise without first obtaining encroachment permits from the Director pursuant to Chapters 12.13 and 12.38 of the Municipal Code and any other permits as may be required by City and Applicable Law; provided, that in cases of emergency affecting public health or safety or the preservation of life or property, Franchisee shall, to the extent reasonably practicable, apply for such permits no later than the next business day. All construction, modification and repair of the Facilities shall be accomplished pursuant to the terms of the encroachment permits and Applicable Law. SECTION 11. Facility Location Maps. Within ninety (90) days following the installation of any Facility, Franchisee shall file a map or maps showing the accurate location and size of all its Facilities then in place, and shall, upon installation of any additional Facilities or upon removal, change or abandonment of all or any portion thereof, file a revised map or maps showing the location and size of all such additional and/or abandoned Facilities as of that date. SECTION 12. Tunnel or Bore When Possible&Repaving of Streets. It is understood that open-trench pipeline installation in compliance with Chapter 12.13 of the Municipal Code will be permitted under this Franchise. However, there may be instances where it is necessary to lay underground pipes in or under any portion of a paved street by a tunnel or bore such as across busy street intersections, so as not to disturb the foundation of such paved street and minimize traffic impacts, but only to the extent it is practicable and economically reasonable to do. All work shall be done under a permit to be granted by the Director upon application, review and approval of which shall not be unreasonably withheld therefore, and subject to ordinances and rules adopted by the City in the exercise of its police powers and not in conflict with or inconsistent with the paramount authority of the State. Franchisee's work under this Franchise is exempt from the street excavation moratorium provisions in Section 12.13.120 of the Municipal Code. In all cases, the affected Streets shall be repaved from curb to centerline along the pipeline route, including striping and marking. Slurry seal shall be applied to the remaining lanes on the other side of the centerline or median. Franchisee shall construct up to 40 ADA- compliant curb ramps consistent with State standards in constructing ADA facilities along the pipeline route on either side of the street number and location subject to the sole discretion of the Public Works Director. This would include all missing and non-standard ramps along the pipeline route adjacent to where paving or slurry sealing is to be performed. 7 SECTION 13. Damage to Street or Property. If any portion of any street shall be damaged by reason of defect in any of the Facilities maintained or constructed under this Franchise, or by reason of any other cause arising from the operation or existence of any Facilities constructed or maintained under this Franchise, Franchisee shall, as soon as reasonably practicable and at its own cost and expense, repair such damage and restore such street or portion of street to as good a condition as existed before such defect or other cause or damage occurred, and so that the useful life of the street is not reduced. Such work shall be completed under the direction and approval of the Director, which approval shall not be unreasonably withheld, and in accordance with Applicable Law. Franchisee shall obtain from the City an encroachment permit and any other permits required by Applicable Law before doing any such work. In the event of Release of a Contaminant by Franchisee or from any Facility of Franchisee, Franchisee shall immediately conduct such Remedial Work and pay all Remediation Costs, at its sole expense, as is reasonably necessary to remedy the same in accordance with Applicable Law. In the event that Franchisee shall fail or neglect to make such Street repair, replacement, restoration work, or Remedial Work, then thirty (30) days after notice therefore has been given Franchisee by the Director, the City may repair, replace or restore said Street at the expense of Franchisee. Franchisee agrees to pay to the City the cost of performing such work. The amount so chargeable shall be the reasonable direct cost of such work plus the current rate of overhead being charged by the City for reimbursable work. If in the judgment of the Director, said street or property damage constitutes a public nuisance, public emergency, or other imminent hazardous threat to public health, safety, or welfare, that requires immediate action, Director or designee will immediately contact Franchisee so that the Franchisee may take appropriate corrective/remedial action. If the Franchisee is inaccessible or fails, neglects, or refuses to take immediate action to remedy the hazardous condition, the Director may cause the condition to be remedied in such manner as the Director deems expedient and appropriate and Franchisee will reimburse the City for all cost incurred for such actions undertaken by the City. SECTION 14. Franchisee's Failure to Comply with Franchise. The City may declare this Franchise forfeited/terminated at such time that City determines that Franchisee fails, neglects, or refuses to comply with any of the material provisions or conditions herein (Breach of Franchise). The City will provide Franchisee sixty (60) days (from the date notice is received by Franchisee) to cure said Breach of Franchise. In the event the Breach of Franchise is not cured within sixty (60) days or, in the event that such cure takes longer than sixty (60) days to complete and Franchisee has not taken reasonable steps to diligently pursue such cure, the City Council may terminate this Agreement with no further action required and Franchisee shall be deemed to have forfeited this Franchise. 8 SECTION 15. Assignment Franchisee may assign this Franchise Agreement to any affiliate or subsidiary of Franchisee or to Franchisee's parent company or to lenders of Franchisee provided such assignee agrees to meet all the requirements of this Franchise Agreement and provides to the City commercially reasonable evidence of its ability to meet all the requirements in this Franchise Agreement. Any other assignment, sublicense, or transfer of Franchisee's rights pursuant to this Franchise requires City's prior written consent which may be withheld at the City's sole discretion with or without cause. In addition, if Franchisee requests to assign this agreement to a public utility and or any entity not required by law to pay franchise fees, City may withhold consent until Franchisee agrees to pay the value of the franchise fee through the term of the Franchise. Except as provided above, this Franchise Agreement is personal to Franchisee, and Franchisee will not assign, or transfer in any way any privilege hereunder in whole or in part, and any attempt to do so will be void and confer no right on any third party. SECTION 16. Franchisee's Obligations Upon Expiration, Revocation or Termination. Upon the permanent discontinuation, termination or suspension of use of the Facilities or any portion thereof, Franchisee shall, within thirty(30) days thereafter,provide written notice to the Director of Franchisee's intention to either (1) abandon all, or a portion, of such Facilities in place, or (2) remove all, or a portion, of such Facilities. Such notice shall describe the location of the Facilities desired to be abandoned or removed and the relative physical condition of such Facilities. The Director shall determine whether such abandonment or removal may be effected without detriment to the public interest and under what conditions and terms the proposed abandonment or removal may be safely accomplished and shall then notify Franchisee of such requirements. Franchisee shall, within one hundred eighty (180) days after receiving all required permits or governmental approvals needed thereafter, either remove or abandon all or a portion of such Facilities as may be reasonably necessary to comply with all provisions of Applicable Law. SECTION 17. Surety Bond. Franchisee shall, after receiving all permits required in Section 10 above, and at least thirty (30) days prior to commencing any construction.under this Franchise, file with the City Clerk of City a corporate surety bond or other form of security reasonably acceptable to the City in such an amount as is reasonably necessary so that Franchisee will truly observe, fulfill and perform each and every term, condition and requirement of this Franchise. In the event of any Breach of Franchise or breach of any condition of the aforesaid bond, the whole amount of the sum therein named shall be used to cure any such breach, and the same shall be recoverable from the principal and sureties upon the bond. In the event that such breach does not result in a forfeiture of the Franchise, Franchisee shall be required to replenish the bond in the original amount as a condition to continued operation of the Franchise. 9 SECTION 18. Insurance. A. General Liability Franchisee shall, at Franchisee's sole cost and expense, keep or cause to be kept in full force and effect at all times after posting the Surety Bond as described in Section 17 above, for the mutual benefit of City and Franchisee, a comprehensive form of general public liability insurance against claims and liability for personal injury, death, or property damages arising from the use, construction, or maintenance of this Franchise of at least One Million Dollars ($1,000,000.00) for bodily injury or death to any one person, at least Two Million Dollars($2,000,000.00) for any one accident or occurrence, and at least Five-Hundred-Thousand Dollars ($500,000.00) for property damage. Director at his or her sole discretion may require additional insurance amounts. Franchisee shall furnish City with certificates or endorsements representing all insurance required by this Franchise Agreement. All such certificates or endorsements shall contain language to the effect that (1) the City, its officers and employees are listed as additional insureds, (2) the insurer waives the right of subrogation against City and against City's agents and representatives, (3) the policies are primary and noncontributing with any insurance that may be carried by City, and (4)the policies cannot be canceled or materially changed except after thirty (30) days notice by the insurer to City. Franchisee shall furnish City with copies of all such certificates or endorsements promptly upon receipt of them. Franchisee may effect for its own account any insurance not required under this Franchise Agreement. Franchisee shall deliver to City, in the manner provided for notices, certificates or endorsements of all insurance policies required by this Franchise Agreement, together with evidence satisfactory to City of payment required for procurement and maintenance of the policy, within the following time limits: 1. For insurance required prior to the commencement of construction under this Franchise, within ten (10) days after the Surety Bond described in Section 17 above is posted; and 2. For any renewal or replacement of a policy already in existence, within ten (10) days following the expiration or other termination of the existing policy. If Franchisee fails or refuses to procure or maintain insurance as required by this Franchise Agreement, or fails or refuses to furnish City with required proof that the insurance has been procured and is in force and paid for, City shall have the right at City's election and on thirty (30) days written notice, to either purchase such insurance and use the proceeds of the Surety Bond for payment or declare the forfeiture of this Franchise. 10 B. Workers Compensation Pursuant to California Labor Code Section 1861, Franchisee acknowledges awareness of Section 3700 et seq. of this Code, which requires every employer to be insured against liability for Workers' compensation; Franchisee covenants that it will comply with such provisions prior to commencing performance of the work hereunder. Franchisee shall obtain and furnish to City, workers' compensation and employer's liability insurance in an amount of not less than the State statutory limits. Franchisee shall require all subcontractors to provide such workers' compensation and employer's liability insurance for all of the subcontractors' employees. Franchisee shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employer's liability insurance and Franchisee shall similarly require all subcontractors to waive subrogation. SECTION 19. Notices. Any notice required to be given under the terms of this Franchise may be served by certified mail, overnight mail service, confirmed or hand delivery to the addresses as follows: To City To Franchisee City of Huntington Beach Poseidon Resources(Surfside) LLC Attn: Director of Public Works Attn: President 2000 Main Street, 501 West Broadway, Suite 2020 P.O. Box 190 San Diego, CA 92101 Huntington Beach, CA 92648 Either party may from time to time provide the other a notice of change of address in writing, which shall become operative upon receipt for purposes of this Franchise Agreement. SECTION 20. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Franchise Agreement is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Franchise Agreement. The City Council of the City of Huntington Beach hereby declares that it would have adopted this Franchise Agreement and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. SCTION 21 Automatic Stay—Waiver Non-Executory Contract 11 a. In consideration of the City's execution and performance of this Agreement, the City's and Redevelopment Agency's ("Agency") inherent police power relating to the public health and safety of the citizens of the City as recognized by 11 U.S.C. Section 362, and in consideration of the recitals and mutual covenants contained herein and in the Amended and Restated Owner Participation Agreement, and for other good and valuable consideration, including the agreement of the City to afford Poseidon a period in excess of 10 (ten)years to perform under the terms of the Exchange Agreement as provided therein, the receipt and sufficiency which are hereby acknowledged, Poseidon hereby agrees that in the event that Poseidon(by its own action or by the action of its members, shareholders or creditors, if applicable), shall at any time during the term of this Agreement(a) file with any bankruptcy court of competent jurisdiction or be the subject of any petition for relief under the Bankruptcy Code of 1978 as amended, or any amended or successor statutory provisions (the "Bankruptcy Code"), (b)be the subject of any order for relief issued under the Bankruptcy Code, (c) file or be the subject of a petition seeking a reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act of law relating to bankruptcy, insolvency, or other relief for debtors, (d) have sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator, or liquidator, (e)be the subject of any order,judgment or decree entered by any court of competent jurisdiction approving a petition filed against such party for the reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act or law relating to bankruptcy, insolvency, or relief for debtors, then, in any such event, the Agency and the City shall thereupon be entitled to relief from any automatic stay imposed by Section 362 of the Bankruptcy Code, or any similar stay to the extent necessary for the exercise of the rights and remedies otherwise available to the Agency or the City as provided in this Agreement and as otherwise provided by law. Poseidon hereby waives the benefit of such stay to the extent provided herein and does hereby consent to the entry of an order,of any court of competent jurisdiction granting immediate relief from,modification or termination of such stay, and Poseidon does hereby further agree to raise no objection to any motion or proceeding seek relief from, modification or termination of such stay. b. Poseidon further acknowledges that upon execution of this Agreement, the Agency and the City shall have performed the material obligations as provided herein, leaving the majority performance remaining solely with Poseidon. In the event of a bankruptcy proceeding as described in the preceding paragraph, Poseidon acknowledges and agrees that this Agreement is not executory as that term is defined in the Bankruptcy Code and in particular Section 365 thereof. Section 22. Most Favored Nation. Franchisee hereby grants to City a "most favored nation" right throughout the term of this Franchise Agreement and any future amendments pursuant to the terms of this Section. This means that during the period commencing on the date hereof, in the event that Franchisee enters into an agreement with any government entity for the use of public right of ways for transportation of water similar to the terms of this Franchise at a franchise fee that is more favorable than the price offered to City, Franchisee shall offer the more favorable fee to City for generally comparable in type and scope to this Franchise. 12 SECTION 23. Entirety The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement contains the entire agreement between the parties respecting the subject matter of this Agreement, and supersedes all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. SECTION 24. Counterparts, Multiple Copies,Faxed Signatures. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Faxed signatures shall have the effect of original signatures. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on -^6z-k (Y7 20 /0 (Signatures Continued) 13 POSEIDON RESOURCES (SURFSIDE) LLC, a CITY OF HUNTINGTON BEACH, a municipal Delaware 1' ited liability company corporation of the State of California By: Mays r print name ,p r ITS: (circle one)Chairman/Preside t/Vice President, AND .ty Clerk INITIATED AND APPROVED: By: AA print name Director of Public orks ITS: (circle one)Secretary/Chief Financial Officer/Asst. Secretary-Treasurer REVI D APPROVED: It Administrator AP ROVED AS TO FORM: Cit Attorney 14 Exhibit"A" Primary and Alternative Pipeline Routes 15