SETTLEMENT AGREEMENT BETWEEN THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA AND THE CITIES OF BELLFLOWER, CERRITOS, DOWNEY AND SIGNAL HILL

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1 SETTLEMENT AGREEMENT BETWEEN THE WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA AND THE CITIES OF BELLFLOWER, CERRITOS, DOWNEY AND SIGNAL HILL This Settlement Agreement (the " Settlement Agreement" or " Agreement ") is entered into as of May 1, 2015, ( " Effective Date' ) by and between the City of Bellflower, a municipal corporation and general law city ( " Bellflower "), the City of Cerritos a municipal corporation and charter city ( " Cerritos "), the City of Downey, a municipal corporation and charter city Downey"), and the City of Signal Hill, a municipal corporation and general law city ( " Signal Hill ") (referred to herein collectively as the " Cities,' and specifically referred to herein as the Lead Cities' when intended to limit the reference to Cerritos, Downey and Signal Hill only), on the one hand, and the Water Replenishment District of Southern California, a special district WRD "), on the other hand as the " Parties. ' All parties referred to above shall be collectively referred to herein RECITALS A. On or about August 24, 2010, the Lead Cities filed an action against WRD entitled City of Cerritos, et at v. WRD, Los Angeles Superior Court Case No. BS , alleging WRD had unlawfully assessed replenishment assessments ( " RAs ") for fiscal years through against the Lead Cities in violation of both Article XIII D, Section 6, of the California Constitution (added to the Constitution by Proposition 218 in 1996) Article XIII D" or " Proposition 218 ") and WRD' s enabling statute ( the " WRD Act "), and seeking a refund of those RAs (the " RA Action ") B. On or about July 5, 2011, WRD filed an action seeking to validate the RA for fiscal year against all persons interested in the RA, entitled WRD v. All Persons Interested in the Matter of WRD Resolution No Los Angeles Superior Court Case No. BC ( the " Validation Action "). Bellflower filed an answer in the Validation Action and filed a cross complaint against WRD on or about December 2, 2011, alleging violations ofboth Article XIII D and the WRD Act. C. In or about February of 2012, WRD initiated the following actions against the Cities, among others, for the purpose of collecting payment of certain allegedly delinquent RAs and interest thereon: ( 1) WRD v. City of Cerritos, Los Angeles Superior Court Case No. VC060498; ( 2) WRD v. City ofdowney, Los Angeles Superior Court Case No. VC060546; and 3) WRD v. City of Signal Hill, Los Angeles Superior Court Case No. VC ( the Collection Actions "). The Collection Actions were subsequently consolidated with other collection actions ( VC060499, VC and BC512581) under the lowest- numbered case name and number and thereafter captioned and referred to as: WRD v. City ofsignal Hill et at, Los Angeles Superior Court Case No. VC D. On or about February 28, 2014, the Lead Cities filed a. Supplemental Petition and Complaint in the RA Action alleging violations of both Article XIII D and the WRD Act with respect to the RAs for fiscal years and E Therefore, through the RA Action, the Validation Action and the Collection Actions ( collectively, the ` Litigation ") there exists a dispute between the Parties regarding the /

2 validity of RAs WRD adopted and levied for fiscal years , , , , , and F. Although not yet the subject of litigation, these also exists a dispute between the Parties regarding the validity of the RAs WRD adopted and levied for fiscal years and G. Through this Settlement Agreement, the Parties desire to enter into a global, good faith settlement io fully and finally resolve all disputes and controversies currently existing between the Parties which are the subject of the Litigation and RAs WRD has adopted subsequent to the filing of the Litigation. Specifically, the Parties desire to enter into a settlement to resolve all disputes regarding the validity of the RAs WRD adopted and levied for fiscal years , , , , , , , , and ( the " Settled RAs "). The Parties further desire to enter into a three - fiscal -year period during which the Cities will not file any litigation against WRD in any way related to the validity of the RA or any project funded by the RA, including litigation related to the planning, adoption, execution and /or implementation of the Groundwater Reliability Improvement Program ( "GRIP ") and related to a safe yield determination under Water Code The Parties also wish to extend the peace term specifically for GRIP for a set Willi of seven years. H. In anticipation of the preparation and execution of this Settlement Agreement, on March 3, 2015, WRD and the Lead Cities executed a settlement sheet which memorialized the negotiations between the Parties and material terms and conditions of this global settlement the " Teini Sheet "). I. The parties believe that Proposition 218 -like procedures promote transparency, good governance, and foster positive relationships and communication between the pumper community, on the one hand, and WRD on the other. Because of these mutual interests and to promote due process, the Parties have agreed to a set of Proposition 218 -like procedures that they believe are generally acceptable to the pumper community and other stakeholders in the WRD service area. It is in that spirit that WRD has agreed as a matter of contract to implement Proposition 218 -like procedures, which are consistent with procedures WRD has been implementing since the Fiscal Year 2013/ 14 RA. NOW, THEREFORE, for full and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and based upon the foregoing recitals and the terms, conditions, covenants, and agreements contained herein, all Parties hereto contract as follows: AGREEMENT 1. Recitals Incorporated. The recitals set forth above, inclusive and alone, are incorporated herein by reference and made a material part of this Settlement Agreement. 2. Payment and Proiect Funding to Cities. WRD agrees to pay the Cities' attorneys' fees and costs and fund certain water projects of the Cities that provide benefits and improvements to the groundwater basin within WRD' s service area in the total amount of 9, 100,000, subject to the terms set forth herein /

3 3. Payment of Attorneys' Fees and Costs and Water Project Costs a) WRD shall pay to the Cities the total sum of four million, one hundred thousand, dollars ($ 4, 100,000.00) within sixty ( 60) days of the filing by the Cities of a Request for Dismissal with prejudice of the RA Action and the Validation Action, as set forth in Section 12. Payment shall be made in the form of a check made payable to the law firm of Aleshire & Wynder, LLP ( the " Settlement Payment "), who shall distribute for payment of the attorneys' fees and costs as follows: $ 100,000 to Bellflower and $ 4,000,000 to the Lead Cities in the manner separately agreed by the Lead Cities. b) The Cities will apply the Settlement Payment to their municipal water enterprise funds as reimbursement for their " Qualifying Attorneys' Fees." The Parties agree the $ 100,000 payment from WRD to Bellflower consists entirely of Qualifying Attorneys' Fees and costs Bellflower has incurred in connection with the Settled RAs. For purposes of this provision, Qualifying Attorneys' Fees" for the Lead Cities shall mean attorneys' fees and costs, including expert consulting fees: ( 1) incurred by the Lead Cities in the prosecution of the RA Action, ( 2) incurred prior to the execution of this Settlement Agreement; and ( 3) documented by billing summaries provided to WRD by the law firm of Aleshire & Wynder, LLP. Attorneys fees and costs incurred in the defense of the Collection Actions by the Lead Cities or lobbying activities are excluded and shall not be deemed Qualifying Attorneys' Fees. c) To the extent the Qualifying Attorneys' Fees do not amount to $ 4,000,000 for the Lead Cities, they shall apply any remaining funds towards the costs they have incurred or will incur in connection with the following projects: ( 1) by Cerritos, for the Cerritos Well C5 Wellhead Treatment Project, ( 2) by Signal Hill, for City of Signal Hill Reclaimed Water Main Project, ( 3) by Downey, for the City of Downey Well No 21 and Well No 22 Projects. The application of these remaining funds to the projects designated herein shall not be subject to the requirements of Sections 4 through 6 hereof. 4. Basin Improvement Project Funding. a) WRD shall fund five million dollars ($ 5, 000,000.00) ( the " Obligation ") in basin improvement projects of the Lead Cities ( " City Projects ") within seven ( 7) years from the Effective Date of this Agreement (the " Funding Deadline "). b) Projects eligible to meet the Obligation shall consist of projects approved in the manner specified at Section 6 ( " Projects" or " City Projects "). c) WRD may obtain the funds necessary to satisfy the Obligation from ( i) Proposition 1, Proposition 84, federal Water Resources Development Act ( "WRDA "), Bureau of Reclamations Title XVI, or other grants, including any required match by WRD, (ii) existing or future funds obtained through the issuance of Certificates of Participation ( "COP ") by WRD, and iii) any other funding source available to WRD. WRD and the Cities shall cooperate in processing joint, or individual WRD applications for grant funding and make all reasonable and good faith efforts to support the approval of such grant applications. d) Grant funding obtained pursuant to joint, or individual applications, for City Projects will be credited against the Obligation. If grants require matching funds, WRD shall commit and /

4 provide the funds required for grant matching, or otherwise arrange for the funding of the grant matching from sources other than WRD Grant matching funded by WRD, or obtained by WRD from any other source will be credited against the Obligation. The Cities are not required to contribute to any match, but may do so at their election ( where, for example, additional funds could be obtained by the City contribution beyond those required herein), and as described below. The Cities' match, however, will not be credited towards satisfaction of the Obligation by WRD 5. Designation and Approval of City Projects. a) The Lead Cities shall identify and propose to WRD within one ( 1) year of the Effective Date of this Agreement the basin improvement piojects they propose as City Projects under this Agreement All City Projects must have regional benefits, reduce reliance on imported sources of water, or enhance water security in the basin. The Lead Cities shall instruct WRD in their proposal how the $ 5 million funding Obligation shall be allocated among the Lead Cities' projects. b) WRD shall approve the City Projects it accepts within three ( 3) months thereafter and shall consider and approve all projects in good faith. WRD shall not unreasonably withhold the approval of any proposed project and shall not take any action detrimental to any such proposed project. c) WRD shall identify within three ( 3) months of approving City Projects, a schedule under which it estimates the City Projects will be funded. The Parties shall cooperate in good faith to align the project needs and funding schedule to the most reasonable extent possible. 6. Development & Management of Approved City Projects. a) The approved City Projects shall be designed and built by WRD unless WRD elects, in its sole discretion, to authorize the City for whose benefit a project is approved ( the Owner City ") to carry out a Project. The Party that carries out the Project shall be solely responsible for management of the Project, including cost over -runs or savings exceeding the Project' s Budget, as described below and compliance with any regulatory or other applicable laws ( e.g., California Environmental Quality Act [ " CEQA "]). The party who is not carrying out the Project may have access to the Project site and all records, but may not interfere with Project management. b) WRD and the Lead Cities shall agree on a budget for each approved City Project, including a. budget for the design, and shall further agree on a design firm for the Project ( the Original Project Budget '). The design firm shall design the Project to meet the Budget, or explain how the Budget should be modified, and shall deliver to the Parties the plans along with the estimate of the cost of the Project. The cost of the Project shall include construction design, management and soft costs, including contingencies. Costs shall not include costs for WRD staff or internal WRD administrative costs. Engineering representatives of the Parties shall agree on reasonable allowances for such costs and contingencies /

5 c) If the Owner City has already designed the Project, the plans shall be utilized by WRD, unless the design firm detennines such plans do not conform to the Project. If the Owner City' s plans are used for the Project, WRD shall reimburse the Owner City for plan preparation in a reasonable amount designated by the corresponding Owner City' s City Manager or his designee. Any amount reimbursed to the Owner City for Project plans shall be credited against the Obligation as part of the Project Budget. d) The Project Budget shall be updated at the time of bidding and award of contract upon agreement of the Parties ( the ` Final Project Budget "). If the Final Project Budget is less than the Original Project Budget, the surplus shall be allocated to another approved City Project, as directed by all three Cities. If the surplus cannot be allocated to another approved City Project, then the surplus shall not be credited against the Obligation. If the Final Project Budget is more than the Original Budget, the Owner City may: ( i) adjust the Project scope, ( ii) provide additional funding sufficient to meet the Project Budget, or (iii) select a less expensive Project. e) WRD shall set aside and restrict sufficient funds, from the funding sources designated at Section 4, to meet the Original Project Budget until the time the contract for construction of the City Project is awarded. To the extent any surplus exists upon the adoption of a Final Project Budget, WRD shall apply the restricted funds to another approved City Project, as directed by all three Lead Cities. If the surplus cannot be allocated to another approved City Project, then WRD shall continue to maintain the restricted funds to meet the Obligation payment requirements at the end of the Funding Deadline. To the extent an Owner City commits to provide additional funding pursuant to Section 6( d), then it shall set aside and restrict the funds committed. f) All City Project construction contracts shall ( 1) conform with the most recent Green Book on Standard Specification for Public Works Construction; ( 2) set forth schedules of performance, and ( 3) set forth standard terms for performance, including a provision for liquidated damages. g) In the case of City Projects carried out by WRD, WRD shall transfer ownership of the Project upon the completion, the release of mechanics liens and filing of the Notice of Completion The Owner City shall have the right to inspect and accept a Project before WRD may file Notice of Completion. 7. Deadlines for Project Completion and Funding a) Completion of individual City Projects shall be controlled by the terns of the construction contracts therein. However, all City Projects approved pursuant to Section 5 shall be under construction no later than one ( 1) year after the Funding Deadline. b) If WRD has not funded, or committed funds pursuant to Section 6( e) the total $ 5 million Obligation by the Funding Deadline, WRD shall pay the remaining balance of the Obligation to the Cities within sixty (60) days of the Funding Deadline /

6 8. Proposition 218 -Like Procedures. a) WRD hereby waives and releases any claims or defenses it may have with respect to Article XIII D, Section 6, subsections ( a)( 1) and ( 2), and as these provisions are interpreted by the Parties as provided in this Settlement Agreement ( the " Proposition 218 -Like Procedures "). Accordingly, WRD hereby agrees to comply with the Proposition 218 -Like Procedures as specified herein. b) WRD will provide notice of its annual Replenishment Assessment ( " RA ') and protest opportunity to Active Pumpers within its service area, pursuant to the agreed upon Proposition 218 -Like Procedures. c) " Active Pumpers" shall mean holders of an adjudicated right who has pumped water from a groundwater producing facility during the prior Water Year, as that term is defined in Water Code 60013, that has not been decommissioned as of the date of the notice. WRD shall establish a process by which to determine whether a holder of an adjudicated right who has not pumped water from a groundwater producing facility during the prior Water Year can demonstrate a probability of doing so in the fiscal year to which the RA applies ( the following fiscal year). If such holder of an adjudicated right can so demonstrate, it shall qualify as an Active Pumper. d) Each Active Pumper shall be allowed one protest for each fiscal year' s RA. Protests from parcels with groundwater producing facilities exempt from the RA will not be recognized. WRD will measure whether there is a majority protest by comparing the number of protests from Active Pumpers to the total number of Active Pumpers. In the event of a majority protest, the Cities will not object to the adoption of the RA at a rate not to exceed the prior fiscal year' s RA rate plus an adjustment for inflation ( based on the consumer price index for Los Angeles) on the ground that a majority protest prevents the imposition of a new RA, and the Parties agree that such an adjustment of the RA complies with this Agreement. e) WRD shall also provide notice of its annual RA to all holders of adjudicated pumping rights in its service area for the limited purpose of ensuring that it does not miss any Active Pumpers, but will count for purposes of protest only those rights holders that are Active Pumpers. 1) In the event there is a development in the law rendering the Section 8 ( b) through e) Procedures unlawful, the Parties shall meet and confer and in good faith seek to revise the Section 8 Procedures to render them lawful. A determination that a procedure is ` unlawful" for purposes of this subsection refers to a determination that the specific procedure at Section 8( b) through 8( e) does not meet the requirements of Article XIII D, Section 6( a) not whether Article XIII D, Section 6( a), applies to the RA In the event the Parties reach an agreement regarding any such revised procedures, Section 8 shall be revised accordingly pursuant to Section 15( f) /

7 9. Proposition 218 Proportionality Requirements. a) WRD reserves any rights, claims, or defenses with respect to the following requirement, set forth at Article XIII D, Section 6, Subsection ( b)( 3): The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel." b) In any challenge to the WRD' s uniform RA, this Settlement Agreement does not limit WRD' s discretion to defend itself in such a challenge on the grounds that the proportionality requirement of Article XIII D, Section 6 ( b)( 3) does not apply to WRD' s RA. c) In any challenge to the WRD s uniform RA by the Cities after the term at Section 10 expires, this Settlement Agreement would not limit the Cities' discretion to allege that the requirement of Article XIII D, Section 6(b)( 3) applies to WRD' s RA. 10. Peace Term. The Parties, who are all public agencies, acknowledge that the Litigation has been extremely expensive, and agree that their intent in settling the Litigation and entering into this Settlement Agreement is to foster a new attitude of cooperation and enhanced communications, with the purpose of raising issues early and resolving disputes without litigation. To that end, the Cities agree that they will not file any litigation, either directly or indirectly, e.g. by joining any third party' s lawsuit, against WRD in any way related to the validity of the RAs WRD may adopt for fiscal years , or , or any project funded by those three RAs, including litigation related to the planning, adoption, execution and /or implementation of the Groundwater Reliability Improvement Program ( " GRIP ") and litigation related to a safe yield determination under Water Code But the Cities further agree they will not file any litigation, either directly or indirectly, against the validity of GRIP for the full seven years of this Agreement. However, they shall retain their rights to challenge in a court action any failure by WRD to comply with the procedures at Section 8 or any other term of this Settlement Agreement. The Cities retain the right to submit to WRD written protests to any RA, including to the , or RAs, pursuant to the Proposition 218 -Like Procedures at Section 8 of this Agreement. This Section 10 does not apply to any litigation related to any breach of this Settlement Agreement, which may be enforced through litigation at any time pursuant to the procedures set forth at Section Consultation & Cooperation Between the Parties. a) The Cities will cooperate with WRD in facilitating a settlement with non - settling parties, ( other than Tesoro), including the City of Pico Rivera, with respect to the Settled RAs. The Cities will not join in any challenge to the Settled RAs brought by any other party. b) The Parties will cooperate to prepare and issue a joint press release containing agreed -upon message points explaining the benefits of this Settlement Agreement, including the /

8 regional benefits to the basins and enhanced water security The Parties will also remove from their websites any prior statements, alerts, or notices they have posted regarding the Litigation settled through this Agreement. c) WRD may present this Settlement Agreement to members of its Technical Advisory Committee ( " TAC ") stakeholders to explain its background and any impacts on WRD and its stakeholders ( the " TAC Consultation "). The Cities will assist with the TAC Consultation as reasonably requested by WRD d) It is in the interest of the Cities and WRD to reduce replenishment costs of WRD with the objective of reducing the RA rates. WRD is in the process of implementing its Groundwater Reliability Improvement Program (` GRIP "), through which WRD intends to reduce future replenishment costs. Accordingly, in the interest of avoiding any unnecessary or unreasonable interruption in the implementation of GRIP, the Cities shall not challenge GRIP during the Terrn of this Agreement After the Tenn expires, and only to the extent the Cities contend GRIP raises any issues related to the adoption of the unifonn RA, the Cities may challenge GRIP regarding such issues. The Cities shall address any comments or concerns they may have on the environmental review process for GRIP only through the Gateway Water Management Authority ( " GWMA "), but will not challenge any aspect of GRIP during the Teuu of this Settlement Agreement. 12. Dismissal of Litigation. The Cities shall file Requests for Dismissal with prejudice of the RA Action and the cross - complaint in the Validation Action, and WRD shall file a Request for Dismissal with prejudice of the Collection Actions within thirty ( 30) days of the Effective Date of this Agreement, which Effective Date shall be no earlier than the date upon which this Agreement is executed by all Parties. The dismissals with prejudice shall not preclude the Cities from challenging in a court action, or WRD from defending, future RAs after the expiration of the term at Section 10 of this Agreement Except as expressly provided elsewhere in this Agreement the Parties shall bear their own attorneys' fees and costs in connection with the Litigation and this Agreement. 13. Enforcement. a) Failure by WRD to make any timely payments or the Cities to provide timely information in the manner provided under this Agreement shall constitute a breach of this Agreement. b) Any payment not made by WRD at the time and in the manner provided under this Agreement shall constitute a delinquent payment, which shall bear interest at the rate of 6% six percent) per annum. d) No force majeure provision applies to the deadlines to fund or construct a City Project under this Agreement In the event WRD fails to meet funding deadlines for a City /

9 Project pursuant to Section 6( e) of this Agreement, WRD shall be responsible for any additional costs resulting from the delay and the additional costs shall not be counted towards the satisfaction of WRD' s Obligation WRD shall also be responsible for any consequential damages resulting from such delay, to the extent that it causes any such damages. c) In the event any party is required to file a court action to enforce this Settlement Agreement the prevailing party ( or parties) will be entitled to recover reasonable attorney fees and costs plus a 10% penalty. e) In the event the Cities are required to enforce this Settlement Agreement through court action, the Cities may do so upon 10 -days' notice to WRD and without filing a claim with WRD under the Government Code or WRD' s Administiative Code. The parties will jointly request priority or " fast- track" designation of any such enforcement action. In an action by the Cities to enforce this Settlement Agreement, WRD shall not assert any defenses based upon the applicability of Proposition 218 to the RAs settled pursuant to this Settlement Agreement. Additionally, an enforcement action by the Cities as to a breach of one provision of this Settlement Agreement shall not interrupt any ongoing application, funding, or construction of a Prod ect. 14. Releases. WRD and the Cities hereby release each other and any of each other' s employees, agents, attorneys, contractors, and /or representatives from any and all claims, liabilities, damages, fees, costs, or causes of action, known or unknown, that either of them has or may have arising in any way from or related in any way to ( 1) the Litigation, or (2) the Settled RAs.. Notwithstanding the foregoing, any Party may enforce the terns of this Agreement. a) This release shall not be a limitation on any claim or action that WRD may bring to collect future RA payments from the Cities that may become due after this Agreement. including, but not limited to, any claim or action WRD may bring to collect payment of the Settled RAs not paid as of the date of this Agreement). b) Each Party acknowledges that they are fully familiar with and have read the provisions of Section 1542 of the Civil Code of the State of California, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR /

10 c) Each Party, being aware of Section 1542 and having had the opportunity to consult legal counsel regarding the applicability of Section 1542 to the subject matter of this Settlement Agreement, expressly waives and relinquishes any and all rights and benefits afforded by Section 1542 to the full extent that such rights or benefits may lawfully be waived, as well as any other statute, law, rule or common law principle of this or any other jurisdiction of similar effect to Section General Provisions. a) Authority to Sign. Each of the Parties represents and warrants to every other party that it has the requisite power and authority to enter into this Agreement on behalf of itself and to consummate the transactions contemplated by this Settlement Agreement, and that each Party' s signatory is authorized to sign on behalf of the Party b) Benefit of Counsel /Consultant. In entering into this Agreement, each Party represents and wan ants that it is not relying on any representations, opinions, conclusions, recommendations, or opinions expressed by, provided by, or inferred from any other Party to this Agreement, any attorney for any other Party, or any other Party' s experts, consultants, or agents. Each Party represents and warrants that it has been fully advised by its attorney concerning the effect and finality of this Agreement, and that the Party understands, without reservation or doubt, the effect and finality of this Agreement. c) Counterparts. This Agreement may be executed in counterparts, and all so executed shall be binding upon all Parties hereto, notwithstanding that the signatures of the Parties' designated representatives do not appear on the same page. d) Governing Law. This Agreement is entered into and shall be interpreted in accordance with the laws of the State of California without regard to any doctrine of choice or conflict of law. e) Construction of Agreement. This Settlement Agreement is the product of arm' s - length negotiations between the Parties and their respective attorneys Each of the Parties hereto expressly acknowledges and agrees that this Settlement Agreement shall be deemed to have been mutually prepared so that the rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. f) Modifications No changes, modification, or amendment of this Settlement Agreement shall be valid unless it is made in writing and signed by the Parties. g) All notices and other communications between the Parties required under this Agreement shall be in writing to the contact information provided below, as herein provided. Notices shall be deemed to have been duly given ( i) if and when personally served, or (ii) three 3) days after deposit thereof in the Umted States mail, registered or certified, return receipt requested, postage prepaid, or (iii) one ( 1) business day after deposit with a nationally recognized overnight courier service, or (iv) via facsimile, effective on receipt of transmission confirmation /

11 if given during normal business hours, or the following business day if not, provided that a hard copy of such facsimile notice is sent on the same day via one of the methods of delivery set forth in subparagraphs ( i) to ( iii) foregoing Any Party to receive notice hereunder may change or add its address for the purpose of receiving notices as herein provided by delivering notice in the manner aforesaid to all other Parties. WRD Attn: General Manager CITY OF CERRITOS Attn: City Manager 4040 Paramount Blvd Bloomfield Ave. Lakewood, California Cerritos, California CITY OF DOWNEY Attn: City Manager Brookshire Ave. Downey, California CITY OF SIGNAL HILL Attn: City Manager 2175 Cherry Ave. Signal Hill, California CITY OF BELLFLOWER Attn: City Manager Civic Center Dr. Bellflower, California h) The term of the Agreement shall be coterminous with the Funding Deadline. The Releases of Section 13 regarding the Litigation and the Settled RAs shall survive termination of this Agreement and the release in Section 8( a) shall expire when the term expires. i) Severability. Should any provision of this Agreement be declared or deten lined by any court to be illegal or invalid, the validity of the remaining parts, terms, or provisions shall remain in full force if the legal substance of the settlement this Agreement contemplates is not affected in any manner adverse to any Party. j) Integration. This Settlement Agreement constitutes the entire contract between the Parties, with respect to the subject matter hereof, and supersedes all discussions, agreements and understandings, both written and oral, among the Parties with respect hereto, including the Term Sheet. k) Cooperation and Additional Documents. The Parties agree to cooperate with one another to effectuate all aspects of this Agreement. Each of the Parties also agrees to execute and deliver to each of the other Parties all additional documents, instruments and agreements and to /

12 take such additional actions as are required to implement the terns and conditions of this Agreement. 1) No Third Party Beneficiaries. This Settlement Agreement is made and entered into for the sole benefit of the Parties and their successors in interest, and is entered without any admission of liability by any Party. Each of the Parties specifically disavows any desire or intention to create a third -party beneficiary contract, and specifically declares that no person or entity, save and except for the Parties hereto stated and referenced, shall have any rights hereunder nor any right of enforcement hereof. WRD is not waiving any rights, claims, or. defenses with respect to non - parties to this Agreement. If a non -party to this Agreement challenges an RA, WRD may raise any defense, including that Proposition 218 does not apply to WRD' s RAs. Such position in any litigation with non - parties to this Agreement, however, shall not relieve WRD of the obligations to follow the Proposition 218 -Like Procedures pursuant to Section 8 of this Agreement, or any agreed wntten modification of Section 8 pursuant to Section 15( f) of this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives. SIGNATURE PAGES FOLLOW] /

13 WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA 5 -/- 6 Name: Sergio Calderon Title: President WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA Name: Robb Whitaker Title: General Manager CITY OF CERRITOS Name: Carol K. Chen Title: Mayor CITY OF CERRITOS Name: Arthur Gallucci Title: City Manager CITY OF DOWNEY a 7 7,f Name: Luis H. Marquez / Title: Mayor /

14 hc CITY OF DOWNEY v/.p/.// Name: ilbert A. Livas Title: City Manager CITY OF SIGNAL HILL G4-Izi/ La Name. Title: Mayor arry Fjcffester CITY OF SIGNAL HILL 44/ /( S- l Name: Kenneth C. F Title: City Manager CITY OF BELLFLOWER Name= 01=Sta rtas Title: Mayor S ott A. Larsen CITY OF BELLFLOWER ii Name:, effrey L. Stewart Title: ity Manager END OF SIGNATURES] /