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Reso 0316-01/1969RESOLUTION NO. 316 3 PREAMBLE: 4 1. San Marcos County Water District, hereafter 5 called entity, has previously authorized the Attorney 6 General of the State of California to institute on its 7 behalf one or more law suits under the Federal Antitrust 8 Laws which law suits were in fact filed against defendants 9 United States Steel Corporation, Smith-Scott Company, Inc., 10 Kaiser Steel Corporation, United States Industries, Martin- 11 Marietta Corporat ion, United Concrete Pipe Corporation~ 12 and American Pipe and Construction Co. 13 2. Pursuant to court orders, similar actions 14 brought by the Federal Government and other plaintiffs in 15 the States of Califorrlia, Oregon, Washington and Hawaii 16 were all coordinated before a single Federal District 17 Court Judge. 18 O. In 1967 the actions against all defendants, 19 with the exception of' American Pipe and Construction CO., 20 were settled and compromised on a lump sum basis, the pro- 21 ceeds being distributed amorlgst the various plaintiffs 22 punsuant to an agreement, all of which was duly approved 23 and ratified by entity ana approved by the Court. 24 4. A condition of the acceptance of said partial 25 settlement by certain plaintiffs not represented by the 26 Attorney General of the State of California was an agree- 27 ment by and between the plaintiffs concerning the conduct 28 of the litigation still remaining against, and the 29 allocation among plaintiffs of the expected recovery from 30 defendant American This agreement known to plaintiffs 31 as the Western Associated Pipe Plaintiffs Organization 1 Compact provides, among other things, for (e) common 2 sharing of expenses~ (b) the retention of a lead 3 counsel to prosecute and try all cases against the 4 remaining deferldant American Pipe and Construction 5 Co. under the supervision of an Executive Committee 6 of the plaintiffs party to the compact~ and (c) the 7 distributiom of any recovery against American to 8 all plaintiffs proportionately to their verified 9 transactions with American over the fourteen year 10 period 1950 through 1963. ll 5. On July 14, 1967~ the Attorney General 12 of the State of California entered into such Compact~ 13 bereinafter called WAPPO, on behalf of entity. Since 14 then, the agreements embodied in the WAPPO Compact have 15 been and are being carried out with the Attorney General 16 of Califormi a as chairman of its Executive Committee. 17 6. Plaintiffs' counsel, acting through their 18 Executive Committee and lead counsel, have now negotiated 19 and reached agreemerit on the terms of a settlement and ~0 compromise of the litigation with defendant American 21 Pipe and Construction Co., the terms of which are more 22 fully set Out in the attached document entitled "MEMORANDUM 23 OF UNDERSTANDING FOR SETTLEMENT OF WAST COAST PIPE CASES 24 BETWEEN ALL PLANTIFFS AND AMERICAN PIPE AND CONSTRUCTION 25 COMPANY". 26 7. Such Memorandum of Understanding provides 2V for payment by American to all plaintiffs of the lump 28 sum amount of eight million five hundred thousand ~9 dollars ($8,500,000) over a period of seven years 30 with iraterest. 31 / 1 NOW BE IT RESOLVED THAT: 2 A. 3 The MEMORANDUM 0F UNDERSTANDING FOR SETTLEMENT 4 OF WEST COAST PIPE CASES BETWEEN ALL PLAINTIFFS AND 5 AMERICAN PIPE AND CONSTRUCTION COMPANYend the Western 6 Associated Pipe Plaintiffs 0rganizatlon Compact, copies 7 of which are attached hereto as Exhibits "I" and "III", 8 respectively, are hereby adopted, ratified and confirmed. 9 B. 10 The 0by Blanchard of entity is 11 hereby authorized to sign the release of claims against 12 the defendant and attached hereto as Exhibit "II" as the lS official act of entity. 14 C. 15 The Attorney General of the State of California 16 ~s hereby authorized by entity to enter into a stipulation 17 dismissing this litigation with prejudice and without 18 costs and to take any and all other action which may be 19 acquired of this entity in order to effectuate and con- ~0 summate the compromise and settlement provided ~or in said ~1 Memorandum of Understanding and distribute any menlos ~ received from defendant American Pipe and Construction Co. ~3 in accordance with said WARPO Compact. 24 Adopted this 6th day of January 19 y ~chard, President MEMORANDUM OF UNDERSTANDING FOR SETTLEMENT OF WEST COAST PIPE CASES BETWEEN ALL PLAINTIFFS AND AMERICAN PIPE AND CONSTRUCTION COMPANY parties: The parties to this memorandum of understanding are the Western Association of Pipe Plaintiffs' Organization, hereinafter referred to as "WAPPO", and American Pipe and Construction Company, hereafter referred to as "American" Amount to be Paid: American agrees to pay to the fiscal agent designated by WAPPO the sum of eight million five hundred thousand dollars ($8,500,000) payable as follows, to wit: The sum of one million two hundred fifteen thousand two hundred dollars ($1,215,000)on or before January 1, 1969, to the fiscal agent designated by WAPPO which said sum shall be placed in either an interest-bearing savings account or in the purchase of a certificate of deposit at the option of WAPPO and which is to be returned to American in the event of a failure to consummate this settlement within nine months of the date hereof. Said fiscal agent shall not distribute the sum of one million two hundred fifteen thousand two hundred dollars ($1,215,200) to the plaintiffs until the fiscal agent has received certified copies of the orders of dismissal of all WAOPO Pipe Casses American further agress on or before January 1, 1969 to deliver to said fiscal agent its promissory note in the sum of seven million two hundred eight-four thousand eight hundred dollars ($7,284,800) payable to the order of said fiscal agent as it address in installments as shown on Exhibit "A" and bearing interest at the rate of five percent (5%) per annum on the declining balances of said note, said interest to be payable at the same time principal payments are required to be made here- under. Said note shall further provide that if any interest is not paid as it becomes due, it shall be added to the principal and bear a like rate of interest. Said note shall further provide that if any payment of either principal or interest is not made as it becomes due, the entire balance of said note remaining unpaid shall become and be immediately due and payable. Said note shall also reserve to American the right to make pay- ments on account of principal or interest in advance of their due date without penalty. Said note shall further provide that in the event an action is commenced to collect said note or any part thereof, there shall be added to the judgement for any principal or interest found by the court ot be due such additional sum by way of attorneys' fees as to the court having jurisdiction of said cause shall seem reasonable, said attorneys' fees to be due on the filing of a complaint. American by December 16, 1968, shall provide WAPPO with copies of any and all agreements or amendments thereto with creditors of American which authorizes the performance of this memorandum of understanding and shall be in the form and subsance satisfactory to counsel for WAPPO. American agrees that it will provide such assistance in verifying plaintiffs' transactions as WAPPO shall from time to time require American and its attorney's agree that the appeal of a taxpayer against the City of San Diego shall be dismissed by December 16, 1968, and to withdraw motions by American ? the validity of WAPPO, selection of special counsel by the State of California, American's Settlement with the City and County of San Francisco, and all other pending motions and challenges in the Western Pipe Cases. American and its Attorneys agree to execute & covenant in a form satisfactory to WAPPO covenanting that American and its attorneys shall not further attack in any manner the validity of WAPPO and the selection of special counsel by the State of California. Each plaintiff that is a signatory to WAPPO shall release its claim against American, and special counsel for WAPPO shall stipulate to dismissal with prejudice and without costs of its action against American. Protective order: No person attending the meeting between counsel on November 20 and 21, 1968 concerning the subject matter of this memorandum of understanding shall divulge the nature thereof nor of any of the subjects discussed threat to any person whose responsibilities or duties to one or more of the parties herein do not require that he be consulted concerning or informed of said discussions in order for one or more of said parties to take action with respect to any of the subjects discussed on said dates, and no officer, employee or agent of any of the parties hereto shall disclose any of the aforesaid subjects to any other person whose responsibilities or duties to one or more of the parties do not require such other person to have knowledge of such subjects in order for one or more of said parties to take action with respect thereto, until: December 2, 1968, or one day following dissmissal of the jury in the trial of Washington Public Power System Supply V. American, whichever is later. Consum..... of Settlement: The settlement herein referred to resulted from discussions between counsel for plaintiffs and American in proceedings before the Honorable Martin Pence concluded on November 21, 1968 in San Diego, California. Counsel for the parties hereto each agree to recommend in good faith, without qualifications, and with full measure of support, the settlement set forth herein to their respective client or clients, it being understood that ratification by such clients is necessary. In consideratin of the payment of the settlement amount set forth in this memorandum of understandin, plaintiffs shall deliver to American duly executed releases and stipulations to dismiss as above provided, together with duly adopted and certified resolutions or equivalent documents ratifying and confirming this settlement American agrees to furnish WAPPO with certified copies of the resolution of American Pipe and Construction Company's board of directors, and certified copies of the resolution of Pipe Linings, Inc. (the latter concerning the City of San Diego litigation) authorizing American's officers and attorneys to make this settlement. The documents referred to shall be in such form as shall be agreed to between WAPPO and Amercian. Execution of this Memorandum: This memorandum of understanding may be executed in any number of counterparts with like effect as if all signatures were on the original. Dated: Novmeber 21, 1968 .}anuary ], ]969 8112]5:208 April !~ ]969 505 July iI 1969 505 October Is 1969 505 $00 January I, 1970 505 800 Ai~s-~l 1~ 1970 505.800 july Is 1970 505.800 january 1, 1971 472.300 July ] 1971 472300 january !, 1972 472 300 duly 11 1972 472300 january I, 1973 472 300 july i~ 1973 472 300 januar7 I, 1974 472 300 July 1, 1974 472,300 January 1, 1975 4711600 Total 1 RELEASE OF AMERICAN PIPE & CONSTRUCTION CO. 3 1. This release is executed fn favor of and for 4 the benefit of American Pipe & Construction Co., a California 5 corporation, together with its subsidiary and affiliated 6 companies and the present and former officers, directors, 7 employees and agents of American Pipe & Construction Co. and 8 its subsidiary arid affiliated companies, including successors 9 by merger, the heirs, representatives, executors, adminis- 10 trators, successors and assigns thereof (hereinafter designated 12 2. This release is executed by San Marcos County l~ Water District 14 15 heroinafter designated as "Releasor". 16 3. This release concerns and relates to the 17 following products and services manufactured or supplied 18 by American: concrete or sUeel pipe or any other products 19 or services associated with the construction of pipelines 20 and other installations utilizing concrete or steel pipe, 21 including by way of illustration only and without limiting 22 the generality of the foregoing, the lining or coating of 23 new pipe, the rehabilitation of steel pipe, both in place 24 and elsewhere, pipe lining materials such as "Amerplate," S5 either separately or as a constituent part of pipe manu- 26 faetured by American or others, and "specials" such as S7 manhole pipe arid fittings manufactured, sold by or supplied 28 by American (hereinafter designated pipe products . 29 4. The period of time covered by this release ~s transactions between American and Releasor either directly EXHIBIT or indirectly which transaction are still pending as of January 1, 1969. 5. For and in consideration of the sum of One Dollar ($1.00) and other valuable consideration paid by American to Releasor, the receipt of which is hereby acknowledged, Releasor hereby forever releases, discharges and acquits Amercian of and from each, every and all claims, controversies, actions, causes of action, obligations or liabilities of any nature whatsoever, now or hereafter known, suspected or claimed, which Releasor or any of its agents ever had, now has or hereafter can, shall or may have or allege against American based upon allegations of conspiracy, collusion, monopoly or attempted monopoly, which might be asserted under the Clayton Act (15 USC, $$ 15 and 26), or under any other state or federal antitrust trade regulation or similar law giving rights to relief under the same or similar circumstances; and in connection with the foregoing only, Releasor expressly waives the provisions of Section 1542 of the Civil Code of the State of California, reading: "1542. (Certain Claims Not Affected by General Releasor.) A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 6. Releasor warrants that the persons executing this document on behalf of Releasor are fully authorized so to do and Releasor makes such warranty in full knowledge that Releasee has no independent knowledge of the authority or lack thereof of such persons but is relying upon Releasor's warranty. 1 Y. Any claim, aatlon or controversy concerning ~ this release shall be determined under the laws of the 3 State of California. 4 IN WITNESS WHEREOF, Releasor has caused this 5 release to be executed this 6th day of ,January 6 1969 8 San Marcos County Water District [Full name or Releasor) 9 12 Attesting Witness ~Mar~o~ Secretary, S County Water 13 Office District 14 15 16 18 19 ~0 24 WESTERN ASSOCIATED PIPE PLAINTIFFS ' COMPACT 1. This Agreement is made and entered into this 14th day of July , 1967, by and between the parties set forth on attached Exhibit "A." Background to and Purpose of Compact: 2. The parties have each for some time asserted against defendant American Pipe and Construction Company (hereinafter usually called "American"), and others in Federal Court complaints and causes of action alleging damage occasloned by activities in violation of the federal antitrust laws. 3. Certain of the parties are also asserting com- plaints and causes of action of the same nature against American Vitrified Products Co. (heriinafter called "Amvit") and certain of the parties are asserting complaints and causes of action of the same nature relating to in-place pipe rehabilitation against Pipe Linings, Inc., a subsidiary of defendant American. 4. The parties are in the process of effectuating an agreement with certain other defendants in the above actions concerning the pipe transactions of said other defendants and their respective liabilities with respect thereto and reserving to the parties their causes of action against sll other persons, firms, and corporstions, including American, Amvlt and Pipe Linings, Inc. 5, The parties have been add are currently required by the Court in their handling, past amd present, of this mass of litigation (heroinafter collectively referred to as the "Western Pipe Cases" or the "litigation") to cooperate and to coordinate tinair respective activities through a single counsel and an attorneys' sloering cammittee Exhibit III without any assuracne of relative trial property inter se or of any specific degree of trial consolidation and to proceed to collective and simultaneous preparatin for trial of all causes pending against American. 6. It further appears from the volume of claims now asserted against American by the parties that successful early trial of only some of said causes and execution of judgement thereon could substantially prejudice the collectibility of other claims of equivalent merit and equity. 7. To achieve equity and parity of right and bearing in mind the ultimate equivalence of the public interest in all meritorious claims, the parties intend by this Compact to provide a contractual framework to accomplish among other things, the following: (a) Create an organization named and hereinafter called, "Western Asso- ciated Pipe Plaintiffs' Organiza- tion," or, "WAPPO" which will equate their deverse interests, sum their common interests and decide on steps to be taken by the parties in the Western Pipe Cases; (b)Create an Executive Committee of WAPPO to oversee the day-to-day conduct of the Western Pipe Cases by special counsel; (c)Arrange for the engagement of quali- fied special counsel to conduct the Western Pipe Cases on a day-to-day basis until condluded, subject to the supervision and control of Executive Committee; (d) Provide for the financing of the Western Pipe Cases and the appointment of a Financial provisions of this Compact; (e) Provide for the distribution of pro- ceeds realized from the Western Pipe Cases among the parties on a pro rata basis in accord with the verified dollar magnitude of each party's claim; and NOW, THEREFORE, in consideration of the foregoing promises, recitals, objectives and purposes, and for other valuable consideration, the parties hereto mutually agree, as follows: WAPPO: Organization, Membership, Powers and Duties, Voting, Procedures, Activities, Miscellaneous 8. There is hereby created the Western Associated Pipe Plaintiffs' Organization (WAPPO), whose membership shall consist of each party to this Compact and each of which parties shall be represented in WAPPO activities by and act through a representative who is an attorney. This attorney may represent more than one party. (A party may designate alternate representatives.) Each party hereby delegates to its representative all necessary authority, subject to reasonable reports, to carry out Compact, except as to those matters expressly requiring party governing body action. 9. WAPPO shall meet on the call, reasonably noticed, of Executive Commitee, special counsel, or of 35% of the votes of WAPPO members evaluated by the formal (transaction basis) vote prescribed herein. 10. Voting at WAPPO Meetings: (a) Unless any representative requests a formal tranaction basis vote or this Compact elsewhere so requires, representatives shall each vote on the matter being considered, each representative to have only one vote regardless of the number of parties he represents. This shall be known as the "informal voting basis." ~b) Whenever a represemtative requests a formal (transaction basis) vote or this Compact so requires, the matter in question shall be determined by formal vote and formal Vote shall supplant informal vote on the same matter if occurring st the same WARPS meeting. In s formal vote each representstive's vote shall be weighted to reflect inter party the % of dollar volume of the parties for whom the representative votes and represents to all parties' dollar volume (i.e., 100%) based on pipe acquisition transactions of the parties from American as determined from the 8-year verified transaction statements of American (Sept. 1, 1954 - Aug. 31, 1962, inc.) on file with the Bank of America National Trust and Savings Association in San Francisco in its capacity as agent in effectlisting the agreements referred to in paragraph 4, above, (c) Any representative at any WAPPO meeting may request either an informal or formal vote on shy matter and if the request is seconded the vote shall be taken. (d) Unless otherwise specified heroin, an informal vote shall be decided by s simple majority of those present and voting; and a formal vote shall be decided by 51% of the dollar volume present and voting. 11. Duties of WAPPO Representative: Each member shall perform such litigation tasks as are assigned to it by special counsel and/or the Executive Committee or by majority WAPPO vote. Such tasks are to be distributed ss equitably as possehie. 12, A quorum for WAPP0 exeeding shall be 51% Of the dollar value of the 8-year period Americam verifi- cation statements 13, The designated WAPPO representatives of the parties are not forth on Exhibit "A" opposite the name of the party represented EXECUTIVE COMMITTEE: Organization, Membership, Powers and Duties, Voting Procedures, Miscellaneous. 14. The Executive Committee shell consist of one WARP0 representative from each of the following parties or groups of parties: Pacific Northwest (b) Stete of California Los Angeles County Flood Control District City of San Diego (e) Other California plaintiffs Such representative may be removed by either the naming perry or by a 90% formal WAPPO vote but the successor shall be nemed by the naming party. A party may volunterily resign its right to designate a WAPPO Executive Committee represente- tive, in which case a 5]% formal WAPPO vote shell designate the succeeding naming psrtv. The members of the Executive Commttee end their alternates are set forth on attached Exhibit "B." An elternate may vote 15. The permanent Chairman of the Executive Committee shall be the representative of the State of California. 16. The Executive Committee shall meet as needed in its or its chairmans directions to carry out its duties end, in addition, shall meet on es]], reasonably noticed, of speciel counsel. 17. Executive Committee meeting be limited to its personnel, their aides as needed end the ex off members who shall be, however, without vote. Said ex office members are special counsel, his sides ss needed and the members of the Financial Committee esteblished by ibis Compact. 18. Any WAPPO member may (but without vote) attend Executive Committee meetings where his case is under special consideration or the meeting is with representation of American and his case is under special consideration 5. 19. Any WAPPO member may attend (but wltbout vote) any Executive Committee meeting where he is requested to attend by a committee member, but such request shall be for cause. 20. Executive Committee, subject to the terms ..and conditions of this Compact, shall have full authority to supervise and control special counsel in his carying out of the day-to-day administration of the litigation.. Execu- tive Committee shall report On its activity at WAPPO meetings called as the litigation situation renders desirable. Where still feasible, WAPPO may review and reverse Executive Cormnittee decisions by majority Vote. 21. Representatives of the Executive Committee may attend such of special counsel's meetings with repre- sentative of defendants as said committee chooses. 22. Voting at Executive Conm~ittee Meetings: All Executive Con~nittee matters shall be determined in Executive Committee meetings by a simple majority of ~he members present except those nmtters otherwise treated in this Compact. A quorum for Executive Co~Ilitteo meetings shall be three members unless the non-appearing members waive a quorum. 23. Executive Committee members shall be reimbursed their reasonable travel and living expenses in attending meetings of the Executive Committee duly called as Provided in this Compact. SPECIAL COUNSEL: Powers and Duties. 25. The Executive Committee shall contract behalf of WAPPO for the engagement of special counsel sistent with the provisions of this Compact. 26. Special counsel shall be entitled to be reim- bursed for expenses incurred in carrying out his duties, as follows: personal expenses such as transportstlon, hotel and living expenses, and the usual expenses of litigation, such ss reporters' fees, deposition costs and handling of documents may be incurred without prior approval by the Executive Committee. Extraordinary expenses such ss expert witness fees or the employment of personnel, must be approved in advance by the Executive Committee. Expenses will be paid for on a monthly basis based on statements thereof submitted to and approved by the Executive Committee and Finance Committee. 27. Special counsel shall receive for his services his out-of-pocket expenses and l0s of amounts recovered from American, American Vitrlfied, and Pipe Linings, Inc. in concluding all the litigstion sgalnst said defendants, after first deducting the out-of-pocket expenses of WAPP0 from such recovery. These shall include all joint WAPP0 expenses but not those of the individual members. Any awards of attorneys' fees or costs shall be held and distributed by the Finance Committee in the same manner ss are proceeds of settlement or Judgment. 28. Special counsel shall not receive on account of his 10S contingent fee more than $500,000 unless and until all WAPPO causes of action against said defendants now on file or subject to s motion to add in the litigation have been terminated. 29. Subject to this Compact, the day-to-day super- vision and control of Executive Committee end the rendition of adequate end timely reports to the Executive Committee, special counsel shall have the duty, responsibility, and authority to conduct the litigation to a final con- clusion on behalf of all WAPPO mmebers. Special counsel, with majority Executive Committee approval, may determine the trial priority stance of WAPPO before the judiciary. 30. Special counsel is not obligated to initiate and conduct an appeal except as he is directed by the Executive Committee, but shall be obligated to defend all appeals. FINANCE COMMITTEE Organization, Membership, Powers and Duties 31. There is hereby created the Finance Committee of WAPPO, composed of two individuals, Robert M. Desky, Esq. and John M. Burnett, Esq., who shall function vis-a-vis WAPPO as trustees inthe matters here set forth. 32. The Finance Committee shall be the historical successor and heir to the fiancnial administrators of the Association of Pipe and Antitrust Plaintiffs (APAP), who arranged for and handled group financing of the litigaton prior to about July 1, 1967. 33. The Finance Committee shall arrange for and handle the funding of future litigation expenses and the payment thereof. Funds for the payment of litigation expenses will be obtained from the parties comprising WAPPO by means of pro rata assessment based upon the American 8- year verification statements. Such assessments shall be proposed by the Finance Committee from time to time in such amounts as may be necessary to provide a fund for the payment of anticipated expenses of the litigation and shall be approved by the members of WAPPO. Each member of WAPPO hereby agrees to pay approved assessments promptly upon demand. 34. The Finance Committee is authorized to make suitable arrangements for the safekeeping of all funds received by them or subject to their order and to engage, at WAPPO expense, clerical personnel ss requirat in carrying out their duties hereunder. 35. The Finance Committee shall handle ell financial feelings with special counsel ant the Executive Committee, the payment of expenses and all other financial aspects of the litigation. The Finance Committee shall make the necessary arrangements for and shall oversee the tistribution of proceeds of all recoveries contemplated heroin. Authority to Negotiate Settlements, to Recommend Approval of Settlements, to Approve Settlements. 36. Except as hereinafter provided, special counsel shall only be authorized to effect a negotiated settlement of any cause or causes of action upon unanimous recommendation of all members of the Executive Committee. In the event that settlement of one or more causes of action, but less than all, is to be negotiated, the recommendation Of the attorney or attorneys of record for the plaintiff or plaintiffs involved shall also be secured. With respect to any case, however, which is in the course of trial i.e., called for trial by the clerk and on which hearings are currently pro- ceeding prior to verdict, or in the instance of a court trial, prior to submission of the cause for decision), special counsel shall be authorized to effect s negotiated settlement of the case at trial upon the recommendation of three out of five members of the Executive Coiimittee, provided that under such circumstances the additional recommendation of t~e attorney or attorneys of record for the plaintiff or plaintiffs whose claims are being tried must also be secured. Notwith- standing the foregoing provision, however, any settlement which shall constitute a settlement of the claims of 9. all plaintiff's against one or more defendants in the Western States Pipe Cases must receive the unanimous re- commendation of all members of the Executive Committee. 37- It is expressly agreed that no party shall settle any-cause of sotion rleferred to heroin in which it is a plaintiff except in accordance with the provisions of this Compact. In the event that any settlement is recom- mended by special counsel and bp the Executive Committee in accordance With the provisions of the preceding paragraph 36~ it is agreed on behalf of all attorneys of record for WAPPO members that they, and each of them will in good faith reccomend approval of such settlement to their public agencies or superiors that they represent. 38. Notwithstanding any other provision of this Compact, the governing bodies of the parties hereto expressly reserve the right to approve or disapprove any settlement affecting their respective causes of action. This reservation, however shall not be deemed to affect the authority delegated by this Compact to WAPPO, the Executive Commffttee and special counsle as regards the day-to-day conduct of the litigation. Distribution of Proceeds of Settlement and Judgments Obtained in the Litigation 39. All monies recovered and received frgm de- fendants American, Amvit and Pipe Linings, Inc. as the pro- ceeds of either a settlement negot:iated and agreed upon or a Judgment rendered in the litigation shall be transferred immmediately upon receipt to the order of the Finance Com- mittee for deposit in a state or national bank designated by said Finance Committee and shall be distrihuted as pro- vided hereinafter. 40. Proceeds: Priority of Distribution. All proceeds received by the Finance Committee shall be dis- bursed according to the following priorities: (a) Fees of a bank, if any, serving as a depository, or agent for a payment. (b) Other expenses of distribution. (c) Reimbursement of all plaintiffs for the litigation expenses advanced or paid by them to WAPPO pursuant to assessments duly made in accordance with this Compact. (d) Payment to special counsel of the fees and expenses authorized in accordance with this Compact. (e) The balance of the proceeds as provided in Paragraph 41. 41. Proceeds: Distribution of recoveries from defendant American and Pipe Linings, Inc. After payment of the expenses referred to in the preceding paragraph, the balance of the proceeds (hereinafter referred to as "net proceeds") received from defendants American and Pipe Linings, Inc., whether by settlement or judgement in any cause of action in the Western Pipe Cases shall be distributed among all the parties to this Compact in proportion to the dollar value that each party's pipe acquisition transactions from American bears to the total transactions of all the parties, using the transaction verification statements of American for the 8-year period referred to in paragraph 10(b), above, as supplemented by the additional transaction verifications required by court order of American for the periods January 1, 1050 through August 31, 1954, inclusive, and September 1, 1962 through December 31, 1963, inclusive, the aggregate of all such periods being referred to herein as the 13 year period." Additionally, pipe rehabilitation transactions of ~ne City and County of San Francisco to a maximum of million, and of thc City of San Diego to a maximum of $1.25 million~ if said entities or either of them are parties to this Compact, will share in the distribution of the net proceeds that are the subject of this paragraph on the basis of 50% of the amounts of sucln transactions as verified by American or Pipe Linings Inc. within the said 13-year period. 42. Proceeds: Distribution off recoveries Amvit.* All net proceeds, as defined herein, Of the liti- gation received from defendant Amvit whether by settlement or Judgment, shall be distributed exclusively to the party or parties who have specifically assorted complaints and causes of action against said defendant, in proportion to the dollar value of the pipe acquisition transaction of each such party, determined or verified in such manner as may be agreed In writing by all of said parties participating in this distribution. 43. Proceeds: Partial distribution No partial or interim distribution of proceases off any settlement or Judgment or any combination thereof shall be made except by formal 75% vote of the parties to this Compact. No such partial or interim distribution shall be made or calculated until the parties shall have been reimbursed in the amount of the assessments previously paid to the Finance Committee for litigation expenses and until after special counsel fees and other major litigation expense then due and owing shall have been paid, or Feserve for such payments has been set aside. The sum of all partial or interim distribution of net proceeds, as defined herein, shall not exceed $5 million. available for such payments, having in mind the priority of payments specified in paragraph 40 above. In no event shall a total of more than $500,000 be paid special counsel until the termination of this litigation when all balances due shall be paid. 44. Proceeds: Extraordinary and final distribution. Distribution of proceeds not accounted for by paragraph 43 above, shall be made only upon a 90% formal vote at a WAPPO meeting, especially called to consider extraordinary or final distribution. Prior to any final distribution meeting, the Finance Committee stall take all steps necessary to arrange for the payment of all WAPPO obligations and the winding up of its fiscal affairs. Upon the completion of final distribution of all proceeds of the litigation and the rendering of its final report by the Flnsnce Committee, WAPPO and this Compact shall terminate. 45. Exemption: This Compact may be executed in counterpart by the parties tincrete. IN WITNESS WHEREOF, the parties hereto have caused these presents to be subscribed by their representatives duly empowered So to do as of the day, month, and year hereinabove first written by subscribing these presents on the spaces provided on attached Exhibit "A," which is hereby made s part hereof. 13.