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HomeMy WebLinkAboutItem 11c - National Opioid Settlement DATE: April 4, 2023 TO: Honorable Mayor and City Council FROM: Michael Maurer, City Attorney SUBJECT: RESOLUTION NO. 7491 OPTING INTO SETTLEMENT AGREEMENTS WITH DISTRIBUTORS OF OPIOIDS, WALGREENS CO., WALMART, INC., AND CVS HEALTH CORPORATION/CVS PHARMACY, INC., AND OPIOID MANUFACTURERS TEVA PHARMACEUTICAL INDUSTRIES LTD. AND ALLERGAN FINANCE, LLC/ALLERGAN LIMITED CEQA: Exempt Recommendation: Adopt SUMMARY Last year, states and cities across the United States brought litigation against the three largest pharmaceutical distributors of opioid painkillers, Amerisource Bergen, Cardinal Health, and McKesson (the “Distributors”), and the opioid painkiller manufacturer, Janssen (owned by Johnson & Johnson) (“J&J”), which resulted in two proposed settlements totaling approximately $26 billion dollars. The City has previously opted into the Distributors and the J&J Settlements and has started receiving payments. Between November and December 2022, five additional parties (the “New Parties”) have entered into National Opioid Settlements with terms identical to the Distributors/J&J Settlements. The City can opt into these new settlements, thereby releasing its claims against the New Parties, in order to receive a maximum of $412,000, paid out over a period of 15 years. The funds are restricted to certain opioid abatement/remediation uses. The City can either allow the funds to be used by Los Angeles County or elect to use the funds itself subject to reporting requirements to the state. Alternatively, the City can take no action, thereby opting out of the settlements, while maintaining its right to pursue litigation against the New Parties. It is recommended that the City Council opt into the Settlement Agreements and authorize the City Manager to accept the funds directly to be used in the City for allowable purposes. Opting into Five Additional National Opioid Settlements April 4, 2023 Page 2 of 5 BACKGROUND & DISCUSSION A. Allocation of Funds Litigation against the New Parties has resulted in a proposed settlement totaling approximately $20.2 billion. The proposed settlement is broken into five separate deals: (1) the Walgreens Settlement; (2) the Walmart Settlement; (3) the CVS Settlement; (4) the Teva Settlement; and (5) the Allergan Settlement. The estimated total nationwide payout and payment schedule are outlined below: Defendant Estimated Max Payout (100% Participation) Years Walgreens $5,522,528,766 15 years Walmart $3,011,242,061 Primarily paid within 3 years, but if participation levels are not met until later, payment can extend over 6 years CVS $5,002,083,578 10 years Teva $4,246,567,371.76 6 years Allergan $2,372,972,184.12 7 years Of the amounts above, California is to receive approximately $1.8 billion and is to distribute these funds pursuant to intrastate allocation agreements for the new settlements. As outlined in the Intrastate Allocation Agreements, Settlement Fund payments due to the State of California are allocated as follows: 15% to the State Fund; 70% to the California Abatement Accounts Fund; and 15% to the California Subdivision Fund. This results in the State receiving 15% of the payments allocated to California and local subdivisions receiving the remaining 85%. The percentages paid out to the California Subdivision Fund are reserved for entities that participated in the litigation of the claims giving rise to the settlement agreements. The percentages paid out to local subdivisions that did not litigate (such as Arcadia), but choose to opt into the settlements, comes from the share of the settlement proceeds that are placed in the California Abatement Accounts Fund. Essentially, this means that the City of Arcadia, if it chooses to opt into the settlement, is entitled to receive a percentage share from the California Abatement Accounts Fund. Opting into Five Additional National Opioid Settlements April 4, 2023 Page 3 of 5 The City of Arcadia has been allocated 0.033% of the 70% of the approximately $1.8 billion (i.e., best case scenario), which is equal to $412,000. This total amount will be disbursed over a period of 15 years, with payments decreasing as each settlement finishes paying out. The first payments are scheduled to occur in the latter half of 2023. After the receipt of these initial payments, further payments will be received annually thereafter. As stated above, the ultimate settlement amount is not yet known because of the bonus structure built into the agreements. The default distribution of funds in the settlement agreements provides that the funds will go directly to the county in which a city is located. A city can elect to have its funds delivered directly to the city by providing notice in the settlement agreements. Additionally, a city within a county may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the settlement fund administrators at least 60 days prior to a payment date. In deciding whether to allow a city’s funds to go directly to the county in which a city is located, a city should consider the following: (1) whether the amount of money is substantial enough for the city to handle on its own; (2) whether the city offers the services and has the employees to spend the money in accordance with its prescribed uses; and (3) whether the city wants to engage in the reporting requirements over the course of the next 15 years (16 years of distribution and an additional year following final distribution). B. Use of Received Funds Similar to the Distributor and J&J Settlements, funds received from these additional settlements must be used for future opioid remediation or abatement. For instance, participating subdivisions may use funds for areas such as services to treat opioid use disorder; support people in treatment and recovery; connect people to care; address needs of criminal justice-involved persons; address the needs of pregnant or parenting women and their families, including babies with neonatal abstinence syndrome; prevent over-prescribing and ensure appropriate prescribing and dispensing of opioids; prevent misuse of opioids; prevent overdose deaths and other harms; provide leadership, planning, and coordination of programs; provide training; and conduct research. The Intrastate Allocation Agreements also provide spending limitations in addition to those provided in the settlement agreements. Under the Intrastate Allocation Agreements, no less than 50% of the funds received in each calendar year will be used for one or more of the following High Impact Abatement Activities: (1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; Opting into Five Additional National Opioid Settlements April 4, 2023 Page 4 of 5 (3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD; (4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or (5) interventions to prevent drug addiction in vulnerable youth. In addition to these requirements, there is also a time limit on the spending of received funds. If funds are not expended or encumbered within five years of receipt and in accordance with the settlement agreements and the Intrastate Allocation Agreements, the funds are required to be transferred back to the State. C. Management of Funds Each county and city that receives payment of funds from the settlements must prepare written reports at least annually regarding the use of those funds until the funds are fully expended and for one year thereafter. Each county and city will need to track all deposits and expenditures. These reports will also include a certification that all funds received have been used in compliance with the allocation agreements. The California Department of Healthcare and Services (“DHCS”) may review these reports to determine compliance with the settlement agreements and the Intrastate Allocation Agreement. If the DHCS determines that a participating subdivision’s use of abatement funds is inconsistent with the settlement agreements or Intrastate Allocation Agreements, the parties are required to meet and confer. If the meet and confer process does not provide a resolution, the DHCS may conduct an audit, which can lead to a court action if the matter is still not resolved after an audit. D. Opting In The City must opt into the settlements by April 18, 2023, which requires the City to release its claims against the New Parties. The attached Resolution No. 7491 authorizes the City Manager to execute an Allocation Agreement and a Participation Agreement as well as performing any other tasks necessary to opt in. Samples of each Agreement are attached to this report (final documents will be separately provided to the City for execution). If the City Council takes no action, it will effectively opt out of the settlements and Arcadia’s designated funds will flow to the State. By opting out of the settlements, the City would still have the opportunity to bring its own action against the New Parties. Opting into Five Additional National Opioid Settlements April 4, 2023 Page 5 of 5 ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA under Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines. FISCAL IMPACT Approval of the settlement will result in gross payments of up to $412,000 for opioid abatement over a 15-year period. If the City elects direct payments, the City would have nominal staff costs to administer and report on its use of the funds. RECOMMENDATION It is recommended that the City Council determine that the proposed action is not a project under CEQA; adopt Resolution No. 7491 opting into settlement agreements with distributors of opioids, Walgreens Co., Walmart, Inc., and CVS Health Corporation/CVS Pharmacy, Inc., and opioid manufacturers Teva Pharmaceutical Industries Ltd. and Allergan Finance, LLC/Allergan Limited; and elect to receive payments directly. Attachments: Sample CA Allocation Agreement Sample Participation Agreement Resolution No. 7491 1 Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributor Settlement 1. Introduction Pursuant to the Distributor Settlement Agreement, dated as of July 21, 2021, and any revision thereto (the “Distributor Settlement Agreement”), including Section V and Exhibit O, the State of California proposes this agreement (the “CA Distributor Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections IV and V of the Distributor Settlement Agreement.1 For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections IX or X of the Distributor Settlement Agreement. Pursuant to Exhibit O, Paragraph 4, of the Distributor Settlement Agreement, acceptance of this CA Distributor Allocation Agreement is a requirement to be an Initial Participating Subdivision. 2. Definitions a) CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Distributor Settlement Agreement. b) Janssen Settlement Agreement means the Janssen Settlement Agreement dated July 21, 2021, and any revision thereto. c) Litigating Special District means a school district, fire protection district, health authority, health plan, or other special district that has filed a lawsuit against an Opioid Defendant. Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, and LA Care Health Plan. d) Plaintiff Subdivision means a Subdivision located in California, other than a Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020.  1 A parallel but separate agreement (the “CA Janssen Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Janssen Settlement Agreement. An eligible Subdivision may elect to participate in either the Distributor Settlement or the Janssen Settlement, or in both. 2 e) Opioid Defendant means any defendant (including but not limited to Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020. 3. General Terms This agreement is subject to the requirements of the Distributor Settlement Agreement, as well as applicable law, and the Distributor Settlement Agreement governs over any inconsistent provision of this CA Distributor Allocation Agreement. Terms used in this CA Distributor Allocation Agreement have the same meaning as in the Distributor Settlement Agreement unless otherwise defined herein. Pursuant to Section V(D)(1) of the Distributor Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the Distributor Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation. 4. State Allocation The Settlement Fund payments to California,2 pursuant to the Distributor Settlement Agreement, shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Distributor Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”). A. State of California Allocation Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation. B. CA Abatement Accounts Fund i. Allocation of CA Abatement Accounts Funds a) Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be  2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. 3 allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds. b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Distributor Settlement Agreement. c) A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight). d) A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Distributor Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions. e) The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. f) Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2. 4 ii. Use of CA Abatement Accounts Funds a) The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Distributor Settlement Agreement. b) In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities: (1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD; (4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or (5) interventions to prevent drug addiction in vulnerable youth. c) The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d) For the avoidance of doubt, and subject to the requirements of the Distributor Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated. 5 iii. CA Abatement Accounts Fund Oversight a) Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. b) If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Distributor Settlement Agreement or this CA Distributor Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c) If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame. d) If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Distributor Settlement Agreement or this CA Distributor Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement. e) Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions. C. CA Subdivision Fund i. Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid-related expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2. 6 The CA Subdivision Funds will be allocated as follows: a) First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document; b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c) Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant. D. Provision for State Back-Stop Agreement On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(R), of the Distributor Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Distributor Settlement, and if applicable, the Janssen Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments. To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney 7 General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms. For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General. 5. State and Subdivision Reporting a) DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site. b) Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions. c) The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision.  d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section V(B)(2) of the Distributor Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and the Distributors. e) In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions. 8 6. Miscellaneous a) The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Distributor Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa. b) Except as provided in the Distributor Settlement Agreement, this CA Distributor Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party. c) Except as provided in the CA Distributor Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d) Except as provided in the Distributor Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. APPENDIX 1 DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Distributor Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one- hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage. APPENDIX 1 100.000% 100.000% 100.000% Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Alameda County Alameda 2.332% 2.853%2.4237952% City Alameda Alameda 0.069%0.0570162% City Albany Alameda 0.013%0.0107768% City Berkeley Alameda 0.152%0.1249656% City Dublin Alameda 0.033% 0.040%0.0338810% City Emeryville Alameda 0.023%0.0185765% City Fremont Alameda 0.108%0.0888576% City Hayward Alameda 0.117%0.0966218% City Livermore Alameda 0.054%0.0446740% City Newark Alameda 0.026%0.0217626% City Oakland Alameda 0.486% 0.595%0.5055601% City Piedmont Alameda 0.014%0.0114064% City Pleasanton Alameda 0.067%0.0554547% City San Leandro Alameda 0.039%0.0321267% City Union City Alameda 0.043%0.0352484% County Amador County Amador 0.226% 0.277%0.2349885% County Butte County Butte 1.615% 1.975%1.6783178% City Chico Butte 0.216% 0.264%0.2246499% City Oroville Butte 0.079%0.0646595% County Calaveras County Calaveras 0.226% 0.277%0.2351644% County Colusa County Colusa 0.059%0.0489221% County Contra Costa County Contra Costa 2.102% 2.571%2.1844585% City Antioch Contra Costa 0.037%0.0301879% City Brentwood Contra Costa 0.026%0.0215339% City Clayton Contra Costa 0.002%0.0018060% City Concord Contra Costa 0.055%0.0456676% City Danville Contra Costa 0.010%0.0082255% City El Cerrito Contra Costa 0.023%0.0189024% City Hercules Contra Costa 0.010%0.0078273% 1 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Lafayette Contra Costa 0.006%0.0046030% City Martinez Contra Costa 0.012%0.0098593% City Moraga Contra Costa 0.004%0.0031007% City Oakley Contra Costa 0.010%0.0079416% City Orinda Contra Costa 0.005%0.0038157% City Pinole Contra Costa 0.013%0.0110909% City Pittsburg Contra Costa 0.053%0.0436369% City Pleasant Hill Contra Costa 0.013%0.0106309% City Richmond Contra Costa 0.146%0.1201444% City San Pablo Contra Costa 0.018%0.0148843% City San Ramon Contra Costa 0.021%0.0176459% City Walnut Creek Contra Costa 0.026%0.0212132% County Del Norte County Del Norte 0.114% 0.140%0.1189608% County El Dorado County El Dorado 0.768% 0.939%0.7980034% City Placerville El Dorado 0.015%0.0127642% City South Lake Tahoe El Dorado 0.081%0.0665456% County Fresno County Fresno 1.895% 2.318%1.9693410% City Clovis Fresno 0.065%0.0536211% City Coalinga Fresno 0.012%0.0098554% City Fresno Fresno 0.397%0.3270605% City Kerman Fresno 0.005%0.0042534% City Kingsburg Fresno 0.008%0.0066167% City Mendota Fresno 0.002%0.0019387% City Orange Cove Fresno 0.004%0.0035607% City Parlier Fresno 0.008%0.0069755% City Reedley Fresno 0.012%0.0098804% City Sanger Fresno 0.018%0.0146135% City Selma Fresno 0.015%0.0127537% County Glenn County Glenn 0.107% 0.131%0.1116978% County Humboldt County Humboldt 1.030% 1.260%1.0703185% 2 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Arcata Humboldt 0.054%0.0447660% City Eureka Humboldt 0.117% 0.143%0.1216284% City Fortuna Humboldt 0.032%0.0266837% County Imperial County Imperial 0.258% 0.315%0.2679006% City Brawley Imperial 0.011%0.0087986% City Calexico Imperial 0.019%0.0152799% City El Centro Imperial 0.158%0.1302522% City Imperial Imperial 0.006%0.0048791% County Inyo County Inyo 0.073% 0.089%0.0754413% County Kern County Kern 2.517% 3.079%2.6159145% City Arvin Kern 0.006%0.0046425% City Bakersfield Kern 0.212%0.1747198% City California City Kern 0.009%0.0070820% City Delano Kern 0.030%0.0249316% City McFarland Kern 0.003%0.0025644% City Ridgecrest Kern 0.015%0.0120938% City Shafter Kern 0.013%0.0103417% City Tehachapi Kern 0.009%0.0073580% City Wasco Kern 0.008%0.0069861% County Kings County Kings 0.293%0.2413469% City Avenal Kings 0.007%0.0056335% City Corcoran Kings 0.013%0.0107032% City Hanford Kings 0.027%0.0226038% City Lemoore Kings 0.016%0.0131900% County Lake County Lake 0.795%0.6545389% City Clearlake Lake 0.041% 0.050%0.0426253% City Lakeport Lake 0.021% 0.026%0.0222964% County Lassen County Lassen 0.319% 0.391%0.3320610% City Susanville Lassen 0.027%0.0219295% County Los Angeles County Los Angeles 13.896% 16.999%14.4437559% 3 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Agoura Hills Los Angeles 0.005%0.0040024% City Alhambra Los Angeles 0.042%0.0343309% City Arcadia Los Angeles 0.033%0.0267718% City Artesia Los Angeles 0.001%0.0005100% City Azusa Los Angeles 0.026%0.0210857% City Baldwin Park Los Angeles 0.027%0.0218520% City Bell Los Angeles 0.008%0.0068783% City Bellflower Los Angeles 0.002%0.0014485% City Bell Gardens Los Angeles 0.014%0.0114301% City Beverly Hills Los Angeles 0.065%0.0534897% City Burbank Los Angeles 0.100%0.0823132% City Calabasas Los Angeles 0.006%0.0048948% City Carson Los Angeles 0.019%0.0159805% City Cerritos Los Angeles 0.005%0.0039682% City Claremont Los Angeles 0.010%0.0082584% City Commerce Los Angeles 0.000%0.0002971% City Compton Los Angeles 0.044%0.0361882% City Covina Los Angeles 0.028%0.0229127% City Cudahy Los Angeles 0.001%0.0006020% City Culver City Los Angeles 0.055%0.0449894% City Diamond Bar Los Angeles 0.001%0.0006993% City Downey Los Angeles 0.052%0.0429994% City Duarte Los Angeles 0.003%0.0027261% City El Monte Los Angeles 0.031% 0.038%0.0318985% City El Segundo Los Angeles 0.033%0.0268020% City Gardena Los Angeles 0.034%0.0278088% City Glendale Los Angeles 0.166%0.1366586% City Glendora Los Angeles 0.016%0.0134411% City Hawaiian Gardens Los Angeles 0.005%0.0040549% City Hawthorne Los Angeles 0.050%0.0407833% 4 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Hermosa Beach Los Angeles 0.018%0.0145307% City Huntington Park Los Angeles 0.023%0.0190667% City Inglewood Los Angeles 0.059%0.0489195% City La Cañada Flintridge Los Angeles 0.003%0.0025565% City Lakewood Los Angeles 0.005%0.0039971% City La Mirada Los Angeles 0.010%0.0081572% City Lancaster Los Angeles 0.045%0.0369689% City La Puente Los Angeles 0.002%0.0012999% City La Verne Los Angeles 0.024%0.0194190% City Lawndale Los Angeles 0.002%0.0017731% City Lomita Los Angeles 0.004%0.0031940% City Long Beach Los Angeles 0.439%0.3614151% City Los Angeles Los Angeles 2.715% 3.321%2.8218811% City Lynwood Los Angeles 0.016%0.0134345% City Malibu Los Angeles 0.002%0.0019269% City Manhattan Beach Los Angeles 0.032%0.0260686% City Maywood Los Angeles 0.004%0.0035528% City Monrovia Los Angeles 0.031%0.0254455% City Montebello Los Angeles 0.030%0.0250670% City Monterey Park Los Angeles 0.031%0.0256677% City Norwalk Los Angeles 0.031%0.0258228% City Palmdale Los Angeles 0.046%0.0375827% City Palos Verdes Estates Los Angeles 0.006%0.0053102% City Paramount Los Angeles 0.011%0.0091483% City Pasadena Los Angeles 0.146%0.1200524% City Pico Rivera Los Angeles 0.022%0.0183333% City Pomona Los Angeles 0.111%0.0911933% City Rancho Palos Verdes Los Angeles 0.002%0.0012645% City Redondo Beach Los Angeles 0.062%0.0506992% City Rosemead Los Angeles 0.003%0.0028260% 5 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City San Dimas Los Angeles 0.003%0.0022016% City San Fernando Los Angeles 0.013%0.0104837% City San Gabriel Los Angeles 0.018%0.0147726% City San Marino Los Angeles 0.009%0.0073791% City Santa Clarita Los Angeles 0.022%0.0178167% City Santa Fe Springs Los Angeles 0.031%0.0257531% City Santa Monica Los Angeles 0.158%0.1298513% City Sierra Madre Los Angeles 0.006%0.0048646% City Signal Hill Los Angeles 0.010%0.0084884% City South El Monte Los Angeles 0.005%0.0039603% City South Gate Los Angeles 0.020%0.0166272% City South Pasadena Los Angeles 0.012%0.0095334% City Temple City Los Angeles 0.005%0.0039498% City Torrance Los Angeles 0.112%0.0919820% City Walnut Los Angeles 0.006%0.0047305% City West Covina Los Angeles 0.049%0.0404521% City West Hollywood Los Angeles 0.013%0.0108517% City Whittier Los Angeles 0.032%0.0260581% County Madera County Madera 0.349% 0.427%0.3630669% City Chowchilla Madera 0.012%0.0097332% City Madera Madera 0.039%0.0318441% County Marin County Marin 0.564% 0.690%0.5861325% City Larkspur Marin 0.015%0.0124697% City Mill Valley Marin 0.020%0.0168401% City Novato Marin 0.028%0.0229824% City San Anselmo Marin 0.009%0.0078062% City San Rafael Marin 0.089%0.0729823% County Mariposa County Mariposa 0.084% 0.103%0.0876131% County Mendocino County Mendocino 0.439% 0.536%0.4558394% City Ukiah Mendocino 0.039%0.0317153% 6 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County Merced County Merced 0.551% 0.674%0.5724262% City Atwater Merced 0.024%0.0195846% City Livingston Merced 0.006%0.0045873% City Los Banos Merced 0.020%0.0165142% City Merced Merced 0.061%0.0500762% County Modoc County Modoc 0.065% 0.080%0.0678250% County Mono County Mono 0.023% 0.029%0.0242606% County Monterey County Monterey 0.908% 1.111%0.9437083% City Greenfield Monterey 0.006%0.0050552% City King City Monterey 0.005%0.0037355% City Marina Monterey 0.017%0.0144098% City Monterey Monterey 0.041%0.0336540% City Pacific Grove Monterey 0.009%0.0074842% City Salinas Monterey 0.094%0.0776576% City Seaside Monterey 0.023%0.0191772% City Soledad Monterey 0.007%0.0060870% County Napa County Napa 0.288% 0.352%0.2994325% City American Canyon Napa 0.017%0.0136869% City Napa Napa 0.078%0.0642783% County Nevada County Nevada 0.441% 0.539%0.4579827% City Grass Valley Nevada 0.024%0.0197805% City Truckee Nevada 0.003%0.0023843% County Orange County Orange 4.364% 5.339%4.5363576% City Aliso Viejo Orange 0.014%0.0113841% City Anaheim Orange 0.554% 0.678%0.5759282% City Brea Orange 0.086%0.0708897% City Buena Park Orange 0.087%0.0714352% City Costa Mesa Orange 0.124% 0.152%0.1288366% City Cypress Orange 0.033%0.0271937% City Dana Point Orange 0.001%0.0005560% 7 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Fountain Valley Orange 0.055%0.0455980% City Fullerton Orange 0.137% 0.168%0.1425744% City Garden Grove Orange 0.213%0.1752482% City Huntington Beach Orange 0.247% 0.302%0.2568420% City Irvine Orange 0.139% 0.170%0.1442350% City Laguna Beach Orange 0.047% 0.058%0.0493043% City Laguna Hills Orange 0.014%0.0115457% City Laguna Niguel Orange 0.001%0.0007071% City Laguna Woods Orange 0.001%0.0006546% City La Habra Orange 0.060% 0.073%0.0621049% City Lake Forest Orange 0.012%0.0101249% City La Palma Orange 0.012%0.0095439% City Los Alamitos Orange 0.008%0.0069190% City Mission Viejo Orange 0.014%0.0117560% City Newport Beach Orange 0.179%0.1470134% City Orange Orange 0.150%0.1231320% City Placentia Orange 0.029% 0.035%0.0298912% City Rancho Santa Margarita Orange 0.001%0.0006296% City San Clemente Orange 0.008% 0.010%0.0086083% City San Juan Capistrano Orange 0.008%0.0065510% City Santa Ana Orange 0.502% 0.614%0.5213866% City Seal Beach Orange 0.020%0.0165891% City Stanton Orange 0.035%0.0291955% City Tustin Orange 0.073%0.0600341% City Westminster Orange 0.104% 0.127%0.1082721% City Yorba Linda Orange 0.044%0.0362223% County Placer County Placer 1.045% 1.278%1.0861002% City Auburn Placer 0.017%0.0141114% City Lincoln Placer 0.031%0.0255599% City Rocklin Placer 0.076%0.0625485% 8 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Roseville Placer 0.196%0.1616559% County Plumas County Plumas 0.205% 0.251%0.2128729% County Riverside County Riverside 4.534% 5.547%4.7128296% City Banning Riverside 0.017%0.0143848% City Beaumont Riverside 0.021%0.0171135% City Blythe Riverside 0.012%0.0096714% City Canyon Lake Riverside 0.000%0.0001761% City Cathedral City Riverside 0.067%0.0553614% City Coachella Riverside 0.021%0.0173054% City Corona Riverside 0.147%0.1207083% City Desert Hot Springs Riverside 0.024%0.0200433% City Eastvale Riverside 0.000%0.0002747% City Hemet Riverside 0.051%0.0421792% City Indio Riverside 0.056%0.0457794% City Jurupa Valley Riverside 0.001%0.0008991% City Lake Elsinore Riverside 0.021%0.0172949% City La Quinta Riverside 0.063%0.0516732% City Menifee Riverside 0.032%0.0260909% City Moreno Valley Riverside 0.137%0.1130348% City Murrieta Riverside 0.048% 0.059%0.0497423% City Norco Riverside 0.016%0.0134542% City Palm Desert Riverside 0.083%0.0682465% City Palm Springs Riverside 0.076%0.0629862% City Perris Riverside 0.009%0.0076774% City Rancho Mirage Riverside 0.052%0.0431098% City Riverside Riverside 0.268%0.2206279% City San Jacinto Riverside 0.010%0.0085936% City Temecula Riverside 0.022%0.0180086% City Wildomar Riverside 0.008%0.0062500% County Sacramento County Sacramento 3.797% 4.645%3.9465887% 9 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Citrus Heights Sacramento 0.057%0.0465312% City Elk Grove Sacramento 0.130%0.1066994% City Folsom Sacramento 0.108%0.0890850% City Galt Sacramento 0.017%0.0143704% City Rancho Cordova Sacramento 0.008%0.0067679% City Sacramento Sacramento 0.721% 0.882%0.7496530% County San Benito County San Benito 0.106% 0.130%0.1101417% City Hollister San Benito 0.027%0.0225355% County San Bernardino County San Bernardino 3.259% 3.987%3.3878124% City Adelanto San Bernardino 0.008%0.0066640% City Apple Valley San Bernardino 0.025%0.0207360% City Barstow San Bernardino 0.015%0.0122056% City Chino San Bernardino 0.064%0.0525893% City Chino Hills San Bernardino 0.001%0.0006388% City Colton San Bernardino 0.031%0.0253443% City Fontana San Bernardino 0.112%0.0920543% City Grand Terrace San Bernardino 0.006%0.0051051% City Hesperia San Bernardino 0.035%0.0291522% City Highland San Bernardino 0.004%0.0029061% City Loma Linda San Bernardino 0.009%0.0071188% City Montclair San Bernardino 0.039%0.0322108% City Ontario San Bernardino 0.179%0.1472934% City Rancho Cucamonga San Bernardino 0.084%0.0689431% City Redlands San Bernardino 0.057%0.0469150% City Rialto San Bernardino 0.073%0.0603206% City San Bernardino San Bernardino 0.178%0.1461880% City Twentynine Palms San Bernardino 0.002%0.0012605% City Upland San Bernardino 0.052%0.0424460% City Victorville San Bernardino 0.033%0.0269400% City Yucaipa San Bernardino 0.016%0.0128772% 10 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Yucca Valley San Bernardino 0.003%0.0021228% County San Diego County San Diego 5.706% 6.980%5.9309748% City Carlsbad San Diego 0.128%0.1050485% City Chula Vista San Diego 0.189% 0.231%0.1961456% City Coronado San Diego 0.044%0.0359095% City El Cajon San Diego 0.113%0.0933582% City Encinitas San Diego 0.061% 0.074%0.0630289% City Escondido San Diego 0.145%0.1192204% City Imperial Beach San Diego 0.014%0.0118283% City La Mesa San Diego 0.055% 0.068%0.0575593% City Lemon Grove San Diego 0.022%0.0183911% City National City San Diego 0.080%0.0656808% City Oceanside San Diego 0.213%0.1753428% City Poway San Diego 0.062%0.0511040% City San Diego San Diego 1.975% 2.416%2.0531169% City San Marcos San Diego 0.089%0.0733897% City Santee San Diego 0.033%0.0268401% City Solana Beach San Diego 0.017%0.0138564% City Vista San Diego 0.052%0.0425144% Consolidated San Francisco San Francisco 3.026% 3.702%3.1457169% County San Joaquin County San Joaquin 1.680% 2.055%1.7460399% City Lathrop San Joaquin 0.009%0.0075394% City Lodi San Joaquin 0.053%0.0439484% City Manteca San Joaquin 0.054%0.0443454% City Ripon San Joaquin 0.013%0.0104219% City Stockton San Joaquin 0.313% 0.383%0.3256176% City Tracy San Joaquin 0.084%0.0692047% County San Luis Obispo County San Luis Obispo 0.816% 0.999%0.8484126% City Arroyo Grande San Luis Obispo 0.024%0.0199053% City Atascadero San Luis Obispo 0.029%0.0240680% 11 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City El Paso de Robles (Paso Robles) San Luis Obispo 0.043%0.0353456% City Grover Beach San Luis Obispo 0.017%0.0137881% City Morro Bay San Luis Obispo 0.020%0.0160922% City San Luis Obispo San Luis Obispo 0.077%0.0637841% County San Mateo County San Mateo 1.074% 1.313%1.1159599% City Belmont San Mateo 0.021%0.0169860% City Burlingame San Mateo 0.019%0.0152537% City Daly City San Mateo 0.044%0.0363880% City East Palo Alto San Mateo 0.013%0.0103982% City Foster City San Mateo 0.020%0.0166101% City Half Moon Bay San Mateo 0.004%0.0031638% City Hillsborough San Mateo 0.013%0.0110029% City Menlo Park San Mateo 0.015%0.0126209% City Millbrae San Mateo 0.013%0.0105836% City Pacifica San Mateo 0.016%0.0130625% City Redwood City San Mateo 0.056%0.0463511% City San Bruno San Mateo 0.021%0.0172161% City San Carlos San Mateo 0.013%0.0108885% City San Mateo San Mateo 0.052%0.0425841% City South San Francisco San Mateo 0.043%0.0353943% County Santa Barbara County Santa Barbara 1.132% 1.385%1.1768968% City Carpinteria Santa Barbara 0.001%0.0008938% City Goleta Santa Barbara 0.004%0.0028969% City Lompoc Santa Barbara 0.047%0.0389379% City Santa Barbara Santa Barbara 0.122%0.1004559% City Santa Maria Santa Barbara 0.058%0.0479179% County Santa Clara County Santa Clara 2.404% 2.941%2.4987553% City Campbell Santa Clara 0.014%0.0112566% City Cupertino Santa Clara 0.008%0.0066824% City Gilroy Santa Clara 0.025%0.0202891% 12 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Los Altos Santa Clara 0.013%0.0103338% City Los Gatos Santa Clara 0.013%0.0103220% City Milpitas Santa Clara 0.036%0.0298120% City Morgan Hill Santa Clara 0.015%0.0124619% City Mountain View Santa Clara 0.041%0.0334608% City Palo Alto Santa Clara 0.039%0.0323080% City San Jose Santa Clara 0.294% 0.360%0.3054960% City Santa Clara Santa Clara 0.067%0.0549723% City Saratoga Santa Clara 0.004%0.0034161% City Sunnyvale Santa Clara 0.053%0.0434069% County Santa Cruz County Santa Cruz 0.783% 0.957%0.8135396% City Capitola Santa Cruz 0.020%0.0168191% City Santa Cruz Santa Cruz 0.143%0.1180348% City Scotts Valley Santa Cruz 0.015%0.0126525% City Watsonville Santa Cruz 0.063%0.0520136% County Shasta County Shasta 1.095% 1.339%1.1380191% City Anderson Shasta 0.024%0.0198896% City Redding Shasta 0.284%0.2334841% City Shasta Lake Shasta 0.004%0.0031993% County Siskiyou County Siskiyou 0.228% 0.279%0.2373393% County Solano County Solano 0.760%0.6260795% City Benicia Solano 0.031%0.0253903% City Dixon Solano 0.016%0.0130849% City Fairfield Solano 0.109%0.0897317% City Suisun City Solano 0.021%0.0176183% City Vacaville Solano 0.119%0.0976497% City Vallejo Solano 0.167%0.1373644% County Sonoma County Sonoma 1.218% 1.490%1.2661290% City Healdsburg Sonoma 0.032%0.0266929% City Petaluma Sonoma 0.081%0.0667507% 13 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Rohnert Park Sonoma 0.041%0.0340759% City Santa Rosa Sonoma 0.184%0.1519070% City Sonoma Sonoma 0.022%0.0183438% City Windsor Sonoma 0.016%0.0129298% County Stanislaus County Stanislaus 1.722%1.4182273% City Ceres Stanislaus 0.041%0.0340260% City Modesto Stanislaus 0.217%0.1788759% City Newman Stanislaus 0.006%0.0046964% City Oakdale Stanislaus 0.018%0.0145531% City Patterson Stanislaus 0.015%0.0126590% City Riverbank Stanislaus 0.010%0.0085699% City Turlock Stanislaus 0.065%0.0531966% County Sutter County Sutter 0.306% 0.374%0.3179548% City Yuba City Sutter 0.074%0.0606242% County Tehama County Tehama 0.213% 0.261%0.2216654% City Red Bluff Tehama 0.014%0.0117771% County Trinity County Trinity 0.082% 0.101%0.0855476% County Tulare County Tulare 0.809% 0.990%0.8410949% City Dinuba Tulare 0.014%0.0116929% City Exeter Tulare 0.004%0.0032479% City Farmersville Tulare 0.003%0.0027879% City Lindsay Tulare 0.007%0.0057111% City Porterville Tulare 0.021%0.0171845% City Tulare Tulare 0.037%0.0302273% City Visalia Tulare 0.066%0.0545872% County Tuolumne County Tuolumne 0.486% 0.594%0.5047621% County Ventura County Ventura 2.192% 2.681%2.2781201% City Camarillo Ventura 0.002%0.0012815% City Fillmore Ventura 0.002%0.0020294% City Moorpark Ventura 0.008%0.0067337% 14 of 15 APPENDIX 1 Participating Subdivision Classification Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City Oxnard Ventura 0.156% 0.190%0.1617338% City Port Hueneme Ventura 0.021%0.0174145% City San Buenaventura (Ventura) Ventura 0.085%0.0702181% City Santa Paula Ventura 0.014%0.0119072% City Simi Valley Ventura 0.065%0.0533043% City Thousand Oaks Ventura 0.022%0.0179902% County Yolo County Yolo 0.357% 0.437%0.3713319% City Davis Yolo 0.055%0.0451747% City West Sacramento Yolo 0.066%0.0544321% City Woodland Yolo 0.058%0.0477904% County Yuba County Yuba 0.214% 0.262%0.2225679% City Marysville Yuba 0.014%0.0112079% 15 of 15 1 APPENDIX 2 Cost Reimbursement Procedure 1. Additional defined terms: a) Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were paid or incurred (i) prior to July 21, 2021 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting this CA Distributor Allocation Agreement. Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs. b) First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section X and Exhibit R of the Distributor Settlement Agreement or Section XI and Exhibit R of the Janssen Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c) Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d) Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses. 2. Cost Reimbursement to Plaintiff Subdivision a) Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating a National Opioid Settlement with Distributors, Johnson & Johnson, and others. b) Claims Procedure. i. If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section X or Exhibit R of the Distributor Settlement Agreement or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for 2 Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii. A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act. iii. The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs. iv. The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v. Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. vi. The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section V.B.2 of the Distributor Agreement. vii. A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and the Distributors a 3 report of the fees and expenses incurred by the Special Master pursuant to Section V.B.2 of the Distributor Agreement. c) Claims Priority and Limitation. i. The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii. Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices. iii. Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv. Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full. v. In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi. In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Distributor Settlement Agreement and the Janssen Settlement Agreement be used to pay Costs. d) Collateral Source Payments and Third-Party Settlement. i. In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. 4 ii. In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above.