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HomeMy WebLinkAbout1995-03-29 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA �\ P.O. BOX 8127, FOUNTAIN VALLEY,CALIFORNIA 927284127 ,,II IN44 ELLIS. FOUNTAIN VALLEY,CALIFORNIA 92708-7018 (714)962 2411 I I March 24, 1995 NOTICE OF SPECIAL MEETING JOINT BOARDS OF DIRECTORS COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA WEDNESDAY MARCH 29. 1995 - 7:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 Ellis Avenue Fountain Valley, California 92708 The Special Meeting of the Joint Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the above location, time and date. Board Se ary u COUNTY SANITATION DISTRICTS d ORANGE COUNTY. CALIFORNIA 10944 ELUS AVENUE OO.BOX 0127 I FOUNTAIN VALLEY.GUFOIWIA W72� V M 98z.xan JOINT BOARD AND EXECUTIVE COMMITTEE MEETING DATES Joint Board Meetings Executive Committee Meetinas April Apr26, 1995 Apr 19, 1995 May May 24, 1995 May 17, 1995 June Jun 28, 1995 Jun 21, 1995 July Jul 26, 1995 Jul 19, 1995 August Aug 23, 1995 None Scheduled September Sep 27, 1995 Sep 20, 1995 October Oct 25, 1995 Oct 18, 1995 November Nov 22, 1995 None Scheduled December Dec 27, 1995 None Scheduled January Jan 24, 1996 Jan 17, 1996 February Feb 28, 1996 Feb 21, 1996 March Mar 27, 1996 Mar 20, 1996 April Apr 24, 1996 Apr 17, 1996 ti- AGENDA JOINT BOARDS OF DIRECTORS COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92708 SPECIAL MEETING MARCH 29, 1995 - 7:30 P.M. In accordance with the requirements of California Government Code i Section 54954.2, this agenda has been posted in the main lobby of the Districts' Administrative Offices not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Boards for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or that there is a need to take immediate action 's which need came to the attention of the Districts subsequent to the posting of the. agenda, or as set forth on a supplemental agenda posted not less than 72 hours prior to the meeting dale. .................._................................................................................................................................._...........-....._........._.......................... i (1) Pledge of Allegiance and Invocation (2) Roll call (3) Appointment of Chair pro tem, if necessary (4) Public Comments: All persons wishing to address the Boards on specific agenda items or matters of general interest should do so at this time. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Boards of Directors except as authorized by Section 54954.2(b). r 03/29/95 (5) ALL DISTRICTS v Update by Staff and Consultants concerning developments related to the County's Commingled Investment Pool (a) Consideration of action re proposed settlement agreement relative to the County's Commingled Investment Pool. (6) ALL DISTRICTS Consideration of motion approving Amendment No. 3 to the Agreement for Removal and Disposal/Reuse of Districts' Residual Solids with Pima Gro Systems, Inc., providing for a five-year extension of the term of the agreement effective April 1, 1995 through March 31, 2000, with option for two one-year extensions, subject to annual reviews and CPI increase limits, establishing the cost at$28.00 per wet ton, providing for inclusion of provisions in the agreement to implement a cost recovery or revenue option, and to allow the Districts or Pima Gm to seek contract adjustments in the face of extraordinary price increases or decreases and authorizing staff to negotiate said price to reflect alternative use sites or technologies; and authorizing the General Manager to execute said Amendment in form approved by the General Counsel. (7) ALL DISTRICTS Consideration of Resolution No. 95-30, repealing Rules of Procedure for the Conduct of District Business Resolutions Nos. 87-51, 89-56, 91-35, 93-156 and 94-109, as repealed, establishing Rules of Procedure for the Conduct of Business of the Districts. (8) ALL DISTRICTS Report by Finance, Administrative and Human Resources Committee regarding the request by Garden Grove Sanitary District for a short-term"bridge loan" to prevent their loan default arising from the Orange County bankruptcy. (9) ALL DISTRICTS [ CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Boards,the Chair may convene the Boards in closed session to consider matters of pending or potential litigation,or personnel matters, pursuant to Government Code Sections 54956.9,54957 or 3 54957.6. [ Reports relating to (a)purchase and sale of real property; (b) matters of pending or potential litigation;(c)employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Public Records Act,may be reviewed by the Boards during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Boards on any of these subjects,the minutes will reflect all required disclosures of information. 3 [ ( [ITEM (9) CONTINUED ON PAGE 3) -2- e '9 03/29/95 V (9) ALL DISTRICTS- (Continued from page 2) (a) Convene in closed session, if necessary (b) Consideration of legal actions relative to Orange County Investment Pool bankruptcy (c) Reconvene in regular session (d) Consideration of action, if any, on matters considered in closed session (10) ALL DISTRICTS Other business and communications or supplemental agenda items, if any (11) ALL DISTRICTS Matters which a Director would like staff to report on at a subsequent meeting (12) ALL DISTRICTS Matters which a Director may wish to place on a future agenda for action and staff report (13) DISTRICT 1 Other business and communications or supplemental agenda items, if any (14) DISTRICT 1 Consideration of motion to adjourn (15) DISTRICT 2 Other business and communications or supplemental agenda items, if any (16) DISTRICT 2 Consideration of motion to adjourn (17) DISTRICT 3 Consideration of Resolution No. 95-31-3, granting a short-term loan to Garden Grove Sanitary District to prevent their loan default arising from the Orange County bankruptcy. (18) DISTRICT 3 Other business and communications or supplemental agenda items, if any (19) DISTRICT 3 Consideration of motion to adjourn (20) DISTRICT 5 Other business and communications or supplemental agenda items, if any (21) DISTRICTS Consideration of motion to adjourn -3- 03/29/95 s (22) DISTRICT 6 lJ Other business and communications or supplemental agenda items, if any (23) DISTRICT 6 Consideration of motion to adjourn (24) DISTRICT 7 Other business and communications or supplemental agenda items, if any (25) DISTRICT 7 Consideration of motion to adjourn (26) DISTRICT 11 Other business and communications or supplemental agenda items, if any (27) DISTRICT 11 Consideration of motion to adjourn (28) DISTRICT 13 Other business and communications or supplemental agenda items, if any (29) DISTRICT 13 Consideration of motion to adjourn (30) DISTRICT 14 v Other business and communications or supplemental agenda items, if any (31) DISTRICT 14 Consideration of motion to adjourn ......._............_-.._.................................................................................-.._..................-................................................................_......� NOTICE TO DIRECTORS: To place items on the agenda for the Regular Meeting of the Joint Boards, Directors shall submit items to the Board Secretary not later than the close of business 14 days preceding the Joint Board meeting. The Board Secretary shall include on the agenda all items submitted by Directors, the General Manager and General Counsel and • all formal communications. .Board Secretary: Penny Kyle (714) 962-2411, ext. 2026 i Secretary:I ...................................................Petra Tyndall....................(714) 962.2411..ext:2029'.....'._...._..._......._....._-...........__. ....... -4- 0 Y JOINT BOARDS OF DIRECTORS BOARD MEETING MARCH 29, 1995 Agenda Item (6): Consideration of the following actions relative to the Amendment of Agreement for Removal and Disposal/Reuse of Districts' Residual Solids with Pima Gro Systems, Inc: Consideration of motion approving Amendment No. 3 to said Agreement with Pima Gro Systems, Inc., authorizing: (a) A price reduction from $30.75 per wet ton to $28.00 per wet ton, reflecting new agricultural use sites, (b) An extension for a five-year period with an option for up to two additional one-year renewals effective April 1, 1995, (c) Language amendment to allow staff to negotiate said price to reflect alternative use sites and/or technologies. Summary Michael Moore, Project Specialist, will provide the recommendation of staff to amend the start date of Pima Gro's agreement to April 1, 1995 from its present date of June 1, 1995, in addition to the amendment items already approved at the March OMTS Committee Meeting. The reason for this recommendation is to take advantage of the cost savings of $1.75 per wet ton (approximately $10,000 per month) that was proposed, and the need to adjust the total compensation of the present agreement. Staff Recommendation 1. Amend Pima Gro agreement start date to April 1, 1995 reflecting a five-year (plus two one-year renewal options), and language to allow the use of alternative land application sites and technologies. ed Rol K53OD07.rpl _T COUNTY SANITATION DISTRICTS al ORANGE COUNTY. CALIFORNIA 1 B MIS Ave v0.BOA Br2) V� March 22, 1995 w W"v'LEY.uu IA 927Ma127 nm ssz-z.n STAFF REPORT OMTS95-016: Consideration of motion to authorize staff to amend Districts' agreement with Pima Gro Systems, Inc. (Pima Gro) to reflect an agreement start date of April 1, 1995 to begin realizing a cost savings of approximately $10,000 per month. Summary At the March 1. 1995 OMTS Committee Meeting, the Directors approved staff's recommendation to amend portions of the current agreement with Pima Gro Systems, Inc. regarding: • Duration (extend the agreement for ten years). • Compensation (reduce the price to $28.00 per wet ton reflecting new agricultural use site(s)). • Agricultural use site language (allows for allocation to sites to maximize reliability, while minimizing costs). The Districts' agreement with Pima Gro is due to expire on June 1, 1995, and staff initially recommended that the contract be renewed effective at that time. However, due to the unanticipated closure of the Thermal Processing Site in Riverside County and the resultant increase in price associated with hauling our biosolids to Kern County, rate of compensation to Pima Gro increased from $25.50 per wet ton to an average of $30.75 per wet ton, and Districts will exceed the total authorized compensation more quickly than anticipated. In addition, an earlier start date for renewal of the agreement will enable Districts to begin realizing the savings of$1.75 per wet ton proposed by Pima Gro. Recommendation Based on the need to increase the total compensation of Pima Gro's agreement, and the ability to begin realizing cost savings at an earlier date, and further discussion with legal Counsel staff now recommends amending the Agreement in regards to: • Duration (extend the agreement for five years with up to two one-year renewal options) with an effective start date of April 1, 1995. • Compensation (reduce the price to $28.00 per wet ton reflecting new agricultural use sites). ..✓ • Language (to allow the use of alternative land application sites and technologies). MDM:gc Ref i530O18.rpl V I SPECIAL JOINT BOARDS OF DIRECTORS MEETING AGENDA FOR MARCH 29, 1995 (7) Consideration of Resolution Repealing Rules of Procedure for the Conduct of District Business Resolutions Nos. 87-51, 89-56, 91-35, 93-155 and 94-109, as repealed, establishing Rules of Procedure for the Conduct of Business of the Districts. Summary In August of last year,discussions began on restructuring the Districts committees and establishing charters for each of them. The purpose of changing the committee structure was to improve the directors' understanding of the Districts'operations,to provide more informed policy oversight and to improve the coordination of the Districts'programs and projects. In September,the Boards adopted Resolution No. 94-109,Fixing and Establishing Rules of Procedure for the Conduct of Business of the Districts. In February,the Directors were each provided with a copy of the"Directors Handbook for Board Committees"which includes the finalized mission and charter of each committee. `..r� This month will mark the sixth month of this committee structure,the start of Don McIntyre as the new General Manager,and the initial proposal of a new staff table of organization. For these reasons it's appropriate to stand back for a moment and assess how well the committee structure is operating and what,if anything, needs to be changed to make Its structure or operation more effective. The Steering Committee is recommending that the Joint Boards committee structure be organized as follows: Committee Meets Reports To Operations,Maintenance and Technical Services 1st Wed. Executive Committee Planning,Design and Construction 1st Thurs. Executive Committee Finance,Administration and Human Resources 2nd Wed. Executive Committee Executive 3rd Wed. Joint Boards Steering 4th Wed. Joint Boards Boards of Directors 4th Wed. Steering Committee Recommendation to the Joint Boards of Directors Approve Resolution No. 95-30, repealing Rules of Procedure for the Conduct of District Business Resolutions Nos.87-51,89-56,91-35,93-155 and 94-109,as repealed,establishing Rules of Procedure for the Conduct of Business of the Districts. l:6vp4oc`9m�commdleylbdaV1g2995.7 i RESOLUTION NO. 95-30 ESTABLISHING RULES OF PROCEDURE FOR THE CONDUCT OF BUSINESS OF THE DISTRICTS A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA, FIXING AND ESTABLISHING RULES OF PROCEDURE FOR THE CONDUCT OF BUSINESS OF THE DISTRICTS AND REPEALING RESOLUTIONS NOS. 87-51, 89-56. 91-35, 93-155, AND 94-109 RE RULES OF PROCEDURE FOR THE CONDUCT OF DISTRICT BUSINESS WHEREAS, it is necessary to establish rules of procedure to facilitate the orderly handling of business to come before the Joint Administrative Organization of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California; and, WHEREAS, these Boards, from time to time, have (Y�RasSYfiH©ri, established rules of procedure, and from time to time have amended said rules so that different aspects of said procedures are to be found in a number of resolutions and motions; and, WHEREAS, it is desirable and appropriate to update, consolidate, simplify, and clarify the existing rules of procedure into one document readily accessible to the Directors, Staff and general public. NOW, THEREFORE, the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY RESOLVE, DETERMINE AND ORDER: � 1 f Section 1: That any procedures set forth in the Joint Ownership, Operation and Construction Agreement, effective July 1, 1985, as amended, hereinafter referred to as "Joint Agreemeni ", in conflict with the procedures set forth herein, take precedence. Section 2: That the following rules of procedure be adopted for the conduct of business of the Joint Administrative Organization and of each County Sanitation District of Orange County, party to the Joint Agreement: A. REGULAR MEETINGS. There shall be a regular monthly meeting of the Boards of Directors of the County Sanitation Districts of Orange County, which are parties to the Joint Agreement, on the fquo Wednesday of every month at 7:30 p.m., in the Joint Administrative Offices of the Districts, located at 10844 Ellis Avenue, Fountain Valley, California. provided, however, if the iz`' :f#><1 Wednesday of the month falls upon a legal holiday, said monthly meeting shall be held on the next day thereafter, at the same time and place, unless the Board adjourns to a different date time certain. The Boards of Directors may adjourn any regular, special or adjourned special meeting to a time and place certain, as specified in the order of adjournment. B. SPECIAL MEETINGS. A special meeting of the Board of Directors of any District may be called in either one of the following ways: (1) By the Chairman of the Board of Directors of said District, or (2) By the written request of the majority of the Directors of the District delivered to the Board Secretary. A special meeting of the Directors of the Joint Administrative Organization may be called by the Chairman of the Joint Administrative Organization or by a majority of the Executive Committee. 2 i The call or notice for special meeting shall be in writing and delivered personally or by mail at least twenty-four(24) hours before the time of such meeting, as specified in the notice. Any notice deposited in the regular mail addressed to a Director at the address he or she has on file with the Board Secretary postage prepaid, sixty (60) hours in advance of any such meeting as specified in the notice, shall be presumed to have been delivered. The call or notice shall specify the time and place of the special meeting, a description of the business to be transacted, and copies of all pertinent written materials. Such written notice may be dispensed with as to any Director or alternate Director who, at or prior to the time the meeting convenes, files with the Board Secretary a written waiver of notice. Such waiver may be given by telegram. Such written notice may also be dispensed with as to any member who is actually present at the meeting at the time it convenes. The Board Secretary shall diligently attempt to notify each Director personally of the time, place and purpose of said meeting, not less than twenty-four (24) hours before the time of said meetings. ttf 3 sal t(qg »the"ddiniriW fatty offices �7 Ci�iL y C. MEETINGS ADJOURNED BY BOARD SECRETARY. If at any regular, adjourned regular, special, or adjourned special meeting, there is not a quorum of Directors present, the Board Secretary may declare the meeting adjourned to a stated time and place and shall cause written notice of the adjournment to be given in the same manner as for a special meeting, unless such notice is waived as provided for s/ 3 in special meetings. A copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the meeting was held within twenty-four (24) hours after the time of the adjournment. D. NOTICES TO NEWS MEDIA. When any local newspaper of general circulation, radio or television station requests, in writing, notices of meetings of the Board of Directors of any District or of the Joint Administrative Organization, the Board Secretary shall thereafter, until receipt of a notice terminating said request, deliver notices of regular, regular adjourned, and special adjourned meetings to such newspapers, radio or television stations. Delivery shall be made in the same manner as delivery is made to the Directors. E. RULES OF ORDER. The business to come before each individual District, and before all the member Districts, as part of the business of the Joint Administrative Organization, shall be carried on and conducted in accordance with the provisions of the latest Edition of"Robert's Rules of Order Revised", a copy of which is on file in the Office of the Board Secretary of the Joint Administrative Organization, except where the special provisions hereinafter set forth conflict therewith. F. QUORUM. A majority of the Directors in five of the nine County Sanitation Districts of Orange County, constituting the members of the Joint Administrative Organization, shall constitute a quorum of the Joint Administrative Organization. G. CHAIRMAN OF THE DISTRICT. A Chairman (and Chairman Pro Tem) shall be elected by majority vote as the first order of business by the members of each District Board of Directors at the first meeting in May of each year, and said 4 u Chairman (and Chairman Pro Tem) shall serve at the pleasure of the majority of said members. H. JOINT CHAIRMAN AND VICE JOINT CHAIRMAN OF THE JOINT ADMINISTRATIVE ORGANIZATION. A Joint Chairman and Vice Joint Chairman of the Joint Administrative Organization shall be elected by a majority vote of the Districts at the regular meeting in July of each year. The nominations for Joint Chairman shall be made at the regular Board meeting in June of each year, and the nominees may prepare a statement of not more than 100 words stating their qualifications for the office of Joint Chairman. The statements shall be mailed to members of the Joint Boards of Directors with the agenda and other meeting material for the July regular meeting. The nominations and election for Vice Joint Chairman shall be made at the regular Board meeting in July of each year and shall be made immediately following the election of the Joint Chairman. The Joint Chairman and Vice Joint Chairman shall serve at the pleasure of a majority of the Districts. In the event the office of Chairman becomes vacant due to resignation or retirement of the incumbent prior to the expiration of the regular term, the Vice Joint Chairman shall automatically succeed to the office of the Joint Chairman and shall continue to serve through the remainder of the regular term unless sooner removed by action of a majority of the Districts. In the event the office of Vice Joint Chairman becomes vacant prior to the expiration of the regular term, nominations and the election of a Director to serve in that capacity shall be conducted at the next regular Board meeting. The person so elected shall serve the balance of the regularly- scheduled term unless sooner removed as a result of action by a majority of the .✓ 5 i Districts. Subject to the provisions of serving at the pleasure of a majority of the Districts, the Joint Chairman shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Joint Chairman. I. PRESIDING OFFICER. The Chairman of the Joint Administrative Organization shall preside during meetings of the Directors of the Joint Administrative Organization. In the absence of the Chairman of the Joint Administrative Organization, the Vice Chairman of the Joint Administrative Organization shall preside. When the Directors of a District are meeting concurrently with the Directors of other Districts for the conduct of Joint Administrative Organization business, any business for consideration and action by the District will be acted upon under the Chairmanship of the Chairman of the Joint Administrative Organization, except when delegated to the District Chairman. �, �;�;4Ri�S �RET71uY"YAT+1U NltRE' .�73i R� _<iza, y , ��fit ffti�etive Organization shaft ap01h rson ti 5 '��'#ptessure of the Boards .S ! o„$ a asd e e ..ar 7dtthe individual Districts, parttes'toiWJ 21ffi ogfeement. The S ti meetings ofthe Boards of Directors uri used by:th B e a a iat retbrd of each meeting for subii'ii iiffftfFt fr6c"tb . segment approval at the following meeting; provided, however, that ,when art 4X$9 , '' k pecial adjourned me of ofi the Board of Directors �C + �!Peeting, Minutes of saidWl�efK `.Ss a1F 1 S,''ili pitted a i i !the Bo q'Lll�Wir C iif e l y j 6 K REGULAR BUSINESS TO COME BEFORE THE DIRECTORS OF THE JOINT ADMINISTRATIVE ORGANIZATION. Insofar as practicable, all items of business to be taken up at a regular meeting of the Joint Administrative Organization shall be submitted to the Board Secretary, who shall include on the agenda all such items submitted by Directors, the General Manager and General Counsel, and all formal communications. The Board Secretary shall mail to each Director a notice of such regular meetings, together with a proposed agenda, not later than the Friday immediately preceding such regular meetings. Said agenda, insofar as possible, shall include copies of resolutions, except as hereafter provided, and a description of all matters to be considered, together with any pertinent written materials. Agendas shall be posted in a location freely accessible to the public not less than 72 hours in advance of the meeting. Resolutions designated as "standard" and adopted by the Boards of Directors from time to time, and approved as to form and content, need not be included with said agenda; provided, however, that the information completing said standard resolutions shall be set forth on the agenda listing, and copies of said standard 7 resolutions shall be on file with the Secretary at the meeting time and place. Items of business not known at the time the regular agenda is mailed as herein provided, may be considered as supplemental agenda items; provided that all requirements of the Ralph M. Brown Act (California Government Code Section 54950 at seq.) are satisfied. No business, except with consent of a majority of the Districts present, and only if permitted by the Ralph M. Brown Act, not appearing on the regular or supplemental agendas may be brought before the Directors of the Joint Administrative Organization or its member Districts. The meeting agenda shall provide for an opportunity for members of the public to address the Board(s) on items of public interest. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion, and remarks may be limited to five minutes. \" L. HANDLING OF BUSINESS AND VOTING. During the course of a Board meeting, routine matters listed on the agenda for consideration will be referred to by Agenda Item Number only. Voting on all resolutions shall be by roll call, except if waived by unanimous voice vote, in which event, the Chairman may order a unanimous ballot cast in favor of the motion or resolution under discussion. When a roll call vote is required on joint business of the Districts, and except as provided hereinafter, the name of each Director shall be called only once, and the Director's vote regarded the same for each District represented, unless a Director expresses the desire to vote differently for any District represented, or unless a member 8 �... of the Board of Directors asks that each District be individually polled. On matters of considerable interest or on which there appears to be a controversy, the motion or resolution shall be read by title or repeated by the Chairman. The Chairman shall thereafter call for discussion of the motion or resolution, at which time any member may discuss the pending matter. Any person other than a Director present at the meeting may speak on the motion if recognized by the Chairman. Sole discretion as to the extent of discussion outside of the membership of the Board shall rest with the Chairman. At the close of discussion, the Chairman may, at the Chairman's discretion, repeat the motion or resolution pending, and thereafter, call for a vote. The Board Secretary shall determine and state whether or not a motion or resolution is adopted by roll call vote. On all other matters, the Chairman shall determine the outcome of the voting. Ra?�r icy► ..... �i,�—���� Ew� W19 €ii �bYhlgi �nt6mr��t����J�Si�t�i�k$ s'�tH9 : e" brhmttkea�i5t:(?"�IS�II Z 6k1 Gt t(r BGSr£1atwrRM 9, 0k.%Bb; i UIRP VleCtsi,arld 00 C'11taii'a,tl l UDC 'aih,;Of ktA,Jpfi F „t,�ati�?j�r�!1�� �, , �a�k�ntitr trre��Ink,aar�lhiStr��r, ; WWy"#P pf lh' P xecuttue. tntn€tCHe�r g6d ts�fA� o? Hf{��Sa§�a!?���1, Olracta�a7 "DTstrict3Q��r 9 The Committee shall review the reports,al1 recommendations of the other Standing Committees and may tSo C bruit- matters related to the O(r1tOwV Shlp, operation and constrac'$ Districts and make recommendations thereon to the Joint Boards KRIM The Chair and Vice:Chair`of the Joint,Admlgtsttr- Organization shall be the Chair and Vice Chair of the EXecGtr A , t ep. respectively. The Committee'shall meet,og thet ird;V month, or may meet at the call of:its Chair:; (b) ;,XINANCE <ADMlNl$TRATlVF AND 5ESOURCES COMMITTEEi`,€There f ll be a permanent Finance, "TIIp�strative and Human Resources Committee to advise the Staff anct"I"M ('eLrofimendations on matters related to the financial, budgeting, adn l[ti6�,tffi and personnel policies and programs of the Joint Administrative Organization: The Committee shall review with the Staff the procedures for development, preparation and format of the annual Joint Works budgets and recommend appropriate change, and counsel the Staff during the budget process to assure the proper interpretation and implementation of the Boards' policies and that the desired procedures have been followed. The responsibility for consideration and adoption of the respective.individual District budgets rests with each individual District Board. The Committee is responsible to periodically interview and emend theelection of outside auditors. The Committee shall review the 10 fssult of the annual audit of the Districts' accounts with representatives of the \./ :, Ubtside audit firm, including any comments received recommah"dirip it itoOments. The Committee shall review management's respoq_N%Mth co[rents and make appropriate recommendations for implementa[i�i Periodically, the Committee shall recommend emplgYA an outside firm to audit internal control procedures to safeguard the asseWdriffe Joint Districts. The Committee shall interview and make recommendeEf nT ,, on the employment of investment-banking firms,bond counsel and ifnecesS21, or desired, financial advisors to be used in connection with the Districts'htf1 g programs. The Cplrtrniitas shall periodically coordinate recommendations on personnel eir syof the Joint Districts' operations or segments of the operations on an as`-needed basis, The Committee shall.make recommendations onpers6hMa1 policies and procedures,.labor negotiations, insurers and coverage, procurement procedures, and such other related activities as may be needed or appropriate. The Chair and Vice Chair of the Finance, Administrative and Human Resources Committee shall be appothIddf3 "the Joint Chair. The Finance, Administrative and Human Resources Committee shall meet on the second Wednesday of each month or at the its Chair. (d) OPERATIOT�3eN1FK91EkFEN7dNQE�AND TECHNICAL OR Gt E=10MITTEE. There shall be a permanent Committee designated the Operations Maintenance and Technical Services Committe�Vith,the goal �mpliance with all public health and environmental laws an rep tortsj' }ions, Maintenance and Technical Services Committee shall f, Yl JNRM .2ppropriate recommendations on the:matters pertaining toIK d"p'e`ratiogi 6M, %Jbint Treatment Works, including such matters as current and projected service/flow needs, level and quality of treatment, conservation, recycling and reuse activities, and air quality issues. j The Committee shall also review issues pertaining to the } gs�HPDES Ocean Outfall Discharge Permit including annual review of the Pontractor(s),performing the oca�kO9 to Itoring and research programs required as condition of said permit and related issues regarding protection of the U marine waters off metropolitan Orange County's coastline from impacts resulting from the Districts' operations and discharge of treated wastewater. The Committee shall also review matters pertaining.to contractual arrangements by the Districts to provide sewerage services to areas outside the Districts'boundaries or approved spheres of influence MW The Committee shall review plans for the future needs of the Districts,.explore aitei fiues'and make recommendations on solutions to the Planning, Design and Construction Committee, In carrying out its responsibilities, the Committee shall regularly study, visit observe the various operational functions of the Joint Treatment Works. 12 ..J hair'of the Operatigt%,,Maintenano+ ROMI !! ! ' �NftN4r�~�d��fcaf,e��rnantl„�l ° '. .Otrudion earn Otte65T9MMO IONNO, MTERAMMM ° f IC,'pviewangt. Pi4@4A� rydao,11 ' :m �!O < -',. 6L.f�lt9I projects whl,`4 ,�, .� 0 4b �;4j "k t 15 M al'otenance and Tob "kl�SI j YfttSs JIJt d"rtlsw,est btrsh> 2iµpGitCl S!!h(q fa"r"tro' t7t;r1 5h seNices tht3 e r i jffrc+ few 3truction projects for seit831iti �ih � (3fl,CdktisEb�,i ws and Board policies. Said oversight shalftjgltYftbtttw ? 5 Professio � etyices and public work4�h, ion projects and ad#1e044 et"s,`jC116reto In carrying out its responsibilities,.the Committi38 @ 18 791 11d regular status reports on the projects from Staff, and �i 13 Sari'struction`Committ O"W90 b, W"'M The'PteittttiiYl< �»cii eft "fit tfie"firstThursdayoffi# 7 YE ca tf C ,C aJ ,;. (2) STEE ING"COMNI T7'EE, Ih dddit(ohI-(3 ,- fii i itt hW46lnt Chair may appoint a Steering Committee corPOWMWO fir, the Vice Joint Chair and the Chairs of the 194 �59MM 1N offiffiff [i tite flow of aot(vrT 6S to the Comm ttcl § ttee shall also conduct:atohnance eval x k t eC,Bnerat Manager and submit recommendationsoncompensation'td x. ..x the'ENWtive Committee and the .foii%,'8oards of Directors. The Committee shall also review theGeneral Manager's evaluation and compensation of senior management direct reports, based on established criteria, and senior rr�sqsowenfs goals and objectives for the following year. The Steering Committee shall meet on the fodrthtW c`WON each month preceding the Joint Boards meeting,or at the call of the Joini (3) SPECIAL AND'A[Y-MOC'COMMITTEES. fr adtl ;" Standing Committees, the Chair of the Joint j5@01nistrative Organization qvffi a Standing Committee, or upon.vote of a majority of the Districts th . _ appoint, from time to time, Special or Ad Hoc Committees to study and report od specific matters. Such Committees shall be temporary in nature, and theirassigntri0ft 14 , shall pertain to a current, specific issue: Upon completion of the assigned task,the Ad Hoc or Committee will be dissolved. The Chair and Vice Chair of Special and Ad Hoc Committees shall be appointed by Chair of the appointing authority. Special or Ad Hoc Committees shall meet at the 06111I f N. MOTION TO REFER TO A STANDING COMMITTEE j;ko Director at a Joint Administrative Organization meeting may,move to have a'tidlI'or any.other activity affecting the members of the Joint Administrative Organization ore*, one of the member Districts,referred to a Standing Committee for study and report. This motion shall be a privileged motion, and when duly seconded, discussion thereof strOJl( a"limited to Directors ohty. Said motion shall receive an affirmative vote of a ¢IsjO, of the Districts for adoption. Section 3: That Resolution Nos. 87-51 , 89-56, 91-35, 93-155, and 94-109 and all other Resolutions previously adopted by these Boards with regard to meeting procedures, are hereby repealed, and that all Resolutions or motions or portions thereof in conflict herewith are hereby rescinded and made of no further effect. Section This Resolution shall become effective upon add li$�i PASSED AND ADOPTED at a regular meeting held , 1995, 1 15 .r JOINT BOARDS OF DIRECTORS SPECIAL MEETING MARCH 29, 1995 Agenda Item (8): Consideration of a short-term loan to the Garden Grove Sanitary District to prevent their loan default which could harm all borrowing entities in the County Summary: One of our member agencies, the Garden Grove Sanitary District, has a $5.4 million debt service payment due May 1, 1995. Director Swan proposed to the Finance and Personnel Committee that the Districts loan the Sanitary District the funds for a short term to prevent a default which could harm all the borrowing entities in the County, including us. The short-term loan would be secured by first rights to any proceeds from the Orange County Investment Pool and a loan to the Sanitary Districts from Bank of America. A 77% withdrawal from the OCIP would provide approximately $4.2 million for the Sanitary District to repay a short-term loan. The Committee directed staff to continue to evaluate the legality and feasibility of a short-term loan to Garden Grove Sanitary District and to return to the April 12 Committee meeting with a report. Timely final approval of a loan was expected to require a special Board meeting. Staff Recommendation That the District 3 Board, or the Joint Boards, consider the request from the Garden Grove Sanitary District for a loan to enable them to make a May 1, 1995 debt service payment. J\WPOOL\BSYG95\09�-09 COUNTY SANITATION DISTRICTS of ORANGE COUNTY. CALIFORNIA March 29, 1995 10W Ewe AVENUE F.o.eQX8127 FOUNTAIN VALLEY.CALIFOANK 0272"127 nule®E.un STAFF REPORT LOAN TO GARDEN GROVE SANITARY DISTRICT Background One of our member agencies, the Garden Grove Sanitary District, has a $5.4 million debt service payment due May 1, 1995. Director Swan proposed to the Finance and Personnel Committee that the Districts loan the Sanitary District the funds for a short term to prevent a default which could harm all the borrowing entities in the County, including us. The short-term loan would be secured by first rights to any proceeds from the Orange County Investment Pool and a loan to the Sanitary Districts from Bank of America. A 77% withdrawal from the OCIP would provide approximately $4.2 million for the Sanitary District to repay a short-term loan. The Committee directed staff to continue to evaluate the legality and feasibility of a short-term loan to Garden Grove Sanitary District and to return to the April 12 Committee meeting with a report. Timely final approval of a loan was expected to require a special Board meeting. In the meantime, a special Joint Board meeting has been called to review OCIP matters. Proposal General Counsel has reviewed the statutes and codes and has determined that it would be legal for one or more County Sanitation Districts to loan funds to the Garden Grove Sanitary District for its public purpose. Staff and General Counsel have agreed that it is significantly simpler and less costly for only one District to make the loan. The proposal discussed by the Finance and Personnel Committee would result in a $5.4 million loan to the Sanitary District until their OCIP distribution. There are two scenarios for this. The Sanitary District has filed with Judge Ryan a petition for an immediate release of 77% of their deposit, or approximately$4.2 million. The fallback position is that the Sanitary District would be paid out of the OCIP with the rest of the depositors, estimated to be in June 1995. This loan would earn interest in an amount similar to that which would have been earned if the District had invested the funds. Loan to Garden Grove Sanitary District Page 2 „ March 29, 1995 The remainder of the Sanitation District loan to the Sanitary District, approximately $1.2 million, would be repaid to the District from proceeds of a new loan to the Sanitary District from the Bank of America. Thus, within three to six months, the Sanitation District would be completely repaid with interest. The Finance and Personnel Committee recommended that this proposal be considered. Alternative Between the Committee meeting and now, Director Sheldon Singer from the Sanitary District has proposed an alternative. This proposal eliminates the need for the Sanitary District to borrow from the Bank of America. Instead, the Sanitation District would carry a five-year loan for approximately$1.2 million due from the Sanitary District. The Sanitation Districts can legally execute a five-year note. We are attempting to get a legal opinion from Garden Grove Sanitary District that it can legally issue such a note. Several points would need to be clarified or established before entering such an agreement, including the ability of the Sanitary District to repay the loan, revenue coverage ratios, adequate sewer use rates, and status with LAFCO. GGS:lc .r�wooaaa�nnEv.rrensam�mccmui Settlement Agreement Plan � Cash ♦ Notes � Claims � ± 100% A Plan Litigate or Negotiate for ° B Cash Remainder a 1 n Opt Out Litigate � -- Settlement Terms : Option A ALL SANITATION AGENCIES - (in millions) Settlement Recovery Secured Repayment Cash Notes Claims Claims Sanitation S305.7 S20.6 S45.8 S50.3 ' I -■ . Settlement Terms : Option B ALL SANITATION AGENCIES (in millions) Cash Litigate Sanitation .7 or Negotiate ----- --- -------- --- -- - I JI Path to 100 % Recovery Notes z $20.6 million settlement Secured Plan A Claims tt $45.8 million ® Repayment Claims $50.3 million t t`F Cash Distribution $305.7 million Plan B Litigate + $48.9 million (Previously or withdrawn) $354.6 million Negotiate � � v Issues . Three Pools vs. One Pool - accounting records exist - incorporated in Term Sheet 6 - Recovery Notes maintains $.80 / $.90 deal . Withholds - Previously Treated as Cash - question of timing - reduces cash distribution by less than 1 cent Improvements . Recovery Notes will be "Good as Gold" . Litigation Proceeds flow directly from the Settlement Secured Claims to the Repayment Claims . Pool Participants will never be subordinate to Merrill Lynch . Repayment Claim is stronger County Sanitation Districts END-OF-MONTH CASH BALANCE 1995 Calendar Year $40.0 $31.5 $30.9 $30.0 — -- - - - - - - - - - - - - - - - -♦- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $23.3 $22.7 ♦ $19.2 $20.0 - - - - - - ♦ - $ .1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0 $10.0 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0 0 $0.5 � $0.0 O $0.3 � -$10.0 - - - - - - - — - - - - - - - - - - - - - - - - - - - - - - - - — $e:a -$20.0 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -415.9 - - - - - - - - - - - $23.3 -$30.0 $2s.s �1 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Assuming no more pool money, no new loans (to us or from us) and historic accounts payable spending rate . l Scenario 1A COUNTY SANITATION DISTRICTS OF ORANGE COUNTY Estimated Monthly Cash Flows (in Millions of Dollars) As of March 29. 1995 1995 jam," February March Agit M[ J= J& At11111at September October Nove0be[ Dagembet Beginning Cash Deposits (6.33) 23.34 19.18 16.11 31.52 30.84 22.74 0.56 18.42) (15.91) (23.27) (25.01) Release of Funds in County Pool 46.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 gece'o 1i; User Fee &Tax Apportionments 11.00 7.80 5.30 22.10 7.10 0.00 1.50 0.00 0.00 0.00 7.60 33.60 Interest&Other Income 1.18 0.87 0.76 1.03 1.00 0.79 7.27 0.81 0.62 1.15 0.90 0.60 Subtotal: Receipts 12.18 8.67 6.06 23.13 8.10 0.79 2.77 0.81 0.62 1.15 8.50 34.20 R...we ants: Payroll m 2.70 2.70 3.90 2.70 2.70 2.70 2.70 3.90 2.70 2.70 2.70 2.70 Accounts Payable 4.68 3.86 4.43 4.22 6.21 5.52 4.90 5.12 4.64 5.04 6.77 6.04 Taxable Commercial Paper Program 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 COP Program Interest&Principal 1.13 6.28 0.80 0.80 0.77 0.77 17.35 0.77 0.77 0.77 0.77 0.77 Subtotal: Requirements 28.51 12.83 9.13 7.72 8.68 8.99 24.95 9.79 8.11 8.51 10.24 9.51 Ending Cash Deposits 23.34 19.18 16.11 31.52 30.94 22.74 0.66 18.421 (15.91) f23.27) 125.01) 10.32) Assumptions No Future Withdrewals After $46.9DO.000 No Now Bpnawirg Interest Earnings on Average Cash Balance @ 4% COP Service After March at March Rates priority Capital Improvement Plan per 12130 Eno,Estimates Operating Payable$Based on 1994 Actual Averages COUNTY SANITATION DISTRICTS OF ORANGE COUNTY Schedule ofEstlmated District Cash Flows for the period April 1,1995 Mru July 31,1995 (In Millions ofOollars) As of Marsh 29, 1995 April 19% May 1996 June 1995 July 1995 Est User Fee Interest& Payroll Eat User Fee Interest& Payroll Est Interest& Payroll Est. User Fee Interest& Peyroll Est District Balance &Tax &Other A/P& Balance &Tex &Other AIP& Balance &Other A1P& Balance &Tax &Other A/P& Balance No. 3131195 Apport. Income Debt.Sm. 4130196 Apport. Income Debt.Saw. 5131196 Income obt.Sow W30195 Appon. Income ebl.Sew 7131195 1 1,224 1,800 101 760 2.366 600 99 855 2,209 78 885 1.402 100 125 2.923 (1,296) 2 4,950 7,000 321 2.410 9,891 2,230 313 2,711 9,723 246 2,808 7,163 500 395 8,286 (228) 3 5,629 7,700 318 2.387 11,180 2,410 310 2,686 11,194 2" 2,780 8,658 800 392 7.607 2,043 5 469 1.200 37 275 1,421 400 36 310 1,547 28 320 1,255 50 45 1,391 (41) 6 867 1.000 50 374 1,543 350 49 420 1,522 38 435 1,125 60 61 1,021 226 7 1,363 2,000 83 623 2,823 650 81 701 2,853 64 726 2,191 100 102 1.808 SOS 11 285 1,200 63 469 1,079 400 61 628 1,012 48 547 513 75 77 1.385 (720) 13 214 200 10 75 349 60 10 84 335 8 87 256 15 12 91 192 14 1,187 0 46 347 see 0 45 390 541 35 403 173 57 433 (203 Total 1 16.108 22,100 1,029 7,720 31,5171 7,100 1,004 8,685 30,9361 789 8.989 22.738 1.500 1,266 24,945 557 OPTION A SETTLEMENT AGREEMENT (Millions of Dollars) CASH NOTES OTHER FUTURE PAYMENTS GRAND TOTAL(b) 1000 75.20 4.44 9.70 10.70 0.30 1.70 Do 102.00 "Original" Cash Previous Recovery Settlement Repayment Professional Withheld FNMA 12/6/94 Distribution Emergency Notes(a) Secured Claims(a) Reserve Llquldetlon Escrow Balance 5195(a) Withdrawals Claims(a) Proceeds Proceeds CSDOC $454.3 $294.7 $46.9 $20.1 $44.2 $48.5 $1.4 $7.5 $0.0 $463.3 NOTES: (a) Includes pre-petition Interest&misallocated Interest which are recovered In cash,recovery notes,settlement secured claims and repayment claims In an approximate 77"/0/3%/9%/11q distribution (b) Interest will also be paid that has been accrued on the average daily balance we had remaining In the pool since December 7,1994. This amount will be added to the cash distribution expected In May 1995. CAN WE WAIT FOR OUR CASH ? • The Only REAL Money is the Pool Money • Merrill Lynch and Others Challenging Status of Pool • Without the Pool, Access to Our Cash is Uncertain ' We Are Under Water in July • Delay Causes Fiscal Uncertainty • $17.7 Million COP Payment August 1 , 1995 WHEN DO WE CHOOSE BETWEEN OPTION "A" OR " B"? • By April 17 When Electing to Settle • May Change Choice Prior to Eleventh Day After Entry of Ryan's Order • May Change From Option "A" to Option "B" Between June 5 to June 8 If Recovery Notes Not "Good As Gold" PRESENTATION BY: RICHARD ARDOIN BRONSON , BRONSON & McKINNON • County Litigation Strategy • County Settlement Strategy 4 PRESENTATION BY: RICHARD ARDOIN BRONSON , BRONSON & McKINNON • County Litigation Strategy s • County Settlement Strategy e OPTION "A" 1 . Certainty 2. Participation 3. Safety OPTION "B" 1 . Control 2. Creativity 3. Potential OPTION "A" 1 . Certainty a. Claims Allowed 100% b. Fixed Participation in 3rd Party Recoveries c. Fixed Payment and Security Structure 6 OPTION "A" 2. Participation a. Right to Review and Advise County Attorneys b. Participation in County's Superior Ultra Vires (Illegality) Standing c. Interest in All Shared Claims OPTION "A" 3. Safety a. Approved Payment Structure on Allowed Claims b. Favorable Forum c. No Litigation Substitute for Recovery Notes OPTION " B" 1 . Control a. Unlimited Authority to Pursue Any Party, Any Claim b. Power to Control All Strategic and Tactical Decisions c. Independent Settlement Authority OPTION " B" 2. Creativity a. Credible Claims Against the County b. Ability To Set County and 3rd Parties Against One Another c. Flexibility to Intervene and/or Disrupt County Actions OPTION " B" 3. Potential a. No Theoretical Limitation on Recovery from 3rd Parties, County b. Possible Priority on Some Part of Recovery from County 4 HAZARDOUS MATERIAL SPILL STATUS REPORT Contractor: Couch&Sons a Site of Spill: Slater Avenue Pump Station Incident: Diesel Fuel Spill Date of Spill: March 23, 1995 DATE TIME ACTMTY COMMENTS 3/22"5 3:00 p.m. Fuel transfer from a 500 gallon above ground storage tank to The diesel fuel entered Slater Avenue and Bowed into an an onsite generator resulted in a diesel fuel spill. open and closed channel storm drain running through Central Park and a housing development The channel terminates at a storm water pump station which discharges water to the Bolas Chica Ecological Reserve. 4B0 p.m. Huntington Beach Fire Department Hazardous Material At approximately 7:00 pm.,Ancon Marine,Inc.started Response Team arrived at the site after receiving a call from cleanup activities coder the direction of the H.B.Public a citizen. A representative from Coach&Sons stated that Works staff. Efforts involved manual clean up of the approximately 2 gallons of diesel fuel had spilled. The H.B. channel,and the use of sorbant pads and containment booms. Pubec Works Hazardous Materials Team was contacted to assess the damage to the street,storm drains,and park. Couch&Sons hired Ancon Marine,Inc.to assist in the dean up activities. 3/24/95 8:00 a.m. CSDOC Construction Inspector finds cleanup activities at The inspector notified the CSDOC Construction Manager site. who then notified CSDOC Safety and Emergency Response staff. 8:45 a.m. CSDOC Safety and Emergency Response staff started an The area adjacent to the diesel tank and the generator had investigation of the incident An inspection of the pump been cleaned by Ancon Marine,Inc.prior to inspection. station and adjacent area was conducted. 9:00 a.m. A meeting and site walk was conducted to survey the extent The scope and extent of the cleanup activities were of the damage resulting from the spill. A strong odor of expanded. The full extent of the conmmination was not diesel fuel was noticeable at various locations throughout the readily identified. park. A visible sheen was on the water running through the channel. =05 1:00 P.M. A meeting was held to develop a clean up plan with The H.B.Public Works staff requested the removal of all representatives from H.B.Public Works,H.B.City contaminated vegetation and soil in the open channel. The Attorney's Office,H.B.Fire Department,Cofich&Sons,and pipe section of the storm drain must be steam cleaned. CSDOC. Discussion included the possibility that an Sorbznt booms were to be placed at strategic locations underground storm water drain pipe may have been between the spill site and the storm water pump station. contaminated as a result of the spill. This underground pipeline must be inspected to determine if it was contaminated. DATE TMIE ACTMTY Comments 4:00 p.m. The U.S. Coast Guard,State of California Department of Fish The clean up activities continued until 6:00 p.m. and Game,the Regional Water Quality Control Board visited the clean up site. 3/25195 7:00 a.m. Clean up activities continued with a reduction in the number Cleanup activities in the open channel continued throughout of elm up staff. the day. 3126/95 No elm up activities. Diesel fuel contamination remained in the channel. 3/27/95 1:00 p.m. A site inspection was conducted to determine if the elm up The H.B. Fire Department Hazardous Materials Response was progressing and if there were any additional anions Tenet collected water samples from the underground drainage necessary m clean the site. pipe mW the charnel. The samples appeared to be contaminated. Clean up activities were not scheduled by Cogch. 3/27/95 3:00 p.m. A meeting was held to discuss and outline a remedial action H.B.Public Works expressed concern that elm up activities plan for the site clean up. Colich&Sons estimated that 35 had been suspended for two days and they outlined minimum gallons of diesel fuel had been spilled on 3/23195. elm up requirements for this project. Environmental consultants working for Colich&Sons proposed a clean up plan to achieve these requirements and agreed to provide a written plan by 3128/95. 1:00 p.m. No clean up activity at site. A meeting was conducted to H.B.Public Woks demanded that work begin on 3/29/95 and review the written plan. continue 24 hems a day until satisfactory completion. The written plan was discussed. The regulatory agencies again soled the clean up criteria. One dead duck was found Boating in the channel. If additional wildlife is injured or killed,the California Department of Fah and Game may take over the supervision of the elm up effort and charge all expenses back to Colich&Sera. The Regional Water Quality Control Board stipulated that sampling must be conducted on the section of channel between the park and the storm water pump station. 3/28/95 3:30 p.m. Colich&Soo obtained necessary permits from Huntington The clean up activities resume in the park. Beach. 3129/95 12:30 p.m. Clean up activities continued in the park. Approximately 50 Ancon isolated the storm drain system and began steam fah and frogs were removed from the storm drain system and cleaning and removing debris host the culvert areas. Clean placed in an adjacent lake. Colich&Sons revised the up activities,24 hours per day,will continue within the park remedial action plan. boundaries. It has been estimated that the park clean up will continue approximately 7 more days. After the park is completed,the clam up effort will move to the residential area west of Golden West. EMrWAS3G�!'Fa Lr 2 IHEI WSW MMT j6§E RCEFj41 p,5i !r. :mRT flR51 CU55 MMl,ppstAcaFr,EFaa.IA0RU `-II zYTI4r _ 3 RECORD NSIISA=O OOHE ISTM RAIL FSFNI -- DA7E0. �. ' jam (•;[TN!rl CCukT 4 ::;�� _ �t,•.;;.eirs_IF• FILED DE PUn iURA 5 6 7 ��iZ 2 JI9 w arMR� u.Futt NITED STATES DISTRICT COURT T FOR THE CENTRAL DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, et al., ) No. CV 90-3122-AAH (Jrx) 12 Plaintiffs, ) Hj ORDER GRANTING DEFENDANTS' MOTION FOR 111, 13 V. ) SUMMARY JUDGMENT ON THE 3 FIRST CAUSE OF ACTION BASED 14 MONTROSE CHEMICAL CORPORATION ) ON THE STATUTE OF LIMITATIONS OF CALIFORNIA, et Al., ) IS ) Defendants. ) 16 ) 17 AND RELATED COUNTERCLAIMS, CROSS-) CLAIMS AND THIRD-PARTY ACTIONS ) 1x S )19 The motion of MLDeCendants MONTR65E CHEMICAL CORPORATION OF 31 Al 20 CALIFORNIA; ATKFMIX THIRTY-SEVEN, INC.; STAUFFER MANAGEMENT 21 COMPANY; ICI AMERICAN HOLDINGS, INC.; and CHRIS-CRAFT INDUSTRIES, INC. 22 (hereinafter'Defendants") for summary judgment came on regularly for hearing before this Court AL61<23 on �L 24 After considering the moving and opposition papers, arguments of counsel and all other 25 matters presented to the Court, IT IS HEREBY ORDERED THAT the motion is GRANTED. 26 IT IS SO OMED, DATED— D � "41d copy Ptys > — 28 i f. !3 ,:ctice PtYs twn�n�wgn'nma MAR 23 I995 'am S'7h piSl�l.T ilfi'r&s ~' crus�_l ATIOsm AT Ua 3 EXECUTIVE SUMMARY OF COMPREHENSIVE SETTLEMENT AGREEMENT RE ORANGE COUNTY INVESTMENT POOLS PLEASE BE ADVISED THAT THIS EXECUTIVE SUMMARY IS BEING PROVIDED TO YOU FOR YOUR CONVENIENCE ONLY, AND IS NOT INTENDED TO BE, AND SHOULD NOT BE, RELIED UPON BY YOU IN DETERMINING WHETHER TO ACCEPT OR REJECT THE SETTLEMENT AGREEMENT. YOU SHOULD CAREFULLY REVIEW THE SETTLEMENT AGREEMENT IN ITS ENTIRETY WITH YOUR COUNSEL AND OTHER PROFESSIONALS. IN THE EVENT THAT ANY PROVISION OF THE SETTLEMENT AGREEMENT IS INCONSISTENT WITH THIS EXECUTIVE SUMMARY, THE TERMS OF THE SETTLEMENT AGREEMENT SHALL CONTROL. I. General. The Settlement Agreement provides that you may elect to have your rights in the Orange County Investment Pools treated in one of three ways, as outlined herein. Each Pool Participant is directed to the financial schedules (Exhibits 1, 2 and 3) attached to the Settlement Agreement for a compilation of how its rights will be treated. A. Participants who elect Option A will receive cash which averages approximately 77% of their December 6, 1994 investment balances in the pools, and notes, and allowed claims against the County in return for a broad release of the County, and other persons, entities, and parties as described in the Settlement Agreement, and assignment of all Pool-related Claims to the County. It is the intent that Participants electing Option A receive the consideration provided for in the Settlement Agreement as their sole consideration, and, except as specifically provided that they not retain litigation rights or claims against any person, entity or party related to the investment pools and/or this case. B. Participants who elect Option B will receive the above cash distribution only, with reservation of most of their litigation rights against the County. C. Participants who choose not to settle will not receive any distribution and will preserve their present rights and claims. II. Summary of Option A -- Treatment of Non-School Participants. Non-School Participants who elect Option A shall receive items A-D below. A. Cash Distributions: 20729387 1. Cash distributions will be received from one of three separate pools (overall approximately 77C/$1 minus Withheld Proceeds identified below) . Each Participant will receive differing amounts depending upon, among other things, the pool in which its funds were invested. a. Bond Pool b. Commingled Pool C. Special Investment Funds 2. Withheld Proceeds are funds remaining with broker/dealers and banks -- currently approximately 2C/$1 -- and are not available for immediate distribution. a. County expects Withheld Proceeds to be less than 1C/$1 by Effective Date of Settlement Agreement. b. Withheld Proceeds are to be distributed to settling Participants upon recovery by the County. i. Delay in distribution is required to avoid loss of litigation claims. ii. Any Pool Participant electing Option A may, as identified in the Settlement Agreement, elect to receive Recovery Notes (21.63% of total) , Settlement Secured Claim (31.38%) & Repayment Claim (46.99%) instead of waiting for distribution of Withheld Proceeds. B. Recovery Notes: 1. Each Non-School Pool Participant receives face amount of Recovery Notes to reach approximately 8O0/$1. 2. County must use its best efforts to make Recovery Notes easily convertible to cash at face value by June 5, 1995. C. Settlement Secured Claims: 1. Each Non-School Pool Participant receives a Settlement Secured Claim in an amount to reach approximately 89C/$1. 2 . The Settlement Secured Claims are secured by a first priority security interest on up to 65% 0£ litigation recoveries by County against third-party defendants. However, the percentage of litigation proceeds securing the Settlement Secured Claims declines with the percentage of Participants electing Option B. 20729387 -2- 3. Settlement Secured Claims shall be treated as allowed claims against the County in the County' s bankruptcy case. D. Repayment Claims: 1. Each Non-School Pool Participant receives Repayment Claims in an amount of 11C/$1. (The purpose of this package is to provide each Participant electing Option A payments and claims having a face value of 100�/$1. ) 2. Repayment Claims are secured by a second-priority security interest on up to 65% of litigation recoveries by County. 3. Repayment Claims are allowed claims against the County in the County's bankruptcy case. However, Repayment Claims cannot be paid, except from litigation recoveries, until Recovery Notes, Settlement Secured Claims, and administrative and other priority claims against, and certain bond debt of, the County and the claims of the County's vendors are paid and certain County-administered accounts are restored to the 89C/$1 level. III. Summary of Option A -- Treatment of School Participants. School Participants electing Option A shall receive A-C below. A. Cash Distributions: 1. Generally, same as Non-School Participants. 2. "Taxable note school districts" will have their cash distributions reduced by amounts being withheld from Pools by FNMA concerning those notes and receive an assignment of the County' s claims against FNMA instead. B. Recovery Notes: Each School Pool Participant receives Recovery Notes in a face amount to reach 90C/$1. C. Repayment Claims: Each School Pool Participant receives Repayment Claims in the amount of 10q/$1. The purpose of this package is to provide School Participants electing Option A payments and claims having a face value of 1000/$1. IV. Summary of Option B -- All Pool Participants. Participants electing Option B shall receive A-C below. A. Cash Distributions: Same as Option A but without the right to recover Withheld Proceeds as Recovery Notes, Settlement Secured Claims and Repayment Claims. 2m29M7 -3- B. Recovery Notes, Settlement Secured Claims, and Repayment Claims: None. C. Reservation of Rights: Participants who elect Option B shall reserve all rights against the County except the ability to prevent the distribution of the Pool assets or to recover any distribution of Pool assets. V. Non-Settling Pool Participants. The Settlement Agreement will preserve the legal claims of non-settling Participants. VI. Timing of Implementing Settlement. A. Election by each Pool Participant to enter into Settlement Agreement must be made by April 17, 1995. B. Effective Date of Settlement Agreement: 1. 11 days after the Bankruptcy Court enters an order approving the Settlement Agreement (anticipated by end of April) , provided 80% in number and 90% in dollar amount of all Pool Participants become Settling Pool Participants. • Cash from the pools to be distributed within 5 business days of the Effective Date unless an order approving the settlement is stopped by appeal. 2. Pool Participants may change election of Option A or B after the Bankruptcy Court enters an order approving the Settlement Agreement and prior to the expiration of the 11-day period after the Court's order is entered but before it becomes a final order. 3. Pool Participants electing Option B may thereafter change their election to Option A until the earlier of June 5, 1995 or the date on which the County sends a notice that no further changes will be permitted. 4. Any Participant may change its election at any time with the County' s consent. C. If the County does not make Recovery Notes easily convertible to cash by June 5, 1995, Pool Participants previously electing Option A may change their election to Option B by June 8, 1995. 20729387 -4- OCIP Summary of • Dollars 7.378 •. 2.653 : . 12 1 .252I /IN iNJJi/ $0 Schools Non-Schools Non-Schools County Total Cash ■ Withheld Proceeds Recovery Settlement Secured Claims % Repayment Claims . County Unrecovered OCIP Percentage of Recovery 12/6 Balance 1 11' , 1U30/0 ' ' 11 11' nn....nnnnnnn.,�:' nmm�mnmm�mn�l'' nnnnnnmm�nnm/�:: .1 11' . 4 1 1 1' , 11' . 1 11' , SchoolsCommingled Bond Cash E Recovery Notes Settlement Secured Claims [:] Repayment Claims Withheld Proceeds E] • Post-petition Interest OCIP Percentage of Recovery Schools 120.00% -103%-- - --------2% 1% 100.00% _. 1 140160% m M00% rn R c d 60.00% 0 d a 40.00% 20.00% 0.0 % Cash ® Recovery Notes ® Repayment Claims Withheld Proceeds ❑ Pre-petition Interest ❑ Post-petition Interest OCIP Percentage of Recovery Non-Schools Commingled Pool 120.00^io _ 103% - 2%--- 1 % 1 % 100.00% -- - - - - - - -- 11 % 9% rn m v 60.00% 00 N °- 75% 40.00% — 20.00% 0.00% Cash ® Recovery Notes ® Settlement Secured Claims ❑ Repayment Claims ® Withheld Proceeds ❑ Pre-petition Interest ® Post-petition Interest OCIP Percentage of • Non-Schools : • • & Specific 1 10 . .�" ..,. 1 11' , .1 11' 1 11' i 1 1/' , 1 11' , WithheldCash Settlement Secured Claims E] Repayment Claims Proceeds . Pre-petition Interest IIII Post-petition March 28, 1995 6:25pm MASTER COMPREHENSIVE SETTLEMENT AGREEMENT RE ORANGE COUNTY INVESTMENT POOLS THIS AGREEMENT is entered into as of 1995, by and among the County of Orange (the "County'), on its own behalf and on behalf of the Orange County Investment Pools, an instrumentality of the County (the "Pools"), and each of the school districts, special districts, cities and other public agencies and instru- mentalities identified on Exhibits 1 and 2 hereto (in the singular, each such entity being a "Non-County Pool Participant," and collectively the "Non-County Pool Participants") which becomes a party to this Agreement by timely executing an "Agreement to Become Settling Non-County Pool Participant" in the form of Exhibit 4 hereto on or before the Deadline specked below (each such Non-County Pool Participant being a "Settling Non-County Pool Participant'; and the County, the Pools, and the Settling Non- County Pool Participants being referred to collectively as the 'Parties" and individually as a "Party'), with reference to the following facts and recitals: RECITALS A. The County and the Pools are each debtors in cases pending under chapter 9 of title 11 of the United States Code in the United States Bankruptcy Court for the Central District of California, which cases have been assigned Case Nos. SA 94-22272-JR (the "County Chapter 9 Case") and 94-22273-JR (the 'Pools Chapter 9 Case"), respectively (collectively, the "Chapter 9 Cases"). 3865.0F 3865.000 B. The Pool Committee and the Subcommittees (each as defined in Section 1) and their professionals, though involved in the administration of the Pools Chapter 9 Case and the negotiations leading to this Agreement, are not parties to this Agreement between the County, the Pools and Settling Non-County Pool Participants and make no representations or warranties regarding the substance of this Agreement or the accuracy of the Exhibits thereto. C. Prior to the filing of the Chapter 9 Cases, funds of or administered by the County and funds of each of the Non-County Pool Participants were invested by the County Treasurer as part of the Pools. D. The Pool Assets are insufficient to permit the payment in full of all of the Pool Balances (as defined in Section 1) of all of the County Claimants (as defined in Section 1) and of all of the Non-County Pool Participants. Substantial disputes have developed among the Parties with respect to, among other things, (i) the legal interests of the Parties in the Pool Assets; CH) the appropriate allocation of the Pool Assets among the County Claimants and the Non-County Pool Participants, and (iii) Pool-Related Claims (as defined in Section 1). Among other assertions, the Settling Non-County Pool Participants claim that they are entitled to receive the full amount of their investments in the Pools before any distribution is made therefrom to the County Claimants. The County disputes this claim. E. The Parties desire to agree upon an allocation and distribution of the Pool Assets and the resolution of any and all Pool-Related Claims and Pools-related matters between or among certain of them. BS-013F -2- 3865.000 IN CONSIDERATION OF THE FOREGOING, and for other good and valu- able consideration, the receipt of which is hereby acknowledged, it is hereby agreed by and between the Parties hereto as follows: AGREEMENT 1. Definitions. As used herein, the following terms have the following meanings: a. "Affiliate" of a person or entity means any other person or en- tity which is controlled by, controls or is commonly controlled with such person or entity, directly or indirectly. b. "Agreement" means this Comprehensive Settlement Agreement Re Orange County Investment Pools. C. "Agreement to Become Settling Non-County Pool Participant' means an agreement in the form of Exhibit 4 hereto. d. "Assigned Pool-Related Claims" means Pool-Related Claims which are assigned to the County or which are to be prosecuted by the County and the proceeds of which are to be received by the County pursuant to the provisions of Section 12. e. 'Bankruptcy Cade" means title 11 of the United States Code, 11 U.S.C. §§ 101 et sec., as in effect on the Petition Date, together with all amendments, modifications and replacements as the same exist on any relevant date to the extent applicable to the Chapter 9 Cases. I. 'Bankruptcy Court" means the United States Bankruptcy Court for the Central District of California or, in the event such court ceases to BB-013F 3a 5=0 -3- exercise jurisdiction over the Chapter 9 Cases, such court or adjunct thereof that exercises jurisdiction over the Chapter 9 Cases in lieu of the United States Bankruptcy Court for the Central District of California. g. 'Business Day' means any day other than a Saturday, a Sunday, or a 'legal holiday," as the term 'legal holiday' is defined in Bankruptcy Rule 9D08. h. "Chapter 9 Cases" has the meaning set forth in the Recitals hereto. i. "County' has the meaning set forth in the introductory para- graph hereof. j. "County-Administered Accounts" means the accounts admin- istered by the County which are identified in Exhibit 3 and, notwithstanding anything to the contrary in this Agreement, the accounts labeled 'Irvine Coast Assessment District' and 'Irvine Coast CFD 88-1" on Exhibit 2. All references to "Irvine Coast CFD 88-1" on Exhibit 2 shall be deemed to be references to 'Irvine Coast Assessment District," and the amounts listed on Exhibit 2 under the headings "Total Recovery Notes," 'Total Settlement Secured Claims," "Total Repayment Claim" and 'Professional Reserve" next to the names 'Irvine Coast Assessment District' and 'Irvine Coast CFD 88-1" shall be deemed for all purposes to be zero. k. "County Chapter 9 Case" has the meaning set forth in the Recitals hereto. BB-013F 4 3 5.000 I. "County Claimant" means the County and each County Ad- ministered Account; when used in the plural, "County Claimants" means the County and all County-Administered Accounts. M. "County Creditors' Committee" means the Official Committee of Creditors of the County of Orange appointed in the County Chapter 9 Case pursuant to section 1102(a)(1) of the Bankruptcy Code. n. "Deadline" means 5:00 p.m. on April 17, 1995, the latest date on which a Non-County Pool Participant may elect, without the consent of the County, to become a Settling Non-County Pool Participant by executing and de- livering to the County, in the manner specified therein, an Agreement to Become Settling Non-County Pool Participant. o. "Deficiency Amount" means, as to each Non-County Pool Participant listed on Exhibit 1 or 2, the sum of the amounts listed next to the name of such Non-County Pool Participant on such Exhibit under the headings "Total Recovery Notes," 'Total Settlement Secured Claims" and 'Total Repayment Claims." p. "Effective Date" has the meaning set forth in Section 16. q. "Excluded Claims" means any claims, demands, obligations, debts, liabilities, suits, causes of action, remedies or rights: (1) arising under this Agreement; (2) arising from acts or omissions occurring after the Effective Date which are not required or specifically contemplated by this Agreement; (3) which a Settling Option A Pool Participant may have against () any underwriter of secur- ities issued by or for the benefit of such Settling Option A Pool Participant, with respect to any indebtedness incurred by such Settling Option A Pool Participant 386013E 3865.000 .5- in connection therewith or (ii) any financial advisor, attorney, accountant or other professional advisor to such Settling Option A Pool Participant arising out of advice given or services rendered in its capacity as such to such Settling Option A Pool Participant regarding a decision to invest in the Pools or the issuance of debt by such Settling Option A Pool Participant; (4) which the County may have against (i) any underwriter of securities issued by or for the benefit of the County, with respect to the issuance of such securities or the incurring of any debt evidenced thereby or (ii) any financial advisor, attorney, accountant or other professional advisor to the County arising out of advice given or services rendered in Its capacity as such to the County wlth respect to matters unrelated to the management or investment of assets allocated to the Pools; (5) which a Settling Option A Pool Participant may have respecting the deposit of funds by such Settling Option A Pool Participant in any court or with the clerk of any court in accordance with applicable law, but only to the extent that such deposit is not reflected in such Settling Option A Pool Participant's Pool Balance and does not form a basis for a distribution to such Settling Option A Pool Participant under section 3; and (6) resulting from the collection of developer impact fees by the County for the benefit of any Settling Option A Pool Participant. r. "Fannie Mae Escrow" means the escrow established pursuant to the "Stipulation with Respect to Preservation of Claims and Setoff Claims be- tween Debtors and Federal National Mortgage Association," in which $118,500,000 has been deposited. S. "Final Order" means an order or judgment issued by and en- tered on the docket of the Bankruptcy Court or another court with jurisdiction 85-013F �- 3565.000 over the matter that has not been reversed, stayed, modified, or amended, and as to which either (i) the time to appeal has expired and no appeal has been timely filed, or (it) If an appeal has been timely filed, such appeal has been resolved by the highest court to which the order or judgment was timely appealed or from which certiorari was sought. t. "Interim Distribution" means, with respect to any County Claimant or Non-County Pool Participant, any distribution made to such County Claimant or Non-County Pool Participant subsequent to December 6, 1994, out of the Pools pursuant to any order of the Bankruptcy Court other than the Tax Dis- tribution Order, and any other distribution out of the Pools made subsequent to December 6, 1994, which has been or is to be applied against such County Claimant's or Non-County Pool Participant's distribution entitlement or Pool Balance or distributional entitlement in respect thereof pursuant to any order of the Bankruptcy Court, but does not Include any distributions under the Tax Distri- bution Order. U. "Litigation Costs" means all costs and expenses incurred by the County in prosecuting or otherwise attempting to collect or realize upon Pool- Related Claims against anyone other than a Party to this Agreement (including Pool-Related Claims of the County and Assigned Pool-Related Claims), the pro- ceeds of which would constitute Litigation Proceeds, including, without limitation, the fees and costs of attorneys and other professionals, including experts, engaged in connection therewith and the cost of computerized document management systems. BB-013F M65.000 -7- V. "Litigation Proceeds" means any cash or other property (ex- cluding any cancellation or modification of indebtedness of the County, but subject to Section 11(f)) received or recovered from anyone other than a Party to this Agreement, including, but not limited to, awards of interest, attorney's fees, penalties, actual or punitive damages, and increased ownership interests in property, on account of any Pool-Related Claims of the County and any of the Assigned Pool-Related Claims, whether by way of settlement, litigation, or otherwise, but specifically excluding any payment or distribution received by the County out of Pool Assets or out of the Withheld Proceeds or the Fannie Mae Escrow and any other payment or other distribution received by the County under this Agreement. W. "Net Litigation Proceeds" means the amount which remains after deducting Litigation Costs from Litigation Proceeds. X. "Net Proceeds," when used with respect to an asset, means the proceeds received upon the sale or other disposition of or realization upon such asset, less (i) commissions and other costs incurred in such sale or other disposition or realization, and (ii) any payments made or withheld from such proceeds on account of any claim secured by such asset. Y. "Non-County Pool Participant" and "Non-County Pool Partici- pants" have the meanings set forth in the introductory paragraphs hereof; provided, however, that notwithstanding anything to the contrary in this Agreement, the Irvine Coast Assessment District and Irvine Coast CFD 88-1 shall not be deemed to be Non-County Pool Participants, and shall instead be deemed to be County-Administered Accounts. BB-013F IM5.000 -8. Z. "Non-School Pool Participant' means, in the singular, each Non-County Pool Participant that is identified on Exhibit 2, and, in the plural ("Non-School Pool Participants"), all Non-County Pool Participants identified on Exhibit 2. aa. "Non-Settling Pool Participant' means any Non-County Pool Participant which is not a Settling Non-County Pool Participant. alb. "Option A" means, for any Settling Non-County Pool Partici- pant, the treatment described in Section 7(a). ac. "Option B" means, for any Settling Non-County Pool Partici- pant, the treatment described in Section 7(b). ad. 'Parry" and "Parties" have the meanings set forth in the intro- ductory paragraph of this Agreement. ae. 'Petition Date" means December 6, 1994, the date on which both of the Chapter 9 Cases were fled with the Bankruptcy Court. af. 'Pools" has the meaning set forth in the introductory paragraph of this Agreement. ag. 'Pool Assets" means the securities, cash and other similar assets which are or should have been reflected on the books and records of the County as assets of the Pools as of December 6, 1994 (including any proceeds thereof), but does not include any amounts paid pursuant to the Tax Distribution Order. an. 'Pool Balance" means, as to each County Claimant and Non- County Pool Participant identified in Exhibit 1, 2 or 3, the aggregate amounts set BB-013r 3865.000 -9 forth next to the name of such County Claimant or Non-County Pool Participant on such Exhibit under the heading "Pool Cash Value." ai. "Pool Balance Fraction" means, as to each County Claimant or Settling Non-County Pool Participant, that fraction, the numerator of which is such County Claimant's or Settling Non-County Pool Participants' Pool Balance, and the denominator of which is $5,688,240,393.41 (reflecting the aggregate Pool Balances). aj. "Pools Chapter 9 Case" has the meaning set forth in the Recital "A" hereto. ak. "Pool Committee" means the Official Investment Pools Partici- pants' Committee appointed in the Pool Chapter 9 Case pursuant to sections 901(a) and 1102(a)(1) of the Bankruptcy Code. In the event that the Pools Committee is reconstituted as a separate committee or a subcommittee of the County Committee in the County Chapter 9 case, "Pools Committee" shall thereafter mean such reconstituted committee or subcommittee. al. "Pool-Related Claims" means any and all claims, demands, obligations, debts, liabilities, suits, causes of action, remedies or rights of any kind whatsoever, at law, in equity, by statute or otherwise, whenever arising, whether known or unknown, suspected or unsuspected, fixed or contingent, liquidated or unliquidated, matured or unmatured, choate or inchoate, pending or not pending, which in any way relate or pertain to the Pools, the operation or management of the Pools, any transaction entered into by or on behalf of the Pools, any investment made in, by, or on behalf of the Pools, the manner in which assets of the Pools have been invested, purchased or sold, any purchase ea-013F -10- 3868.000 or sale of assets by or on behalf of the Pools, any deposit of funds into the Pools or withdrawal of funds from the Pools, any other transfer of assets by the Pools or of assets of the Pools, the conduct, act or omission of any person or entity (including, without limitation, the County, the Non-County Pool Participants, and the officers, officials, directors and employees thereof (in their capacity as such)) in connection with the Pools or with any transaction with, or investment of, the Pools, any statement, representation or omission to state respecting or relating to the Pools, and any other act or omission which otherwise in any way relates or pertains to the Pools or the manner in which the affairs of the Pools have been conducted; provided. however, that the term 'Pool-Related Claims" does not include any Excluded Claims. am. "Professional Fees Reserve" means a reserve fund to be created and held for the payment of expenses of the Pool Committee and all Subcommittees thereof, as approved for payment by the Pool Committee or ap- propriate Subcommittee, including, without limitation, all fees and expenses of any attorneys and financial advisors retained by the Pool Committee and all Subcommittees thereof, as approved for payment by the Pool Committee or appropriate Subcommittee. an. "Recovery Notes" means notes to be issued by the County, which shall be general obligations of the County with a superpriority over all other administrative, priority and general unsecured claims and have such other terms and provisions as are agreed upon in writing by the County and the Pool Com- mittee. ee-013F 3865.000 t t ao. "Related Parties" means, with respect to any Party, such Party's successors, predecessors, assigns and present and former officers, directors, officials, and employees, in each case only in their respective capacities as such. ap. "Released Claims" has the meaning set forth in Section 20. aq. "Releasing Party" means each Settling Non-County Pool Par- ticipant, the Pools and the County (on its own behalf, and on behalf of any County Administered Account only to the extent, if any, that the County has authority to grant a release on behalf of such County Administered Account). ar. "Repayment Claim" means an allowed, nonpriority, noncontin- gent, fully liquidated, undisputed claim in the County Chapter 9 case: (i) which shall be deemed to have arisen prior to the County Chapter 9 Petition Date; (ii) on account of which the holder shall not be entitled to receive and shall not receive any payment or other distribution from the County or out of any assets of the County, whether under a plan of adjustment for the County or otherwise, other than the Secured Claim Percentage of the Net Litigation Proceeds following the payment of all Settlement Secured Claims under Section 11(d)(ii), until after the payment in full of all Senior Claims against the County and the payment in full of all interest on such Senior Claims which accrues or matures after the County Petition Date, whether or not any claim for such post-County Petition Date interest is allowed under the Bankruptcy Code, and even if such claim for post- County Petition Date interest is disallowed as a claim in the County Chapter 9 Case, whether as a result of section 502(b) of the Bankruptcy Code or otherwise; (iv) which shall be secured only by a second priority lien on the Secured Claim Ia 13F 12 3865.000 Percentage of Net Litigation Proceeds which shall be junior only to the lien granted under Section 11 to secure the Settlement Secured Claims and shall share ratably with all other Repayment Claims in the Secured Claim Percentage of the Net Litigation Proceeds following the payment of Settlement Secured Claims, as provided in Section 11; and (v) which shall bear interest, allowable only as a Repayment Claim, only to the extent, if any, that such interest is required under applicable law and is allowable as a claim under the Bankruptcy Code. as. "Reserved Recovery Notes" has the meaning set forth in Sec- tion 9. at. "Reserved Distributions" has the meaning set forth in Sec- tion 9. au. "School Pool Participant" means each Non-County Pool Par- ticipant listed on Exhibit 1 hereto. ay. "Section _" means a section of this Agreement. aw. 'Secured Claim Percentage" means the product of multiplying 65% by that fraction, the numerator of which is the sum of the Deficiency Amounts of all Settling Non-School Pool Participants who elect Option A, and the denominator of which is $832,833,023.61 (representing the sum of the Deficiency Amounts of all Non-School Pool Participants). ex. "Senior Claim" means any allowed claim against the County (i) which is an administrative or other claim against the County which is entitled to priority under the Bankruptcy Code; (ii) under or evidenced by the County of Orange California 1994-95 Tax and Revenue Anticipation Notes, Series A; the 8B-013F 3865.000 -13• County of Orange California 1994-95 Tax and Revenue Anticipation Notes, Series B; the County of Orange California 1994-95 Taxable Notes; the County of Orange 1994-95 (Teeter Plan) Taxable Notes; the County of Orange 1994-95 (Teeter Plan) Tax-Exempt Notes; the County of Orange California 1994-95 Pooled Tax and Revenue Anticipation Notes; any tax exempt Tax and Revenue Anticipation Notes which the County issues in the future; the County of Orange Series 1994E Taxable Pension Obligation Bonds and any extension, renewal, modification, refunding or refinancing of any of the foregoing to the extent that such extension, renewal, modification, refunding or refinancing is in a principal amount not in excess of the amount of the indebtedness which is extended, renewed, modified, refunded or refinanced; (iii) for goods or services provided, delivered or rendered to the County or any agency or instrumentality thereof prior to the Petition Date (other than claims of any County Administered Account) limited, in the case of a claim described in this clause (iii) for which a County Administered Account is liable, to the extent that funds are not made available for the payment thereof by such County Administered Account as a result of the distributions made to such County Administered Account under this Agreement; (iv) under the Recovery Notes; (v) which is a Settlement Secured Claim; or (vi) which the County agrees to grant or allow to any County Administered Account which is a Releasing Parry and is bound by the assignment contained in Section 12, to compensate such County Administered Account for all or any portion of the amount by which such County Administered Account's Pool Balance exceeds the amount of the distributions made to such County Administered Account out of Pool Assets, but only to the extent of (x) debt containing the same terms and conditions of the 6 B-013r -14- IM5.000 Recovery Notes in a principal amount equal to up to three percent (3%) of such County Administered Account's Pool Balance; and (y) debt containing the same terms and conditions as Settlement Secured Claims in a principal amount equal to up to nine percent (9%) of such County Administered Account's Pool Balance; provided, however, that the term "Senior Claim" shall not include any allowed claim against the County (x) which is subordinated to any other allowed claim against the County under section 510(b) or 510(c) of the Bankruptcy Code (other than by reason of any contractual subordination provision governed by Section 510(a)), (y) which is a claim allowed under Section 7(a)(2) or Section 7(b)(3) of this Agreement; or (z) which is held for the benefit of any bank, broker, dealer or other third parry against which any Party has a Pool-Related Claim (determined without regard to the provisions of Section 12), or any Affiliate or Related Parry of any such bank, broker, dealer or other third party. The County agrees that it will not utilize any debt repayment funds reflected in the County Administered Accounts applicable to claims of the type described in clause (ii) to the extent that such debt repayment funds are or have been maintained by the County as a reserve with respect to a claim of the type described in clause (i), to fund the County's operating expenses or those of any other County Claimant. ay. "Settlement Secured Claim" shall mean a non-priority, non- contingent, fully liquidated, undisputed, allowed general unsecured claim against the County, which shall be deemed to have arisen prior to the County Petition Date, which shall not be subject to subordination to any other non-priority unsecured claim against the County under Section 510 of the Bankruptcy Code or otherwise and which shall be secured as provided in Section 7 by a first BB-013r 5 3865.000 priority security interest in and lien on the Secured Claim Percentage of the Net Litigation Proceeds. Regardless of any valuation of the collateral securing the Settlement Secured Claim under Section 506(b) of the Bankruptcy Code, the entire unpaid amount of the Settlement Secured Claim shall be and remain secured by the Secured Claim Percentage of the Net Litigation Proceeds. az. 'Settling Non-County Pool Participant' has the meaning set forth in the introductory paragraph hereof. be. 'Settling Non-School Pool Participant' means each Non- School Pool Participant who becomes a Parry to this Agreement by executing an Agreement to Become Settling Non-County Pool Participant. bb. "Settling Option A Pool Participant' means each Settling Non- County Pool Participant who has elected Option A as of June 8, 1995 or who timely elects Option A thereafter in accordance with Section 7. bc. "Settling School Pool Participant' means each School Pool Participant who becomes a party to this Agreement by executing an Agreement to Become Settling Non-County Pool Participant. bd. 'Subcommittees" means the Official School and College Dis- tricts Subcommittee of the Pool Committee, the Official Orange County Cities Subcommittee of the Pool Committee, and the Official Non-Orange County Cities Subcommittee of the Pool Committee. In the event that any Subcommittee is re- constituted as a separate subcommittee in the County Chapter 9 case, the term "Subcommittees" shall include such reconstituted subcommittee. be. 'Tax Distribution Order" means the "Order Authorizing Dis- bursement of Certain Prepetition Real Property and Other Taxes, and Other Col- 69-013r 3565.000 -16 lected Receipts in Accordance with Non-Bankruptcy Law and Otherwise Applic- able Orange County Regulatory Procedures" entered by the Bankruptcy Court in the Pools Chapter 9 case on or about January 26, 1995. bf. 'Transfer" has the meaning set forth in section 101(54) of the Bankruptcy Code, 11 U.S.C. 3 101(54). bg. "Unallocated Interest" means any interest actually earned by the Pools, other than on any amounts in the Fannie Mae Escrow, on any investments described in Exhibit 8, and on any Withheld Proceeds, which was not taken into account by the accountants for the County and the Pool Committee in calculating the amounts set forth under the heading "Cash Distribution on Effective Date" in Exhibits 1, 2 and 3. bh. "Withheld Proceeds" means any cash or cash equivalents Withheld from the Pools which constitute the proceeds of any Pool Assets, but which have been withheld by a third party other than in the Fannie Mae Escrow under an adverse claim of right to such proceeds. The Withheld Proceeds include the amounts held by the adverse claimants identified in Exhibit 5 hereto. In the event that any amounts are recovered from any such adverse claimant which could only constitute a recovery of Withheld Proceeds or Litigation Proceeds, whether as a result of a judgment of a court, an award of an arbitrator, or a settlement with such adverse claimant, then unless such recovery is the result of a court order or arbitrator's award which is accompanied by findings which permit an allocation of such recovery as between Withheld Proceeds and Litigation Proceeds, the amounts so received from such adverse claimant, up to the amount of the Withheld Proceeds held by and not previously recovered from BB-013F SM5.000 -17- such adverse claimant, shall be deemed to be a recovery of Withheld Proceeds, and the remainder be deemed to be Litigation Proceeds. bi. 'Withheld Proceeds Fraction" means, as to each County Claimant or Settling Non-County Pool Participant, that fraction, the numerator of which is such County Claimant's or Settling Non-County Pool Participants' Withheld Proceeds Share, and the denominator of which is $121,213,282.32 (representing the total Withheld Proceeds Shares). bj. "Withheld Proceeds Share" means, as to each County Claimant or Non-County Pool Participant identified on Exhibit 1, 2 or 3, the amount set forth next to the name of such County Claimant or Non-County Pool Participant on such Exhibit under the heading "Withheld Proceeds." bk. "Withheld Proceeds Shortfall" means, as to each Settling Option A Pool Participant, the amount by which such Settling Option A Pool Par- ticipant's Withheld Proceeds Share exceeds the amount of the Withheld Proceeds distributed to such Settling Option A Pool Participant under section 3(d). 2. Distribution of Pool Assets to County Claimants. Subject to Section 4, the Pools, through the County, shall distribute to each County Claimant the following amounts out of the Pool Assets: a. Except as set forth in Section 2(b), the amount set forth next to the name of such County Claimant under the heading "Cash Distribution on Effective Date" on Exhibit 3, minus any Interim Distribution to such County Claimant made after March 17, 1995. b. Notwithstanding Section 2(a), the Irvine Coast Assessment District (which includes Irvine Coast CFD 88-1) shall receive, in lieu of the BB-013F 1B. 3B65.000 distribution specified in Section 2(a): (i) those unliquidated mutual fund securities which are reflected in the balance listed next to "Irvine Coast Assessment District" on Exhibit 2 under the heading "Pool Cash Value" — "Speck"; and (ii) the amount by which the aggregate balances listed next to "Irvine Coast Assessment District" and "Irvine Coast CFD 88-1" under the heading "Cash Distribution on Effective Date" on Exhibit 2 exceeds $47,994,429.38, minus any Interim Distributions made to the Irvine Coast Assessment District (or Irvine Coast CFD 88-1) after March 17, 1995. C. Such County Claimant's Withheld Proceeds Fraction of any Withheld Proceeds which are released from the claim of the adverse party by which they are held and turned over to the Pools. d. Such County Claimant's ratable portion of any Unallocated Interest which is in excess of $2,176,493.13 (such $2,176,493.13 representing amounts owing and unpaid to Salomon Brothers for its services in the liquidation of Pool Assets, which amount shall be paid to Salomon Brothers out of the Unallocated Interest), based on the relationship of the weighted average daily balances of such County Claimant in the Pools subsequent to the Petition Date to those of all County Claimants and Non-County Pool Participants (in each case, calculated by excluding any balance attributable to the investments described on Exhibit 8). 3. Distribution of Pool Assets to Settling Non-County Pool Participants. Subject to Section 4, the Pools, through the County, shall distribute to each Settling Non-County Pool Participant the following amounts out of the Pool Assets: BB-013F 3M5.000 -19. a. Except as provided in Section 3(b), the amount set forth next to the name of such Settling Non-County Pool Participant under the heading "Cash Distribution on Effective Date" on Exhibit 1 or 2, as applicable, minus any Interim Distributions made to such Settling Non-County Pool Participant after March 17, 1995. b. Notwithstanding Section 3(a), each Settling Non-County Pool Participant who is identified on Exhibit 8 shall receive the following in lieu of the distribution specified in Section 3(a): (i) the unliquidated Guaranteed Investment Contract ("GIC") which was included in calculating such Settling Non-County Pool Participant's balance under the heading "Pool Cash Value" — "Specific" on Exhibits 1 or 2, as described on Exhibit 8; and (ii) the amount by which the balance listed next to the name of such Settling Non-County Pool Participant under the heading "Cash Distribution on Effective Date" on Exhibit 1 or 2 exceeds the amount set forth next to the name of such Settling Non-County Pool Parti- cipant on Exhibit 8 under the heading "Balance As of December 6, 1994," minus any Interim Distributions made to such Settling Non-County Pool Participant after March 17, 1995. C. Such Settling Non-County Pool Participant's Withheld Pro- ceeds Fraction of any Withheld Proceeds which are released from the claim of the adverse party by which they are held and turned over to the Pools; provided, however, that following the assignment by a Settling Option A Pool Participant of its right to distributions out of Withheld Proceeds under this Section 3(c) to the County in accordance with Section 7(a)(4), any amounts which would otherwise 3M5.3r 3865.000 -20- be paid under this Section 3(c) to such assigning Settling Option A Pool Participant shall instead be distributed to the County. d. Such Settling Non-County Pool Participant's ratable portion of any Unallocated Interest which is in excess of$2,176,493.13 (such $2,176,493.13 representing amounts owing and unpaid to Salomon Brothers for its services in the liquidation of Pool Assets, which amount shall be paid to Salomon Brothers out of the Unallocated Interest), based on the relationship of the weighted average daily balances of such Settling Non-County Pool Participant in the Pools subsequent to the Petition Date to those of all County Claimants and Non-County Pool Participants (n each case, calculated by excluding any balance attributable to the investments described on Exhibit 8). 4. Procedures for Distributions of Pool Assets. On or before the fifth Business Day after the Effective Date, the Pools, through the County, shall make an initial distribution out of the amounts available for distribution out of Pool Assets (i) pursuant to Sections 2(a), 2(b), 3(a) and 3(b); (i) pursuant to Sections 2(c) and 3(c) (to the extent, if any, that Withheld Proceeds are then available for distribution); and (ill) pursuant to Sections 2(d) and 3(d) (to the extent, if any, that the allocation of Unallocated Interest can be timely determined and the Unallocated Interest exceeds $2,176,493.13). In the event that, following such initial distribution, additional Withheld Proceeds or previously undistributed Unallocated Interest in excess of such $2,176,493.13 are or become available for distribution to County Claimants and Non- County Pool Participants, the County, on behalf of the Pools, shall make a distribution therefrom as soon as practicable thereafter in accordance with Sections 2 and 3. Each Settling Non-County Pool Participant shall furnish the County, acting on behalf of the BB-013F 3865.000 -21- Pools, with its bank wire or other payment instructions in writing; and the County may rely on such written instructions in making distributions under this Agreement. 5. Professional Fee Reserve. On or before the fifth Business Day fol- lowing the Effective Date, the County, acting on behalf of the Pools, shall distribute into the Professional Fee Reserve, out of the amount available for distribution out of Pool Assets, the aggregate of all amounts listed under the heading "Professional Reserve" following each Settling Non-County Pool Participant's name on Exhibits 1 and 2 which have not previously been paid pursuant to Bankruptcy Court order to the professionals engaged by the Pool Committee and the Subcommittees. This distribution to the Professional Fee Reserve shall be placed in escrow with an escrow agent selected by the Pool Committee pursuant to an escrow agreement in a form to be approved by the Pool Committee. Payments shall be made out of the Professional Fee Reserve only upon the entry of an order of the Bankruptcy Court authorizing such payments. Any funds remaining in the Professional Fees Reserve after the payment of all professional fees and expenses of the Pool Committee and the Subcommittees shall be retained in such escrow to be used to pay the fees and expenses of the professionals utilized by the Pool Committee and the Subcommittees as they may be reconstituted in the County Chapter 9 Case and for such other purposes as may be specified in the escrow agreement. 6. Assionment by Pools of Rights Respecting Fannie Mae Escrow. The Parties agree and acknowledge that all amounts presently contained in the Fannie Mae Escrow, and the securities whose sale generated such amounts, constitute Pool Assets, and not assets of any particular County Claimant or Non-County Pool Participants. As a matter of settlement only, and in an effort to achieve an overall BB-013r -�- 3M5.000 resolution of their disputes, the Parties have agreed to allocate the amounts in the Fannie Mae Escrow (and any interest earned thereon or allocable thereto) as part of the distribution of Pool Assets to the County and to the Non-County Pool Participants with respect to whose indebtedness such amounts were withheld. This settlement and allocation in no way constitutes an admission or acknowledgement by any Parry that the amounts in the Fannie Mae Escrow are anything other than Pool Assets or that any par- ticular County Claimant or Non-County Pool Participant has or had any specific interest In the amounts In the Fannie Mae Escrow or in any securities whose sale generated such amounts, and in no way constitutes any other admission or acknowledgement as among the Parties or as to anyone not a Party to this Agreement. As part of their settlement, the Parties agree that: a. The Pools hereby assign, convey and transfer to the County any and all rights and claims of the Pools with respect to the $90,000,000 amount reserved in the Fannie Mae Escrow with respect to $90,000,000 of County of Orange, California 1994-95 Taxable Notes and any interest earned on or allocable to such amount after the Effective Date. The Parties agree that to the extent that any amounts so reserved (and any interest earned thereon or allocable thereto) are released from the Fannie May Escrow, they shall be paid to and become funds of the County which the County may retain and utilize for its own account. b. The Pools hereby assign, convey and transfer to the Orange County Board of Education any and all rights and claims of the Pools with respect to the $6,300,000 amount reserved in the Fannie Mae Escrow with respect to $6,300,000 in Orange County Board of Education 1994 Taxable Notes, and any interest earned on or allocable to such amount after the Effective Date. B9-013F 3M5.000 -23- The Parties agree that to the extent that any amounts so reserved (and any interest earned thereon or allocable thereto) are released from the Fannie Mae Escrow, they shall be paid to and become funds of the Orange County Board of Education, which the Orange County Board of Education may retain and utilize for its own account. C. The Pools hereby assign, convey and transfer to the Newport-Mesa Unified School District any and all rights and claims of the Pools with respect to the $7,000,000 amount reserved in the Fannie Mae Escrow with respect to $7,000,000 in Newport-Mesa Unified School District 1994 Taxable Notes, and any interest earned on or allocable to such amount after the Effective Date. The Parties agree that to the extent that any amounts so reserved (and any interest earned thereon or allocable thereto) are released from the Fannie Mae Escrow, they shall be paid to and become funds of the Newport-Mesa Unified School District, which the Newport-Mesa Unified School District may retain and utilize for its own account. d. The Pools hereby assign, convey and transfer to the North Orange County Community College District any and all rights and claims of the Pools with respect to the $7.000.000 amount reserved in the Fannie Mae Escrow with respect to $7,000,000 in North Orange County Community College District 1994 Taxable Notes, and any interest earned on or allocable to such amount after the Effective Date. The Parties agree that to the extent that any amounts so reserved (and any interest earned thereon or allocable thereto) are released from the Fannie Mae Escrow, they shall be paid to and become funds of the North 69-013F -24- 3865.660 Orange County Community College District, which the North Orange County Community College District may retain and utilize for its own account. e. The Pools hereby assign, convey and transfer to the Irvine Unified School District any and all rights and claims of the Pools with respect to the $8,200,000 amount reserved in the Fannie Mae Escrow with respect to $8,200,000 in Irvine Unified School District 1994 Taxable Notes, and any interest earned on or allocable to such amount after the Effective Date. The Parties agree that to the extent that any amounts so reserved (and any interest earned thereon or allocable thereto) are released from the Fannie Mae Escrow, they shall be paid to and become funds of the Irvine Unified School District, which the Irvine Unified School District may retain and utilize for its own account. 7. Distribution by County in Respect of Deficiency Amounts of Settling Non-County Pool Participants. Each Settling Non-County Pool Participant may elect treatment with respect to its Deficiency Amount in accordance with either Option A or Option B, described below. The election shall be made by initialing the applicable box marked "Option A" or "Option B" in Paragraph 2 of the Agreement to Become Settling Non-County Pool Participant. Such election may be changed only as follows: (1) such election may be changed by submitting to the County, at the address for notice to the County, a new Agreement to Become Settling Non-County Pool Participant, appropri- ately executed and with the new option elected by proper initialing, at any time prior to the eleventh day following the entry of the order of the Bankruptcy Court described in Section 16(b); (ii) an election of Option B thereafter may be changed to an election of Option A only until the earlier of (x) 9:00 a.m. PDT on June 5, 1995 and (y) the date and time on which the County provides written notice that the ability to change an election of 89.013F 3865.000 -25- Option B to an election of Option A is no longer available, provided that for purposes of this clause (ii), and notwithstanding Section 22, such notice will be deemed to have been provided and to be effective at 9:00 a.m. PDT of the morning of the date on which such notice is mailed or otherwise transmitted by the County, regardless of the time of day on which such notice is actually transmitted and regardless of when such notice is actually received; and (iii) If and only if the County fails to obtain a liquidity facility satisfactory to the Pools Committee as described in Section 15 by no later than June 5, 1995, an election of Option A may be changed to an election of Option B until 5:00 P.M. PDT June 8, 1995. Except as provided in clauses (i), (ii) and (iii) above, an election of Option A or Option B may be changed only with the written consent of the County, which may be granted or withheld in the County's sole discretion. a. Option : Subject to Sections 8 through 10, inclusive, each Settling Non-County Pool Participant who elects Option A shall: (1) receive from the County a principal amount of Recov- ery Notes equal to the amount set forth next to that Settling Non-County Pool Participant's name on Exhibit 1 or 2 under the heading 'Total Recovery Notes;" (2) in the case of a Settling Non-School Pool Participant who elects Option A, be allowed a Settlement Secured Claim against the County in the County Chapter 9 Case in an amount equal to the amount set forth next to that Settling Non-School Pool Participant's name on Exhibit 2 under the heading 'Total Settlement Secured Claims;" (3) be allowed a Repayment Claim against the County in the County Chapter 9 Case in an amount equal to the amount set forth 1013r 3865.000 -26- next to that Settling Non-County Pool Participant's name on Exhibit 1 or 2 under the heading 'Total Repayment Claims"; and (4) f and only if such Settling Non-County Pool Participant has a Withheld Proceeds Shortfall after all distributions to such Settling Non-County Pool Participant have been made pursuant to Sections 3(c) and 4, then such Settling Non-County Pool Participant shall receive: (i) an additional principal amount of Recovery Notes out of the Reserved Recovery Notes equal to 21.63% of such Settling Non-County Pool Partici- pant's Withheld Proceeds Shortfall; (ii) be allowed an additional Repayment Claim against the County in the County Chapter 9 Case in the amount of 46.99% of such Settling Non-County Pool Participant's Withheld Proceeds Shortfall; and (iii) be allowed a Settlement Secured Claim against the County in the County Chapter 9 Case in the amount of 31.36% of such Settling Non-County Pool Participant's Withheld Proceeds Shortfall. Notwithstanding the foregoing, each Settling Non-County Pool Participant who elects Option A may, at any time, assign, transfer and convey to the County, by a writing in form and substance reasonably satisfactory to the County, all of such Settling Non-County Pool Participant's rights to receive any further distribution out of Withheld Proceeds under Sections 3(c) and 4. In the event of such assignment, such Settling Non-County Pool Participant shall receive a principal amount of additional Recovery Notes out of the Reserved Recovery Notes and be allowed an additional Repayment Claim and a Settlement Secured Claim calculated in accordance with the first sentence of this Section 7(a)(4) except that, for 89-013F 3965.000 -27- purposes of making such calculation, such Settling Non-County Pool Participant's Withheld Proceeds Shortfall shall be deemed to be the amount by which such Settling Non-County Pool Participant's Withheld Proceeds Share exceeds the amount theretofore distributed to such Settling Non-County Pool Participant with respect to Withheld Proceeds pursuant to Sections 3(c) and 4. b. Option B: Each Settling Non-County Pool Participant who elects Option B shall reserve and retain, unimpaired by this Agreement, all rights and claims it may have, if any, against the County and the other County Claimants and their Related Parties, including all claims that the County or any other County Claimant or such Related Party is liable in damages for any and all alleged misconduct (whether before or after the Petition Date) of the County, any other County Claimant, the Pocls, the Orange County Treasurer or any other officers, officials, employees or agents of the County, any other County Claimant or the Pools, and including specifically with respect to alleged self-dealing by the Orange County Treasurer and other alleged breaches of fiduciary duty, fraud, conversion, misappropriation of funds, negligent investments and other alleged misconduct and the alleged withholding of the funds of such Pool Participants. Each County Claimant and the Pools shall reserve and retain all of its rights: (i) to object to, defend against or otherwise challenge the validity, allowability, amount, priority and any other characteristic of any such reserved right or claim of any Settling Non-County Pool Participant who elects Option B, (ii) to assert any rights, claims and remedies it may have against each Settling Non-County Pool Participant who elects Option B and its Related Parties, and (iii) to seek to ea-our -28- 3865.000 subordinate any reserved right, remedy or claim of a Settling Non-County Pool Participant who elects Option B under section 510 of the Bankruptcy Code or any other provision of applicable law. Notwithstanding anything to the contrary contained in the foregoing provisions of this Section 7(b) or in any other provision of this Agreement, the County (for Itself and on behalf of each County Adminis- tered Account, which shall be bound by the allocation of Pool Assets in Section 2) and each Settling Non-County Pool Participant (including, without limitation, each Settling Non-County Pool Participant who elects Option B) hereby waives, relinquishes, and releases any right or claim to, and agrees that it shall in no manner seek to, reallocate and seek to recover, impose a trust upon or other- wise reclaim as the M of a trust for its benefit, or for any other reason or other- wise recover any of the cash distributed from the Pools under Sections 2, 3 and 4 of this Agreement or in the form of any Interim Distributions to any County Claimant or Settling Non-County Pool Participant (the foregoing release being limited to claims to any such distributions and not applying to the assertion of general unsecured claims against the County). The County shall use its best efforts to recover all Withheld Proceeds as soon as practicable in view of the goal of prosecuting litigation on Pool-Related Claims against holders of Withheld Proceeds to the fullest extent possible and to pay or cause to be paid in full all Recovery Notes, Secured Settlement Claims and Repayment Claims through expense reductions and revenue enhancements; provided, however, that the foregoing shall in no way be deemed to constitute or require a waiver of any rights of the County under the Bankruptcy Code or any other applicable law. 1013F 3865.000 -29- 8. Initial Distribution of Recovery Notes and Initial Allowance of Repay- ment Claims and Settlement Secured Claims. By no later than the later of (i) June 13, 1995 and (ii) five (5) Business Days after the Effective Date: (a) the County shall distrib- ute to each Settling Option A Pool Participant the principal amount of Recovery Notes which such Settling Option A Pool Participant is entitled to receive under Section 7(a)(1); and (b) each Settling Option A Pool Participant shall have a Repayment Claim and, in the case of each Settling Non-School Pool Participant who has elected Option A, a Settlement Secured Claim, in the respective amounts calculated pursuant to Sections 7(a)(2) and 7(a)(3). 9. Reserve With Respect to Recovery Notes, Repayment Claims. and Settlement Secured Claims Relating to Withheld Proceeds Shortfall. Upon the distribu- tion of Recovery Notes and the allowance of Repayment Claims and Settlement Secured Claims pursuant to Section 8, and until such time as all distributions required under Sec- tions 2 and 3 have been completed: (a) additional Recovery Notes in the principal amount of 21.63% of the sum of the Withheld Proceeds Shares of all Settling Option A Pool Participants (the "Reserved Recovery Notes") (and any interest paid on or proceeds from the sale of the Reserved Recovery Notes, which the County shall be permitted to sell only at face) shall be held in trust by the County in a segregated account for the benefit of the Settling Option A Pool Participants who become entitled thereto under Section 7(a)(4); and (b) the distributions (the "Reserved Distributions")that would be made out of the Net Litigation Proceeds under Section 11 on account of (i) an additional Repayment Claim in the amount of 46.99% of the sum of the Withheld Proceeds Shares of all Settling Option A Pool Participants; and (ii) a Settlement Secured Claim in the amount of 31.38% of the sum of the Withheld Proceeds Shares of all BB-013r .30- 3M5.000 Settling Option A Pool Participants, along with any interest earned on the Reserved Distributions, shall be held in trust by the County in a segregated account for the benefit of the Settling Option A Pool Participants who are ultimately entitled thereto under Sections 7(a)(4). 10. Distribution of Reserved Items. The Reserved Recovery Notes, any interest paid thereon, any proceeds from the sale of the Reserved Recovery Notes and interest earned on such proceeds, and any Reserved Distributions and interest earned thereon shall be distributed as follows: a. In the event that a Settling Option A Pool Participant elects to assign its rights to a distribution out of Withheld Proceeds to the County in accor- dance with Section 7(a)(4): (1) such Settling Option A Pool Participant shall re- ceive, out of the reserve described in Section 9, the principal amount of Recovery Notes (or, if the Reserved Recovery Notes have been sold, cash proceeds thereof in such principal amount) that such Settling Option A Pool Participant is entitled to receive upon such assignment under Section 7(a)(4); any interest earned on or allocable to such principal amount of Reserved Recovery Notes or sale proceeds; that portion of the Reserved Distributions which is allocable to the Settlement Secured Claim and the Repayment Claim which are allowed to such Settling Option A Pool Participant upon such assignment under Section 7(a)(4); and any interest in the reserve allocable to such portion of the Reserved Distributions and (iii) the amount of the Repayment Claim described in Section 9(b)(i) and the Settlement Secured Claim described in Section 9(b)(ii) shall be reduced, respectively, by the amount of the Repayment Claim and the Settlement 88-013F 3865.000 -31- Secured Claim which are allowed to such Settling Option A Pool Participant upon such assignment. b. As soon as practicable after a final determination that there are no further Withheld Proceeds which may be recovered by the County or the Pools and distributed under this Agreement, either by Final Order or Final Orders of the Bankruptcy Court or written agreement of the County and the Pool Com- mittee following fifteen (15) days' written notice to the County Committee, each Settling Option A Pool Participant who has not previously assigned its rights to distributions out of Withheld Proceeds to the County under Section 7(a)(4) shall: (i) receive, out of the Reserved Recovery Notes (or the cash proceeds thereof), a principal amount of Recovery Notes (or cash) equal to the principal amount of the Recovery Notes which such Settling Option A Pool Participant is entitled to receive under Section 7(a)(4), plus the interest earned on such principal amount of Recovery Notes (or on the cash proceeds thereof); (ii) be allowed a Repayment Claim and, a Settlement Secured Claim, computed in accordance with the provisions of Section 7(a)(4), and be paid, out of the Reserved Distributions, that portion of the Reserved Distributions which are allocable to the Repayment Claim and Settlement Secured Claim which are so allowed to such Setting Option A Pool Participant, plus any interest in the reserve allocable to such portions of the Reserved Distributions. C. Any and all property which remains in the reserve established under Section 9 following the distributions required under Sections 10(a) and 10(b) shall be retained by the County as funds of the County. ee Di3v 32 3865.000 11. Security Interests in and Distribution of Net Litigation Proceeds. a. The County hereby grants to each Settling Non-School Pool Participant who elects Option A a first priority security interest in and lien upon the Secured Claim Percentage of the Net Litigation Proceeds, to secure the Settlement Secured Claim of such Settling Non-School Pool Participant which is allowed pursuant to Section 7(a)(2) and (4). Such lien and security interest shall secure all Settlement Secured Claims on a ratable basis. b. The County hereby grants to each Settling Option A Pool Participant a second priority security interest in and lien upon the Secured Claim Percentage of the Net Litigation Proceeds, to secure the Repayment Claim of such Settling Option A Pool Participant which is allowed pursuant to Section 7(a)(3) or (4). Such lien and security interest shall secure all Repayment Claims on a ratable basis. C. The County shall execute such financing statements and other documents to evidence and perfect the liens and security interests granted under Sections 11(a) and 11(b) as the Pool Committee may reasonably request. d. Upon the receipt of any Litigation Proceeds in the form of cash, the County shall be entitled first to reimburse itself therefrom for any and all Litigation Costs. Promptly following such receipt and reimbursement, the County shall: (i) pay in cash the Secured Claim Percentage of the Net Litigation Proceeds which it receives in the form of cash to the holders of Settlement Secured Claims on a ratable basis, in an amount which shall not exceed the unpaid portion of such Settlement Secured Claims and; (ii) then pay in cash any remaining portion of such cash Net Litigation Proceeds to the holders of 88-013F 3865.000 -33- Repayment Claims on a ratable basis, in an amount which shall not exceed the unpaid amount of such Repayment Claims. To the extent that, prior to the satisfaction in full of the Settlement Secured Claims and Repayment Claims allowed or reserved for under Sections 7(a), 8, and 9, the County receives more than 35% of the Net Litigation Proceeds, the County shall not use such additional Net Litigation Proceeds received by the County to fund the County's operating expenses or those of any other County Claimant. After the Repayment Claims have been paid in full, the County shall be entitled to retain, for its own account, all remaining Net Litigation Proceeds which are in the form of cash, up to an amount equal to the sum of: (i) $236,735,199.55; plus (ii) 21.66% of the difference between (x) $81,979,251.49 and (y) 67.63% of the Withheld Proceeds which become available for distribution; and (iii) all interest that would have ac- crued on a principal amount of Recovery Notes equal to the sum of () and (ii) under the terms of the Recovery Notes through the date upon which the County has been able to recover the full amount of such principal amount of Recovery Notes and interest hereunder. Following all distributions out of Net Litigation Proceeds described above, the County shall pay to each Settling Option A Pool Participant that portion of any additional Net Litigation Proceeds which are received in the form of cash which equals the product of multiplying such addi- tional Net Litigation Proceeds by such Settling Option A Pool Participant's Pool Balance Fraction, and the County shall be entitled to retain for its own account the remaining portion of such additional Net Litigation Proceeds. e. Upon the receipt by the County of any Litigation Proceeds which consist of property which is not cash (including, without limitation, readily 88-013F ,34- 386S.000 marketable securities), the County shall hold such property subject to the liens granted by this Section 11 and may not sell or transfer such non-cash property without either (1) the written consent of the Pool Committee; or (ii) an order of the Bankruptcy Court authorizing such sale which is entered at a hearing of which counsel to the Pool Committee has been provided at least ten (10) days notice. The County shall use its best efforts to sell or otherwise dispose of such non- cash property expeditiously on a commercially reasonable basis. Upon the sale or transfer of any such non-cash property, any cash Net Proceeds thereof shall be treated and distributed as Litigation Proceeds under Section 11(d), and any non-cash Net Proceeds shall continue to be treated under this Section 11(a). f. Notwithstanding anything to the contrary contained in Section 11(d) or 11(a), in the event that a County-Administered Account receives proceeds of a Pool-Related Claim of such County-Administered Account which do not constitute Litigation Proceeds, but which would have constituted Litigation Proceeds but for the inability of the County to assign Pool-Related Claims of such County-Administered Account in accordance with Section 12, then: (i) the Net Litigation Proceeds shall be deemed to have been increased by the amount by which such proceeds received by such County-Administered Account on account of such Pool-Related Claim exceeds all costs and expenses incurred by the County or such County-Administered Account in prosecuting or otherwise attempting to collect upon or realize upon such Pool-Related Claim; and (ii) to the extent that any additional amounts are payable to Settling Option A Pool Participants under Section 11(d) or 11(a) as a result of such deemed increase in 86-013r 3865.000 -35- Net Litigation Proceeds, such excess shall be paid out of amounts that would otherwise have been retained by the County pursuant to Section 11(d) or 11(a). g. Until all Settlement Secured Claims and all Repayment Claims have been paid in full, the County shall not settle any Pool-Related Claims of the County or Assigned Pool-Related Claims on terms whereunder any portion of the consideration to be received by the County for such Pool-Related Claims of the County or Assigned Pool-Related Claims would consist of the cancellation or modification of any indebtedness of the County, whether under a plan of adjustment or otherwise, without the written consent (which written consent shall not be unreasonably withheld) of the Pool Committee to such settlement and the terms on which the holders of Repayment Claims and Settlement Secured Claims will share in the benefits of such debt cancellation or modification. 12. Assignment of Pool-Related Claims or Proceeds Thereof to County. a. Each Settling Option A Pool Participant and the County, on behalf of each County Administered Account, but only to the extent, If any, that the County has the authority to make such assignment on behalf of such County Administered Account, hereby assigns, transfers and conveys to the County, to the fullest extent allowed by law without destruction or material impairment thereof, any and all Pool-Related Claims of such Settling Option A Pool Participant or County Administered Account against any person or entity which is not a Party to this Agreement and which is not specifically released under the terms of Section 14 and any and all proceeds of such Pool-Related Claims. Such assignments shall vest in the County all rights to recovery of Litigation Proceeds for such assigned claims, subject only to the terms provided in this Agreement. BB•013F 3865.000 -36- Each Settling Option A Pool Participant and the County, on behalf of each County Administered Account (to the extent, if any, that the County has authority to make the foregoing assignment on behalf of such County Administered Account) acknowledges the County's ownership of the claims, rights to recovery and pro- ceeds assigned hereunder and the County's right to prosecute such claims and rights to recover in the County's name, and/or in the name of the assigning Settling Option A Pool Participant. b. All Pool-Related Claims of Settling Option A Pool Participants or County Administered Accounts which would be assigned to the County under Section 12(a) but for the fact that such Pool-Related Claims would be destroyed or materially impaired by their assignment or attempted assignment to the County under Section 12(a) shall be retained by the Settling Option A Pool Participants to which they belong prior to the Effective Date. The Settling Option A Pool Partici- pants or County Administered Accounts retaining such Pool-Related Claims shall cooperate with the County to enable the County to prosecute such Pool-Related Claims on behalf of and in the name of such Settling Option A Pool Participant or County Administered Accounts in the same manner and with the same degree of control by the County and its legal counsel as though such Pool-Related Claims had been assigned to the County; provided, however, that such Settling Option A Pool Participant or County Administered Account shall not be obligated to incur any expense or liability in rendering such cooperation. The Litigation Proceeds from any such Pool-Related Claims shall be paid over to the County and shall be subject to all terms of this Agreement as though they had been assigned to the County under Section 12(a) above. To the extent that any judgment is rendered 88.013F 3865.000 '37' against a Settling Option A Pool Participant (including an award of attorneys' fees and costs to the opposing party in any such litigation) on account of the cooperation of such Settling Option A Pool Participant in the prosecution of a Pool-Related Claim of such Settling Option A Pool Participant, the amount of such judgment shall be considered a Litigation Cost to be paid before any distribution of Net Litigation Proceeds. In addition, if the County files suit on an Assigned Pool-Related Claim in the name of a Settling Option A Pool Participant or County Administered Account and not in its own name, and such Settling Option A Pool Participant or County Administered Account is adjudged liable for participating in the filing of such suit without fault on the part of such Settling Option A Pool Participant or County Administered Account, the amount of such judgment shall be considered a Litigation Cost to be paid by the County before any distribution of Net Litigation Proceeds, and, in the event that the Litigation Proceeds are insufficient to pay such Litigation Cost and such judgment is for a liability in tort other than an award of attorney's fees, the County shall indemnify and hold harmless such Settling Pool Participant or County Administered Account as an administrative expense in the County Chapter 9 case, and any amounts paid on account therefor by the County shall be a Litigation Cost to be reimbursed to the County before any distribution of Net Litigation Proceeds. C. Without in any manner limiting the scope of the foregoing, each Settling Option A Pool Participant and the County, on behalf of each County Administered Account (to the extent, if any, the County has the authority to bind such County Administered Account hereby) hereby agrees that the County shall have the ability to enter into binding and enforceable settlements and releases of ee-013F -38- - 3965.000 Assigned Pool-Related Claims, subject to the provisions of Section 11(f) and any necessary Bankruptcy Court approval thereof. d. In connection with the foregoing, each Settling Option A Pool Participant hereby represents and warrants to the County that such Settling Option A Pool Participant has not previously assigned, pledged, hypothecated or otherwise made the subject of a Transfer to any person or entity any Pool- Related Claim held by such Settling Option A Pool Participant. e. The County shall use its best efforts to maximize the Net Liti- gation Proceeds resulting from the Pool-Related Claims assigned to the County or which the County is being given the right and power to prosecute pursuant to this Section 12; provided, however, that nothing contained herein shall be construed to require the County to incur any liability other than for its own attorney's and other professional fees and other costs in the prosecution of Pool- Related Claims. Notwithstanding the foregoing, any liability incurred by the County in prosecuting any Pool-Related Claims shall be treated as a Litigation Cost to be reimbursed to the County before any distribution of Net Litigation Proceeds. The provisions of Exhibit 6, the Litigation Review Provisions, are hereby specifically incorporated into this Agreement; and the County and each of the Settling Option A Pool Participants agree to observe and shall be bound by such provisions. No term or provisions of this Section 12 shall be construed to eliminate or restrict any right or obligation of any Party under Exhibit 6. 13. Joint Powers Authority. As soon as practicable following the Effective Date, the County and all interested Non-County Pool Participants shall form a new Joint Powers Authority ("JPA") for the purpose of managing the investment of funds BB-013r 3865.000 -39- for the County and all public agencies located therein. The charter of the JPA shall be in such form as may be agreed upon between the County and the Pools Committee. The JPA shall have a board of directors appointed by the Pool Participants who participated in the JPA, including the County. The JPA shall have the authority either to hire its own staff or private management firms to manage and direct the investment of funds deposited with the JPA, subject in all respects and at all times to appropriate guidelines established by the JPA board of directors. The JPA board of directors shall conduct public meetings no less frequently than quarterly. 14. Support For Termination of Certain Distribution Arrangements. The Settling Non-County Pool Participants shall not oppose (including in proceedings before the Bankruptcy Court) the discontinuation, effective five (5) Business Days following the Effective Date, of all interim distribution programs. 15. Recovery Note Liquidity. The County shall use its best efforts to cause the Recovery Notes to be immediately liquid at par at the time they are to be dis- tributed, without discount or brokerage commissions, through the use of a credit en- hancement liquidity facility satisfactory to the Pool Committee which is obtained on or before June 5, 1995. 16. Conditions to Effectiveness of Agreement and Effective Date. Save and except for the provisions of Section 17, which shall take effect immediately, the pro- visions of this Agreement shall not become effective until the first date on which each of the following conditions shall have been satisfied or, in the case of any condition which is waivable by its terms, been waived in writing by the Parry specked therein as being entitled to waive such condition (the "Effective Date"): BB-013F -40- 3865.000 a. Non-County Pool Participants who constitute at least 80% in number of the Non-County Pool Participants and hold at least 90% of the aggre- gate amount of the Pool Balances of all Non-County Pool Participants shall have become Settling Non-County Pool Participants by executing Agreements to Become Settling Non-County Pool Participants by the Deadline; provided, however, that this condition may be waived in writing by the County, without any prior notice, in a writing delivered to counsel to the Pools Committee. b. The Bankruptcy Court in the Chapter 9 Cases shall have en- tered an order or orders, in form and substance satisfactory to the County, which shall have become a Final Order or Final Orders, which shall: @ contain provisions reasonably satisfactory to the County and the Pool Committee; @) approve and authorize the distribution of unallocated taxes made pursuant to the Tax Distribution Order and provide that any County Claimant or Settling Non- County Pool Participant who has received any payments made pursuant to the Tax Distribution Order shall be released from any obligation to return all or any portion of such payments arising under any provision of the Bankruptcy Code; (iii) approve the settlements, compromises, releases, and all other terms and conditions contained in this Agreement and authorize the County and the Pools to enter into and perform all of their respective obligations under this Agreement; and (iv) provide for the grant of the security interests and liens provided in Section 11, that such security interests shall be fully perfected without the need for any filing or other action, and substantially incorporate the provisions of Section 11; provided, however, that the requirement that any such order or ee-oiar 41 3865.000 orders have become a Final Order may be waived in writing by the County, without any prior notice, in a writing delivered to counsel to the Pools Committee. If both of the conditions to the Effective Date have not occurred or been duly waived, and the Effective Date has not occurred, by June 5, 1995, or by such later date or dates as may be agreed to in writing by the County and the Pool Committee, then this Agreement shall terminate and be null and void and of no further force or effect, and each Agreement to Become Settling Non-County Pool Participant which has been executed by any Non-County Pool Participant shall become null and void and of no further force or effect. In such event, nothing contained in this Agreement or any Agreement to Become Settling Non-County Pool Participant shall in any way constitute a waiver of any rights by, or in any manner prejudice the rights of, the County Claimants or any Non-County Pool Participant. 17. Cooperation And Best Efforts In Seeking Bankruptcy Court Orders. Each Party agrees to cooperate with the County and the Pools in seeking, and not to hinder or interfere with any proceedings to obtain, the order or orders described in Sec- bon 16(b). The County agrees to use its best efforts to (i) file an appropriate motion with the Bankruptcy Court as soon as reasonably practicable and, thereafter, to obtain the order or orders described in Section 16(b); and (ii) to obtain the authority to grant the release provided in Section 19(b) and make the assignment described in Section 12 on behalf of County Administered Accounts by the Effective Date. 18. Reconstitution of Pool Investors' Committee. The Parties shall use their best efforts, including supporting any necessary requests to the Bankruptcy Court or the United States Trustee, to have the Pool Committee be reconstituted as a sub- committee of the County Creditors' Committee and to have certain of is members B8-013r -02 3665.000 become members of the County Creditors' Committee, or to have the Pool Committee be reconstituted as a separate committee in the County Chapter 9 Case. Any expenses of such subcommittee or separate committee, including without limitation professional fees, shall be paid out of the Professional Fees Reserve in accordance with Section 5; provided, however, that nothing in this Agreement shall prejudice professionals representing such separate committee, such subcommittee and/or any individual Non- County Pool Participant from applying for and receiving compensation from the County pursuant to Section 503(b) of the Bankruptcy Code "in making a substantial contri- bution" in the County Chapter 9 Case after the Effective Date, as the quoted phrase is used in Section 503, 9 the Bankruptcy Court determines such committee, subcommittee or individual Non-County Pool Participant or professional has made a "substantial contribution" in the County Chapter 9 Case after the Effective Date, or prejudice the County from opposing any such request. 19. Release. a. Each Settling Option A Pool Participant hereby fully, finally, and forever irrevocably releases, relieves, quitclaims, and discharges the County, any County Administered Account which does not attempt to prosecute a claim that would be released under Section 19(b) if such County Administered Account was bound by Section 19(b) (a "Released County Administered Account"), the Pools, each other Settling Option A Pool Participant and all the County's, the Pool's, each such Released County Administered Account's and each such other Settling Option A Pool Participant's Related Parties from, and waives and relinquishes, any and all Pool-Related Claims which such Settling Option A Pool Participant, or any person or entity claiming from, through, or under such Settling BB-013r 3863.000 -43- Option A Pool Participant, ever had, now has, or hereafter can, shall, or may have against the County, the Pools, any Released County Administered Account, any other Settling Option A Pool Participant or any of the County's, the Pool's, each such Released County Administered Account's and each such other Settling Option A Pool Participant's Related Parties (and any right of indemnity, contribution or subrogation arising therefrom or relating thereto), including, without limitation, with respect to any distribution from the Pools to the County, any County Administered Account or any Settling Option A Pool Participant; provided, however, that nothing contained herein shall release (1) any claims against, or obligations of, any Party arising under this Agreement or (ii) the claim of any Settling Option A Pool Participant against a Related Party of the County or the Pools to whom the County or the Pools has denied indemnification for Pool- Related Claims under the County's indemnification policies or applicable law if and only if such Settling Option A Pool Participant provides the County with a written agreement, in form and substance reasonably satisfactory to the County, to indemnify the County and the Pools against any claim for indemnification which such Related Party of the County or the Pools may assert against the County as a result of such Settling Option A Pool Participant's assertion of a Pool-Related Claim against such Related Party of the County or the Pools, if such Related Party is adjudged by a court to have any such right of indemnification against the County or the Pools. b. The County (on its own behalf and on behalf of each County Administered Account which is a Releasing Party) hereby fully, finally, and forever irrevocably releases, relieves, quitclaims, and discharges each Settling Option A 68-013F ,44. 3865.000 Pool Participant and all of each such Settling Option A Pool Participant's Related Parties from, and waives and relinquishes, any and all Pool-Related Claims which the County, any County Administered Account which is a Releasing Party, or the Pool, or any person or entity claiming from, through, or under the County, any County Administered Account which is a Releasing Party, or the Pool, ever had, now has, or hereafter can, shall, or may have against any Settling Option A Pool Participant or any such Settling Option A Pool Participant's Related Parties (and any right of indemnity, contribution or subrogation arising therefrom or relating thereto), including, without limitation, with respect to any distribution from the Pools to such Settling Option A Pool Participant, provided, however, that nothing contained herein shall release any claims against, or obligations of, any Parry arising under this Agreement. C. Each Settling Non-County Pool Participant hereby fully,finally, and forever irrevocably releases, relieves, quitclaims, and discharges each and every other Settling Non-County Pool Participant and all of each such other Settling Non-County Pool Participant's Related Parties from, and waives and relinquishes, any and all Pool-Related Claims which such Settling Non-County Pool Participant, or any person or entity claiming from, through, or under such Settling Non-County Pool Participant, ever had, now has, or hereafter can, shall, or may have against any other Settling Non-County Pool Participant or any of such other Settling Non-County Pool Participant's Related Parties (and any right of indemnity, contribution or subrogation arising therefrom or relating thereto), including, without limitation, with respect to any distribution from the Pools to any Settling Non-County Pool Participant; provided, however, that nothing contained BB-013r 3865.000 45- herein shall release any claims against, or obligations of, any Party arising under this Agreement. d. Each Party hereby fully, finally, and forever irrevocably re- leases, relieves, quitclaims, and discharges the Pool Committee and any individual members thereof, each Subcommittee and any individual members thereof, each individual who has acted as an independent intermediary (in its capacity as such) between the County and the Pools Committee in connection with this Agreement, and the attorneys, accountants and other professionals employed by the Pool Committee or any Subcommittee from, and waives and relinquishes, any and all claims, demands, obligations, debts, liabilities, suits, causes of action, remedies or rights which in any way relate to services rendered to, on, or on behalf of the Pools Committee, any Subcommittee or any individual member thereof through the Effective Date, which such Party, or any person or entity claiming from, through, or under such Party ever had, now has, or hereafter can, shall, or may have against the Pool Committee, any individual member thereof, any Subcommittee, any individual member thereof, each individual who has acted as an independent intermediary (in its capacity as such) between the County and the Pools Committee in connection with this Agreement, or the attorneys, accountants or other professionals employed by the Pool Committee or any Subcommittee and any right of indemnity, contribution or subrogation arising therefrom or relating thereto; provided, however, that nothing contained herein shall release any claims against, or obligations of, any Party arising under this Agreement. BB-013r -46. 3865.000 e. Each Settling Non-County Pool Participant listed on Exhibit 8 hereby fully, finally and forever irrevocably releases, relieves, quitclaims and discharges the County, any County-Administered Account, the Pools, and all of the County's, the Pools' and the County-Administered Accounts' Related Parties from, and waives and relinquishes, any and all claims, demands, obligations, debts, liabilities, suits, causes of action, remedies or rights which arise out of or relate to the investment of funds in Guaranteed Investment Contracts or securities which are reflected or taken into account in the balance set forth next to the name of such Settling Non-County Pool Participant under the heading "Pool Cash Value" — "Specific" in Exhibit 1 or 2, whenever arising, whether known or unknown, suspected or unsuspected, fixed or contingent, liquidated or unliquidated, matured or unmatured, choate or inchoate, pending or not pending, which such Settling Non-County Pool Participant, or any person or entity claiming from, through, or under such Settling Non-County Pool Participant ever had, now has, or hereafter can, shall or may have against the County, any County- Administered Account, the Pools, or any of the County's, any County- Administered Accounts, or the Pools' Related Parties (and any right of indemnity, contribution or subrogation arising therefrom or relating thereto); provided, however, that nothing contained in this Section 19(e) shall release any claims against, or obligations of, any Party arising under this Agreement, or any Pool- Related Claims other than those relating to the investments described in this Section 19(e) or in Section 3(b) or 3(c). f. EACH RELEASING PARTY EXPRESSLY UNDERSTANDS THAT section 1542 of the Civil Code of the State of California provides as follows: 88-013F �� 3865.000 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. g. EACH RELEASING PARTY HEREBY AGREES THAT THE PROVISIONS OF SECTION 1542 of the Civil Code of the State of California and all similar federal or state laws, rights, rules, or legal principles, legal or equitable, which may be applicable hereto, to the extent that they may apply to any of the matters released herein, ARE HEREBY KNOWINGLY AND VOLUNTARILY WAIVED AND RELINQUISHED BY EACH RELEASING PARTY in each and every capacity, to the full extent that such rights and benefits pertaining to the matters released herein may be waived, and each Party to this Agreement hereby agrees and acknowledges that this waiver and relinquishment is an essential term of this Agreement, without which the consideration provided to it would not have been given. In. In connection with such waiver and relinquishment, each Re- leasing Party acknowledges that it is aware that it may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those which it now knows or believes to be true, with respect to the matters released herein. Nevertheless, it is the intent of each Releasing Party in executing this Agreement or an Agreement to Become Settling Pool Participant, as applicable, fully, finally, and forever to settle and release all such matters, and all claims rela- tive thereto, which exist, may exist or might have existed (whether or not previ- ously or currently asserted in any action) which are the subject of the releases granted under subsections (a), (b) and (c). Each Releasing Party acknowledges 10131F 3865.000 48- that it has received or had the opportunity to obtain independent legal advice regarding any release which it is granting under this Agreement and that is has conducted such investigation as it deems appropriate, necessary and possible with respect to any such release. 20. Nonassignment of Released Claims. Each Releasing Party hereby represents and warrants that every claim, demand, debt, liability, obligation, action, cause of action, suit and other matter released by such Releasing Party pursuant to the provisions of Section 19 ("Released Claims") has not heretofore been assigned, en- cumbered, or hypothecated, and is not the subject of a Transfer, by such Releasing Party. Each Releasing Parry hereto agrees to indemnify each other Releasing Party and such other Releasing Party's Related Parties, and hold them harmless, from the assertion of any Released Claims which is based upon or arises in connection with any such prior assignment, hypothecation, Transfer, or encumbrance. 21. Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally or by facsimile transmission on the Party to whom directed with confirmation of transmission; or on the third Business Day after mailing if mailed to the Party to whom directed, by first class mail, postage prepaid, registered or certified, return receipt requested, and properly addressed to such Parry's address as set forth next to such Parry's signature line in this Agreement or in the Agreement to Become Settling Pool Participant executed by such Parry. Any Party may change its address by giving written notice to the other parties in the manner set forth above. 1013F 3W5.000 49- 22. Entire Agreement: Modification: Waiver. This Agreement, including the Exhibits hereto, constitutes the entire agreement between the Parties and supersedes all prior and contemporaneous agreements, representations, warranties, and understandings of the Parties, whether oral, written or implied, as to the subject matter hereof. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all Parties affected thereby. No waiver of any of the provisions of this Agreement shall be deemed or constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the Party making the waiver. 23. No Third-Party Beneficiaries. Except as otherwise specifically pro- vided in this Section 23, nothing contained in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any person or entity other than the Parties hereto; provided, that solely for purposes of enforcing the re- strictions on the payment of Repayment Claims set forth in clause (ii) of the definition thereof in Section 1: (i) each holder of a Senior Claim who becomes such as a result of the lending of money or other extension of credit to the County following the Effective Date (whether or not such holder relied on such restrictions in lending money or otherwise extending credit to the County); and (i) each holder of a Senior Claim who the County agrees in writing shall be a third party beneficiary of such restriction, shall be deemed to be a third-party beneficiary of such restriction on the payment of Repayment Claims with the right to enforce such restrictions directly for its own benefit. Nothing contained in this Agreement is intended to relieve or discharge the obligation or liability of any third party to any Party to this Agreement except as expressly provided herein, nor shall any provision give any third party any right of subrogation or action over or BB-013r -SO- 3865.000 against any Party to this Agreement or any third parry released under this Agreement. Nothing in this Agreement shall in any way affect the rights of, or confer any rights upon, any Non-County Pool Participant who elects not to become a Party to this Agreement by executing this Agreement or an Agreement to Become Settling Non- County Pool Participant. 24. Assionment. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and assigns. 25. Further Assurances. Each Party hereto agrees to execute any and all documents and to do and perform any and all acts and things necessary or proper to effectuate or further evidence the terms and provisions of this Agreement. 26. No Reoresentations or Warranties. Except as expressly set forth in this Agreement, none of the Parties hereto makes any representation or warranty, written or oral, express or implied. 27. Severability. If any portion of this Agreement shall be held to be in- valid or unenforceable, then that portion shall be deemed to have been modified to the minimum extent necessary in order to cause it to be valid and enforceable and to ac- complish its intent as evidenced by the entirety of this Agreement; and the Parties ac- knowledge that the balance of this Agreement shall be unaffected by such modifications and remain valid and enforceable. 28. Headings. The descriptive headings of the several Sections of this Agreement are inserted for convenience of reference only and do not constitute a part of this Agreement. 29. Applicable Law. This Agreement shall be governed in all respects, including the validity, interpretation and effect, by title 11 of the United States Code and 68 013F51- 3M5.000 the laws of the State of California, without giving effect to the principles of conflicts of law thereof. 30. Consent to Entry of Orders and Judgments by Bankruptcy Court. Each Party hereto hereby consents to the determination by the Bankruptcy Court, as a "core proceeding" within the meaning of 28 U.S.C. § 157 or any successor provision, and to have the Bankruptcy Court hear and determine and enter appropriate orders and judgments subject to review under 28 U.S.C. § 158, as provided in 28 U.S.C. § 157(c)(1) or any successor provision, in any action brought to enforce, interpret, reform or rescind this Agreement or any of the provisions hereof and over any action to determine or declare the rights of any of the Parties under this Agreement. 31, Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The execution of an Agreement to Become Settling Pool Participant shall be deemed to constitute the execution of this Agreement. 32. No Admissions. Neither this Agreement, nor any of the terms hereof, nor any negotiations or proceedings in connection herewith, shall constitute or be construed as or be deemed to be evidence of an admission on the part of any Party of any liability or wrongdoing whatsoever, or the truth or untruth, or merit or lack of merit, of any claim or defense of any Party or directly or indirectly impair or adversely affect any rights or claims not released, modified, waived or otherwise affected under this Agreement; nor shall this Agreement, or any of the terms hereof, or any ne- gotiations or proceedings in connection herewith, or any performance or forbearance hereunder, be offered or received in evidence or used in any proceeding against any Party, or used in any proceeding, or otherwise, for any purpose whatsoever except with 3B-013r 3865.000 -52- respect to (a) effectuation and enforcement of this Agreement and (b) any proceedings in the Bankruptcy Court to approve this Agreement and the execution and delivery hereof. 33. Due Authorization. Each Party to this Agreement hereby represents and warrants that (i) such Party is duly-authorized to enter into this Agreement; and (ii) the person purporting to execute this Agreement or an Agreement to Become Settling Pool Participant on behalf of such Party has been duly authorized to execute this Agreement or such Agreement to Become Settling Pool Participant on behalf of and to bind such Party. 34. Attorneys' Fees. In any action or proceeding brought by a Party against any another Party to enforce any provision of this Agreement, or to seek damages for a breach of any provision hereof, or where any provision hereof is validly asserted as a defense, the prevailing Parry shall be entitled to recover reasonable attorneys' fees from the other Party in addition to any other available remedy. 35. Construction. The Parties acknowledge that each Parry and its counsel have reviewed this Agreement, and each Party has had its interests represented in the drafting of this Agreement, and that the rule of construction to the effect that ambiguities are to be resolved against the drafting parry shall not be employed in the interpretation of this Agreement, the Agreement to Become Settling Non-County Pool Participant, or any document executed and delivered by any Party in connection with the transactions contemplated by this Agreement. 36. Terms Generally. The defined terms in this Agreement shall apply equally to both the singular and the plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine B6-013F IM5.000 -53- and neuter forms. The term "person" includes individuals, corporations, partnerships, trusts and other entities and associations. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The words "approval," "consent" and "notice" shall be deemed to be preceded by the word 'written." 37. 1994-95 School Pooled Notes. To the extent that the County has and continues to intercept and retain property taxes and other revenues ("School Property Taxes") to be collected and retained by the County as security for the payment of those certain School District Notes ("School District Notes"), the proceeds of which School District Notes were pledged for payment of those certain 1994-95 School Pooled Tax and Revenue Anticipation Notes ("1994-95 School Pooled Notes") issued by the County in connection with the School District Notes, the County shall timely pay equal amounts owing under the 1994-95 School Pooled Notes which the County issued to purchase the School District Notes of those Settling Non-County Pool Participants listed in Exhibit 7" ("Participants"). The County acknowledges that it has collected and deposited in segregated accounts, and agrees to continue to collect and deposit in segregated accounts, the School Property Taxes as security for the repayment of the School District Notes of the Participants in connection with which those 1994-95 School Pooled Notes were issued. The County shall use the School Property Taxes to pay the amounts owing under the School District Notes and the 1994-95 School Pooled Notes issued to purchase the School District Notes of the Participants. Nothing in this Section 38 shall affect any right or claim reserved and retained under Section 7(b) by a Settling Non-County Pool Participant listed on Exhibit 1, which is not a Settling Option A Pool Participant. D9-013r .54- 3865.CDo IN WETNESS WHEREOF, each of the Parties hereto has caused this Agreement or an Agreement to Become Settling Pool Participant to be executed on its behalf by its officers or other official representatives thereunto duly authorized, all as of the day and year first above written. 88-013F .55- 3865.000 LIST OF EXHIBITS TO COMPREHENSIVE SETTLEMENT AGREEMENT Exhibit 1 School Pool Participants Exhibit 2 Non-School Pool Participants Exhibit 3 County Claimants Exhibit 4 Agreement to Become Settling Non-County Pool Participant Exhibit 5 List of Brokers Withholding Proceeds and Amount Withheld by Each Broker Exhibit 6 Litigation Oversight Provisions Exhibit 7 TRANS Participants Exhibit 8 Specific Investment Funds — Not Held by Bank of America 88-014 3865.000 OCIP FARMIPANTS EXHIBIT 1.SCHOOL POOL FAMBCRANTI COMpBENENBIVESETREMEWAOREEMEM SCHEDULE OF ESTIMATED BALANCES AND AVAILABLE RECOVERIES my M ea.M •Man •F..aN a.pm.Y N4R.YM RNN.I.NMAMN..n.1a aNNwM., I.Y.I. wn[AMnNege} ..."I,M N.A.. µ4r.erlm ].tl;NxN YMN.N 1Wy.w PM] 4M IM] MAHNIN N .r91 Nm4WW /nawnryw arM MANIA. 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E. tA95561.W 1,2q,)COL2 LN),MO.H am ON Cm R&3M.49) IXW.243 t TroewmmEMAE..Aw 7IMIM B1.Y5.3) B1A55.9) OAa O.00 OW 12m1rAB) M.W]AB WD S,.EMA Eevaw Arc ))1.M013 9M,]B2W Y0.181.13 0O0 0 GOam am It2.33).OBI 6)8.51t5l IWMOS2ebl1 E . 3).618}40.1] 21.940.18513 31.90SA81.60 0 Oaam am OAO RS2.BM.M1 20}WA11.51 imwrMWBPRB E. 3.900A10.59 I.BM.BB)A) 1,MBAM.W 0.00 O.d 000 (40.M131) 1.MB.IM.4B Pe..2 27 ML.M OCIP PARTICIPANTS EXHIBIT 3-COUNTY CLAIMANTS COMPREHENSIVE SETTLEMENT AGREEMENT SCHEDULE OF ESTIMATED BALANCES AND AVAILABLE RECOVERIES Cash I......L ImeMmsm Cash Value Cash Value ImMm O 1fibu0pn Balance Pool Cash Value Sabnca Auliccsted Vuessi M1cm mewlea00ns FNMA Masada Oa ElMaure PeNCIWM 188IN CmmmInOMO BPM Specllk Reacus, MbmL(E) ]A-12/61941b) Thmupllyl) Es. succeeds IS Owes I.] MSI Fein lnenselary 5.108A33A9 3.900,240.93 3,900.24013 0.00 O.W (1,Sm,OW.W) (83,090.43) 2]1].15&50 went selmynupmentxlon 0.00 om 0.00 OW 0.00 ON TnecumnCcyale Caudal M.941.94 504.02163 504,621.53 Sm 0.00 ow (10.70.0% 4w,965.04 TuemumuMlMe 0eaN0m 2.3%,8%34 +,023,024.33 1.023.824M om 0.00 O.W (b,WB]n I.M.WO.W TenmMSMnkpo cenycn &535,W1A1 7.282,77271 7,202.772.71 0.00 0.00 am (155,16614) 7.121.ea8.4? IMS Ft"lnlemb4kry 6.89IX9A4 5.26M,57412 5.M3.574.92 000 0.00 (2,08A13.00) MZ145,35) 3,0dROI&5? Lepell]ed lMl9enl Mae!A 707,07938 601,851w 001,W1.W Om D00 am (13623.01) Wall Prep W Fund 1,OW,)3D74 ]WA40.)0 760.04070 0.0 O.aO a00 (18,333.89) 750,308?I HCA Emergency Med Sery 2.868A80.52 2,10,0282 2.189.68282 0.00 0.00 Om (40,85333) 2,143A29.59 CamNReNemeMClud 12.0 962 9,62 0w OAO an 0.20) 9.0 HCA TUPP 1110,507.67 840.195.88 8441BS.W 0.00 0.00 (333,152.09) HBA]1.00) 4W,972.38 Cauny ClOAlnaryMuoe W,80DG5$A9 ]B.BOI.OB3M b.N1.093M 0.00 OW 4210"0,a00m (828,091]3) Law EnlNub Me CmnnuNc 27,M384,92 21.361A08.38 31.381,4C8.M a.00 0.00 12H,M.00) (4S.5W.71) 20,881.8w.60 VlellmMundda AWtlseas 764?05.51 514.078.10 584.07O10 0.00 O.W (149.1100.010 (I2M4.20) 422.1131.w COvuTmebM Nme R¢pepmM 55)A02.083]3 425.738A%.45 425.738m3.45 000 OW 0.W (SW.OW.OW.00) (9AI0.)WAA) 3M.W&O41.W OQiuWIe NPM Rapgmenl 61=00000 3.712,84002 3.712AM.02 O.W 0.00 0.00 (79.105.51) 3,BM?ASl IMnwwe Aryan Opendenf 2+,842.)63.65 22,W3.3W.]4 22VISA OA7 OW O.ld (6,552,82B.W1 (146.45341) 9.PS,WIJ3 JoInwryns AryMOebl 29,BSO.44sA) '!2,%sAWA) z2,%6AWA] 0.W 0m P.aT1)&GO (4%,39201) t8,w1,Y4346 hMWayne NryMOeM 9,992,+04.04 G.128.W)33 9338.5%.33 O.W 01.808.54 0m (179.140.7I) 0,2M,2M1Tese,d2 Want, Menses Fundl. 3,)24,W0.04 2,BNAWA6 2.293=W ON OW O00 (80.612.94)17) 2.]84.2M.13 Ca,sulme.SeMce Fund 383.9W.]5 263,M3.5] 2Po103.% O.W oW (W,WDm) (OMBAN W2A43.M Va.heemoln,I Plan 23,]]9.W21G 18.182AW.% 18,182AW.92 ON a.W (3.701.701.00) (M.262M) 15.% .06, 1 NMLmeCmm II,R M,204,]W.41 +S.Sa0.W0.)9 IS,WD90a.]4 a.W OW 1]11m0,00 (3]0$Bz2s) 14,4%A9842 PmP BM.dlWy seemed W.m=J)4 3.813d18.34 MA12.316J4 0.W Ow O W (%Iot W) 3],]BB,845m ReOMe Medlin Sue. 1.273. 3S4 3.CW.1W.01 3.610=]9 O.W ON (SIOWO.W) (W.%1W) 7.243.2%.W Tepro.& mmalSM. 11,2]3.005.W 1.010.014.12 0,010T32.02 ON ON (1,1W.R D10 IIW4Nlq ).313?]3M Aepm.O GnpNICIM.Se 1,331.3]2.38 1.010.811.13 1,018,611.12 O.aO Om Om (31,B84.17) 9W,HB.BS 3eIMMed SSluy CaM. 1.010,000A0 1.07O,950.I6 1,%B,BW.16 ow O.W 1279.50OA% (y,945.4) ]74.504,]4 WesM Mend Enlapdu 124.792,661 95.315$41]0 85,315MI.20 OW O.W mm.moso tzm.lmO131 90,5811.755.% opae8m 5We clean, 13.281.25 10.144.10 10,1M.10 0.00 O.W 0.00 R18.13) 012].9] saner Senles M715 ]16)9 T15.79 0.00 O.W Om (152% ]W.Sa ATS Tmel 2,w9,76dm 1,9&$.394aa 1.s6.5.594.)9 9.00 DW 0.W (33,350A5) 1.204 8A3 OAF.mlly suPPal E.csa. 1.81a,9M1e L230s16A3 1,230?I8.4 aW OW 0W (Mzm95) 1,73&541 0 Tun 1M,SW,a)A) 301W,a84.511 30.102A60A9 a.m ON (+B.4o1.811a0) H,64ZOOS ]) T+?38$41A2 HMbm Bill PValE 39A51,W11G 30,132.nea1 W.422.]M.]1 am Om 0.m (612,O08A0) 29.4Mn1A] Eueu Lenders seen s 5W,4]0,32 4M.O3J.54 425,033.54 am Om O.m (9.055.73) 415,BT).01 Speu Lenbm ReeueaemeM 032 0.% 02) Om Oa0 &DO ry.01) Old SaIdenW TaPMWMq N.9m.08 28,MNoo M.]m52 Om 000 a00 ( (Pm M,140.45 WIess W.Rumen, 48A1 38.86 3G.W ow Om OW (O]B) 35.10 Game ON%-1 lmpave 5,]8].% 4,M1.54 4.83154 am 825.03 0.00 ,459M 5A30.84 SentOuse IDIA Reeamvemul z20,W8s9 z16.6l 2W.2W.35 0.m 0.W O.WON (4,4m p2) 2 5A OR CO n01ne12 Red M.53x01 15,6%A3 15.SB2.M 0.00 0m 0W (Ma.72) 15A4030 Plans WM 287.903H 1W1B5.13 180.005.12 0.m O.m HS,W0.00) H.OM.]3) 1W.W8.40 Nam TUNn LeMeupinp W.Po338 67,182.86 %.102.Po 0.m O.m Ow (1.4W.M) fl5,TJ1.la Pepe3 27-Mm.85 OCIP PARTICIPANTS EXHIBIT 3-COUNTY CLAIMANTS COMPREHENSIVE SETTLEMENT AGREEMENT SCHEDULE OF ESTIMATED BALANCES AND AVAILABLE RECOVERIES G4M1 ImeaMeM B IOw Cash Value CeelwMaximm NMBN label CashValue elano, Reallocated ntanalham I FNMA AWN an Blameless Penlclpent 12AxM CmmminBleO Sand BxIR Rxenry InbM101 ]I1.12M TodaubMT E. PlcceJa lQ Ieaa EIT.SaM Meb 401,B88.73 500,79I.0e 200,1,0I Be BAD 0.00 O.BD SIAWAT) Will Le NLade Servke H3 2A17.74 IAASAS 1A40.05 0.00 am 0.00 (JB.NI IM.31 Comb Semce Nae Ro 17ABBYO 13.052,43 13A52A3 BAD ON 0.00 Mon) IZ7.34 comb SeMce NeeSR 22A)8.)3 17.160.08 IT.IBBAS 0m OW 0.00 1M-M WAWA@ Seeks."ZmeA(VO 68,17035 52A67.91 52WT.91 BAD ON 0.00 0.109m) 50,85855 AD 02-1 Newpvd Ripe Cp 148.641M 113.531.1E 113531.10 0.00 000 OW RAmm) 111112.20 AD 92.1 Newaod Mdu CO L720.758A7 1,433,8418.00 11433.9OAB 0.00 I3,B02.D4 OW (30A947) 1.417.07053 AD 92-1 Newport Ridge De 245.01.10 100.040W 1SSM9.03 0.0) O.W BAD (YAIB.36) '"Aga3T AD 92-1 Nmyotl RAIM 082.837.I5 552.17am 02.M.28 O.W 5.447.01 (168,788.00) III.M,72) 346.050.57 AD 92.1 Newpatl Rope M.154.71 W2,817.81 552ARB1 BAD BASIN (BB.B M) (11.6BO.1B) 452617.07 AD 92.1 Novel RN0e Ca 151,845.25 1M,535.18 128.535.18 000 2.109A2 BAD (2A53.68) 126A90.03 AO 02-I Nesoi RWpe Se 17,224M 13.155,05 13.155,95 BAD OW BAD (280,30) 12A]5.85 ADB2A NevgMfll60a 3.1W.801 Al 2,590A10.51 2.50051651 DW 25A2010 O.W ISS,74142) 2.590.SW35 Apudisaw Tex Resvum C308.21MA9 BANswu 8?44.203M 0.00 BAD BAD (135.180.14) B] ,omla TYt.bromiamera untl 47.177,3113.02 30AMA5428 NA33.W4.36 010 ON SAO (767,7".47) 35,2W,BY1.B1 Eduutlenal Reamw Aupm 1B}34.812.50 14.355.311.26 14A55.312M BAD Dw 0.0 13OA53M) 14.00.459.00 Add,Dallny."PTex O.w 0.00 O.W 000 OW BAD BAD Una0vub0 PASS Pub UI 1.310.75 1,001.14 1A01.14 O.W Ow 0.010 (21-13) MAI SwptemeMel UsApp Tee 4.125.8%.52 3.151,40037 3,151,400.57 OW Ow 0.00 (67.143.52) 3.044257.05 Haol000fe PnpToo Red 4.721,92am 3.601 3.001 OW OW 0.00 116.841A5) 3.520.734.26 Bus lm Prop Tex Rel ma.6W.88 542.244M &2.244A1 SAO ON OW (13.662B1) 026.580.60 PWAV Witt,Unapp Tex 000 000 0.W 0.00 BAD Ow 000 Seared Unepp Tex 13.07.90757 10.454.7113.M 10.454,70325 Ow 0.00 0.m (22Z74),I6) 10,M2adi Uneeand We,I. Ow BAD Om 0w 000 0.00 am Sale Reiduallon 38.811.767A1 29.514.24132 29,514,241.32 0.00 ON O.W (120,8MJ2) 28A .413.W ASIO Pompous Rooduarri, 6.932.711A5 6,295,10170 S.M9.138.76 0.01) am O.w (112,810M) S.1B2.3)D.84 Stale Radempllu Tu 31.0 AIM 24M BAD ON O.w (0.51) M.55 Dellnawnl Tex so. 201.47132 IWA03.W 153A6222 D.w ON ON (3.M6.60) 150.60142 TrNNr(o MFu 151A76A2 120,43339 IM.43338 0.00 0.00 0.03 (2A85.96) 11)AB)A UneppvNaned lnleml 28,1)1,21PO.]B 22.2w.)0)34 22.20 1.34 0w ON 0m) (474.712.44) 21AW.05410, InlpaMad Texas Told mJ64,080,70 23.49 13 B1 23A110.0I231 Ow Ow O.w fore&BASS 22.07.3115N Shod Bldg No 2,58582 1.97570 1.8751" 0.00 BAD OW (42.10) I.Amw UnappatlOned PaNel Pe 11A34,8W.M 0.]33,84]50 81733.B47.W 0w BID O.w 11w.w0.B8) 8.54).883.80 Tex Cwedm Retina I6,368.34 12.523.38 12A33.38 0.00 0W am (260.02) 12.MW Taltluns9oM Unabi 13.127.675.37 10,026,80203 10M.602.63 0.00 BAD OW (213,ew.Ol gA13,InA8 Aaou Its Pulsed. 557,lw.75 425.67126 425A71,20 0.00 BAD (50.000.00) (AO7.le1 3m.504.w EITav Reuss PduNnOA 192,61372 MIMOSA 147.11868 000 0.0) (A,M AD) (J.131.4B) B01BB30 CIHCCantan4ien0pr 141.71 10624 1011.24 0.00 om BAD (2,31) ROAD CIe COPwnp MNN 3B7.BMM 303.739A5 383.73915 0w 0.00 0.00 (0.471A0) pW.MB.M Vx.doloxnr C C4cen M08.10 1.121.32 1,12"2 OW O.w BAD (M." 1,091,43 Consoles.TnlMp Fun 1Ad 1.10 1.18 OW am 0.00 BOAS IA5 CSAJDSSP 1"28 BM.m am.. am 000 O.W (,]All 017W NMAmxRim Adnp FV 141 1.0 1.0 OW OW 010 MA'S 1.W Nltle Palo Deuebpood 8.96 AM SM Ow 000 BAD 10.15) Son pages 21.Mx805 OCIP PARTICIPANTS EXHIBIT S•COUNTY CLAIMANTS COMPREHENSIVE SETTLEMENT AGREEMENT SCHEDULE OF ESTIMATED BALANCES AND AVAILABLE RECOVERIES CAIN [nw.lmenl Imm"Mat Caih VON. CadavIdw IM.Am p.MMNn Balance PMICash VMua Balance RnellocNaE In1dwoffom WsblWllans FNMA WIIMNM onEMNIw P.gW...I 1DNM COMmNehm Bond SpMloc Rwewg Intamt(W 71142M41bl TMoueh Nll Eamcwt proewa.NI WM 1.1 Fea DIUMNAMIM. 2BQN2.13 60BA2812 SMAHM a.00 am am (12.M,M) 695A00,14 MlA Cram PlOBnM[NCO 1]ae,026.AI 95O928.0 853,926.13 am am (17%wal (mA21]B) 25T,6O1.34 Hou.J,ACOMmDi 13AM.90 IOAM]e 10.303A8 am am ON (219.67) to,OM.1B Cmvn Vans,Comm Part 11as OAS OAS ON Om Om (0.18) 6.22 Child COMem,PMSnm 44.112.73 33,6W.81 33.602.81 ON Om Om 1217.04) NA75M Am Adam,On Aping FY 45.20 MOT 3567 am am ON (ON) UOI MaAdengen ABNp FY 232,051.67 1".All I77.6117a5 Om ON ON (3,76601) 173,011.N Tneaamr1MTrv.MAnl RN 3346 32A6 ON ON ON M.6% 31.77 1.1 T.0-NMlor L.A. 17,O36.013.17 14SM55137 11,695MI 7 am IM,26V6 am planted, 11A9475.25 TrMMANIAOMOO RMM M,NOm 51.165.58 54105.59 am 4.11 D am (1I0.19) STA14" TN.MBW,Akma RMp. 7,258.42510 SM9A0035 S.U.B,ANAS am 8I,971.39 am (IM.129]6) S,BM.Rfp TR-LC COMM'Man POW 2.753.135.12 2,102"38 2,102,620.36 Om am Om 144.e102,54I 2Am,017.62 Omer llMd.N.bLmew WAccount.Ial Sm.N am am om on on TOTAL COUNTYCLAIMANTS $2.O8.6111 11 $1.719.7mA73.54 B67B39,11340 3T1,52O03pAf /1.BM.1B51m]3 ($M,Bm.M.48) P11,364,I]7.13) $111ATD,MSA01 P M.MAM RM05480.35) 81,518,038R211A9 1.1 COunbliMaNtalaMmere MWelad6...donIVIM.InatotlmraMunry Smd.. Tno10NMno6Mennewemretlw.IMdNAwunllN: E.M UnmIaM1 FUM M1111 175.000.00ON ContlnpMgFund M130) M.207.SM.N WMIan Nd.MMMn M1M) 3 WOODO00 TNIar PMn NOIORpgm.nlPI5D) 73=MT.N p,hpal IS(1235) 1,203,002.00 Sim TOM CON Funding(6213) 18.252.MM Tax Lwm.A.M .POM) 11,313,11,55,00 Ana Amngon Apin(M55) 2,50,11.654M Total N Oenand Fund(SIMI 8281,519.MOM IH Th.C.1,N.M.11maledl ell W 11.lnlaml NCounS,Fmd IN.aWndir,am.unls wponl*eOoulad N OCDA,COUMm.e Tempemn,Can.MenNwbr Cllminel"atm.JONn~a AlgnL Amema nl pall 67-1 lmpnwmeM. AOM-1 Newpal PodM,1M Tn.614eelr L50n,mq TNBMSMMOm.Rio.. (N Tn.Cmntln.w,um.M nle.e and.ID 6.CMi Faw.. [Al YMINea ploc dell 0.mduWl 65.ue.pmM m11er31ms 10m S A.r dml.n. M1 Tidal cash dl$ WWn M11 be Morainal 10,Nbmst addi wpomuml N CAMMAO 5,IM1. pop.5 2TAdhAd; AGREEMENT TO BECOME SETTLING NON-COONTY POOL PARTICIPANT (Insert Name of Settling Non-County Pool Participant)' 1. As used in this Agreement to Become Settling Non- County Pool Participant ("Agreement") , the following terms have the following meanings: a. "Comprehensive Settlement Agreement Re Orange County Investment Pools" means that certain Comprehensive Settlement Agreement Re Orange County Investment Pools, dated as of March _, 1995, by and among the County, on its own behalf and on behalf of the Pools, and each of the * school districts, special districts, cities, and other public agen- cies and instrumentalities identified on Exhibits 1 and 2 thereto which becomes a Party thereto by timely executing an "Agreement to Become Settling Non-County Pool Participant" in the form of this Agreement. A copy of the Comprehensive Settlement Agreement, without the exhibits thereto, is attached hereto as Exhibit "A" . b. "County" means the County of Orange. C. "Non-County Pool Participants" has the meaning set forth in the Comprehensive Settlement Agreement. d. "Pools" means the Orange County Investment Pools, an instrumentality of the County. 2. The undersigned acknowledges that the execution of this Agreement to Become Settling Non-County Pool Participant and joinder as a party to the Agreement will substantially modify the legal right of the undersigned with regard to its interest in the Pools and other matters described in the Agreement. The under- SIT 4 Ism-002A _1_ 3865.000 signed represents and warrants that, prior to executing this Agreement to Become Settling Non-County Pool Participant, . the undersigned has obtained separate legal and financial advice re- garding this Agreement. 3. In consideration for the benefits to be received by the undersigned under the Comprehensive Settlement Agreement, the execution of other agreements in the form of this Agreement by other Non-County Pool Participants, and other good and valuable consideration, the undersigned, being designated as a Non-County Pool Participant in the Comprehensive Settlement Agreement, _hereby joins as a Party to the Comprehensive Settlement Agreement as if the undersigned had executed the Comprehensive Settlement Agree- ment and agrees to be bound by all of the terms and conditions thereof and to be a "Settling Non-County Pool Participant" there- under. 4. In accordance with Section 7 of the Comprehensive Settlement Agreement, the undersigned elects the following treat- ment in respect of its "Deficiency Amount" (as defined in the Com- prehensive Settlement Agreement) : IT 4 IMP-00M 3865.000 (Please initial the appropriate box) [ ] The undersigned elects Option A, providing for the treatment described in Section 7 (a) of the Compre- hensive Settlement Agreement. [ j The undersigned elects Option B, providing for the treatment described in Section 7 (b) of the Compre- hensive Settlement Agreement. DATED: 19 [Name of Settling Pool Participant] By Its Address to which all notices under the Comprehensive Settlement Agreement should be transmitted: [Name of Settling Pool Participant] [Street Address] [City, State, and Zip Code] [Phone and Fax Number] Attention- tev-oam EXHIBIT 4 - 3865.000 '3 SCHEDULE OF AMOUNTS DUE TO ORANGE COUNTY AS A RESULT OF THE LIQUIDATION OF REVERSE PURCHASE AGREEMENTS AS OF FEBRUARY 22, 1995 BANK OF AMERICA $125,000.00 BANK PARIBAS 10 594.640 19 CANTOR FITZGERALD 741,351 33 DEAN WITTER (4,834.25) (1) • DONALDSON.LUFKIN A JENRETTE 557.427,56 Mtn FIRST BOSTON 57,992.639.BA �y H FUJI BEAK (49,456.52) y ro KIDDER PEABODY 1,214,125.19 U H NOMURA SECURITIES 4.442.983 19 !, PAINE WEBBER 0.00 PRUDENTIAL SECURITIES 20,228 482 65 SANWA BAN( 3,300,000 00 SMITH BARNEY _ 21081.007 28 SUBTOTAL 122,821 311 7D DUE TO MORGAN STANLEY _ (1,408,052.38) TOTAL A121,211,2A2.122, A2.12 (1) Need to book as additional interest �'� March 24, 1995 10:47pm MASTER EXHIBIT "6" LITIGATION REVIEW PROVISIONS 1. RECITALS a. Under Section 12 of the Settlement Agreement of which this Exhibit is a part, certain Pool-Related Claims are either being assigned to the County or the County is being given the right and power to prosecute such claims and receive the proceeds thereof (collectively, the "Assigned Pool-Related Claims") by Settling Option A Pool Participants. b. The County and the Settling Option A Pool Participants (collectively, the "Exhibit W Parties") desire to establish a method for efficiently and confi- dentially reviewing the litigation of the Assigned Pool-Related Claims in a manner reasonably necessary to accomplish the common goals of the Exhibit "6"Parties. (Throughout this Exhibit "6","litigation" shall refer to all types of dispute resolution, including court proceedings, arbitration, and mediation.) 2. REPORTING a. Each law firm representing the County in the prosecution of the Assigned Pool-Related Claims, through litigation or otherwise (a "County Law Firm"), will meet periodically (and at least monthly) with the "Designated Counsel" (as defined in subparagraph (b)) regarding the prosecution of the Assigned Pool-Related Claims. b. The meetings will be confidential and will include one or more counsel (not to exceed representatives of 3 law firms) designated by the Pools Committee, aa-a is 3a65.000 or if such a designation cannot be made, then one or more counsel (not to exceed representatives of 3 law firms) designated by the Bankruptcy Court (the "Designated Counsel"). C. Each meeting shall include, at the request of Designated Counsel a discus- sion of the following information: (1) The general status of the prosecution of the Assigned Pool-Related Claims, particularly including a timely discussion of hearing dates and deadlines. (2) The causes of action and claims for relief filed by any side in litiga- tion on the Assigned Pool-Related Claims and the reasons for includ- ing or excluding possible causes of action and claims for relief. (3) The defendants in the litigation on the Assigned Pool-Related Claims, and the reasons for including or excluding possible defendants. (4) The defenses asserted by any side in litigation on the Assigned Pool- Related Claims. (5) Significant information concerning the Assigned Pool-Related Claims obtained through discovery, investigation, or otherwise. (6) The future plans and prospects for discovery by any party to the liti- gation on the Assigned Pool-Related Claims. (7) The future plans and prospects for motions by any party to the litiga- tion on the Assigned Pool-Related Claims, particularly including sum- mary judgment motions. (8) The status of settlement discussions and proposals, provided that ini- tial settlement proposals and settlement strategy will be disclosed at BB 015 -2_ 3865.COO least 10 days prior to communication to adverse parties unless Desig- nated Counsel otherwise agrees. 3. REVIEW The Designated Counsel will have reasonable opportunity to review strategy with each County Law Firm regarding the prosecution of the Assigned Pool-Related Claims, and will have reasonable opportunity to suggest strategy in prosecuting the Assigned Pool-Related Claims. 4. PLEADINGS AND DOCUMENTS a. Each County Law Firm will deliver in a timely manner to Designated Coun- sel all pleadings, including all motions and supporting papers and all filings responsive thereto, served on or by such law firm as part of any litigation on the Assigned Pool-Related Claims, unless Designated Counsel agrees that such delivery is unnecessary or burdensome. b. Each County Law Firm will make available for review by the Designated Counsel, at reasonable times, any documents provided or made available as part of any discovery or investigation in any litigation on the Assigned Pool- Related Claims (other than documents which are subject to a protective order that would require such County Law Firm to restrict such access) and shall provide access to all computer databases in which data produced in such discovery have been stored. Copies of any documents and access to computer databases to be made available hereunder will be provided to Designated Counsel and the County Law Firm providing such copies shall be reimbursed any direct costs of providing access thereto by the Settling Option A Pool Participants. se-015 3_ 3865.000 5. CONFIDENTIALITY a. All information, knowledge, and documents provided to any Designated Counsel pursuant to this Exhibit "6"(other than documents which are avail- able as a matter of public record or nonprivileged documents which Desig- nated Counsel is required to produce by court order or legal process) shall be held in the strictest confidence by the Designated Counsel. In the event that Designated Counsel is asked to disclose or produce any such informa- tion, knowledge, or documents in connection with any legal proceeding, such Designated Counsel shall give prompt written notice of such request to each County Law Finn and shall cooperate with the County Law Firms in oppos- ing such production or disclosure. b. The information, knowledge, and documents exchanged under this Exhibit "6"may include confidential communications, mental impressions, or other matters that are privileged or otherwise protected from disclosure because of the attomeyclient privilege, the work-product doctrine, or any other appli- cable privileges or protections; any such privileged information and docu- ments shall be held in confidence. C. The Exhibit "6"Parties shall enter into a Joint Prosecution Agreement, in a form acceptable to counsel to the County and the Designated Counsel, which agreement shall preserve all applicable privileges and work product doctrine rights of the County and shall cause their legal counsel to cooperate and consult with each other so as to assert and preserve all privileges that may apply. No such privileges and other protections shall be waived without the express, written approval of the County's counsel and the Designated 88-015 ¢ 3865.000 Counsel. Any inadvertent waiver or disclosure, or any other waiver or dis- closure of privileged or otherwise protected materials by one Exhibit "6" Party shall not constitute a waiver of the privilege on the pan of any other Exhibit "6"Parry. d. Notwithstanding anything to the contrary in this Exhibit "6",any attorney at any County Law Firm may refuse to provide information (whether orally or in writing) or documents to any Designated Counsel, if such attorney reason- ably believes that the disclosure or production of any such information or document would result in the waiver or other loss of an otherwise applicable privilege. 6. MISCELLANEOUS a. The Exhibit "6"Parties agree to execute any and all documents and to do and perform any and all acts and things necessary or proper to effectuate or further evidence the terms and provisions of this Exhibit "6". b. The cost of providing documents to Designated Counsel will be paid by the Settling Option A Pool Participants. BB-015 5_ 3865.000 EXHIBIT "7" TRANS PARTICIPANTS PRINCIPAL SCHOOL DISTRICT AMOUNT Anaheim City $8,700,000 Brea-Olinda Unified 3,300,000 Capistrano Unified 28,000,000 Centralia Elementary 5,000,000 Coast Community College 15,000,000 Cypress 4,395,000 Fountain Valley 3,400,000 Fullerton Elementary 5,000,000 Fullerton Joint Union High 9,790,000 Garden Grove Unified 20,000,000 Huntington Beach City 5,000,000 Huntington Beach Union High 17,500,000 La Habra City 3,000,000 Laguna Beach Unified 3,500,000 Los Alamitos Unified 3,500,000 Magnolia 5,000,000 Newport-Mesa Unified 22,300,000 North Orange County Community College 16,000,000 Ocean View 5,000,000 Orange County Department of Education 18,300,000 Orange Unified 17,400,000 Placentia-Yorba Linda Unified 18,500,000 Saddleback Community College 14,800,000 Santa Ana Unified 33,900,000 Savanna 2,200,000 Tustin Unified 6,175,000 Westminster 5,000,000 TOTAL $299,660,000 SET BY: 5-28-35 ; 15:52 COIA7Y OF ORXVEE SRfltld\ TREISTER4 2i 2 Orange County Investment Pool Secific Investment Funds-Not Held at Bank of America Faced Foal Ba1am w of Number Name lavestasmA Dewiption De ba 6,19H 4885 RANCH SANTA MARGARITA CFD B6.1 $ 1Aa5 99374 GIC w/ Union Baok of Fhdmd(6/23/95)-7.8% 4965 LOMAS LAGUNA CFD 88-2 20AW.00 GIC w/ Crown life(next coupon 8114/95)-85% 5MS FORTOLA HE IS CFD 87-ZA 1,S58,500.00 GIC w/Union Bank of Flolud(next coupon 8/14/95)-7S% 5065 IRVINE COAST ASSESSMENT DISTRICT 47,994A2938 Fidelity Tax-Exempt Mutual Food-379% Dreyfus Tax-Exempt Mutual Fund-3.66% 50$ RANCHO SANTA MARGARITA 8758 2UM.00 GIC w/ Crown Life(m t wupon 8/14/95)-85% SIS5 SANTA TEREKTA CFD 87-9• 57L%= GIC w/Crown We(next=pan 9/14/95)-B.6% 517S RANCHO SANTA MARGARITA CFD 87SC 680,OMOO CIC w/ Algemene Bank(next coupon 8/14/95)-8.4% TataL S 52A ,im12 EXHIBIT 8 MEETRIGDATE: 03/29/95 TMEE. 7:30 p.m. DIsT111CTs: 1, 2, 3, 5, 6, 7, 11, 13 & 19 DISTRICT 1 JOINT BOARD5 IMORENOI .. .... . .. .. MC GUIGAN . . .. _ �� IBsZLOI ........... AGE . . .. ......... IPERRYI . .... ....... MUIRPHRRR . . . .. .. . JL ISmTn I ............ & ........... _ ICOTTIH .... ....... SALTAR . . . . . . ... W ISCOTR ............. COLLWS .......... _ iPO (STEIN I ... ....... STANTO LLI . . . .... ✓ Imm . ............. OOX ......... ISIEWER) ........... STANTON . . . . . .. .. Ir ICOWG ............... DEBAY ........... NEW ............... DENES ........... — — —DIADEM) ............. DETLOM ......... DLSTRICT 2 IPANSERI ............ DUNLAP .......... . . ISCOTTI ............ COLLINS .......... . IDOMMEYI............ ECXENRODE . ...... IGULLWSONI ......... A1EYN1 . .......... y/ IPERRYI . ............ FEIIRYMAN ........ IBELLI .............. DENES .... . ....... t IANDERSONI .......... RONA . .......... _ — WARKERI ........... "LAP.. . ........ Al' IMARSHALU .......... GRDFW ........... IMORENOI .......... EOKENRODE . . . . . . .. JG IWELCNI ............. OULLI%SON ........ IANDERSOM ......... RORA ............ �� MARDI .. ........... HAMMOND ........ IDOWNEYI........... MCOUIGAN ...... IBAUERI . .. .......... LEIPIIG .... ......... ICOONTLI ........... J IM . . . . .. . . . .... LWN ........ _ _ INORSY) ........... SA . ..... IMOREN01 . . . .. . ...... M UIGAN........ — IZLAKE7)............ SINGER ... � UONRI .. . ......... UPHY .......... —ISTEING ......... . . STANTON MUNLA% . ........... PAR........... . IDALVI ........... . . IEMEL ............ IEPPERSONI........... RNZ ............. _ _. INORBY) ............. SA . . ............ DISTRICTS IPOTTSI . ............ SALTARELU........ IDOTSONI ........... SAPIEN MOTSOM ............ SAREN ........... — ........... JL IGER (PARKER) ......... A" ............. JG ULAKER)............. S ......... (BOWMAN) AOE ........... STEINERI ............. STANTONWINTN ......... ILASZL0) ........ BROWN ........... ISTLLERI . ........... STEW ER .......... — (SCOTII ............ COLLINS .......... WAH SI ............. 'SWAN . . .......... (ANDERMIND ......... RONA ............ .� RVANLSTROMI ........ SYLVM . .......... _ WARSHAW ......... ORRFW ........... _K IGU"SONI ......... WELCH ........... — MAUER, ............ LEIRIG ........... IDALYI .............. ZEMEL ........... (MINER) ............ YNIP .. . ....... —LL IMORENO) ........... MCOUKi" ...... _ IEPPERSOM.......... RIM .. .. JC STA" OTHERS IN01)BYI ....... SA . ............. Jz ANDERSON ... IZLAKER............ SINGER ........... .&,& —_ HASENSTAB 7 DEMN...... ISTEINERI ........... STANTON ......... J[ HODGES ... JL Slow ..... IWAHLSTROMI ....... SYLVIA ........... PP KYLE ..... JL LEE........ IDALYI .. ........... ZEMEL ............ . LWDER .... JL WON.10M.. _ MMELLYE.. JL WON...... DISTRICT MOWELLY .. 6NAW...... ICOXI .............. DENY............ JWe OOTEN . ... •L STONE ..... _� [STANTON) .......... STENER........... SIREED ... ♦G .......... IDEBAYI ............ CO% ............. TALEM . ... .......... TORRES .. . r✓. .................... _ DISTRICTS TYNDALL . . .......... (PERRY( Wmm,Pi BI......... ✓ VINO W ... .......... •.•••••••••• } WINSOR .�..^ % (STANTONI .......... MINER........... L ,� /.'��W����_����`/, P DISTRICT] �01GIN( / i IWARDI ........... . NAMLIOND......... � �{XV'�F IwxI . ............ DERAY .EW ........ IPERFm ............ DEBAY . . ........ ....II IMORYT ............ IMOREN01........... MCGUIOAN ICOONRI ........... ISTANTONI .......... STEDIEREWER. ........ DISTRICT 11 IBAUEM .. ...... .... LEIPDR ........ IBAUEFU ........ . ... STANTONO ....... IL((/PYLI/ G(iLO'L9 DISTRICT .. . .... .... STANN ......... ✓P _ _ /_ DISTRC 13 IWELCNI . ........ ... QUI-LD(SON ........ OU INLA% ........ ... PARSER ........... _ ( N ........... MWIRPHY INER ........ (STANTON)DALY) . .......... STEBER........... JA (DALVI ............. ZEMEL ............ JQt — DISTRICT 15 IPOTTS) ........... . SALTAREW ........ JG IWARDI ............ HAMMOND......... ICOONT71 ........... MURPHY .......... J[ DLI02 ISTANTOM .......... STENER........... 03103,95 (MILLER) ............ SWAN ........... .V.- 03/29195- SPECIAL JOINT BOARD MEETING #3- DISTRICT 2. Appointment of Chair pro tern JC: Just to expedite this tonight, I select Burnie Dunlap to be the Chair pro tem for tonight. 96- Pima Gro Amendment JC: We will move on to Item #6, if you would indulge me here a minute. We would like to dispose of this. This is a quick item that we can lake up and get rid of some staff, if you will and so desire. GM: Mr. Chairman, we can make a staff presentation but the long and the short of it is this is a contract to reduce, to avoid costs of about$10,000 per month because Pima Gro is hauling shorter distances and, therefore, is prepared to enter into an extension of the existing contract and the savings are substantial. Therefore we can provide you with a staff presentation and go into detail, but that is the issue before you. #5 - Update on County s Commingled Investment Pool JC: Blake will introduce this item and we'll have a lengthy presentation for you tonight. BPA: Thank you, Mr. Chairman. One hundred and two days ago we all woke to the reality that the County was bankrupt. Our community suffered losses that ultimately totaled at$1.69 billion. For the Sanitation Districts, the loss totals approximately$100 million. For all the cities, water districts and sanitary districts that are in this room tonight, the overall loss is $370 million. But more important than this is the amount of money that remains in the investment pool that is ours. For the Sanitation Districts, there remains $300 million in cash in the investment pool, and for all the cities, water districts and sanitary districts, the total amount of cash sitting up in Santa Ana is over$1 billion. Tonight the Board has on its agenda what is arguably one of the most important, single decisions that you'll ever make: whether or not to accept the proposed settlement agreement that is in your agenda folders and will be described to you tonight. The presentation will outline the details of the deal, the legal framework under which it was written, the litigation and settlement attributes of Options A and B and a process will occur in moving the proposed settlement through Judge Ryan's court. You'll hear about the timing of events that will occur between now and the beginning of June. Tonight with us is a remarkable group of talented people that I've had the pleasure of working with since mid-December, and three of them will be providing presentations formally to us tonight. The first one will be given by Freddie Riess of Price Waterhouse. He's the partner in charge that's been supporting the investment pool committee. He brings energy and talent from an accountant's point of view and has worked tirelessly in bringing the facts forward much more effectively than anyone else in the rase. And h's been the important element that the investment pool committee's been able to use in pushing forward our points of view and properly analyzing the more than 190 accounts that made up the pool. Also with us tonight, and second up, is Richard Ardoin, who is the head of Bronson, Bronson & 1 McKinnon's commercial and security litigation department, and is part of the pool committee's litigation subcommittee. Tonight, Richard wears two hats, as a member of the Bronson, Bronson &McKinnon's legal team that represents this agency as well as the broad role for the pool committee. Thirdly, tonight you're going to hear from Gary Hunt of The Irvine Company. He represents the business community and was one of the three people who was instrumental in bringing the County and the pool committee together in the Tenn 6 sheet that was presented in early February, and it was realty the seed of what we have here before us tonight. Also with us tonight is Cindy Dennis, also of Bronson, Bronson & McKinnon. Cindy and I have been spending too much time together in the last few months, and hopefully what we'll see through all of our efforts of this agency and for the other agencies in this room, I think, is the settlement agreement that, I think, makes a lot of sense. And last is Jon Schotz of Saybrook Capital, who has worked very closely with Price Waterhouse in bringing the facts and figures together and bringing a lot of creativity and what kind of financial opportunities and implications the last few months have provided. So, with that as a brief introduction, I would like to tun it over to Freddie Riess, who will give you a description of what the deal is. FREDDIE RIESS: As Blake has indicated, a lot of time and effort and energy has gone into bringing the settlement agreement to its final form. It has been distributed to all pool participants today. It basically got completed over the weekend when the committee met for the last time to discuss some of the details. Again, we believe that the agreement represents the best arrangement that could be made at this time to resolve the pool participants' interests as well as to avoid any further problems or further Chapter 9 bankruptcies that might occur had the pool participants' committee and the County not worked hard together to get to a settlement that everybody could live with. Again, the most important part of the agreement was that it gave everybody their options. While there may be preferences by individual members of the committee and the professionals, people still have all their choices. Clearly, people can decide to be a settling pool participant which means they choose to settle and they can elect two options, also known as Option A or Option B. And to those who feel their rights or their desires don't match either of those two, then there is no action which is really Option C where they can litigate, I guess, to their hearts' content and see where they come out eventually. Clearly, the pool participants' committee in its voting over the weekend clearty supported the plan and wants everybody to pick Option A or B. I think there is probably, if I had to give my own personal vent on that as well, is probably a strong sense that if you want to advance the cause of getting on with helping the County solve its bigger financial problems than just the pool itself, then picking Option A makes it easier to go forward because in essence, as you will see, picking Option B still leaves a certain amount of litigation that will remain open and, therefore, a lot of time and energy will be spent on litigation about the balance of somebodys claim and that may be distracting at a time when more of the time could be spent on just solving the Countys problems and their financial difficulties. Again,just a quick schematic you have in front of you in hard copy. Those who pick Option A get cash right now, based upon, again, which fund that we're in. We're going to give you a little more detail on that later. They also get notes, recovery notes. They get claims for, they get 2 senior-secured claims, which we can define in a little bit, and they get a repayment claim. All of those together add up to 100% of their original 12106 investment balance. Now in addition to that, everyone who is either Option A or Option B has some additional considerations as well to the extent that some of the income last year in 1994, as previously reported was, I guess, the polite term might have been skimmed into a reserve for economic uncertainty. That amount is also going to be paid to each and every pool participant the way it would have been distributed last year had it not been set aside so that everybody, based on their average daily balance, will get the income from last year that was not previously distributed. In addition, the second additional consideration everybody will get is the extent that no income was distributed from July 1st until December 6th, the day of bankruptcy. We also refer to that as the pre-petitioned interest. That will also be paid out to each and every pool participant, again, based on their average daily balance in the fund, that amount of money in cash to the extent that there is cash set aside for that will also be paid to each and every pool participant. So whether one elects Option A or B, those are two additional cash considerations that will still be paid to everybody. Again, Option B, you basically take the cash, which on average is $.77. If you're in the commingled pool, the exact amount was 76.260, and we'll explain some of the details about that later. And then you have to file a claim that you have a claim for the balance. In otherwords, under Option B you reserve all your rights and do whatever you wish to do, but you don't have a claim other than the cash you get out and, therefore, the County, Mr. Bennett, will obviously object to any claim above the cash if you take Option B, and you will have to litigate to prove that you have a claim greater than the amount of cash remaining_ It's sort of the mutual-fund theory that your money was in a mutual fund, that's all it's worth today is $.77. If you believe you've been damaged, you have to file a claim to prove your damages before the judge in the bankruptcy court. That's why I said to the extent that people pick Option B why they are still settling, it involves a significant amount of potential future litigation. Lastly, if you don't elect either Option A or B, then you get no funds out of the pool until such time as some court awards you whatever you're going to get. It is just total uncertainty. It seems to me very difficult to comprehend those who benefit by taking Option C, when there may be some who need to do that for whatever reason their own district or their own school or whatever needs to do that. So, I guess, I'm just, one of the things that the committee tried to do, though, was leave everybody with all of their options open hoping that everyone would see fit to pick either Option A or B because then they are, in essence, a settling pool participant. GULLIXSON: In terms of everything said on Options A and B, what considerations are we giving up to the County] FIR: If the settlement agreement in total gels approved, and let's assume for the moment everybody is either an A or B participant, then every participant will get their cash, their share of the cash that's in the pool today, and the County agencies that are also in the pool will get the cash applicable to those agencies. In other words, the pool will be liquidated. There will no longer be an OCIP any longer. GULLIXSON: Plan B ..... are we saving any legal rights over Plan B? FIR: Yes, there are some and there are a lot of fine legal points, which I'll leave for the attorneys to cover. But in particular, if you prove a claim above the cash, and your Plan B Option, your claim will be an unsecured claim of the County. What you are giving up is the trust fund theory, 3 which means you can try to seek under Option B, if you pick Option B, you can't seek the trust fund theory that, in essence, you should get 1000 in cash before the County gets any money. So anybody picking Option A or B doesn't have the right to try to seek to get any money from any other pool participant or from the County. Everyone gets their share and they keep their share. If someone takes Option C, they could try to get a court to determine whether or not they are entitled to get 1000 in cash. What happens to the plan, Option A, looking at the Sanitation Agencies as a group, under Option A there would be an additional amount of cash of$305.7 million that would be distributable to the agencies as a group. There would be recovery notes of$20.6 million. Again, the recovery notes are going to be a super priority and will be the first items paid. The agreement has in it that the County has to make those as good as gold or cash-equivalent. You've heard different terns in the newspapers and Jon Scholz will talk about that in a few minutes, and the County has agreed to do their best effort to make them cash and make them very liquid by June Sth. And, again, it is very important, especially to the schools because clearly the schools need it to get to about a 900 total cash, so to the extent the schools get$.76 in cash and $.14 in recovery notes, that$.14 in recovery notes has to become cash for them or else we still have problems with their keeping themselves out of further financial difficulty. Again, the other part of the IOU's, the settlement secured claims, the Sanitation Districts as a whole would get$45.8 million. Those are unsecured claims of the County with security in the litigation proceeds. So every dollar of litigation proceeds gets split according to a formula, 65% to the pool participants, 35% to the County, that ratio which is slightly different than what was in Term Sheet 6 is correct in the sense that it represents the total deficiency everybody has suffered by being in the pool and so as litigation proceeds come in from the very first dollar until every claim has been paid in full, 65% goes to the pool participant and then gets share pro-rata, 35% goes to all the county agencies that were in the pool to fill their deficiencies, as well. Then there's the repayment claim. It was previously called subordinated debt. It's changed somewhat dramatically since the original Term Sheet 6. Jon Scholz, when he gets up,will cover some of those things. The Sanitation Districts, as a group, will get $50 million of those. Those actually have a junior claim in the litigation proceeds so that after all the senior secured claims get paid which aggregate $342 million for all pool participants, then as litigation proceeds exceed the amount required to satisfy the settlement of secured claims, then the money immediately goes to pay the repayment claims until those are extinguished in full. So from first dollar until everything gets paid in full, litigation proceeds basically get shared 65%/35%, 65% belonging to the pool participants. Just in case it wasn't obvious before, if the Sanitation Districts as a whole pick Option B, they would get$305.7 million cash, the same number we had on the previous slide, and nothing else. No other notes, claims, IOU's, etc. Until some court some day determines that they have a claim and then that claim will just give them a right to a claim. It won't tell them how that claim gets paid. The Orange County bankruptcy ultimately will have a plan of adjustment. That plan of adjustment will then deal with any and all claims that exist against the County and how they get paid. So litigating here is just to get a claim allowed. It doesn't tell you once you gel your claim allowed how it gets paid, or what seniority or what rights you get with that claim. That's to be determined. So I guess the schematic here, 1/2 to 100%, is basically a summary of the previous slides. 4 You'll notice over here that I mentioned before that those electing Option A or B that the $305 million distributed to the Sanitation Districts as a group, that is in addition to the $48.9 million that has already been withdrawn under the emergency withdrawal procedure that was put in place to keep everybody alive where people could withdraw up to 30% of their claim if they had an emergency and the committee had to review those as did the county. So, in essence, they would be approximately$354 million in total distributed under just by doing the settlement agreement. There were a couple of issues and I'm going to let Jon Scholz go through those first. JON SCHOTZ: ...3 pools or one pool. ...recovery notes are as good as gold. .. the actual amount of cash will be 76.20 for every dollar. In the bond pool, it is 83.4¢. What we're doing is we were able to take those participants in the bond pool ...were going to get recovery notes before who were not .... are reallocating their recovery notes for those people down on the cash...so that be reallocating our_we were able to maintain the which got us interested in pursuing this in the first place. The withholds are another issue that came out at the last minute. And what those were$240 million, $118 million of which had nothing to do with . That has been dealt with. There is another$121 million that we were told was cash but it has turned out to be cash held by brokerage firms that have loans with the County— Those loans the County went bankrupt, those loans were liquidated.......We have been told that of the $121 million, roughly half of that is going to come back by the time this plan goes effective. The balance, $58 million held by_is a major target of litigation and they have asked for a very onerous release from the County. Eventually that might come back. It makes sense rather than jeopardizing our claims from First Boston to allow that to stay out there, wait on the cash until it comes_ Our share of that will be $41 million, and the County's share is the balance. Unfortunately, those two issues held us up for a little while before we could get our arms around it because it did come up at the last minute. Information has not been perfect. But that's what you do. And as Freddie goes through the schedules, he'll show you exactly on the line item for the Sanitation District how that impacts you. What is critical about this deal is understanding the improvements _deal were made between Term Sheet 6, which came out in February, and where we are Today. First and foremost, recovery notes will be good as gold by June 5th. For our committee H was essential, particularly for the schools, who need to receive $.90 on the dollar to avoid further Chapter 9 bankruptcies. Recovery notes only work for the schools if they are cash-equivalent by that date. If they start to have debt payments that are due, I think June 13th is the first series of payments for the schools, so if they don't have cash by June 51h, we have the beginnings of a meltdown which I think everyone wants to avoid. We want to avoid it. The County wants to avoid it. The second thing we improved was the litigation proceeds will flow directly from the settlement secured claims to the repayment claims. Previously, in Tern Sheet 6, the litigation proceeds Flowed from settlement secured claims, where we were to recover roughly$307 million and the County recovered $160 million. The next $100 million, or$90 million, would go all to the County. And then the repayment claims would then get the balance on the same pro-rata split. We felt, and the County agreed, that it wasn't fair that they take that$90 million_that was their effort to recoup their recovery notes. So now it flows directly from the senior secured 5 claims directly to the repayment fund. The other thing we were concerned about was the Merrill Lynch, I'm using Merrill as an example. We didn't want the pool participants to ever be subordinate to any target of litigation of the County. In other words, there's a $600 million taxable note the County did last June. One of the rumors is that, and it would make a lot of sense, is Merrill Lynch would go buy those notes from the investor , and they would then have an unsecured claim against the county that would be ahead of all the payment claims. We felt that we couldn't stand for that and the County agreed. That was not in the original term sheet. One of the most important things we did is we made the repayment claim much stronger. Previously it was merely a hope note. What it is now is the County will use its best efforts which sounds like not a whole lot but 8 is a standard to hold people to, and it will be a smaller amount. It will be very clear at the time what comes ahead of the repayment plan. Most of what comes before the repayment plan are claims and notes payable to our pool. There's $236 million if everyone went into Option A of recovery notes. Those are ours. We are on the same level of settlement secured claims of$342 million as the county's short-term debt deficiency of$430 million. There are additional trade debt and vendor claims of roughly$100 million, closer to$70 million. . Now the County's share of the loss is treated the same. It's treated no differently than our share of the loss. So it is satisfying our_, the county gets satisfied at the same time. I think what we'll do now is Freddie is going to go through in detail the schedules that are in front of you FR: I might just add one other comment In terms of the separate pools. There are some funds that had as low as 5% in them, in fact one of the County funds was that low. And there was one fund that had 105% in cash in it. It happens to be a small amount, it was a cemetery district and now the joke is people are dying to get into that fund, but in essence everybody would get back whatever cash they were entitled to based on where their money was invested. Again, as we stressed before, the negotiations over the last couple of weeks was to make sure that those who didn't need the recovery notes, those were given to those to get them back to $.80 and $.90, respectively, so that obviously many of the cities and municipalities and Sanitation Districts, in particular, now get the $.76 cash, but get $.04 instead of$.03 in recover notes and again schools that get$.76 cash, get $.14 instead of$.13 in recovery notes so that they are back to the same position. The net effect, though, of honoring the sanctity of the separate pools, commingled bond pool and special funds, was in the aggregate $51 million of money and it is being paid to out to pool participants greater than if you had put everything together and treated it as if it was one big pool, which, in fact, would have required some very significant legal activity as well. So, in essence, the pool participants, as a group, have benefited by$51 million in the aggregate by honoring the separate pool concept. And I think that is an important item that we wanted to preserve as advisor to the pool participants as a whole. One of the last key issues over the last two weeks was how to make sure you know what you're getting when you sign and agree to be a settling pool participant. The first draft of the settlement agreement, itself, had some very, very complex formulas. I, as a CPA , found them almost unintelligible so I was convinced that if I found them unintelligible many other people would be, at least, confused at first hand. So what we decided to do, and got the County's attorneys agreement ultimately, was to reduce everything down to hard copy exhibits. So one of the things that is attached to your agreement is Exhibits 1, 2 and 3. What it basically did is took every formula and said what does that mean to you if you agree to settle. How much do I 6 gel in cash. How much do I get in recovery notes. How much do I get in settlement secured claims. How much is my balance in the repayment claims. How much interest do I get for the reallocated interest of last year. How much interest did I earn up to December 6th. And what else gets charged. In essense, this makes it easy for everyone to go back, check your own books and records and make sure you agree with your beginning balance of 12106. So these things took a lot of work. After we did it Arthur Anderson, on behalf of the County, went back to validate all of the information and all of the numbers. But I think this way each and every agency in a spirit of saying I'm settling with the County, I know what I'm settling for. Not having done it this way would have, again, given rise to great interpretation of what did the formula mean and potential disputes about the interpretation of formulas. So your committee thought it was very important to make it a very significant issue. Because of that ultimately we got concurrence in the negotiating process to put everything in writing. I am just very quickly, if you want me to do that, go across the headings to explain what we did here. We have set up a hotline, if you will, at the Price Waterhouse here in Costa Mesa. Anyone who is on this exhibit, any of the 194 participants, that doesn't understand their balance or their allocation can call our office. I'll leave the name and number here before I finish. My partner will sit with any participant who wants to make sure that they are being treated correctly because there is a very complex financial model that has about another 50 pages of printouts that backs up these schedules. This gives you the final results but if anyone wants to get more into the details, we welcome you and we'll explain it to you. Let's ignore the first two pages, which are the schools, and go to Exhibit 2 and go down to the Orange County Sanitation Districts, which as you can see in the first column had an original investment of$454 million. That is the actual investment by the Orange County Sanitation District. It is the original principal amount. Then you go to the next three columns which says Pool Cash Value. And, again, based upon which, how much money you had in each of the different funds, the amount in the commingled column is 76.26% of your original principal. That which was in the bond fund is 83.94% of your original principal and special funds, it depends on which special funds you were in. But, in essense, those are the three cash amounts that are to be paid to the Orange County Sanitation Districts. Going across the columns, the next one says Recovery Notes. We've calculated how much in recovery notes were required to bring the Orange County Sanitation Districts up to no less than $.80 total recovery after considering the recovery notes. So that number is a calculated number. Then we calculated, everyone had the right to $.09 in settlement secured claims to get up to an 89% recovery. Again, to the extent that somebody was in the bond fund, they may not need $.09 in settlement secured claims, so we actually reallocated some of those to the poorer cash districts vs. the richer cash districts. The goal was equality so that at the end of the day every municipality that was in the pool would have $.89 in recoveries after their settlement secured claim was paid. So in some cases, if somebody had all of their money in the bond fund, and if they were getting 83.94%, then they would have only gotten $.05 in settlement secured claims. They didn't need to gel$.09 to get up to $.89. So everybody, other than the schools, ends up after recovery notes at$.89 after settlement secured claims. And then the balance became the repayment claim and that gets them up to 100 cents. The proof of that is the very next column is called Investment Balance Recovery. That should be the same exact number as in the very first column. It was our way of proving that they add all the pieces across column 2, 3, 4, 5, 6 and 7. You now have, this is how your original 100% claim will be dealt with as part of the settlement agreement. So that now gave you a recovery, if everything got paid, 7 this gives you back 100 cents of your original investment. These are the instruments that get you there. Now we have the extra interest from last year that was now being reallocated back to you, in this case$5.6 million. The next column is the interest earned from July 1 to December 6, $1.1 million. That's additional cash. Later I'll tell you how many cash items there are and you can see it as you gel to the last column. Now, one of the other last negotiating points was because all of the money including the interest that was not paid out last year or the interest not paid out before December 6th was sitting in the pool. It also lost money. So it was only 76% left in cash to pay the interest. Our committee's position, which was sustained in the negotiation, was the claim you have, even on the interest, should not just be the cash that's available, but originally 100% of what the interest would have been. As an example, let's say last year when the interest got skimmed, $100 was skimmed from your account. Right now there's only$.76 in cash to give you the cash back. We got you claims for the other 24%, as well. We got you some additional recovery notes, we got you some additional settlement secured claims and we got you some additional repayment claims. So, to make things a bit confusing, the next three columns tell you really the total amount of currency that will be distributed to you upon closing. So total recovery notes with an asterisk is greater than the recovery notes earlier on the schedule because it includes the recovery notes that you got as part of the additional interest. So when you want to know what you're exactly going to get in the mail eventually, you're going to get recovery notes based on this column,which in the case of the Sanitation Districts, is $20,088 million. And you're going to get settlement claims of$44,186 million, and you're going to get repayment claims of$48,461 million. So at that point you've now gotten back that which was your interest that wasn't payable in cash as well. Sorry it's a little confusing that way. Lastly, going into the last four or five columns, many people have had interim distributions. As you see, the Sanitation District has had $46.9 million, you've already gotten that much cash so this is a subtraction. There is a professional fee reserve. The pool participants are paying all the professionals relating to the pool. The County is paying all of its professionals, as some of you probably saw in the newspaper today, paying all the professionals relating to the County. So a reserve is being set up in an escrow account so that over the life of the case, there will be the fees to pay the professionals. If it is not spent, then it will be redistributed to everybody pro rata to the amount that's been withheld. There is a Fannie Mae escrow that only involves the schools so I won't even discuss that. Then there's the withhold proceeds that Jon talked about. We've put a $.02 subtraction, that's$7.4 million. If it's down to one cent by April 30th, then that will be distributed as well. But right now until the $121 million is collected, it is basically$.02 per pool participant. Lastly, there is the cash. In essence, if you were signing the deal today and it had been approved by the court today and the County was writing a check to you today, the last column is the check that they would write to you today. So in essence the last column is the sum of the cash value columns in the beginning and the two cash value interest columns minus your interim distributions reduced by your professional fee reserve and reduced by your share of the withheld proceeds where the cash is sifting with a broker and not with the County so the County can't possibly write the check to you yet. So the last column is the check you would get there. And then there's one last item that is not on the schedule because it couldn't be reduced to a calculation yet. The pool has been liquidated by Tom Hays and Solomon Bros. And they invested that money by early January into very, very liquid instruments, no derivatives. It's 8 earning at about 5.4% annual interest rate. So that assuming we wait until May when this thing may go effective and have the court's blessing, there will be interest that has been earned since 12/07, but most of it will be earned since early January because in December was when all those toxic derivatives were being liquidated, so there may not be a lot of interest income being earned in December. But, anyway, we calculate that probably everybody will get their pro rate share of interest being earned on their accounts, and it probably adds about $.02 to everyone's balance. It will be distributed as soon as the pool gets liquidated, and it will be based on the average daily balance each agency has in the pool. And, again, that is probably an extra $.02. So that is why, between the misallocaled interest and the interest through 12/06, and the interest after bankruptcy, you've seen some people refer to the plan as being a 103 cent plan or 104 cent plan, it's your money, it's your income that just never got distributed before. But, in essence, people will look at the 12/06 balance because that is what was on your books. If all got paid, everyone ends up with about 103 or 104 cents of that original investment balance. I'm not trying to do funny math but I just want to say you've got these additional extra considerations that you get paid. And that's basically the schedule and hopefully, again, if you have trouble understanding any particular column, we would be happy to explain it to you. JC: Let's lake some questions on this schedule. Tom? SALTARELLI: .... 800mg system .... In here someplace? FR: If It's a County-controlled fund, Exhibit 3 identifies each and every County-controlled fund and shows how they're getting paid, as well. In their case it is just the cash value of their various investments based upon which fund it was in. If you look at the last three pages of this document, you'll probably find it on the County side and this aggregates all of the money, actually the last four pages, are all agencies deemed to be part of the County and are getting back their cash upon liquidation of the pool, as well. In fad,just in summary, the very last page, the county had just under$2.5 billion invested in the pool and they'll be getting on the effective date of this agreement approximately$1.5 billion back. ?7: Has the County taken action on this_yet? FR: Yes ??: What was it? FR: It was approved. They only had one option. GULLIXSON: I'm looking at— About September, 1993, the san district_$100 million ......totally segregated money. On this line can you show me where that $108 million would be. FR: That was in a special fund, so the cash value is sitting in a special fund column. Basically, the investment amount was$11 million by the Sanitation District. It was $11,625,000 to be exact. That was your principal investment in that$100 million transaction. That today is worth $1.687 million. So that has a 14% recovery. COX: It's the reverse repos that you're referring to, John, not the COP's. GULLIXSON: Yes 9 SAPIENT Did the tax increase,where .... FR: Let me answer that slightly differently. I'm very happy that the Supervisors voted and voted 5-0 for the tax. It's my opinion that without a tax, there was probably a very little probability that the repayment claims could ever be paid by the County. They just would not be .. repayment claims. The last 10 or 11%, which adds up to$512 million, between the schools, cities and municipalities, collectively you are holding $512 million of repayment claims. I don't believe the County has the resources to satisfy that claim in particular absent new revenue sources, and the sales tax clearly is a significant new revenue source. JS: There can't be a direct ... between the sales lax and ... that would require a certain majority, ..... You need to have a 50% majority to have a tax .... from any one source. When the money comes in, what we've set up are these priorities, property notes, settlement claims, deficiency,— And they'll be handled in that order. FR: So theyre not earmarked but clearly they help fill all the holes. The County basically has $2 billion of debt today that without this and asset sales, etc., did have certainties as to how they could be paid. DUNLAP: Do we have, the Sanitation Districts, any monies that were required by court to be deposited? For instance, we do condemnations. The court then will require us to ......... TLW: No. Interpleaders, condemnations, no. GULLIXSON: Is the County going after any preferential payments that were made in the 90 days before .... bankruptcy filed? FR: The answer to that is actually not. The settlement agreement, basically, has releases where everybody releases each other. Part of the spirit of getting the cooperation to get this thing done and to avoid litigation and delays, etc., it was decided there would be no effort to look at preferences which may or may not be valid anyway. Also, when you have a plan that will ultimately will pay 100 cents, assuming all the instruments get paid, then preference is meaningless because if you're getting all of your money back over time then the preference doesn't matter. The typical bankruptcy, and Cindy can certainly correct me, preferences typically have significance when people are getting $.10 on the dollar back because, in essence, you don't want someone who got 100 cents back to be benefitted while everyone else got $.10 back, so what happens is those who got 100 cents would put that money back and get $.10 in exchange for that and then the balance could be redistributed. In this situation, even day one, everyone is going to get $.76 or really$.80 with the recovery notes right away between now and June. So there's even is there was a preference, the net impact on any other participant would be very, very diminimus. And therefore the Committee discussed the issue and decided that it was not an issue that the Committee thought was worth pursuing. CINDY DENNIS: And, in addition, if we're claiming, it is sort of a trust, there may not be any elements of a preference so it's a very difficult and iffy case. JC: Who's up next? RICHARD ARDOIN: I'm going to try to do at least one thing for which my profession is not 10 famous, and that is go a little light on for what I know for you is a very difficult and complex decision. And I will come at this question from a very limited perspective, and that is my business is litigation and I'm going to try to lay for you a litigation framework for this case. Where do we stand right now on the litigation landscape and what does it look like down the road? This is very difficult when you're at the beginning of what could be a long road of litigation to know what it will look like months, even years down the road. And I'm going to try to do that to some extent. I'm going to start with perhaps the one area where there is some certainty. And that is, where is the County with the litigation that is now pending against third parties? Because you'll see that my perspective on the A and B decision is very much driven by the question of two pieces of litigation, really. The potential claims of pool members against the County should they choose to go B, or not sign the settlement agreement at all and opt for effectively Option C, and also, and perhaps even more importantly, the third party litigation. There are other parties out there who are exposed, both to the County and the pool participants. And in order to judge and evaluate Options A and B, you have to have some understanding of where the litigation against those third parties might go. So I'm going to start with where the County is right now, and that is the County litigation strategy and the County settlement strategy. Now, this is somewhat presumptuous of me. I don't represent the County. But I think one can determine from what has happened thus far what the County views as some of the strong positions it can take against Merrill Lynch, the essential test case, the first piece of litigation fled. And why is that important to the Sanitation District? Well, it's important to the Sanitation District because if we are going to lock arms with the County, in fact, pool all of the claims, the Sanitation Districts and any other Option A participants might have, and assign those to the County to be divided based on a formula that has already been described to you, it's important to have some feel for the strength of the Countys litigation team, the strength of the County's litigation strategy and whether they seem to have put it in some perspective at this early stage. So, I'm going to speculate for a moment based on what I've seen in the files, what I've seen in the motion practice and what appears to me to be some of the realities that Merrill Lynch and some of these third party defendants, because believe me, there'll be more of them are facing. And the County's litigation strategy right now is not terribly, complex. In fact, I think it is a strong position because it is so simple. Let me tell you one thing that has impressed me. And that is the County, again, who Option A participants will be joining and depending on to a great extent, has a very strong litigation counsel. The Howry and Simon firm is a firm in which you can repose and those who both oppose and litigate on their side have some confidence and trust. It's a strong litigation team. Perhaps more important, these are people who have not only litigated, but they've actually tried cases. So they have formulated what I think is a very credible strategy. And that is to sue Merrill Lynch and not everyone else right away. And to isolate some specific claims that, if I were on the other side, and third parties will be on the other side of this Sanitation District no matter what your options are, would give me some concem. And those are essentially what are called, it's lawyer talk, ultra varies claims. That's simply a Latin term which means illegal transactions. The theory of the County, their lead theories, are essentially two causes of action which accuse Merrill Lynch of engaging with the County in illegal contracts. And it seeks restitution because those contracts are illegal. And why are these, the two causes of action, that seem to be 11 highlighted by the County? But first of all there are very few fact issues involved. Everyone knows how much debt the County incurred. Everyone knows essentially the structure of the derivative transactions which were sold to the County by Merrill Lynch and others, so that the facts are not in great dispute. Isolating legal issues which can actually be determined very quickly and will be pushed very hard for an early determination by the County and anyone who joins with them in asserting these types of claims. I'm not going to get into the specifics of them, but they certainly deal with the issue of whether these governmental entities, whether they be local districts, the County, municipalities, water districts, sanitation districts, whether the funds that were invested for them are subject to the very clear limitations on the incurring of debt beyond annual revenues or income to the County. There are other issues. The question of whether the statutory scheme requires a matching of maturities of these derivatives. Essentially, the argument is that the statues do. And if these transactions didn't, and it did not, then theyre illegal. And if they are illegal, they are unenforceable and it doesn't matter, says the County, and they have a strong argument, whether Mr. Citron or anyone else participated in a fraud, went beyond his authority, has participated in conduct which could lead to some kind of stoppel or unclean hands, all of that is put aside in an ultra vires argument because the beneficiaries of this type of argument are the citizens of Orange County. And anyone that deals with the government of Orange County is assumed to have a law book in one hand and the contract in the other. And whether or not that entity knew the law, it's assumed to have understood it. So the argument will go that the citizens of Orange County are to be protected by these statutes. It's irrelevant if a County official went beyond his or her authority because that's what illegality is all about. Of course, it was beyond their authority. My God, it was illegal. If it was illegal, it is unenforceable and, by the way Merrill Lynch, we want all of the interest you earned on those contracts back. That is the focus right now. That is the litigation strategy, to put a lot of pressure on one party. Again, I'm not privy to exactly the litigation strategy, but that's what is happening in court right now. And I anticipate that is going to be a strong push by the enemy in the near term. You'll see why that's important in your decision on A and B. The County settlement strategy is, I presume again, if I were the County, it would simply be a derivative of my, shouldn't use that word, it would be a product of my litigation strategy. And that is that there's a lot of pressure on Merill Lynch right now. They've got the Kemper lawsuits, taxpayers' lawsuits, the SEC is all over this issue. There are bond claims out there. Joe Katchid and Mr. Learac are two leading plaintiff class action securities lawyers in this state. And if there is a default on those bonds, theyre going to have a very strong litigation strategy against Merrill Lynch and others. It may well be that the strategy is to trigger an early settlement of these claims in order to generate enough funds so there isn't a default on a bond claim. If there's no default on a bond claim, Mr. Katchid and Mr. Learac have to live with a no heart, no valve problem and no damages. There is a lot of pressure on Merrill Lynch and a lot of pressure on everybody to come to the table. I believe that the County has a well-conceived, if in fact this is their strategy, a well-conceived strategy. And we'll see why that can impact the Sanitation District in a moment. Against that background of what is happening, let me talk to you a little bit about what I see as the strengths. If 1 were arguing for Option A or B, and you know lawyers will argue either side of any issue, these are the things that I would point out to you. I'll go through this in some detail and please don't assume that each of these attributes is not without cater veiling problems. I'll try to be objective and balanced as I go through it. Option A would offer me certainty. It would offer participation and it would offer some safety. 12 Option B would offer me some greater control over my litigation. Again, I'm looking at this not from a political, and I don't mean that in a priority or economic position, I'm looking at it from a litigation standpoint. I have a lot more control over my litigation under B. I have both the opportunity and the requirement of being more creative under B. We'll talk about that in a second. And I believe there is a potential upside for B. If people who opt for B, we'll be talking about that, the idea that maybe they can get something more than 100 cents on the dollar. Let's go through each of these and I'll just try to flesh each of them out. Under Option A the first point I mentioned was certainty. This is a strong suit, perhaps the strongest suit of Option A. You may not love what you have, but you know exactly what it is. You have to like the fact that your claims are allowed 100% in bankruptcy court. As people more schooled in bankruptcy will tell you, that doesn't mean you're going to get 100% of your money, but at least the County has stipulated to the allowance of your claim. Under B you are going to have to prove your daim. And the County has promised, whether it will or not, I do not know, to fight the participants on the threshold issue of the allowance of the claims, itself. Under A you don't have to worry about that. There is a fixed participation in third party recoveries. To the extent that everyone would opt for A,we would know that the recovery from third party claims would be 65% allocated to the Option A participants, assuming 100% participation in A by the pool participants. And you will see the B participants in there arguing, perhaps successfully but not with certainty, that they deserve their pro rate share of any recovery from any third party because the County was a trustee. And as a trustee, it is holding whatever it recovers for all the beneficiaries of the trust in the prorated interest in the pool itself. GULLIXSON: I thought we were waiving that theory... RA: If you go to A, you will get 65% assuming everyone went A, the group would get 65% of any recovery. B is not going to be able to challenge the allocation of$.77 to the County, but they can come in and say.. GULLIXSON: ....... C6 No, John. It's only on the 77%. RA: Only on payments out of the pool, the $.77, that's true. GULLIXSON: The issue is the remaining 23¢. Are we going to be waiving our right to act.. TLW: No. You will not waive it on that 230. 1 think there's a distinction to be drawn on the trust theory here. What you would waive is, and the lawyers in this room will follow this, I think, easier than others, but the 770 that's put there, when that's distributed out, everybody who takes it, A's or B's, is precluded from going after that and attacking that 770, that's the raise. That's the body of the trust in cash. In exchange for getting it, you cannot go against the County or anybody else to get any portion. But that has nothing to do with asserting the legal theory that the County held everything in trust in pursuing that, and if you succeed, you'll get the 23¢ or any other portion that's available. The idea being, if you weren't asked to waive that using, as an example if the City of Irvine takes Option A and Yorba Linda takes Option B and they settle out, and then you sue, Yorba Linda and you win, the court says you're right. You 13 have a trust theory. But you go to the County and they say our purse is empty. We have no dollars. You would then say she, but remember Director Hammond at the City of Irvine,you took 770 out of that trust and you shouldn't have taken it because the court just told us we were right and therefore I want it from you. And this precludes you from doing that or against anybody else including the County. So the waiver is only as to the actual cash received by anybody pursuant to agreement. And you waive your claim to both, get the cash and attach the cash. GULLIXSON: Are we waiving our..... TLW: If you get a judgement. RA: The only point I was trying to make here is that the B participants will not be absent when it comes time to litigate with the third party claimants. It's just that they will have more uncertainty as to what they may have uncertainty, they may recover 1200 on the dollar. But they may recover nothing. And they may be unable to share in whatever recovery the A's and the County achieve in their own proceeding. JC: Let's try to move it along, Richard, as best we can. I know there's a lot of questions and we want to answer them, but I think you'll get a better picture if you see all of the elements. RA: I intend to tell you everything I know during the course of this speech, so there won't be anything I can ask a question on that I don't tell you. It's the joy of not knowing enough. The third element of the certainty is fixed payment and security structure. There is a fixed methodology under which the County, your claim against the County will be repaid. It may, again, not be satisfactory to you, but you know what it is. And I think that is something, that uncertainty is something that B's will have to live with for a long time. Participation. Under Option A you do have the right to review and advise the County attomeys. The other side of this coin is that you do not have the control over litigation that you would have if you brought it in your own name. And you have to read Exhibit 6 to the agreement, which is the litigation review requirements. But it does allow you to review and advise the County as to the pooled claims. Second, I mentioned these ultra vires or illegality issues. It is our belief that there is an argument that can be made and, if fact, has been made already by Merrill Lynch, that the County's standing to bring those illegality arguments is superior to that of the individual pool participants. I'm not saying that's true, but I'm saying there is an argument there. And let me give you an example of the argument that's been made. Section 27000 and some of the other sections relating to safely and the ability to incur debt beyond your income on an annual basis mentions the County. And does not, on the face of the statute, apply to as many municipalities, local districts and other governmental entities as do some of the other statutes which may have been violated. Third, you have an interest in all shared claims. There may be pooled participants who assigned to the County claims that are very good claims. We will get a piece of those whether or not they are ours. And, in fact, to the extent the County has a better illegality argument, you would share under A the proceeds of that argument whether or not it was something you 14 independently had standing to bring. Under the category of Safety, there's an approved payment structure on allowed claims. This is really an element of the certainty I've already spoke of. You have a favorable forum. With the county having these claims assigned to it, it is more likely these will be decided in front of the bankruptcy judge who has thus far appeared to be favorable and, I think, a well-respected jurist. No litigation substitute for recovery notes. There is simply is no way the B's can litigate to obtain something which would be good as gold as the County is required to produce for the Ks. The consequence of them failing to do that is you can opt over to B as late as June of this year. Option B-You have control under B that you don't have under A. There is unlimited authority to pursue any party on any claim. As already indicated, the only thing the B's give up to get their money out, is to let everyone else take their 770, as well. Other than that, you have free range. You can sue Merrill Lynch on your own account. You can join with other B's. You can sue numerous securities if you think the County hasn't done it. You can do it anyway. Power to control all strategic and tactical decisions. Under A the County will have substantial control if not ultimate authority over litigation decisions, both strategic and ultimately the only appeal even a settlement, may well be the bankruptcy judge, himself. I believe that the pool participants who choose A will have to be given a strong voice in settlement, and that the bankruptcy judge will give them that. I also believe that County's counsel will give them that because it is a reality that most of the proceeds of that litigation will be going to A participants. But the fact is that the B's don't have to rely on that. They will control their own litigation. With control and with the authority and with the Flexibility goes responsibility. They have to advance their own costs. They have to make their own decisions. They have to successfully litigate and that means they're going to have to put a lot of time and money into effort into the process that the A participants will not have to devote. Independent settlement authority, that's just another factor I've already mentioned. The B's will retain that. Under creativity for the B's, again, they can be creative but the truth is they have to be creative because they don't have a structure in which to work. They have credible claims against the County. The County is going to fight those tooth and nail. It's going to be an expensive process and it's not a foregone conclusion. But they do have credible claims against the County. They also have the ability to set County and third parties against one another. I call this the two cats in a bag theory. As a 8 participant, and strictly from a litigation standpoint. Let's forget the fact we have governmental entities. It's always nice to sue the County on your claim, to sue Merrill Lynch and to put those two cats in the bag and let them fight out over who's responsible for this loss. Because the better job either one of them does on the other, the better off the third party who is not in the bag looks. It's an attractive litigation strategy. The only problem is that in this case you are not dealing with the same type of litigation context that we do in most instances. But that is definitely an attribute of B. Flexibility to intervene and disrupt County actions. There's no question that the B's are going to be intervening in to and trying to piggyback on the litigation efforts of the county and the Option A participants. On the other hand, there is a corollary to that. They are not going to be at the table when those decisions are made. They're not going to necessarily have access to the 15 computer document control mechanisms that the County spent so much money on. They're going to have to have their own joint prosecution agreement. They're going to have to have their own litigation fund. And then there is potential. If you go off and sue individually that you can recover from the County or from these third parties in excess of your principal loss. You can seek consequential damages. You can seek punitive damages. And that's an attraction that B will have. Whether the bankruptcy court in the final analysis will allow the B participants to recover substantially in excess of the A participants given a global settlement remains to be seen. This is much more attractive as an attribute if you're going to go ahead and go to trial. I will tell you that this type of complex litigation very seldom is resolved through a trial. It may well be in this case, but if it is not, there's going to be a bankruptcyjudge probably at the end of the day who's going to have to approve a settlement. And you may well decline to approve a settlement which favors one of these pooled participants over the other. Possible priority on some part of the recovery. It is possible that as a general, unsecured creditor, that the B participants could take priority over the last 110 of the A repayment claim. Again, whether the bankruptcy court and the County and whether the A participants will allow that to happen, there will certainty be objections to that happening. But that is a theoretical possibility. It is something that is attractive as a B participant over an A participant. To me those are some of the pros and Consideration of motion going each way. It's not a simplistic question. It's not something that I can sit here, and like Saint Paul you see the light and know which way to go. The litigation is not going to drive this decision. As I understand it, the real issue in these cases is going to in many instances come down to bankruptcy decisions. I believe it's the thought of many of the people with whom I've spoken to at the Districts that they prefer A. They prefer the certainty of A. They prefer the safety of A. They prefer to, in effect, not treat the County in the way you would treat a third party litigant, that the County, after all, is a part of the constituency of the Districts, itself, and it is an illusion to treat it as though it were a third party entity with unlimited resources and that the impact of a successful claim against the County will not be felt by the very constituents of the District itself. I think that is, from a litigation standpoint, a very defensible position. There are two sides to this issue. There are advantages and disadvantages, whether you go A or B. The question is whether you opt for certainty, participation and safety over the ability to control litigation over the potential upside as opposed to the reality and over the issue of creativity,which carries with it a lot of burdens. JC: We're not going to debate that right now but are there questions about what Richard presented? Tom? SALTARELLLI: ...explanation of illegality with Merrill Lynch makes sense. ..that is a theory that pool participants could .... RA: They would seek to assert every one of the illegality claims. I can tell you that some of the statutes specifically cover the Sanitation District as an independent entity, in our opinion. There are other illegality statutes or statutes the County claims that Merrill Lynch violated, and indeed the County violated, which appear to be more expressly for the County. And that will be an argument you definitely will see. But there is no question that the illegality argument is going to be made by anyone who is pursuing these third party defendants. And the beauty, of course, from the County's standpoint of the illegality argument is that you get beyond the question of the 16 County's conduct and you get straight to the question of illegality. That's what makes it so formidable as a theory by any of the third party defendants. And of course, the theory is that if it is illegal for Merrill Lynch to have engaged in such transactions, then they will be able to quickly have the same conclusion reached by the court apply to other defendants who they will be naming in the near future. SALTARELLI: The second part of the question is that given the fact that the County moves forward, wouldn't it hurt the claims .... have already released ... the County. Merrill Lynch will ..... trust theory. Doesn't that affect the ........ the county moving forward ...... RA: It won't in my opinion because we have not released Merrill Lynch. The County, we are assigning to the County every claim that we could possibly have individually. The County is retaining any claim that it might have, The only claim that I would see that might be attractive from a B standpoint would be an argument, this is the cats in a bag, that the County and Merrill Lynch conspired or Merrill Lynch aided and abetted the County in the violation of its fiduciary duties. But as far as the illegality arguments, I believe that in fact they're probably strengthened in someways by the assignment of those claims to the County, which clearly has all of the illegality arguments. JC: Let's go on to comments Gary Hunt would like to make and then we can get back to this as we begin to debate later on. Thank you, Richard. GARV HUNT: Mr. Chairman, thank you for inviting me here tonight. Blake asked me to come to the last meeting.......introduced himself as the Executive Vice President of The Irvine Company. He slated he was here representing Orange County business council who was ... by .... to develop a pool settlement. We met in eady January. Tom Sutton, himself and George Arygos. We brought in our own financial staffs. .......... JC: Questions of Gary anybody? Okay. Thank you very much, Gary, for that. We also have staff information on the financial picture of the Districts over the next 12 months this calendar year that we can share with you very briefly. We'll do that then put forth some thoughts. BPA: After all the theory and after all the discussion, I wanted to show you, which is included in your packages, is the reality of what our end-of-month cash flow condition will be for the rest of this calendar year assuming we receive no additional cash from the pool and assuming that we make no loans this next fiscal year. And we're under water by the end of July. I can go into more detail and there are more detailed breakouts within your packages, but basically we're out of cash in July. ......somewhat non-..... in the agreement and that issue is how to and when do we select Options A or B. It turns out there may be three opportunities to do that. The first one is between now and April 171h. If we choose to be a settling pool participant, we'll have a choice between Options A and B. That choice will have to be signed off by the Sanitation Districts, put in an envelope and sent to Price Waterhouse who will be counting the ballots much like they've done over the last month over the academy awards, and that information will be passed on to Bruce Bennett of the County's attorney and Patrick Shea of the pool committee. But, beyond that, once this thing goes in front of Judge Ryan, and once he has entered his final decree, there will be 11 days after that for us to change our minds depending upon what the final settlement agreement looks like after Ryan has tuned it up and maybe make changes due to 17 whatever pleadings will be heard in his court. The timing on that is a little unclear, but it would probably be in the vicinity of the first week of May. Assuming that the recovery notes are not made good as gold by June 5th, as now required in the settlement agreement, we will have three days assuming that we're in Option A to switch over to Option B. So there is dear flexibility, dear opportunities for this body to continue to analyze our best options and make a decision up to the very last moment. And the third point, and I think it's the most important point, is can we wait for our cash? As you've already heard, the only real money is the pool money. What is really frightening is Merrill Lynch and others are challenging the pool right now, and it is very unclear that in the event they were successful in doing so, how we would gain access to any of our cash on the short term. Right now the County is holding control of the cash and with this settlement agreement moving through Ryan's court, we have the opportunity to pick up that 770. Without the pool, that access is simply uncertain. As I've already described, we're under water in July. The delays in not knowing what kind of cash is going to be in our hand continues to give us fiscal uncertainties. We are in our budgeting process right now and, frankly, staff is running a little blind and has to make some sweeping generalities in what we expect to do for our budgeting process. On August 1 st there's $17.7 million worth of COP's that will be coming due for debt service. One more piece of hard cash that this agency will be responsible for producing. So in answer to the question can we wait for the cash, the answer is no. We really need the 770 as soon as possible to get on with the business of operating and constructing facilities here at the sanitation districts. JC: Thank you, Blake. Just to recap again one more time. Vic brought up the question of whether we vole tonight. We certainly can. Some people believe we have enough information and in a position that we could do that. That's one option is voting tonight on Plan A or B. The second option is call a special meeting on April 121h, which is two weeks from tonight I believe. And at that time we would vote for Plan A or B. And then to remind you that we do have a third situation and that is to vote to change the plan on April 26th which is the night of the next regular board meeting. I won't go onto June because that's triggered by another situation. So that is our options. There are some of us that believe that we need to get on with this. I know there's some of you that believe otherwise. Let me also make it clear, too, that this is more complicated because of our organizational structure. All nine Districts have to vote separately on this, so we could wind up with having some Districts voting, if they chose to tonight, of one way, and some Districts going the other way. And that doesn't help us out at all. So that's really the picture we're looking at and I just wanted to share that with you before we start out. John, and then Barry. GULLIXSON: Mr. Chairman, I would request before we start discussion on this that we go into closed session. JC:Are there any questions for the people here. We are entitled to go into dosed session, Tom, and discuss that HAMMOND: Can you explain ...Plan C. At some point do we have to come together or do the 18 majority of the Districts....What would happen with something like that? TLW: Recognizing that we have here in this room tonight representatives of nine totally free- standing, independent public agencies, we readily and normally consider ourselves as one. We have the Joint Administration,joint operations, but there are nine separate entities. In fact, the funds that are on deposit,wherever they maybe, in this case the funds that were up at the County Treasurer, are there really in the names of nine different entities: Districts 1, 2, 3, 5, etc. So the right of each agency to pursue the recovery of its monies is the determination of that agency. So in theory any number of agencies or Districts could opt for Option A and the others could elect for Option B. In that event, those going for Option B would be on their own, but it would be their funds that would be utilized to engage counsel and other professional staff and experts that would be necessary to undertake that. And that would not be a cost shared by all of the Districts. If there were two or three or four going for Option B, they obviously could get together and agree to some commonality. HAMMOND: ........ TLW: That is correct. There are nine separate agency funds. In point of fact there were 32 separate accounts or funds with the Treasurer. There were funds for each District for operations, funds for each District for capital, there was a payroll fund and an accounts payable fund, a benefits fund, etc. There were 32 of those. But the finance department has detailed records and can tell you exactly how much would be attributable to each District for both operations and for capital. Now I think on some of the funds that have been combined, Gary, you'll have to help me if we've already combined the fund. We could back it out very readily because we know the respective ownership interests in the joint facilities for each District. So the answer is there. Now, in terms of the schedule related to the settlement agreement, that schedule was prepared by Price Waterhouse independently. They used to gather that information records that they obtained from the County Treasurer, together with some records that were gathered by Arthur Anderson, the accountants for the County. And then they sought in each case to confirm by allotted otherwise the accuracy of that data. For the purposes of preparing that schedule they have combined all of the monies of these nine Districts into a singular amount. And that's what you see not on this chart but on the schedule to the actual settlement agreement. JC: I think, Barry, your question was the bond investment balances for each District, right? Which we don't have, but we do have in this handout which is up there the cash balances for each District. So where we would wind up District by District if you didn't participate and what kind of financial impact that would have on each District. Sal had a question and I want to make sure we get all of the questions of the staff that's here before they leave, and then we'll go into closed session. Go ahead. SAPIEN: I would like to comment on staff presentation. I understand what is STANTON: ....question of regard to ........ JC: I think there is a practical implication here that if a given District wants to take Plan C, you better have the money because the other Districts are not going to help you out, if you will. Any other questions? Burnie? 19 DUNLAP, ...cost of litigation and time and value estimate on Option A vs Option B? FR: One of the reasons why I'm a fan for A is on an economic analysis it is possible that you will get first your$.76, it is probable you'll get the $.04 in recovery notes unless you choose to hold them because they're going to pay them off—, so that's a portfolio question. But that gets you to$.80. It is also possible that the settlement secured claims, since they are parry pursue, meaning they're equal with all the notes that come due this summer as well, that when the County decides how it's going to refinance its debt that comes due this summer, there is and/or some settlements that may get paid in the short term versus the long term, so that one of the ways I look at this is if you have a sense of optimism, you may end up having $.89 of your claim in their relatively near term paid vs. if you are in B you've got$.76 and you wail until you establish litigation to be determined if you have a claim. Now let me tell you this. In most bankruptcy cases claims are not determined until the end of the bankruptcy case. When the case is over then the judge hears the litigation about claims. Let's presume for a moment that the Orange County bankruptcy case goes for two years. Two years from now you may then have your fight about whether you have a daim as an Option B person. Then, and only then, you get a claim. That, again, doesn't automatically get you cash. All it says is you may have a claim against the County and the plan of adjustment will then say how that gets paid over what time period. It may even be in an installment loan payout over time based upon what the County proposes in its plan, which could be a year or two away from now before it becomes effective. So my simple thinking for the moment is, you have a certainty of$.80 rather quickly, possibly of getting another$.09 relatively quickly within the next year and perhaps maybe even shorter vs. if you are B, you may get more than 100 cents, but you may be waiting for a couple of years before you see that. And, I guess, I prefer safety and certainty and I can stand behind Gary Hunt's comment that the cost of litigation and the distraction that it will take from the County fixing itself is an enormous price to pay. JC: Burnie,just to put that into perspective we'll put this chart up that Blake didn't show before, but the notes in this middle section of the page of$20 million, $44 million and $48 million, that's about $110 million that is at risk if we go Plan B. That's what we're holding out there to chase. If you follow Freddie's comments here and his optimism that we probably could get or we would get the $20 million in the recovery notes a probability of$44 million, so what we're chasing is $48 million under Plan A. GRIFFIN: Clarification, please. .... on dollars. Taking into consideration ...... JC: I believe so, that's right. Other questions? Okay, let's dismiss our panel over here. I wish to thank you all again for your presentations. SWAN: John, you wanted Don to stay, didn't you? Or who did you want? GULLIXSON: No SWAN: No staff JC: And only Tom stay? You want Cindy and Richard to stand by? Does any Board member have any discussion to have with them? CINDY: We are your bankruptcy counsel. 20 JC: Stand by, Cindy. Closed session #8- Request by Garden Grove Sanitary District re short-term loan GEORGE BROWN: One of our sanitary districts, Garden Grove, has ........ GGSD has a bond issue or note coming due for$5.4 million........ Peer Swan brought this to the attention of the Finance Committee. The Finance Committee felt that it would be a very poor time to have GGSD go belly up on this note. And Peer suggested that maybe one or two of the other Districts might have sufficient funds to loan. I have talked to the Chair of District 3 ..... it is a program that .........If the bond issue is paid off or if we repay money from bond issue, they will ...... $1.2 million. On Monday an increase in the rate. That enhances our....... The City Council of Garden Grove has also said they would be willing to back that loan. .........What we are looking for is a loan that ......$5.5 million and $1.2 million ... be taken over by Bank of America .... or some other financial .... There is some risk. Very little. The risk basically is that if the County doesn't come up with ........ so, I'm making a motion that the Districts go ahead and sponsor a loan to the Garden Grove Sanitary District for$5.5 million. SWAN: Just a point of order, if I may. What we're doing here, George, is we're recommending that the Districts loan the Garden Grove Sanitary District the$5.4 million subject to their agreement to repay us out of their$.76 as a first priority payment as soon as it comes back and also that they commit and have a commitment letter from Bank of America or an alternative to provide takeout financing so that would be that the excess of over the $.76. GB: We're looking at a six-month long loan, probably paid back in 6P90 days. And the interest would be the average interest .....The five year thing is out. That was ridiculous. JC: Okay, we'll consider the motion passed. 21 COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA MINUTES SPECIAL JOINT BOARD MEETING MARCH 29, 1995 ..i RICiS OFO9gy � c z � � a '�plFCl/N�E ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 ROLL CALL • A special meeting of Me Boards of Directors of County Sanitation Districts Nos. 1,2, 3, 5.6, 7, 11, 13 and 14 of Orange County. California,was held on March 29, 1995,at 7:30 p.m., in flm Distri Administati"Offices. Following dhe Ratio-of Allegiance and invocation the roll was called and the Secretary reported a quorum present for Distncts Nos. 1,2,3. 5,6, 7, 11, 13 and 14 as `7 follows: ACTIVE ALTERNATE DIRECTORS DIRECTORS DISTRICT NO.l: y Pat Me4"oh, Clair Ted A.Moran, James M.Ferryman,Clair pro tam y Arthur Ferry y Mark A.Mumhy _ Joanne Cooma y Themes R Immense Jim Pons y Roger Stanton William G.Steiner DISTRICT NO.Z: y J hh Collins,Clair George Soon Deriie T.Welch, Chair pro tam y JaM M.GWinson y Ba"Denes Bob BaII y Burtae DuNap Glenn Porker y Norman Z.Erkemode _ Carol Downey, y James H.Ran _ Stare Anderson y Fat McG W gars _ Ted R.Moreno y Mark A.Mmphy Joanna Comm y JWie Sa _ Chris herby y Sheldon Super Seems L Zieket y Roger Stanton William G.Stainer y Bob Zamel Tam Daly DIStFOU NO.3: y Sol A.Salem ,Clair Harry M.Dotson y Bumie Durso ,Chair pro tom _ Glmn Parser a Cecilia Ape Walter Bowman y Geoge Brown _ Frank last. y Jam Collis _ George Swn y James H.He. _ Stare Andersen y Don R Griffin Parry Marshall y Vatpr Weer, Ralph Bauer _ Wally Drm y Ere G.Miter y Pat Mali _ Tariff.M. y Margie L Rice _ Grace Epperson JWie Sa Chns Norby x Sheldon Singer George L Zmaet y Roger Stamen Wdiam G.Stemar Orontes Sylvia Rosen WaNOmm 3 Bob Zemel Tom Daly DISTRICT NO.5: y Jan DataY,Chair John C.Coa,Jr. y William G.Steiner,Chan pm tom _ flight Stanton y Jonn C. Co.,Jr. _ Jan Debay DISTRICT NO.6: _ James M.Ferryman,Chair y ArMur Pony y Jan Deasy.Chair pro rem _ John C.Co..Jr. y W IGam G.Steiner _ Roper Smmon DISTRICT NO.7: y Sane Hammond.CNir NO Ward y Thomas R.Safts"Ah,Chair pro tom _ Jim Pons y An Deaay Jahn C.Cos.Jr. _ James M.Ferryman y AMun perry y Pat McGuigan Ted R Mo. y Mad,A.Murphy _ Joanne Comm, y Wiliam G. Shelter Roper Stamen DISTRICT NO. 11: y Wnpr Urania.Crain Ralph Bauer y_ Shirley Danish.Chair pro tern Reph Bauer y Roger Stanton William G.Steiner DISTRICT NO. 13: y John M.GWINNIa, Chan Daniel T.Welch y Gleam Porker,Chair pro tom _ Burnie Dunlap y Mark A.Mi." _ J..Cook y William G.Steiner Roper Stamen y Boa Zemel _ Tom Daly DISTRICT NO. 16: y Themes R.Saft relli,Chair Jim Potts Barry HalnmmW,Chair pro tom Mike Ward y Mark A.Murphy Joanne CeomJ Hallam G. Stoner Roper Stamen y Pear A. Swan Darryl Miller .2. 03/29/95 STAFF MEMBERS PRESENT: Don McIntyre, General Manager, Blake Anderson, Assistant General Manager, Penny Kyle, Board Secretary, Gary Hasenslab, Irwin Haydock, Ed Hodges, John Linder, Mike Moore, Bob Ooten, Gary Streed, Ed Torres OTHERS PRESENT: Thomas L. Woodruff, General Counsel, Richard Ardoin, Lucinda Dennis, Patti Gorezyca, Gary Hunt, Freddie Reiss, Jon Schotz, Phil Stone, George Zlaket DISTRICT 2 In the absence of Chair John Collins and Chair pro Appointment of Chair pro tem tem Daniel T. Welch, Director Burnie Dunlap was appointed Chair pro tam of District No. 2. ALL DISTRICTS The Assistant General Manager advised the Status report re County's Commingled Directors that a presentation would be made on the Investment Pool proposed settlement agreement with the County regarding the Commingled Investment Pool, which was placed in their meeting folders that evening. The presentation would consist of. Freddie Reiss of Price Waterhouse; Richard Ardoin of Bronson, Bronson & Mcl(innon's commercial and security litigation department; Gary Hunt, Executive Vice President of The Irvine Company; and Jon Schotz of Saybrook Capital. Mr. Reiss indicated that a lot of time, effort and energy had gone into bringing the settlement agreement to its final forth, which was distributed to all pool participants that day. He stated that the agreement was the best arrangement that could be made at this time to resolve the pool participants' interests, as well as to avoid any further problems of further Chapter 9 bankruptcies that might occur. The most important part of the agreement is Option A or Option B. The OCIP committee does support the agreement and encourages participants to choose either Option A or Option B. He further stated that those participants who choose Option A will get immediate cash (76.260), recovery notes and senior-secured claims, which adds up to 100% of the original December 6th investment balance. Those who choose Option B would receive cash (76.260). They would then have to file a claim for the balance. Option B reserves your rights to do what you wish, but you don't have a claim other than the cash. It was further reported that the County will object to any claim fled above the cash if Option B is chosen, and you will have to litigate to prove that you have a claim greater than the amount of rash remaining. Mr. Reiss also reported that some of the income in 1994 was skimmed into a reserve for economic uncertainty. That amount will be paid to all pool participants choosing Option A and B in the same way it would have been distributed had it not been set aside. In addition, interest earned from July 1 st through December 6th will be paid to all pool participants based on their average daily balance in that fund. If Options A or B are not chosen, then no funds would be received from the pool until a court awards whatever you are to receive, which is total uncertainty. -3- 03/29/95 `..� If the Districts choose Option A , it will provide an additional amount of$305.7 million in cash, recovery notes of$20.6 million and$45.8 million in settlement secured claims. This is in addition to the $48.9 million that has already been withdrawn under the emergency withdrawal procedure, bringing an approximate total of$354 million in cash that would be distributed to the Districts. Option B will provide $305.7 million in cash plus $48.9 million withdrawn and nothing else;just the right to a claim. The Orange County bankruptcy ultimately will have a plan of adjustment which will deal with claims that exist against the County and how they get paid. Litigating at this point is only to gel a claim allowed; it doesn't state how it gets paid nor what seniority or rights exist with that claim. Jon Schotz was then introduced and staled that the recovery notes under Option A would be good as gold by June 5th, which was essential to the OCIP committee, particularly for the schools who need to receive $.90 on the dollar to avoid further Chapter 9 bankruptcies. Also, the litigation proceeds would now flow directly from the settlement secured claims to the repayment claims. Another concern of the committee was to make sure pool participants would not be made a target of any litigation of the County. The County agreed, which was not in the original Tenn VI Sheet. In addition, the repayment claim was made much stronger. Most of what comes before the repayment plan are claims and notes payable to our pool. If everyone chose Option A, there would be $236 million of recovery notes which would be given to the pool's participants. Mr. Reiss then commented that one of the last key issues dealt with during the last couple of weeks was how to make sure participants knew what they were getting when they signed the agreement to be a settling pool participant. He, himself, found the first draft of the settlement agreement almost unintelligible because of extremely complex formulas. The County's attorneys agreed and reduced everything down to hard copy exhibits, which were attached to the �a►� agreement placed in the Directors' meeting folders as Exhibits 1, 2 and 3. These exhibits took every formula and shows what it would mean to a pool participant in how much cash would be received, how much in recovery notes and settlement secured claims and how much interest should be received for the reallocated interest of last year, as well as how much interest was earned up to December 6th, etc. Having the exhibits done this way clearly defines the formulas to negate any disputes arising from differing interpretations of the formulas. Mr. Reiss then led the Directors through the Exhibits commenting on the columns and line items affecting the Districts. In response to questions by Directors concerning the County and preferential payments, Mr. Reiss responded that the settlement agreement has releases contained within it that releases everyone. In the spirit of cooperation and to avoid litigation and delays, it was decided that there would be no effort looking for preferences. He also pointed out that when there is a plan that will ultimately pay 100 cents, preference is meaningless. In the typical bankruptcy preferences are generally for those who are receiving something less than 100 cents on the dollar. Richard Ardoin was then introduced who went over the litigation aspects of the settlement agreement. He speculated what the Counts litigation strategy would be. He also commented on the strengths of both options contained in the settlement agreement. -4- 03/29/95 Option A would grant participants certainty, which is knowing exactly what you are going to receive. There would also be fixed participation in third party recoveries, fixed payment and security structure. Option A will also allow you to review and advise County attorneys as to pooled claims. In addition, you will have an interest in shared claims. There will also be a portion of safety as there is an approved payment structure on allowed claims. Option B allows more control than under Option A. There is unlimited authority to pursue any party on any claim. You would have power to control all strategic and tactical decisions. This option would also retain independent settlement authority. Option B participants will also have to be creative as they won't have a structure in which to work. They will also have the ability to set County and third parties against one another, as well as the flexibility to intervene and disrupt County actions. In addition there is potential to sue and attempt to recover individually from the County or third parties in excess of your principal loss. There is also possible priority on some part of the recovery. Gary Hunt, Executive Vice President of The Irvine Company, was then introduced and discussed the events immediately following the December 6th bankruptcy and the role the Orange County Business Council played in developing the proposed settlement agreement. The Assistant General Manager then gave a brief report on the financial picture of the Districts for the next 12 months, assuming no additional cash from the pool and no loans are made during the next fiscal year. The Districts would be in the red by the end of July. He then advised the Directors that a decision of whether to accept Option A or Option B would have to be made prior to April 17th. The options chosen would have to be signed off by the individual Districts and mailed to Price Waterhouse, who will be counting the ballots so that the information can be passed on to the County's attorney and Patrick Shea of the Pool Committee. Once Judge Ryan enters his final decree, there would be 11 days after that for the Districts to change their minds, depending upon what the final settlement agreement looks like after any changes that Judge Ryan may implement. He further reported that if the Districts chose Option A and if the recovery notes were not made good as gold by June 5th, as required in the settlement agreement, the Districts would have three days to switch to Option B. Mr. Anderson also stated that Merrill Lynch and others are currently challenging the pool and it is unclear that if they were successful in doing so, how the Districts would gain access to any of their cash on the short term. Also, on August 1st certificates of participation in the amount of$17.7 million will be coming due for debt service. The Joint Chair then stated that the Districts could vote that evening or call a special meeting on April 12th, and that the Districts would be voting separately. General Counsel also explained that the Distdcts were comprised of nine, totally separate entities. Any number of Districts could opt for Option A or B. Those that elect Option B would be on their own, however, as far as costs to engage counsel and other professional staff. Following questions posed by Directors, it was then requested that further discussion be carried into closed session. -5- 03/29/95 v REVISED ALL DISTRICTS General Counsel reported to the Directors the need General Counsel's Comments Prior to for a closed session as authorized by Government Closed Session Code Section 54956.9 to discuss and consider the item that is specified as Item 9(b) on the published Agenda. No other items would be discussed or acted upon. ALL DISTRICTS Moved, seconded and duly carried: Convene in closed session Pursuant to Government Code Section 54956.9 The Boards convened in closed session at 9:34 p.m. pursuant to Government Code Section 54956.9. Confidential Minutes of the Closed Session held by the Board(s) of Directors have been prepared in accordance with California Government Code Section 54957.2 and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. No action was taken re Agenda Item 9(b). ALL DISTRICTS At 10:30 p.m. the Boards reconvened in regular Reconvene in regular session session. ALL DISTRICTS Moved, seconded and duly carried: Approving Amendment No. 3 to the Agreement for Removal and Disposal/Reuse That Amendment No. 3 to the Agreement for of Districts' Residual Solids with Pima Gro Removal and Disposal/Reuse of Districts' Residual Systems. Inc. Solids with Pima Gro Systems, Inc., providing for a five-year extension of the tens of the agreement effective April 1, 1995 through March 31, 2000, with option for two one-year extensions, subject to annual reviews and CPI increase limits, establishing the cost at$28.00 per wet ton, providing for inclusion of provisions in the agreement to implement a cost recovery or revenue option, and to allow the Districts or Pima Gro to seek contract adjustments in the face of extraordinary price increases or decreases and authorizing staff to negotiate said price to reflect alternative use sites or technologies, be, and is hereby, approved; and, FURTHER MOVED: That the General Manager be, and is hereby, authorized to execute said Amendment In form approved by the General Counsel. ALL DISTRICTS Moved, seconded and duly carried: AAporovino Resolution No. 95-30. Amending Rules of Procedure for the Conduct of That the Boards of Directors hereby adopt Business. Resolutions Nos. 87-51. 89-56, Resolution No. 95-30, Amending Rules of 91-35, 93-155 and 94-109, as repealed. Procedure for the Conduct of Business Resolutions Nos. 87-51, 89-56, 91-35, 93-155 and 94-109, as repealed, establishing Rules of Procedure for the Conduct of Business of the Districts. Said resolution, by reference hereto, is hereby made a part of these minutes. -6- 03/29/95 ALL DISTRICTS Director George Brown, Chair of the Finance, Approving Request of Garden Grove Administration and Human Resources Committee, Sanitary District for a short-term loan to reported that Garden Grove Sanitary District has a prevent their loan default debt service payment coming due in the amount of $5.4 million and does not have the funds to meet this obligation. Director Swan had brought this problem to the Committee's attention and suggested that the Districts could extend a short-term loan to prevent this default. The loan would be subject to an agreement that the Districts have first priority for repayment out of the funds the Garden Grove Sanitary District receives from the settlement agreement with the County, as well as a commitment letter from Bank of America or an alternative financial institute for the amount over the settlement fund proceeds. He further stated that the loan would be a six- month loan that would probably be repaid in 60-90 days. It was then moved, seconded and duly carried: That a shoe-tern loan to the Garden Grove Sanitary District to prevent their loan default, be, and is hereby, approved in concept. Director John Gullixson requested that his opposition to the motion be made a matter of record DISTRICT 1 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 1 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 2 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 2 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 3 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 3 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 5 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 5 be adjourned to Tuesday, April 11, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 6 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 6 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. -7- 03/29/95 DISTRICT 7 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 7 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 11 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 11 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 13 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 13 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 14 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 14 be adjourned to Wednesday, April 12, 1995 at 7:30 p.m. The Chair then declared the meeting so adjourned at 10:35 p.m. Secretary of tl e a of irectors of County San tlo istricts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 .. -8- EXCERPTS FROM THE MINUTES OF THE SPECIAL JOINT MEETING OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA A special joint meeting of the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, was held at the hour of 7:30 p.m., March 29, 1995, at 10644 Ellis Avenue, Fountain Valley, California. The Chair of the Joint Administrative Organization called the meeting to order at 7:30 p.m. The roll was called and the Secretary reported a quorum present. .............................. DISTRICT 1 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 1 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 2 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 2 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 3 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 3 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 5 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 5 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 6 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 6 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 7 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 7 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. —1— DISTRICT 11 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 11 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 13 Moved, seconded and duly carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 13 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. DISTRICT 14 Moved, seconded and duty carried: Adioumment That this meeting of the Board of Directors of County Sanitation District No. 14 be adjourned. The Chair then declared the meeting so adjourned at 10:35 p.m. STATE OF CALIFORNIA) )SS. COUNTY OF ORANGE ) I, PENNY KYLE, Secretary of each of the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11 , 13 and 14 of Orange County, California, do hereby certify that the above and foregoing to be a full, true and correct copy of minute entries on the meeting of said Boards of Directors on the 29th day of March, 1995. IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of March, 1995. Secretary oft oard f Directors of County Sanitation Dist ' is NcW 1 , 2, 3, 5, 6, 7, 11, 13 and 14 way —2— STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and Agenda for the Special Board Meeting of Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 held on March 29, 1995, was duly posted for public inspection in the main lobby of the Districts' offices on March 24, 1995. IN WITNESS WHEREOF, I have hereunto set my hand this 29th day of March, 1995. Penny Kyle, Se to each of the Boards of Directors ounty Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 & 14 of Orange County, California JMPDOCIBSFOR WS VE-03.1