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Docusign Envelope ID: 16E112FF-704F-42CB-8ECE-9BO4A927CEOD <br />A. State of California Allocation <br />Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by <br />the State for future Opioid Remediation. <br />B. CA Abatement Accounts Fund <br />i. Allocation of CA Abatement Accounts Funds <br />a) Seventy percent of the total Settlement Fund payments will be allocated to the CA <br />Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be <br />allocated based on the allocation model developed in connection with the proposed <br />negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as <br />adjusted to reflect only those cities and counties that are eligible, based on population or <br />litigation status, to become a CA Participating Subdivision. The percentage from the CA <br />Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in <br />Appendix 1 in the column entitled abatement percentage (the "Local Allocation"). For <br />the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and <br />counties with a population less than 10,000 are not eligible to receive an allocation of CA <br />Abatement Accounts Funds. <br />b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its <br />Local Allocation share as of the date on which it becomes a Participating Subdivision, <br />and will receive payments as provided in the Kroger Settlement Agreement. <br />c) A CA Participating Subdivision that is a city will be allocated its Local Allocation share <br />as of the date on which it becomes a Participating Subdivision. The Local Allocation <br />share for a city that is a CA Participating Subdivision will be paid to the county in which <br />the city is located, rather than to the city, so long as: (a) the county is a CA Participating <br />Subdivision, and (b) the city did not elect to receive its share of funds in the National <br />Opioids Settlement with Distributors AmerisourceBergenCorporation, Cardinal Health, <br />Inc., and McKesson Corporation (the "Distributors Settlement"). If a city later changes or <br />has already changed its distribution election in the Distributors Settlement, that change in <br />election will apply here, provided that the change in election is received by the settlement <br />administrator at least 60 days prior to a Payment Date. A Local Allocation share allocated <br />to a city but paid to a county is not required to be spent exclusively for abatement <br />activities in that city, but will become part of the county's share of the CA Abatement <br />Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA <br />Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA <br />Abatement Accounts Fund Oversight). <br />d) A city within a county that is a CA Participating Subdivision may opt in or out of direct <br />payment at any time, and it may also elect direct payment of only a portion of its share, <br />with the remainder going to the county, by providing notice to the Settlement Fund <br />Administrator at least 60 days prior to a Payment Date. For purposes of this CA Kroger <br />Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and <br />