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HomeMy WebLinkAboutMINUTES - 10271992 - 1.27 TO: BOARD OF SUPERVISORS FROM: COUNTY COUNSEL DATE: October 15, 1992 SUBJECT: Approval of Settlements Negotiated by California State Attorney General 's Office Traffic Signal and Traffic Lighting Antitrust Litigation SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS APPROVE settlements negotiated by California State Attorney General 's Office and AUTHORIZE County Counsel 's Office to sign written authorizations and to take other steps necessary to carry out settlements. ° FISCAL IMPACT No cost to the County; County may receive a share of the settlement monies, but this will not be known until the lawsuit is concluded. BACKGROUND/REASONS FOR RECOMMENDATIONS In February 1987, the California State Attorney General 's Office filed an antitrust lawsuit against various electrical contractors, seeking damages for alleged bid rigging on traffic signal and traffic lighting contracts. The lawsuit was brought on behalf of the state and numerous cities and counties, including Contra Costa County. On March 4 , 1987, the Board approved the Attorney General ' s representation of the County. The Attorney General 's Office has now negotiated settlements with Rosendin Electric, Inc. , Louis M. Rosendin, Howard Electric, Inc. and Theodore Stotman. Under the settlements, the defendants would pay a total of $690, 000, which would be applied against the attorney's fees incurred by the state. The remainder, if any, would be distributed at the conclusion of the lawsuit. Copies of the settlement agreements and written authorizations are attached to this Board order. The settlements just described would result in partial settlement of the case. The case would continue against the other defendants (Steiny & Company, Inc. ; C.V.E. , Inc. ; Robert K. Donnelly; William O. Schafhirt) . As a part of its settlement, Howard Electric has agreed to facilitate the cooperation of a potentially key witness (Geraldine Harris, a former Howard Electric employee) in the prosecution of the remaining defendants. CONTINUED ON ATTACHMENT: X YES SIGNATURE i RECOMMENDATION OF COUNTY ADMINISTRATOR _ RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON —1 1C 7 C1 4?2- APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE /� AND CORRECT COPY OF AN ACTION TAKEN V UNANIMOUS (ABSENT ti ) AND ENTERED ON THE MINUTES OF THE BOARD AYES: NOES: OF SUPERVISORS ON THE DATE.SHOWN, ABSENT: ABSTAIN: ATTESTED OL'aJQA-r 27, IC19z. Contact: David F. Schmidt (510-646-2057) PHIL BATCHELOR, CLE OF Orifi: County Counsel THE BOARD OF SUPERVISORS cc: P. Batchelor, County Administrator ANDIZ��U ,ADMINISTRATOR J.M. Watford, Public Works �- Y - DEPUTY 1 CONSEQUENCES OF NEGATIVE ACTION The Attorney General 's Of f ice may not be able to consummate the negotiated settlements and to obtain cooperation of the key witness. Failure to approve the settlements could also jeopardize the Attorney General 's continued representation of the County in this lawsuit. 2 John K. Van de Kamp Attorney General Andrea Sheridan Ordin Chief Assistant Attorney General Ron Russo Supervising Deputy Attorney General H. Chester Horn, Jr. Deputy Attorney General 3580 Wilshire Blvd. , Suite 500 Los Angeles, CA 90010 (213) 736-7515 Attorneys for Plaintiff THE STATE OF CALIFORNIA, et al. M. Laurence Popofsky Peter H. Goldsmith Judith Z. Gold Heller, Ehrman, White & McAuliffe 333 Bush Street San Francisco, CA 94104-2878 (415) 772-6000 Attorneys for Defendant ROSENDIN ELECTRIC, INC. and LOUIS M. ROSENDIN SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE CITY AND COUNTY OF SAN FRANCISCO THE STATE OF CALIFORNIA, on its ) No. 880011 own behalf and on behalf of the ) COUNTY OF ALAMEDA, et al. , ) SETTLEMENT AGREEMENT BETWEEN PLAINTIFFS AND Plaintiffs, ) DEFENDANTS ROSENDIN ELECTRIC, INC. AND V. ) LOUIS M. ROSENDIN ROSENDIN ELECTRIC, INC. , et al. ) Defendants . ) WHEREAS, the plaintiffs listed in Exhibit A hereto (hereinafter collectively "plaintiffs" ) have alleged in the action entitled State of California, et a1. v. Rosendin Electric, Inc. , 1 et a1. , San Francisco Superior Court No. 880011 and in the action entitled City of Santa Cruz v. Rosendin Electric, Inc. et a1. (United States District Court for the Northern District of california, No. C-87-20037) (hereinafter collectively "the Action" ) , that defendants Rosendin Electric, Inca and Louis M. . I Rosendin (hereinafter collectively "Rosendin" ) were each participants in an unlawful conspiracy to fix, raise, maintain or stabilize the charges for traffic signal and highway .lighting construction in violation of the federal antitrust laws and the California law of unfair competition; WHEREAS, Rosendin, denying wrongdoing of any kind whatsoever and without admitting any of the allegations made in the Action or any liability whatsoever, has agreed to enter into this Settlement Agreement; and WHEREAS, plaintiffs, having conducted an investigation into the facts of this case, have concluded that a settlement with Rosendin in the amount hereinafter set forth is in the best interests of plaintiffs; NOW THEREFORE, in consideration of the covenants and agreements set forth, it is agreed by and between the undersigned, this day of ., 1990, that the claims of the plaintiffs as more fully described herein, be settled and compromised with Rosendin on the following terms and conditions : 1 . This settlement Agreement is entered into among the undersigned to compromise and settle this action as more fully described below. The parties recognize that this settlement covers :Z vigorously disputed claims and the parties expressly agree that neither this Settlement Agreement or any provision of this Settlement shall be: (a) interpreted, construed, or considered an admission of liability for any purpose; or (b) asserted as an admission of liability by any party. 2. The undersigned covenant and represent that they are fully authorized to enter into and to execute this Settlement Agreement. 3. The undersigned parties and their counsel agree to recommend approval of this settlement by the Court, and to undertake their best efforts, including all steps and efforts contemplated by this Settlement Agreement, and any other steps and efforts which may become necessary by order of the Court or otherwise, to effectuate this settlement and the Settlement Agreement. 4. In full, complete and final settlement of the claims asserted, and any other claims which are in any way related to the facts alleged in the Action against Rosendin, including, without limitation, all state or federal antitrust , unfair competition, false advertising or unfair trade practice, fraud, misrepresentation or RICO claims which might have been raised by the plaintiffs in the Action relating to charges for traffic signal and lighting construction, and subject to all of the provisions hereof, it is agreed as follows: (a) Rosendin shall pay in settlement of this action the total amount of $540,000, which sum the parties agree 3 constitutes a reasonable. calculation of the refund which would be due to plaintiffs if they proved their charges, which payment is made solely for the purpose of providing such a refund. . (b) No later. than twenty-five days after the trial court approves this Settlement Agreement, Rosendin shall deliver to plaintiffs' counsel a check, money order or draft in the amount of $270,000. (c) Six months from the date when the payment. . described in paragraph 4.(b) ...is due, .-Rosendin shall deliver to plaintiffs' counsel a check, money order or draft in the amount of $135,000, and six months thereafter Rosendin shall deliver to plaintiffs' counsel an additional. check, money order or draft in the amount of $135,000 . (d) Plaintiffs and their counsel accept the above • settlement to be paid by Rosendin as full satisfaction of all plaintiffs' claims including, without limitation, any claims for fines, penalties, forfeiture, constructive trust and compensatory and punitive damages, and. attorneys' fees and costs incurred in the prosecution of this action. 5. (a) This settlement shall not become fully effective unless this Settlement: Agreement Js approved in all material respects by the trial court, as provided in Paragraph 6 hereof. In the event that the trial court refuses to approve this Settlement Agreement or any material part thereof, the entire Settlement Agreement shall become null and void unless the parties promptly agree to proceed with the settlement as modified by the 4 trial court. If the trial court approves this Settlement Agreement as provided in Paragraph 6, then the parties hereto will proceed with the implementation hereof notwithstanding the pendency of any appeal of such order, except as provided in Paragraphs 8 and 14. In the event of such an appeal, the payments described in Paragraphs 4(b) and (c) shall be made by Rosendin at the times therein mentioned, but the State of California shall hold such funds in United States government securities of federally insured bank certificates of deposit. Any interest -thereon shall become part of the settlement fund and shall be distributed in accordance with Paragraphs 8 and 9 hereof if the order approving this Settlement Agreement is affirmed and becomes final. If such order is not affirmed, then the entire settlement fund, including any interest thereon, shall promptly be returned to Rosendin, and this Settlement Agreement shall be null and void. The State of California will provide to Rosendin, on its request, information regarding the identity of the securities or the certificates in which the settlement fund is invested, and the amounts, and the status of the settlement fund. 6 . Promptly after the execution of this Settlement Agreement, the undersigned shall jointly move for a final order and/or judgment to be entered dismissing plaintiffs, claims against Rosendin with prejudice, and providing that all contribution and/or indemnity claims against Rosendin by any other defendants in the action, or any other persons who may in the future be alleged to be liable to the plaintiffs, or any of them, by reason of the 5 Action or by reason of any of the facts alleged in the Action, shall be barred. 7 . Contingent upon final court approval of this Settlement Agreement, as described in Paragraph 6 hereof, plaintiffs hereby discharge, release, and acquit Rosendin and its officers, directors, partners, Employees, agents, shareholders, attorneys, subsidiaries, parents, affiliates, and all persons acting by or through them, from any and all liability, actions, claims, causes of action, -.suits, demands, debts, sums of money, controversies, damages, costs, attorneys' fees, losses, and expenses of any nature whatsoever, whether liquidated or unliquidated, known or unknown, :Fixed or contingent, arising out of the Action or any of the facts alleged in the Action, including, without limitation, all federal or state antitrust, unfair competition, false advertising, or unfair. trade practices, fraud, misrepresentation, or RICO claims which might have been raised relating to the charges for traffic signal and lighting construction. Plaintiffs, and ea.ch of them, hereby waive any and all rights they might possess under California Code of Civil Procedure section 1542, and any similar rights under any other applicable law. Said section 1542 provides as follows: 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 execution of the release, which if known by him must have materially affected his settlement with the debtor. " 6 Each of the plaintiffs shall be required to execute a signed statement substantially in the form attached hereto as Exhibit B. The parties agree that this Settlement Agreement may be pleaded as. a full and complete defense to, and shall be deemed fulfillment as the basis for an injunction against, any action, suit or other proceeding which may be instituted, prosecuted or maintained in breach hereof. 8. Except as expressly provided herein, no distribution of the settlement amount or any portion thereof shall be made to any plaintiff until (1) each plaintiff has executed a statement substantially in the form attached as Exhibit B and (2) the court has approved this Settlement Agreement and the time for appeal has expired or,if appealed, that order or judgment has been affirmed in its entirety by the court of last resort to which such appeals shall have been taken and such affirmance has become no longer subject to further appeal or review. 9 . The funds paid by Rosendin as provided herein shall be distributed to the various plaintiffs in the Action and/or shall be used to defray plaintiffs, past or future legal fees in the Action, by the State of California as parens patriae, in accordance with law. Rosendin takes no position with respect to the distribution of such funds and shall have no responsibility whatsoever with respect to such distribution. The State of California hereby agrees to indemnify and defend Rosendin and hold it harmless with respect to any claim of any of the plaintiffs or any third party to the effect that it is or was entitled to a 7 greater or different share of the proceeds of this Settlement Agreement than the share, if any, which the State of California decides to distribute to such party, and any other claim relating in any way to the State of California's distribution or management of the proceeds of this Settlement: Agreement. 10. The fact or terms of this settlement with Rosendin shall not be construed to release or limit in any manner whatsoever. the joint or several liability or damage responsibility to the plaintiffs of any other defendant or alleged co-conspirator for the alleged conspiracy, including, but not limited to, any alleged responsibility for any acts of or contracts awarded to Rosendin. 11. Effective upon the execution of the Settlement Agreement by the undersigned counsel: (a) Rosendin agrees that, notwithstanding the entry of any final order or judgment, it will remain subject to the jurisdiction of the court for the purposes described in this paragraph. Rosendin will cooperate with the plaintiffs in their prosecution of the Action by making its employees amenable to court process and making its officers, directors, and/or employers available for deposition at reasonable times and places, subject to the power of the Court to issue protective orders. Plaintiffs will attempt to schedule any such depositions during a time which is convenient for Rosendin and for such witnesses . Plaintiffs shall not propound any additional interrogatories or requests for admission to Rosendin without leave of court upon good cause shown or agreement between plaintiffs an Rosendin. Plaintiffs may seek 8 �O Ily Z> .yfi O +cr0 �G y ,qQ e G0 �,'� 'c° 0 a m g Off; g Gy o K;Ke 00 .y fi 0� �y� O` yfi X00 G� GG 0s5,� fiG' OROS qj y0�b ��QO yy y S' $+cry 0yo �y 40 �. fi 0�0 4y � Sgyfi ti�� 4 fi �^4`y �,' kO „�,,• ^�` $fir ' G° ^0 ;yfi Q° r ,DO �+4 $Q Gy y a° yV b +G° Q"� ° , 0 Ofi yfi ° Q �0 �0 ^yfi y� �Sa $fie fi� 00 4$ ,c,G y fiGi $ ¢r Z0$ 4°� .^yy� (�, 'tA% fid' ti0 -0, y�o J or° �� y O� fi0� °� °`��' $may '4�G ZIC" 'YV y G0 �'I, . yti fi� C', G S{•� fit' w 0 fiG yfi ,� �0 $ �`� fiG a bo ^4y o� eb y �$ �fi�� y 2yyfii . 4 •y fid' ,b0� O0 �✓ ya yfieo �0� CO ^Y 2 y`G �� O� �P�fi $y 0 �y y �� $4 ,Syy °fi yIQ fi0G my �y ti 0- �fiej 4o y4`Q �,$ ��,"� O fiy �'�' why yr,,G �°Ily �$ °�, �0 w�0� ° y-fi ti�i ,,�0� 0-� G'4y0 Qi �'�'� ,'S c,-�,O ��i 0 0 .5 .0 Ko �` �0G g b off" mg Gy G0 m 0� $t`� 'y o scr $ty hG'� 0a G g �QP� fi0� ZY yfi --y .y' 4 3y 0firp�' 0 �0Y �tiG� °�� �� . O� fi0 ��' �G� �tp' ya �� �?r �y qtr o $ 30 $fia ��, � 0 0�' ,Qy �Q o� ,�cyfi �g ��'� GKN ��' ` �. O G'4� °� �� ,�,�' V 4 $ fi$ "� �a �Gti Ki O,c, Q$� �' y 0 0 ,4 , o yti 0 �y fiy �0 Z>0 $.� '4 'yfi y. +Cry' a4 'V � a0 0�G �+� �o� 0� ofi fi2yy fi CO off' ° ,40ci y �0$ �° G• �7 0fiG yfi y� OIlly +cry $fi fi00 �y ,�'�' �0 ''yfi '° "y % ,Ca ll, b party, nor seek any fine or other penalty based upon the facts alleged in the Action or in any way relating thereto, except as set forth in the documents attached hereto collectively as Exhibit C, and such parties further agree that neither . during the probationary period described in Exhibit C nor at any time thereafter will any of them base any of their contracting decisions in any way on the facts or circumstances set forth in Exhibit C, nor need Rosendin disclose such facts or circumstance when submitting bids . 14 . Exhibit C hereto shall be of no force or effect unless and until this Settlement Agreement shall have received approval by the court as provided in paragraph 6, and in the event of an order granting trial court approval that is thereafter reversed, then exhibit C shall become null and void. .15 . The State of California agrees that promptly upon Rosendin's request it will send a letter to the United States Department of Transportation, the United States General Services Administration, and any other federal official or agency which might. be responsible for considering the suspension or debarment of Rosendin from federal contracting activities, in substance unqualifiedly recommending that no such suspension or debarment occur because (1) Rosendin has cooperated in the settlement process and provided a generous settlement; (2) such debarment would adversely affect competition in •the relevant market; and (3 ) the state believes that Rosendin is currently in all respects a responsible contractor. 10 16 . The State of California and its Contractors' Licensing Board agree that they will not make any disclosures of the provisions of Exhibit C beyond those normally made in connection with announcing the terms of settlements and the imposition of disciplinary action and where required by law to disclose the terms of Exhibit C and as may be necessary to implement the terms of this settlement. 17 . It is the intention of the parties that this Settlement Agreement shall be binding upon the successors, parents, subsidiaries and affiliates of each of the parties hereto, and all their present partners, principals, officers, directors, employees, agents, attorneys and assigns. 18. This Settlement Agreement is entered into in compromise of disputed claims. It is fully acknowledged by all parties and their counsel of record that the execution of this Agreement, including the stipulation included in Exhibit C, and the payment of any consideration hereunder, is not and shall not be construed in any way as an admission of wrongdoing or liability on the part of Rosendin and that Rosendin completely denies any liability and is entering this settlement to avoid prolonged and further litigation. It is fully acknowledged by all parties and their counsel of record that. the execution of this Agreement, and the receipt of any. consideration hereunder, is not and shall not be construed in any way as concession by plaintiffs that their claims are less or other than completely meritorious . 19 . Each of the persons or parties signing this 11 Settlement Agreement on behalf of another warrants and covenants that he has obtained all necessary approvals and is fully authorized to do so and to bind such other party to its terms. Hence, warrants that he has the authority to execute this Settlement Agreement on behalf of the State of California, and both he and the ;state of California warrant that they have the authority to execute this Settlement Agreement on behalf of each of the other plaintiffs listed in Exhibit A hereto. warrants that he has. the authority to execute this Settlement Agreement on behalf of Rosendin Electric,- Inc. 20 . This agreement constitutes the only existing and binding agreement among the parties, and the parties acknowledge that there are no other warranties,; promises, assurances or representations of any kind, express or implied, upon which the parties have relied in entering into this agreement, unless expressly set forth herein. 21. This agreement shall begoverned by the laws of the State of California. 22. This Settlement Agreement may be executed in counterparts by the parties hereto. 23 . This Settlement Agreement shall become effective as between the parties to this Settlement Agreement upon its execution by the undersigned counsel for plaintiffs and by counsel for Rosendin. Dated: , 1990 12 EXHIBIT A THE STATE OF CALIFORNIA CITY OF BURLINGAME COUNTY OF ALAMEDA CITY OF DALY CITY CITY OF ALAMEDA CITY OF FOSTER CITY CITY OF BERKELEY CITY OF MILLBRAE CITY OF EMERYVILLE CITY OF PORTOLA VALLEY CITY OF HAYWARD CITY OF SAN BRUNO CITY OF NEWARK CITY OF SAN CARLOS CITY OF PIEDMONT CITY OF SOUTH SAN FRANCISCO CITY OF SAN LEANDRO CITY OF SAN MATEO CITY OF ALBANY CITY OF WOODSIDE CITY OF DUBLIN COUNTY OF SANTA CLARA CITY OF LIVERMORE CITY OF GILROY CITY OF OAKLAND CITY OF LOS ALTOS HILLS CITY OF PLEASANTON CITY OF MILPITAS CITY OF UNION CITY CITY OF MORGAN HILL COUNTY OF CONTRA COSTA CITY OF PALO ALTO CITY OF ANTIOCH CITY OF SANTA CLARA CITY OF CLAYTON CITY OF CUPERTINO CITY OF DANVILLE CITY OF LOS ALTOS CITY OF HERCULES CITY LOS GATOS CITY OF MARTINEZ CITY OF MONTE SERENO CITY OF PINOLE CITY OF MOUNTAIN VIEW CITY OF PLEASANT HILL CITY OF SARATOGA CITY OF SAN PABLO COUNTY OF SANTA CRUZ CITY OF BRENTWOOD CITY OF CAPITOLA CITY OF CONCORD CITY OF SCOTTS VALLEY CITY OF EL CERRITO CITY OF WATSONVILLE CITY OF LAFAYETTE COUNTY OF SOLANO CITY OF THE TOWN OF MORAGA CITY OF BENICIA CITY OF PITTSBURG CITY OF FAIRFIELD CITY OF RICHMOND CITY OF SUISUN CITY CITY OF SAN RAMON CITY OF VALLEJO CITY OF WALNUT CREEK CITY OF DIXON COUNTY OF NAPA CITY OF RIO VISTA CITY OF CALISTOGA CITY OF VACAVILLE CITY OF ST. HELENA COUNTY OF SONOMA CITY OF NAPA CITY OF HEALDSBURG CITY OF YOUN`1'VILLE CITY OF ROHNERT PARK CITY AND COUNTY OF SAN CITY OF SEBASTOPOL FRANCISCO CITY OF COTATI COUNTY OF SAN MATEO CITY OF PETALUMA CITY OF ATHERTON CITY OF SANTA ROSA CITY OF BRISBANE COUNTY OF MARIN CITY OF COLMA CITY OF BELVEDERE CITY OF EAST PALO ALTO CITY OF CORTE MADERA CITY OF HALF MOON BAY CITY OF FAIRFAX CITY OF MENLO PARR CITY OF LARKSUR CITY OF PACIFICA CITY OF MILL VALLEY CITY OF REDWOOD CITY CITY OF NOVATO CITY OF BELMONT CITY OF ROSS CITY OF SAN ANSELMO CITY OF TIBURON CITY OF SAN RAFAEL CITY OF SANTA CRUZ CITY OF SAUSALITO . r 1 DANIEL E. LUNGREN, Attorney General of the State of California 2 DAVE STIRLING, Chief Deputy Attorney General 3 RODERICK E. WALSTON, Chief Assistant Attorney General 4 THOMAS GREENE, Supervising Deputy Attorney General 5 1515 K Street, Suite 511 P. 0. Box 944255 6 Sacramento, California 94244-2550 (916) 324-7874 7 Attorneys for Plaintiffs 8 STATE OF CALIFORNIA, et al. 9 FRANK R. UBHAUS, Esq. 10 JONATHAN WOLFE, Esq. BERLINER, COHEN & BIAGINI 11 10 Almanden Blvd. , 11th Floor San Jose, CA 95113-2233 12 Attorneys for Defendant 13 HOWARD ELECTRIC, INC. and THEODORE STROTMAN 14 SUPERIOR COURT OF THE STATE OF CALIFORNIA 15 FOR THE CITY AND COUNTY OF SAN FRANCISCO 16 THE STATE OF CALIFORNIA, et al. , ) No. 880011 17 ) Plaintiffs, ) SETTLEMENT AGREEMENT 18 ) BETWEEN PLAINTIFFS AND V. ) DEFENDANTS HOWARD 19 ) ELECTRIC, INC. AND ROSENDIN ELECTRIC, INC. , et al. , ) THEODORE STROTMAN 20 ) Defendants. ) 21 ) 22 WHEREAS, the plaintiffs listed in Exhibit A hereto 23 (hereinafter collectively "plaintiffs" ) have alleged in the 24 action entitled State of California, et al. v. Rosendin Electric, 25 Inc. , et al. , San Francisco Superior Court No. 880011, that 26 defendants Howard Electric and Theodore Strotman (hereinafter 27 collectively "Howard" ) were each participants in an unlawful 1 . 1 conspiracy to fix, raise, maintain or stabilize the charges for 2 traffic signal and highway lighting construction in violation of 3 the federal antitrust laws and the California law of unfair 4 competition; 5 WHEREAS, Howard denying wrongdoing of any kind 6 whatsoever and without admitting any of the allegations made in 7 the Action or any liability whatsoever, has agreed to enter into 8 this Settlement Agreement; and 9 WHEREAS, plaintiffs, having conducted an investigation 10 into the facts of this case, have concluded that a settlement 11 with Rosendin in the amount hereinafter set forth is in the best 12 interests of plaintiffs; 13 WHEREAS, Magistrate Edward Infante of the United States 14 District Court for the Northern District of California, sitting 15 in San Jose, acting as a settlement judge in this and related 16 federal proceedings on July 9,, 1992, determined that the 17 hereafter described settlement was a good faith settlement within 18. the meaning of Cal. Civic Code section 877 . 6 . 19 NOW THEREFORE, in consideration of the covenants and 20 agreements set forth, it is agreed by and between the 21 undersigned, this day of , 1992, that the claims 22 of the plaintiffs as more fully described herein, be settled and 23 compromised with Howard on the following terms and conditions: 24 1 . This Settlement Agreement is entered into among the 25 undersigned to compromise and settle this action as more fully 26 described below. The parties recognize that this settlement 27 covers vigorously disputed claims and the parties expressly agree 2 . l 1 that neither this Settlement Agreement nor any provision of this 2 Settlement shall be: (a) interpreted, construed, or considered 3 an admission of liability for any purpose; or (b) asserted as an 4 admission of liability by any party. 5 2. The undersigned covenant and represent that they 6 are fully authorized to enter into and to execute this Settlement 7 Agreement. 8 3. The undersigned parties and their counsel agree to 9 recommend approval of this settlement by the Court, and to 10 undertake their best efforts, including all steps and efforts 11 contemplated by this Settlement Agreement, and any other steps 12 and efforts which may become necessary by order of the Court or 13 otherwise, to effectuate this settlement and the Settlement 14 Agreement. 15 4 . In full, complete and final settlement of the 16 claims asserted, and any other claims which are in any way 17 related to the facts alleged in the Action against Howard: 18 (a) Howard shall pay in settlement of this action 19 the total amount of $150,000, which sum the parties agree 20 constitutes a reasonable calculation of the refund which would be 21 due to plaintiffs if they proved their charges discounted by the 22 fact that Howard is no longer in business, which payment is made 23 solely for the purpose of providing such a refund. 24 (b) Not later than fourteen days after the trial 25 court approves this Settlement Agreement, all parties listed in 26 Exhibit A, Howard shall deliver to plaintiffs ' counsel a check, 27 money order or draft in the amount of $150,000 . 3 . 1 (c) Defendant Theodore Strotman' s counsel,. Frank 2 Ubhaus, will make best efforts to secure the cooperation of 3 Geraldine Harris, a former Howard employee, in the prosecution of 4 this matter against the remaining defendants. 5 (d) Plaintiffs and their counsel accept the above 6 settlement to be paid by Howard as full satisfaction of all 7 plaintiffs' claims including, without limitation, any claims for 8 fines, penalties, forfeiture, constructive trust and. compensatory 9 and punitive damages, and attorneys' fees and costs incurred in 10 the prosecution of this action. 11 5. This settlement shall not become fully effective 12 unless this Settlement Agreement is approved in all material 13 respects by the trial court, as provided in Paragraph 6 hereof . 14 In the event that the trial court refuses to approve this 15 Settlement Agreement or any material part thereof, the entire 16 Settlement Agreement shall become null and void unless the 17 parties promptly agree to proceed with the settlement as modified 18 by the trial court. If the trial court approves this Settlement 19 Agreement as provided in Paragraph 6, then the parties hereto 20 will proceed with the implementation hereof notwithstanding the 21 pendency of any appeal of such order, except as provided in 22 Paragraph 8 . In the event of an appeal of this settlement, the 23 payments described in Paragraph 4 shall be made by Howard at the 24 times therein mentioned, but the State of California shall hold 25 such funds in United States government securities or federally 26 insured bank certificates of deposit. Any interest thereon shall 27 become part of the settlement fund and shall be distributed in 4 . 1 accordance with Paragraphs 8 and 9 hereof if the order approving 2 this Settlement Agreement is affirmed and becomes final . If such 3 order is not affirmed, then the entire settlement fund, including 4 any interest thereon, shall promptly be returned to Howard, and 5 this Settlement Agreement Shall be null and void. The State of 6 California will provide to Howard, on its request, information 7 regarding the identity of the securities or the certificates in 8 which the settlement fund is invested, and the amounts, and the 9 status of the settlement fund. 10 6 . Promptly after the execution of this Settlement 11 Agreement, the undersigned shall jointly move for a final order 12 or judgment to be entered dismissing plaintiffs ' claims against 13 Howard with prejudice, and providing that all contribution or 14 indemnity claims against Howard by any other defendants in the 15 action, or any other persons who may in the future be alleged to 16 be liable to the plaintiffs, or any of them, by reason of the 17 Action or by reason of any of the facts alleged in the Action, 18 shall be barred. After receipt of said final order or judgment, 19 plaintiffs will file a request for dismissal of all of their 20 claims in this Action with prejudice. 21 7 . Contingent upon final court approval of this 22 Settlement Agreement, as described in Paragraph 6 hereof, 23 plaintiffs hereby discharge, release, and acquit Theodore 24 Strotman and Howard and its officers, directors, partners, 25 employees, agents, shareholders, attorneys, subsidiaries, 26 partners, employees, agents, shareholders, attorneys, 27 subsidiaries, parents, affiliates, and all persons acting by or 5 . 1 through then, from any and all liability, actions, claims, causes 2 of action, suits, demands, debts, sums of money, controversies, 3 damages, costs, attorneys ' fees, losses, and expenses of any 4 nature whatsoever, whether liquidated or unliquidated, known or 5 unknown, fixed or contingent, arising out of the Action or any of 6 the facts alleged in the Action. Plaintiffs, and each of them, 7 hereby waive any and all rights they might possess under 8 California Code of Civil Procedure section 1542, and any similar 9 rights under any other applicable law. Said section 1542, and 10 any similar rights under any other applicable law. Said section 11 1542 provides as follows: 12 "A general release does riot extend to claims which the 13 creditor does not know or suspect to exist in his favor at 14 the time of execution of the release, which if known by him 15 must have materially affected his settlement with the 16 debtor. " 17 Each of the plaintiffs shall be required to execute a signed 18 statement substantially in the form attached hereto as Exhibit B. 19 The parties agree that this Settlement Agreement may be pleaded 20 as a full and complete defense to, and shall be deemed 21 fulfillment as the basis for an injunction against, any action, 22 suit or other proceeding which may be instituted, prosecuted or 23 maintained in breach hereof . 24 8 . Except as expressly provided herein, no 25 distribution of the settlement. amount or any portion thereof 26 shall be made to any plaintiff' until ( 1) each plaintiff has 27 executed a statement substantially in the form attached as 6 . 1 Exhibit B and (2) the court has approved this Settlement 2 Agreement and the time for appeal has expired or, if appealed, 3 that order or judgment has been affirmed in its entirety by the 4 court of last resort to which such appeals shall have been taken 5 and such affirmance has become no longer subject to further 6 appeal or review. 7 9 . The funds paid by Howard as provided herein shall 8 be distributed to the various plaintiffs in the Action and/or 9 shall be .used to defray plaintiffs' past or future legal fees in 10 the Action, by the State of California as parens patriae, in 11 accordance with law. Howard takes no position with respect to 12 the distribution of such funds and shall have no responsibility 13 whatsoever with respect to such distribution. The State of 14 California hereby agrees to indemnify and defend Howard and hold 15 it harmless with respect to any claim of any of the plaintiffs or 16 any third party to the effect that it is or was entitled to a 17 greater or different share of the proceeds of this Settlement 18 Agreement than the share, if any, which the State of California 19 decides to distribute to such party, and any other claim relating 20 in any way to the State of California's distribution or 21 management of the proceeds of this Settlement Agreement. 22 10 . The fact or terms of this settlement with Howard 23 shall not be construed to release or limit in any manner 24 whatsoever the joint or several liability or damage 25 responsibility to the plaintiffs of any other defendant or 26 alleged co-conspirator for the alleged conspiracy, including, but 27 not limited to, any alleged responsibility for any acts of or 7 . 1 contracts awarded to Howard. 2 11. Effective upon the execution of the Settlement 3 Agreement by the undersigned counsel Howard agrees that, 4 notwithstanding the entry of any final order or judgment, it will 5 remain subject to the jurisdiction of the court for the purposes 6 described in this paragraph. Howard will cooperate with the 7 plaintiffs in their prosecution of the Action by making its 8 employees amenable to court process and making its officers, 9. directors, and/or employees available for deposition at 10 reasonable times and places, subject to the power of the Court to 11 issue protective orders. Plaintiffs will attempt to schedule any 12 such depositions during a time which is convenient for Howard and 13 for such witnesses . Plaintiffs may seek additional documents 14 from Howard by a subpoena delivered to counsel for Howard. 15 Howard agrees to remain subject to the jurisdiction of the Court 16 for purposes of resolving any discovery disputes under this 17 paragraph. 18 12. It is the intention of the parties that this 19 Settlement Agreement shall be binding upon the successors , 20 parents, subsidiaries and affiliates of each of the parties 21 hereto, and all their present partners, principals, officers, 22 directors, employees, agents, attorneys and assigns . 23 13. This Settlement agreement is entered into in 24 compromise of disputed claims „ It is fully acknowledged by all 25 parties and their counsel of record that the execution of this 26 Agreement, and the payment of any consideration hereunder, is not 27 and shall not be construed in any way as an admission of 8 . 1 wrongdoing or liability on the part of Howard and that Howard 2 completely denies any liability and is entering this settlement 3 to avoid prolonged and further litigation. It is fully 4 acknowledged by all parties and their counsel of record that the 5 execution of this Agreement, and the receipt of any consideration 6 hereunder, shall not be construed in any way as a concession by 7 plaintiffs that their claims are less or other than completely 8 meritorious . 9 14 . Each of the persons or parties signing this 10 Settlement Agreement on behalf of another warrants and covenants 11 that he has obtained all necessary approvals and is fully 12 authorized to do so and to bind such other party to its terms . 13 Hence, warrants that he has the authority to 14 execute this Settlement Agreement on behalf of the State of 15 California, and both he and the State of California warrant that 16 they have the authority to execute this Settlement Agreement on 17 behalf of each of the other plaintiffs listed in Exhibit A 18 hereto. warrants that he has the authority to 19 execute this Settlement Agreement on behalf of Howard. 20 15 . This agreement constitutes the only existing and 21 binding agreement among the parties, and the parties acknowledge 22 that there are no other warranties, promises, assurances or 23 representations of any kind, express or implied, upon which the 24 parties have relied in entering into this agreement, unless 25 expressly set forth herein. 26 16 . This agreement shall be governed by the laws of 27 the State of California. 9 . 1 17 . This Settlement Agreement may be executed in 2 counterparts by the parties hereto. 3 18 . This Settlement Agreement shall become effective 4 as. between the parties to this Settlement Agreement upon its 5 execution by the undersigned counsel for plaintiffs and by 6 counsel for Howard. 7 DATED: 8 DANIEL E. LUNGREN, Attorney- General of the State of California 9 DAVE STIRLING, Chief Deputy Attorney General 10 RODE:RICK E. WALSTON, Chief Assistant Attorney General 11 12 13 THOMAS GREENE, Supervising Deputy Attorney General 14 Attorneys for The State of California, 15 and as Parens Patriae for all Plaintiffs Listed in Exhibit A Hereto 16 17 DATED: , 1992. 18 THEODORE STROTMAN 19 20 DATED: , 1992. HOWARD ELECTRIC, INC. 21 By: 22 Its: 23 24 25 26 27 10 . I EXHIBIT A 2 THE STATE OF CALIFORNIA, COUNTY OF ALAMEDA, CITY OF ALAMEDA, CITY OF BERKELEY, CITY OF EMERYVILLE, CITY OF HAYWARD, CITY OF NEWARK, 3 CITY OF PIEDMONT, CITY OF SAN LEANDRO, CITY OF ALBANY, CITY OF DUBLIN, CITY OF LIVERMORE, CITY OF OAKLAND, CITY OF. PLEASANTON, i CITY OF UNION CITY, COUNTY OF CONTRA COSTA, CITY OP ANTIOCH, CITY : OF CLAYTON, CITY OF DANVILLE, CITY OF HERCULES, CITY CF MARTINEZ, 5 ' CITY OF PINOLE, CITY OF PLEASANT HILL, CITY OF SAN PABLO, CITY OF BRENTWOOD, CITY OF CONCORD, CITY OF EL CERRITO, CITY OF 6 LAFAYETTE, CITY OF THE TOWN OF MORAGA, CITY OF PITTSBURG, CITY OF RICHMOND, CITY OF SAN .RAMON, CITY OF WALNUT CREEK, COUNTY OF 7 NAPA, CITY OF CALISTOGA, CITY OF ST. HELENA, CITY OF NAPA, CITY OF YOUNTVILLE, CITY AND COUNTY OF SAN FRANCISCO, COUNTY OF SAN 8 MATEO, CITY OF ATHERTON, CITY OF BRISBANE, CITY OF COLICA, CITY OF EAST PALO ALTO, CITY OF HALF MOON BAY, CITY OF MENLO PARK, CITY 9 OF PACIFICA, CITY OF REDWOOD CITY, CITY OF BELMONT, CITY OF BURLINGAME, CITY OF DALY CITY, CITY OF FOSTER CITY, CITY OF 10 MILLBRAE, CITY OF PORTOLA VALLEY, CITY OF SAN BRUNO, CITY OF SAN CARLOS, CITY OF SOUTH SAN FRANCISCO, CITY OF SAN MATEO, CITY OF 11 WOODSIDE, COUNTY OF SANTA CLAR.A, CITY OF GILROY, CITY OF LOS ALTOS HILLS, CITY OF MILPITAS, CITY OF MORGAN HILL, CITY OF PALO 12 ALTO, CITY OF SANTA CLARA, CITY OF CUPERTINO, CITY OF LOS ALTOS, CITY LOS GATOS, CITY OF MONTE SERENO, .CITY OF MOUNTAIN VIEW, CITY 13 OF SARATOGA, COUNTY OF SANTA CRUZ, CITY OF CAPITOLA, CITY OF SCOTTS VALLEY, CITY OF WATSONVILLE, COUNTY OF SOLANO, CITY OF 14 BENICIA, .CITY OF FAIRFIELD, CITY OF SUISUN CITY, CITY OF VALLEJO, CITY OF DIXON, CITY OF RIO VISTA, CITY OF VACAVILLE„ COUNTY OF 15 SONOMA, CITY OF HEALDSBURG, CITY OF ROHNERT PARK, CITY OF ( SEBASTOPOL, CITY OF COTATI , CITY OF PETALUMA, CITY OF SANTA ROSA, 16 COUNTY OF MARIN, CITY OF BELVEDERE, CITY OF CORTE MADERA, CITY OF FAIRFAX, CITY OF LARKSUR, CITY OF MILL VALLEY, CITY OF NOVATO, 17 CITY OF ROSS, CITY OF SAN ANSELMO, CITY OF SAN .RAFAEL, CITY OF SAUSALITO, CITY OF TIBURON, AND CITY OF SANTA CRUZ 16 19 20 21 22 23 24 25 26 27 a I John K. Van de Kamp Attorney General 2 Andrea Sheridan Ordin Chief Assistant Attorney General 3 Ron Russo Supervising Deputy Attorney General 4 H. Chester Horn, Jr. Deputy Attorney General 5 3580 Wilshire Blvd. , Suite 500 Los Angeles, CA 90010 6 (213) 736-7515 7 Attorneys for Plaintiff THE STATE OF CALIFORNIA, et al. 8 M. Laurence Popofsky 9 Peter H. Goldsmith Judith Z. Gold 10 Heller, Ehrman, White & McAuliffe 333 Bush Street 11 San Francisco, CA 94104-2878 (415) 7.72-6000 12 Attorneys for Defendant 13 ROSENDIN ELECTRIC, INC. and LOUIS M. ROSENDIN 14 15 SUPERIOR COURT OF THE STATE OF CALIFORNIA 16 FOR THE CITY AND COUNTY OF SAN FRANCISCO 17 THE STATE OF CALIFORNIA, on its ) No. 880011 18 own behalf and on behalf of the ) COUNTY OF ALAMEDA, et al. , ) ACKNOWLEDGEMENT AND 19 ) AUTHORIZATION TO Plaintiffs, ) CALIFORNIA ATTORNEY 20 ) GENERAL TO EXECUTE . v. ) SETTLEMENT AGREEMENT 21 ) ROSENDIN ELECTRIC, INC. , et al. ) 22 ) Defendants . ) 23 ) 24 In consideration of a potential right to receive a share 25 of the proceeds of the Settlement Agreement herein, which the 26 1 undersigned has read in full and incorporates by reference herein, 27 the plaintiff identified below hereby authorizes appropriate EXHIBIT B 1. s r. x I representatives of the California Attorney General to -execute the r. 2 Settlement Agreement on its behalf and expressly covenants and 3 agrees that it will forever refrain from instituting any suit or 4 action against Rosendin, its past or present officers, directors, E 5 agents, employees, parents, affiliates, subsidiaries, divisions, 6 or any of its successors, assigns, or legal representatives, on any 7 claim including, without limitation, any claim arising under the 8 antitrust laws of the United ;states, the Racketeer Influenced and 9 Corrupt Organizations Act (RICO) , or the antitrust or unfair 10 competition or fraud or misrepresentation laws -of any state, based 11 upon or in any way related to the facts alleged in the Action. The 12 said plaintiff agrees to be bound by each and every term of the 13 Settlement Agreement, including without limitation paragraph 7 14 thereof. The undersigned warrants that he has obtained all 15 necessary approvals and has authority to execute this document on 16 behalf of the plaintiff identified below, and thereby to bind that 17 plaintiff to the terms of this document and the Settlement 18 Agreement. 19 Dated: 20 Plaintiff: 21 By: 22 Its : 23 24 25 26 27 EXHIBIT B 2. 1 DANIEL E. LUNGREN, Attorney General of the State of California 2 DAVE STIRLING, Chief Deputy Attorney General 3 RODERICK E. WALSTON, } Chief Assistant Attorney General 4 THOMAS GREENE, Supervising Deputy Attorney General f 5 1515 R Street, Suite 511 P. 0. Box 944255 6 Sacramento, California 94244-2550 (916) 324-7874 7 Attorneys for Plaintiffs 8 STATE OF CALIFORNIA, et al. 9 FRANK R. UBHAUS, Esq. 10 JONATHAN WOLFE, Esq. BERLINER, COHEN & BIAGINI 11 10 Almanden Blvd. , 11th Floor San Jose, CA 95113-2233 12 Attorneys for Defendant 13 HOWARD ELECTRIC, INC. and THEODORE STROTMAN 14 SUPERIOR COURT OF THE STATE OF CALIFORNIA 15 FOR THE CITY AND COUNTY OF SAN FRANCISCO 16 THE STATE OF CALIFORNIA, et al. , ) No. 880011 17 ) Plaintiffs, ) ACKNOWLEDGMENT AND 18 ) AUTHORIZATION TO V. ) CALIFORNIA ATTORNEY 19 ) GENERAL TO EXECUTE ROSENDIN ELECTRIC, INC. , et al. , ) SETTLEMENT AGREEMENT 20 ) Defendants . ) 21 ) 22 In consideration of a potential right to receive a 23 share of the proceeds of the Settlement Agreement herein, which 24 the undersigned has read in full and incorporates by reference 25 herein, the plaintiff identified below hereby authorizes 26 appropriate representatives of the California Attorney General to 27 execute the Settlement Agreement on its behalf and expressly EXHIBIT B 1. .. I covenants and agrees that it will forever refrain from r. 2 instituting any suit or action against Howard Electric, Inc. or r 3 Theodore Strotman its past or present officers, directors, u 4 agents, employees, parents, affiliates, subsidiaries, divisions, t t 5 or any of its successors, assigns, or legal representatives, on 6 any claim based upon or in any way related to the facts alleged 7 in the above-entitled action. The said plaintiff agrees to be 8 bound by each and every term of the Settlement Agreement. The 3 9 undersigned warrants that he has obtained all necessary approvals 10 and has authority to execute this document on behalf of the it plaintiff identified below and to bind that plaintiff to the 12 terms of this document and the Settlement Agreement. 13 14 Dated: 15 Plaintiff: 16 By: 17 Its: 18 19 20 21 22 23 24 25 26 27 2 .