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9 <br />Council, as well as the requirements of Minnesota Statutes section 256.042, <br />subdivision 5(d), apply to Local Governments receiving Opioid Settlement Funds under <br />National Settlement Agreements and Bankruptcy Resolutions within the scope of this <br />MOA. <br />VI.Backstop Fund <br />A.National Attorney Fee Fund . When the National Settlement Agreements provide for the <br />payment of all or a portion of the attorney fees and costs owed by Litigating Local <br />Governments to private attorneys specifically retained to file suit in the opioid litigation <br />(“National Attorney Fee Fund”), the Parties acknowledge that the National Settlement <br />Agreements may provide for a portion of the attorney fees of Litigating Local <br />Governments. <br />B.Backstop Fund and Waiver of Contingency Fee . The Parties agree that the Participating <br />Local Governments will create a supplemental attorney fees fund (the “Backstop Fund”) <br />to be used to compensate private attorneys (“Counsel”) for Local Governments that filed <br />opioid lawsuits on or before December 3, 2021 (“Litigating Local Governments”). By <br />order3 dated August 6, 2021, Judge Polster capped all applicable contingent fee <br />agreements at 15%. Judge Polster’s 15% cap does not limit fees from the National <br />Attorney Fee Fund or from any state backstop fund for attorney fees, but private <br />attorneys for local governments must waive their contingent fee agreements to receive <br />payment from the National Attorney Fee Fund. Judge Polster recognized that a state <br />backstop fund can be designed to incentivize private attorneys to waive their right to <br />enforce contingent fee agreements and instead apply to the National Attorney Fee Fund, <br />with the goals of achieving greater subdivision participation and higher ultimate payouts <br />to both states and local governments. Accordingly, in order to seek payment from the <br />Backstop Fund, Counsel must agree to waive their contingency fee agreements relating to <br />these National Settlement Agreements and first apply to the National Attorney Fee Fund. <br />C.Backstop Fund Source . The Backstop Fund will be funded by seven percent (7%) of the <br />share of each payment made to the Local Abatement Funds from the National Settlement <br />Agreements (annual or otherwise), based upon the initial allocation of 25% directly to the <br />State Abatement Fund and 75% directly to Local Abatement Funds, and will not include <br />payments resulting from the Purdue, Mallinckrodt, or Endo Bankruptcies. In the event <br />that the initial allocation is modified pursuant to Section II.F. above, then the Backstop <br />Fund will be funded by 8.75% of the share of each payment made to the Local Abatement <br />Funds from the National Settlement Agreements (annual or otherwise), based upon the <br />modified allocation of 40% directly to the State Abatement Fund and 60% directly to the <br />Local Abatement Funds, and will not include payments resulting from the Purdue, <br />Mallinckrodt, or Endo Bankruptcies. In the event that the allocation is modified pursuant <br />to Section II.G. or Section II.H. above, back to an allocation of 25% directly to the State <br />Abatement Fund and 75% directly to Local Abatement Funds, then the Backstop Fund <br />will be funded by 7% of the share of each payment made to the Local Abatement <br />3 Order, In re: Nat’l Prescription Opiate Litig., Case No. 17-MD-02804, Doc. No. 3814 (N.D. <br />Ohio August 6, 2021). <br />DocuSign Envelope ID: 040056EC-0D41-4D98-9C65-E01AE876A6AB