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#2 Mr. Thomas A. Campbell 6-21-54 at this time. We have not, however, checked or verified any of the dollar amounts set forth in the Escrow Instructions, since we presume that this is a matter which will be subject to the examination and approval of the District’s accountant, Mr. Conway. With respect to the "Amendment to Escrow Instructions," we have no objection to the provisions contained therein, except with possible reference to subparagraph (2) thereof. This para­graph provides that the amendment is not to be effective unless the escrow is closed on July 1, 1954. Apparently, the assumption is made that the only party who might prevent the close of the escrow on the said date is the District. There is, however, the possibility that the documents deposited by Union Pacific might be insufficient in some respect and that Union Pacific might prevent the escrow from being closed. It would appear to us that if a failure to close the escrow occurred by reason of delinquency on the part of Union Pacific, the District should not be penalized by being compelled to pay the cost of.the donated properties. The matter of whether or not the District can be com­pelled to pay the cost of the donated properties (fire hydrant connections) presents a vexing problem. Under the literal pro­visions of the contract with Union Pacific, Union Pacific is en­titled to receive payment for the value of such donated properties. However, it was never the intention of Union Pacific or the Dis­trict that the District should be compelled to pay the value of the donated properties or that Union Pacific should receive a "windfall" by reason thereof. On this basis, it is our view that the District could bring an action for the reformation of the agreement whereby Union Pacific would not be entitled to receive payment for the value of the donated properties. From our telephone conversations, it is our understand­ing that the Board of Directors or the officers of the District will contact Union Pacific representatives concerning whether the escrow is to be completed on July 1, 1954. FTH:gv E n d s . cc: Mr. Nelson Conway Leo A. McNamee, Esq. Mr. Harry E. Miller Mr. William C. Renshaw Mr.E. E. Bennett Very truly yours, O'MELVENY & MYERS Franklin T. Hamilton