World Service Lawyer's Papers

THE FOLLOWING LETTER WENT OUT TO THE FELLOWSHIP AND
REPRESENT THE KEY DOCUMENTS BACKING UP THE IDEA THAT
SWEEPING CHANGES IN OUR SERVICE STRUCTURE ARE
NECESSARY. READ THEM AND DECIDE WHAT YOU THINK. WHAT I
THINK APPEARS AT THE END AND WILL LIKELY BE PRESENTED IN
SOME FELLOWSHIP NEWSLETTERS. THIS IS WAY TOO IMPORTANT
TO DELAY. READ, DECIDE AND CONTACT FRIENDS IF YOU WANT
TO ACT IN TIME TO DO ANY GOOD.

Interested members may list their email or phone number to me if they wish to be
available to answer questions in a particular area or region:

Bo Sewell bo@bosewell.com 404/525-3351 Atlanta

* CONTENTS *

1) JANUARY 1998 TRANSITION GROUP
on Summary Letters from Legal Consultants

2) Wagner & Middlebrook: In Re Merger Proposal
Our Docket No: 03-9545-141

3) Nevers & Palazzo:
Re: Transition Issues

4) Personal Response

N.A. LOGO - Narcotics Anonymous
World Service Conference
19737 Nordhoff Place
Chatsworth, CA 91311 USA
Telephone (818) 773-9999
Fax (818) 700-0700

From N.A. World Service Conference (styled for web, copy verbatim)
To: All Conference Participants From:
The World Services Transition Group
Date: 10 January 1998
Subject: Summary letters from our legal consultants

As we reported to you in December, we have enclosed copies of letters from
both of the attorneys that we have consulted
during the creation of our proposals for consideration at WSC 1998. These letters
are a general overview of the work that
they have done on our behalf over this conference year. The financial consultant
that we have used has worked with the
attorneys to ensure that all tax and financial issues were addressed. Most of the
financial work will be done between now
and the World Service Conference to set up a chart of accounts that fulfills the
requirements of our proposed unified budget.
Therefore, there will be no overview provided by them until we are closer to the
WSC.

The draft bylaws for the proposed World Board are still being developed. They
will be sent to you after they have been reviewed by the World Service Office
Board of Directors and the World Service Board of Trustees at their upcoming
meetings. Since our report and the resume form was sent our in December, we
have received questions about how to forward a name to the proposed World
Pool. Our proposal states that nominations to the World Pool consist of
submitting a service resume to the Human Resources Panel. If the minimum
requirements are met, the member’s resume would be included in the
World Pool. The proposal also recommends a nomination from a local service
board or committee but does not require it. Anyone who would like to forward
their name for inclusion in the proposed World Pool, should fill out the existing
service resume form. This form was not created for this purpose so additional
information may be submitted along with the resume form. This can include a
nomination, specific interests or skills or any other information that might be
useful to the Human Resources Panel.

The normal two page limit for resumes submitted to the World Service
Conference for consideration does not apply to the
World Pool. It is our expectation that if our proposals are adopted, the Human
Resource Panel will develop a new resume
form that is more appropriate for this use. We expect to see many of you at
upcoming Conference Agenda Report workshops. As always, if you have any
questions about our proposals, please do not hesitate to contact us through the
WSO.

WAGNER & MIDDLEBROOK
ATTORNEYS AT LAW

John E. Wagner
Theresa Wagner Middlebrook
Robert C. Smith of Counsel
3541 Ocean View Boulevard
Glendale, California 91208
Telephone (818) 957-3340
Fax (818) 957-8123

December 4, 1997

The Transition Group c/o World Service Office, Inc.
19737 Nordhoff Place
Chatsworth, CA 91311

Re:
Fellowship Intellectual Property Trust
In re Merger Proposal
Our Docket No: 03-9545-141

Dear Members of the Transition Group:

This letter is intended to summarize the various issues that this firm has
addressed with respect to the proposed merger of WORLD CONVENTION
CORPORATION ("WCC") into WORLD SERVICE OFFICE, INC. ("WSO").
WSO would be the surviving corporation, and its legal name would change to
NARCOTICS ANONYMOUS WORLD SERVICES, INC. Our services have
been targeted to the effects the merger would have on (1) the Fellowship
Intellectual Property Trust ("FIPT"); and (2) the trademark registrations held by
WSO as Trustee throughout the world.

THE IMPACT OF THE FELLOWSHIP INTELLECTUAL PROPERTY
TRUST.

A change of name of the Trustee will require a conforming amendment to the
FIPT, as well as an appropriate amendment filing with the California Secretary of
State. I understand that one concern within the fellowship has been the risk of an
adverse effect on the FIPT if the name of the Trustee changes. In addition, there
is a procedural question as to whether the change in the name of the Trustee
would trigger Article VII, Section 2 of the Operational Rules.

Changing the name of the Trustee (which is different than changing the identity
of the Trustee to some other entity) is not a change to any of the terms or duties
of the Trust itself. Legally, the new name of an existing entity merely replaces the
old name, without having any effect upon the liabilities or responsibilities of the
entity itself. This type of change does not create any legal break in the chain of
title or any break in continuity, so long as the change of name is properly
recorded in the public records.

The Transition Group - Page 2
03-9545-141
December 4, 1997

Article VII, Section 2 is applicable when an amendment to a "provision" or a
"revision" of the Trust Instrument is sought. Unless otherwise defined, a work in
a legal document is to be given its "plain meaning", which typically means to
apply a common dictionary definition. "Provision" is defined as "a clause, as in a
legal document, agreement, etc., stipulating or requiring some specific things;
condition."Revision" is defined as "a re-examination or careful reading over for
correction or improvement." In the Trust Instrument, the name of the Trustee
does not stipulate or require any 'specific things', nor is the name itself a
condition. In addition, the name is not being changed for purposes of correction
or improvement in the substance of the document itself. Therefore, it would not
appear that changing the name of the Trustee would trigger an obligation to
comply with the procedures required by Article VII, Section 2.

With this change of name, we will want to seek the express consent of the
fellowship for the Trustee to use the term NARCOTICS ANONYMOUS as part
of the new name of the Trustee. Although this consent and use is implied in the
approval granted by the fellowship of the new name of the Trustee, obtaining an
express consent would be prudent and as well as clearly document that this use of
the Trust property was considered and found acceptable by the Trustor/Settlor.
That consent has not been necessary or an issue to date, as the Trustee has used
an operational name that did not include any of the fellowship's marks.

On a related matter, we have the additional issue of the recent change of the title
of the former regional service representatives to regional delegates. Likewise, this
should not effect the operation or any of the provisions of the Trust itself, as this
was only a change in name rather than a change of substance.

THE IMPACT ON TRADEMARK REGISTRATIONS.

As you know, at this time WSO holds in trust 70 registrations and/or applications
for registration of trademarks and service marks in 33 countries around the
world. Generally, the correct name of the registrant or applicant should be made
of record with each of those foreign Trademark Offices. With some countries,
the change of name documents needs to be filed immediately upon the change of
name, while other countries are less strict, and would require this when a renewal
application is filed. However, the most prudent practice is to provide the
appropriate notice of change of name of a registration or applicant as soon as
possible after the change goes into effect.

The general penalty for not timely providing the name of a change of name range
broadly from potential unenforceability of the registration to simply delays in any
enforcement proceedings until the ownership records are brought up to date. The
name change process can also sometimes be time consuming.

Therefore, we recommend that once the change of name of the FIPT Trustee
goes into effect, appropriate change documents be filed around the world as soon
as possible. We have previously provided an estimate of overseas costs of filing
the appropriate documents, which are expected to run a minimum of $21,660
plus some additional costs such as translations.

The Transition Group - Page 3
03-9545-141
December 4, 1997

In addition, as you know, the service office has changed its address from
Wyandotte to the present location. For administrative purposes, this would also
be an excellent opportunity to bring the address file records up to date. On 40 of
these files, the change of address notice can be filed either with the change of
name or with the first renewal at no additional charge. There are five registrations
in Columbia, which must have the change of address recorded as soon as
possible, as failure to do so may effect the enforceability of the registrations. For
the balance of the registrations, specifically 20 additional files, there will be
overseas filing or service charges to file the change of address. The estimates
provided to us by our associates to date total $5,539 in overseas costs. We
recommend filing the changes of address at the same time as the change of name
for two reasons: first, a general desire to keep the records current and second,
this will often qualify for discounted legal fees with some of our associates. In
addition to the foregoing costs, there will be additional costs and fees from this
office incurred in the coordination of the filing of the changes of name and
address, which I estimate will run between $4,000 and $5,000.

I trust that this responds to your inquiries to date. If I may be of any further
service, or provide any additional information please let me know.

Very truly yours,

WAGNER & MIDDLEBROOK

Teresa W. Middlebrook

TWM: ba
1:WSO\MERGER\MERGER4.ltr

NEVERS & PALAZZO
A PROFESSIONAL LAW CORPORATION

340 N. WESTLAKE BOULEVARD, SUITE 260
WESTLAKE VILLAGE, CALIFORNIA 91362
(805)495-0700
(818)879-9700
FACSIMILIE: (805)495-4440

DONALD J. PALAZZO

November 24, 1997

Transition Group
c/o World Service Office, Inc.
19737 Nordhoff Place
Chatsworth, California 91311

Re: Transition Issues

Ladies and Gentlemen:

It was a pleasure meeting with you last week and discussing your last set of
questions. As you requested,
this letter will summarize the work done by our law firm.

Our assignment was to advise you in your process of consolidating the
activities of the various world service entities under the administration of
one board. When we started, you and others had already done a lot of work
in figuring our what you wanted to accomplish and had already created
some working models. This meant that our focus was to address the legal
issues presented by these models and advise you in your process of reaching
a consensus on the one approach that appeared to work the best.

In the course of our activities, we consulted frequently with your
accountants, Thomas Havey, LLP, to make sure that the tax and financial
issues were properly addressed. We also consulted frequently with your
intellectual property law firm, Wagner & Middlebrook, to make sure
that the new structure was compatible with the Fellowship Intellectual
Property Trust and the other protections that had been set up in the past
for the Narcotics Anonymous literature and logos. Finally, we worked
closely with the World Service Office executive co-directors and assistant
executive director to help make sure that our recommendations would be
workable with the world service staff and would be on the right track in
addressing the goals and objectives of you, the conference participants and
the fellowship.

Our approach throughout this process was to try to find the simplest,
easiest and most cost-effective way for you to accomplish your goals. One
of the first questions, therefore, was whether the new board could operate
through one entity or if more than one was required. Charles Ross of
Thomas Havey researched the tax laws, examined how the world services
entities did business, looked at their past financial statements and
concluded that only one entity was needed.

After we confirmed to you that we agreed with your decision to continue
operating in corporate form, we recommended that you create your new
board through one of your existing

Transition Group
November 24, 1997
Page 2

corporation, rather than forming a new corporation. We also recommended
that you use World Service
Office, Inc. ("WSO, Inc.") for this purpose, with World Convention
Corporation ("WCC") merged into WSO, Inc. and the
corporation given a new name and new governing documents. There were
several reasons for these recommendations.

First, using WSO, Inc. would mean that we could rely on its existing
tax-exempt status and avoid the delay, uncertainty, expense, and scrutiny
that applying for tax-exempt status all over again would require. Second,
using WSO, Inc. would make it much easier and less expensive to change
over to the new structure, as much of the operations of the various world
service entities were already being conducted under the WSO, Inc. name.
Avoided would be the need for new bank accounts, an extra set of tax
returns, new books of account, new permits, new licenses and new
identification numbers. Instead of going over all contracts and leases and
asking for permission to transfer each of these documents one-by-one to
the new corporation, using WSO, Inc. would mean that a simple
notification would be all that would be required in most cases. Finally,
Theresa Middlebrook of Wagner & Middlebrook reported that using
WSO, Inc. instead of a new entity would save thousands of dollars in legal
fees and application fees in dealing with the effect of the change on the
Fellowship Intellectual Property Trust and on the trademark and copyright
registrations held around the world.

Once these decisions on the structure were made, we then began to prepare
documentation and to do the other work necessary to put this structure
into place. In doing so, we spent substantial time on the new form of bylaws
for the corporation, which is to be renamed Narcotics Anonymous World
Services, Inc. ("NAWS").

In preparing the first draft of the NAWS bylaws for your review, we decided
to use the current WSO, Inc. bylaws as the starting point, making only
changes were your proposals required change where we believe California
law may make change necessary or desirable. This means that the NAWS
bylaws will preserve many of the concepts and much of the language and
format of the WSO, Inc. bylaws, so that language and procedural questions
that were discussed and resolved in the past would not need to be revisited,
and so that the new bylaws would be easier to understand and work with
for people who were already familiar with the old WSO, Inc. bylaws.

In most areas, we were able to work the transition group proposals into the
new bylaws without needing to recommend changes. In a few areas,
however, the first draft of the bylaws took a different approach to try to
reach the same goal. We pointed these changes out to you when we
submitted the first draft to you and discussed those changes with you at our
meeting last week. Based on your input form our meeting with you and
your discussions among yourselves later that weekend, we will be making
additional changes to the bylaws for your final review and approval.

Transition Group
November 24, 1997
Page 3

One area in which we used our discretion was in the amount of detail to
include. It seemed best for the new bylaws to contain minimal detail about
how the changes from the old structure to the new structure would be
implemented. We thought that this was a subject that was best left to the
board members or committees appointed for transition tasks. Once the
transition is completed, keeping all these extra provisions in the bylaws
would be unnecessary and could create needless confusion.

Similarly, the bylaws create a framework for how committees are to be
established, but leave it to the board members in
most cases to decide what committee to form, what these committees will
do, and who their members will be. This will
allow board members more flexibility as needs change over the years.
However, the bylaws did include provision for the
executive committee and for the committee of the guardians, as the
existence and operations of these two committees seemed central to the
concept of how the organization would operate in the future.

One important area addressed by the bylaws was the relationship between
the corporation, the board members and the World Service Conference
("WSC"). Throughout the bylaws, specific provisions instruct the board
members to follow the will of the WSC, such as, for example, in
establishing or amending External Guidelines. A general provision is also
included requiring board members to abide by the Twelve Traditions and
the Twelve Concepts and act in a manner consistent with the will of the
WSC. However, great care was taken not to give the WSC the legal power
to direct the affairs of the corporation for two reasons. One, it is unclear
whether such provisions could be enforceable, since, by law, the board
members have the final authority and responsiblity and are held
accountable to use their best judgement in carrying our their duties.
Second, if giving the WSC the power to go to court to compel certain
action was desired, proof would be needed in court as to who the WSC was
and who was authorized to direct NAWS on behalf of the WSC. This would
then require extensive procedures and formalities on an ongoing basis to
clearly conclude who was qualified for WSC membership, how WSC
membership could be granted, refused or taken away, how WSC would act,
how those acts could be challenged and so on and so on. It does not make a
lot of sense to go through this lengthy, complicated, expensive and
potentially divisive process for every conference just to be able to provide a
better opportunity for someone to go to court to undertake a legal process
that almost certainly would be lengthy, costly, disruptive and divisive.
Rather, it appears to make more sense to follow the other procedures and
safeguards that you have set forth in your proposals to help assure that the
will of the WSC is followed without the need to resort to the courts. The
new bylaws try to do this.

To better allow the WSC to control the choice of board members, the
bylaws call for board members to be selected by the chairperson of NAWS,
with such selection to be made in accordance with the will of the WSC. We
anticipate that the WSC will not give the chairperson any choices, but will
instead submit only one name for each vacant position. This provision is

Transition Group
November 24, 1997
Page 4

intended to avoid the need for the board members to conduct any elections
or make any choices in this area.

Once the board members are selected, the bylaws carry forward your
requirement that at least thirteen affirmative votes are needed to take
action when the full board is seated. With so many votes requried, the risk
is reduced that a small number of board members will take action that,
whether by accident or design, is not reflective of the will of the WSC.

Your initial proposals also called for the suspension of a board member in
the event of misconduct, with only the WSC having the power to remove
the board member. As we discussed, we believe that phrasing the bylaws in
this way could create problems, as the law does not provide for the concept
of suspension, and we would have to create all the rules for how such a
suspension would affect all the various operating procedures of the
corporation, such as quorum requirements, voting requirements, etc. Even
if such rules were created, it is unclear whether a court would follow them
or set up its own rules and procedures, again after a divisive and expensive
court fight. Therefore, the bylaws take a different approach, allowing a
board member accused of misconduct to be removed by the other board
members, but only after the vote todo so by at least thirteen board
members. Even if a board member is so removed, the WSC can vote at its
next conference to reinstate that removal board member if it disagrees with
the removal. In such an event, the remaining board members are directed
to carry out that reinstatement.

Finally, we have addressed with you various related legal issues that have
come up in connection with this project. One was the potential for the
name change to result in additional legal proceedings involving the
corporation, and how to reduce this potential problem. Another involved
working with your accountants to investigate the past dealings of the WSO,
Inc., WCC and various other groups andentities with the IRS adn how best
to position the corporation for future dealings with the IRS. Working with
Theresa Middlebrook, we helped analyze and propose measures to try to
eliminate the ability of creditors to be able to seize or control the Natcotics
Anonymous literature or trademarks in the event of an exonomic disaster
that might put the other corporate assets at risk. We also discussed some of
the legal issues raised by the various titles that could be used to identify
board members, and advised you as how to reduce the risk of confusion or
liability. Along the way, many other questions were addressed and answered
as they came up.

Transition Group
November 24, 1997
Page 5

We hope that this summary is helpful. Please feel free at any time to call if
you have any additional questions or require something futther.

Very truly yours,

Donald J. Palazzo
of Nevers & Palazzo

DJP:gs
Z:\23402.01\LTN\TRANSITI.LT4

PERSONAL RESPONSE

by Bo S.

There might be some confusion among newer members of NA as to why
many of us do not automatically trust members in WS. Well, I can speak
for myself. I have been trained to be this way by WS. With several major
oversights, poor or awful miscarriages of sensitive projects, secrecy with
bad results for the Fellowship and a steady, ongoing series of stories among
members who have been forced out of WS after saying things like, "I think
we have to go to the Fellowship to find out what they want to do about
this." We really wish there were no problem but I can deal with the facts
enough to admit this is the case. These legal papers make the basic level of
the sweeping changes plainer than anything else I have seen. If approved,
these changes would completely alter the Fellowships position and no one
has had time to digest them to see if they have any merit or if they are just
the accumulation of bureaucratic processing over the past five or six years.
Each year’s crop of new recruits factoring in their personal views and
the consistent move towards a few people having MUCH MORE
CONTROL and the Fellowship having almost no real say at all.

Is this what you want, NA? Is the delegate process enough to give the
Fellowship an active voice in the FIPT? I wonder who was supposed to be
speaking for the Fellowship interests in directing the lawyers to prepare
their document? Why is there no mention of Fellowship wishes? Why is
only efficiency and cost effectiveness considered important? It looks bad to
me that the service structure was shut down right after it became obvious
that World Services had NOT been doing its job properly.

Then, before the structure gets a chance to adjust to the new situation, the
entire structure is rewritten under a process that is completely hilarious.
That a small group of powerful addicts would be empowered to work in
general secrecy, issuing vague, confusing statements as if this satisfied their
obligation and responsibility to the Fellowship to keep them informed. It
had an opposite effect: it so confused and baffled the Fellowship that for
the past four to six years, members stopped taking an active interest in
general. Specifically, discussion of the Conference Agenda Report dropped
off almost completely. Given the massive reduction of Fellowship feedback,
it is ludicrous for a few employees to pretend to
be giving these attorneys accurate information. Who speaks for the
Fellowship today? In general, the Fellowship has voiced disapproval of
secrecy, back room dealing, and obscuring issues with big words and poor
presentation.

Openness, honesty, self-lessness and concern for the addict seeking recovery
used to be the principles guiding us. Thinking the Fellowship has a say in
what is going on is like saying customers run K-Mart! They are present,
they certainly support world services with their money - it is the only store
they can shop. But they do not have a say! The managers and executives
make the decisions. But our service center is not K-Mart. We have no where
else to shop plus we own the store!

The whimsical tone of the second legal opinion (Nevers & Palazzo)
obviously ignores the very real and very upsetting changes in our literature,
and taking five years to do an inventory that could have been done in a
week! Perhaps no one told them. Does anyone think the Fellowship asked
for the structure changes? Did any area, region or member ask for this? It
doesn't even come up. Instead we are insulted by examples pretending to be
informed implying that the Fellowship is looking to cause trouble for World
Services, and they don't want to encourage that sort of thing.

It may be a while before the informed Fellowship comes to grips with these
difficulties, but this is hardly a time to cut our lack of understanding into
stone by approving the sweeping structural changes taking away the open
atmosphere of discussion, agreement and awareness that used to
characterize our service structure.

The early statement that the several world service functions could be done
by one corporate entity doesn't even consider the problems incurred by
putting all your eggs in one basket. The examples are poor and worst of all,
the statements relating to the WSC being able to remove board members
and the Fellowship having a say when even the title of 'representative' has
been eliminated from our service structure, replacing it with the word
'delegate' that suits a relationship where organization direction is given
over to others rather than the trustor/trustee relationship implicit in the
FIPT wording.