Shields Pharmacy of Palo Alto, LLC
Shields Pharmacy of Providence LLC
Shields Pharmacy of Rhode Island, LLC
Shields Pharmacy of San Antonio, LLC
Shields Pharmacy of South Carolina, LLC
Shields Pharmacy of St. Louis, LLC
Shields Pharmacy of the Bronx, LLC
Shields Pharmacy of the Southwest Venture, LLC
Shields Pharmacy of the Southwest, LLC
Shields Pharmacy of University LLC
Shields Pharmacy of Virginia, LLC
Shields Pharmacy of Western Florida, LLC
Shields Pharmacy of Western Michigan, LLC
Shields Pharmacy of Western New York, LLC
Shields Specialty Pharmacy of Springfield, LLC
Shields Technology Solutions, LLC
SIC Parent, LLC
SIC Parent, LLC (WRA Partners, LLC owns 51%)
Silk Acquisition Corp.
Sleep Management Solutions LLC
Smart Insurance Co
Smart Insurance Company
Smart Insurance Company Group Holdings, Inc.
Smart Insurance Company Holdings, Inc.
Soap & Glory USA LLC
Solera Health, Inc.
Spa Strategy, Inc.
Spokane Health Care Associates, Inc.
FH 11185097.1
Springville Pharmacy Infusion Therapy, Inc.
Stephen L. LaFrance Holdings, Inc.
Stephen L. LaFrance Pharmacy, Inc.
Summit Medical Group Arizona, LLC
SUNAMERICA AFFORDABLE HOUSING PARTNERS XI
Super D Drugs Acquisition Co.
Superior LuxCo 1 S.a.r.l.
Superior Luxco 3 S.A.R.L.
Superior US 1 LLC
Take Care Employer Solutions, LLC
Take Care Health Arizona, P.C.
Take Care Health Colorado, Inc.
Take Care Health Delaware, P.A.
Take Care Health District of Columbia, P.C.
Take Care Health Georgia, P.C.
Take Care Health Illinois, P.C.
Take Care Health Indiana, P.C.
Take Care Health Kansas, P.A.
Take Care Health Kentucky, P.S.C.
Take Care Health Massachusetts, P.C.
Take Care Health Mississippi, P.C.
Take Care Health Missouri, P.C.
Take Care Health New Jersey, P.A.
Take Care Health Ohio, Inc.
Take Care Health Oklahoma, P.C.
Take Care Health Pennsylvania, PC
Take Care Health Services, P.A.
Take Care Health Systems LLC
FH 11185097.1
Take Care Health Systems, Inc. (FKA I-Trax, Inc.)
Take Care Health Tennessee, P.C.
Take Care Health Texas, P.C.
Take Care Health Wisconsin, S.C.
Take Care Medical Health New York, P.C.
The 1901 Group LLC
The drugstore.com Foundation
The Lane Drug Company
The Patient Safety Research Foundation, Inc.
The PSRF Merger Co., Inc.
Thrifty Payless, Inc.
THV VMD Blocker, LLC
TKH HoldCo, LLC
TMD, Inc.
TPR Holdings LLC
Trinity Home Care, LLC
TSL, Inc.
TURN -KEY PALLIATIVE SERVICES, LLC
Turn -Key Health Holdings, L.P.
Ultra Care, LLC
UMass Memorial Shields Pharmacy, LLC
University Option Care LLC
USA Drug
USA/Super D Franchising, Inc.
VICTORIA MERGER SUB. INC.
Vim, Inc.
Vision Direct Inc
W D Liquor, Inc.
FH 11185097.1
WAB Holdings, LLC
WAG Employee Services Inc.
WagBeau LLC
WagBeau, Inc.
WAGDCO, LLC
WAGHID, LLC
Wag's Restaurants of Illinois, Inc.
Waldoy, L.P
Walgreen Altoona Co.
Walgreen Alumni Association
Walgreen Arizona Drug Co.
Walgreen Benefit Fund
Walgreen Capitol Court, Inc.
Walgreen Co PAC
Walgreen Co Puerto Rico Branch
Walgreen Co.
Walgreen Columbus Co.
Walgreen Community Development
Walgreen Cudahy, Inc.
Walgreen Delaware Co.
Walgreen Drug Stores Historical Foundation
Walgreen Drugs, Inc.
Walgreen Eastern Co., Inc.
Walgreen Fon-Du-Lac, Inc.
Walgreen Fremont Co.
Walgreen Hastings Co.
Walgreen International Investments LLC
Walgreen International S.a.r.l.
FH 11185097.1
Walgreen Investments Co
Walgreen Investments Merger Co., LLC
Walgreen Investments Merger Co., LLC (DE)
Walgreen Kearney Co
Walgreen Laboratories, Inc.
Walgreen Lincoln Co.
Walgreen Louisiana Co., Inc.
Walgreen Market Strategies LLC
Walgreen Medical Supply, Inc.
Walgreen Mercantile Corporation
Walgreen Milwaukee, Inc.
Walgreen National Corporation
Walgreen Network Health Services
Walgreen Nevada Corporation
Walgreen New Berlin, Inc.
Walgreen Oconomowoc, Inc.
Walgreen of Hato Rey Inc.
Walgreen of Hawaii, LLC
Walgreen of Maui, Inc.
Walgreen of Maui, Inc.
Walgreen of Nevada, LLC
Walgreen of New Mexico, Inc.
Walgreen of Puerto Rico, Inc.
Walgreen of San Patricio, Inc.
Walgreen of US Virgin Islands, LLC
Walgreen Oshkosh, Inc.
Walgreen Pharmacy Services Eastern LLC
Walgreen Pharmacy Services Eastern, LLC
FH 11185097.1
Walgreen Pharmacy Services Midwest, LLC
Walgreen Pharmacy Services Southern, LLC
Walgreen Pharmacy Services Western, LLC
Walgreen Pharmacy Services WHS, LLC
Walgreen Pharmacy Strategies, LLC
Walgreen PR Branch
Walgreen Properties, Inc.
Walgreen Racine, Inc.
Walgreen Realty Resources LLC
Walgreen South Dakota, Inc.
Walgreen Southgate Corp.
Walgreen Specialty Holdings, LLC
Walgreen Watertown, Inc.
Walgreen Waukesha, Inc.
Walgreen West Bend, Inc.
Walgreen Wisconsin, Inc.
Walgreen Woodmar, Inc.
Walgreen-Option Care, Inc. IFKA CuraScript Infusion)
Walgreens Advance Care, Inc.
Walgreens Annapolis, LLC
Walgreens Assistance, Inc.
Walgreens Boots Alliance Holdings LLC
Walgreens Boots Alliance Scottish LP
Walgreens Boots Alliance US I LLC
Walgreens Boots Alliance US 2 LLC
Walgreens Boots Alliance US 3 LLC
Walgreens Boots Alliance, Inc.
Walgreens Business Services, LLC
FH 11185097.1
Walgreens.com Inc
Walgreens Community Development Corp
Walgreens Health COE LLC
Walgreens Health Holdings, LLC
Walgreens Health Initiatives - IPA, Inc.
Walgreens Health Initiatives, Inc.
Walgreens Health Services II LLC
Walgreens Health Services III LLC
Walgreens Health Services LLC
Walgreens Health Ventures LLC
Walgreens Healthcare Plus, Inc.
Walgreens Home Care Inc
Walgreens Infusion and Respiratory Services, LLC
Walgreens Infusion Services at Legacy Health, LLC (formerly Option Care at Legacy, L.L.C.) Walgreens Infusion Services Holding, Inc.
Walgreens Infusion Services, Inc. (FKA Option Care,)
Walgreens Investments Co.
Walgreens Long -Term Care Pharmacy LLC(FKA SeniorMed)
Walgreens Mail Service, Inc.
Walgreens Mail Service, LLC
Walgreens Network Health Services LLC
Walgreens of Massachusetts, LLC
Walgreens of New Mexico, Inc.
Walgreens of North Carolina, Inc.
Walgreens Personal Financial Services, LLC
Walgreens Pharmacy Strategies, LLC
Walgreens Sleep and Respiratory Pharmacy LLC
Walgreens Specialty Care Centers LLC
FH 11185097.1
Walgreens Specialty Pharmacy Holdings, Inc.
Walgreens Specialty Pharmacy Holdings, LLC
Walgreens Specialty Pharmacy, LLC
Walgreens Store No 3288 LLC
Walgreens Store No 3332 LLC
Walgreens Store No 3680 LLC
Walgreens Store No 4650 LLC
Walgreens Store No 4651 LLC
Walgreens Store No 5576 LLC
Walgreens Store No 5838 LLC
Walgreens Store No. 7839, LLC
Walgreens Venture Capital, LLC
WALGREENS WELL NETWORK OF MODESTO, LLC (FORMERLY ACCOUNTABLE CARE NETWORK OF MISSOURI, LLC) nc on 5/23/2013
WALGREENS WELL NETWORK OF OAKLAND, LLC (FORMERLY ACCOUNTABLE CARE NETWORK OF GEORGIA, LLC) nc on 5/23/2013
WALGREENS WELL NETWORK OF PALO ALTO, LLC (formerly Walgreens Well Network of Maryland LLC) nc on 5/23/2013
WALGREENS WELL NETWORK OF SACRAMENTO, LLC (FORMERLY
ACCOUNTABLE CARE NETWORK OF COLORADO, LLC) NC on 5/23/13 WALGREENS WELL NETWORK OF SAN FRANCISCO, LLC (formerly Walgreens Well Network of California LLC) nc on 5/23/2013
Walgreens.com, Inc.
Walgreens-Optioncare, Inc.
Waltrust Properties, Inc.
WBA Acquisition 3, LLC
WBA Acquisition 4, LLC
WBA Acquisition 5, LLC
WBA Acquisition 6, LLC
WBA Financial, LLC
FH 11185097.1
WBA Innovation Midco, LLC
WBA Innovation Parent, LLC
WBA Innovation, LLC
WBA INVESTMENTS, INC. (FKA WBA INVESTMENTS, LLC)
WBA RxR US LLC
WBA Shields Merger Sub, LLC
WBA US 1 Co.
WBA US 10 LLC
WBA US 4 LLC
WBA US 5 LLC
WBA US 6 LLC
WBA US 7 LLC
WBA US 8 LLC
WBA US 9 LLC
WCAS Shields Holdings, LLC
WD Liquor, Inc.
Wedge Acquisition Company
Well Ventures, LLC
Weymouth Property, Inc.
WHI (PR Branch)
Whole Health Management, LLC
WHP Health Initiatives, Inc.
Worthmore Cosmetics And Vitamins Co.
WRA Partners, LLC
WVC Investments LLC
FH 11185097.1
EXHIBIT K
Subdivision Participation and Release Form
[Draft]
Governmental Entity:
State:
Authorized Official:
Address 1:
Address 2:
City, State, Zip:
Phone:
Email:
The governmental entity identified above ("Governmental Entity"), in order to obtain and in consideration for the benefits provided to the Governmental Entity pursuant to the Settlement Agreement dated December [ ], 2022 ("Walgreens Settlement"), and acting through the undersigned authorized official, hereby elects to participate in the Walgreens Settlement, release all Released Claims against all Released Entities, and agrees as follows.
The Governmental Entity is aware of and has reviewed the Walgreens Settlement, understands that all terms in this Participation and Release Form have the meanings defined therein, and agrees that by executing this Participation and Release Form, the Governmental Entity elects to participate in the Walgreens Settlement and become a Participating Subdivision as provided therein.
2. The Governmental Entity shall promptly, and in any event no later than 14 days after the Reference Date and prior to the filing of the Consent Judgment, dismiss with prejudice any Released Claims that it has filed. With respect to any Released Claims pending in In re National Prescription Opiate Litigation, MDL No. 2804, the Governmental Entity authorizes the Plaintiffs' Executive Committee to execute and file on behalf of the Governmental Entity a Stipulation of Dismissal with Prejudice substantially in the form found at [website link to national settlement website to be provided].
3. The Governmental Entity agrees to the terms of the Walgreens Settlement pertaining to Participating Subdivisions as defined therein.
4. By agreeing to the terms of the Walgreens Settlement and becoming a Releasor, the Governmental Entity is entitled to the benefits provided therein, including, if applicable, monetary payments beginning after the Effective Date.
5. The Governmental Entity agrees to use any monies it receives through the Walgreens Settlement solely for the purposes provided therein.
FH 11185097.1
6. The Governmental Entity submits to the jurisdiction of the court in the Governmental Entity's state where the Consent Judgment is filed for purposes limited to that court's role as provided in, and for resolving disputes to the extent provided in, the Walgreens Settlement. The Governmental Entity likewise agrees to arbitrate before the National Arbitration Panel as provided in, and for resolving disputes to the extent otherwise provided in, the Walgreens Settlement.
7. The Governmental Entity has the right to enforce the Walgreens Settlement as provided therein.
8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for all purposes in the Walgreens Settlement, including without limitation all provisions of Section XI (Release), and along with all departments, agencies, divisions, boards, commissions, districts, instrumentalities of any kind and attorneys, and any person in their official capacity elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, and any other entity identified in the definition of Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Walgreens Settlement are intended by the Parties to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of the Governmental Entity to release claims. The Walgreens Settlement shall be a complete bar to any Released Claim.
9. The Governmental Entity hereby takes on all rights and obligations of a Participating Subdivision as set forth in the Walgreens Settlement.
10.In connection with the releases provided for in the Walgreens Settlement, each Governmental Entity expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads:
General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her would have materially affected his or her settlement with the debtor or released party.
A Releasor may hereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Governmental Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, FH 11185097.1
oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Governmental Entities' decision to participate in the Walgreens Settlement.
11. Nothing herein is intended to modify in any way the terms of the Walgreens Settlement, to which Governmental Entity hereby agrees. To the extent this Participation and Release Form is interpreted differently from the Walgreens Settlement in any respect, the Walgreens Settlement controls.
I have all necessary power and authorization to execute this Participation and Release Form on behalf of the Governmental Entity.
Signature:
Name:
Title:
Date:
FH 11185097.1
EXHIBIT L
Settlement Fund Administrator Terms
[Exhibit to be inserted prior to the Reference Date]
FH 11185097.1
EXHIBIT M-1: PAYMENT SCHEDULE
Payment Year
Maximum
Maximum
Annual
Annual Fees
Annual
Maximum
Payment (See
Remediation
Exhibit M-3)
Payment (See
Exhibit M-2)
Year 1
---
$369,445,784
$369,445,784
9/1/22 - 8/31/23
Year 2
$122,393,885
$243,858,900
$366,252,785
9/1/23 - 8/31/24
Year 3
$122,393,885
$243,858,900
$366,252,785
9/1/24 - 8/31/25
Year 4
$122,393,885
$243,858,900
$366,252,785
9/1/25 - 8/31/26
Year 5
$122,393,885
$243,858,900
$366,252,785
9/1/26 - 8/31/27
Year 6
$122,393,885
$243,858,900
$366,252,785
9/1/27 - 8/31/28
Year 7
$122,393,885
$243,858,900
$366,252,785
9/1/28 - 8/31/29
Year 8
---
$369,445,784
$369,445,784
9/1/29 - 8/31/30
Year 9
---
$369,445,784
$369,445,784
9/1/30 - 8/31/31
Year 1.0
---
$369,445,784
$369,445,784
9/1/31 - 8/31/32
Year 11
---
$369,445,784
$369,445,784
9/1/32 - 8/31/33
Year 12
---
$369,445,784
$369,445,784
9/1/33 - 8/31/34
Year 13
---
$369,445,784
$369,445,784
9/1/34 - 8/31/35
Year 14
---
$369,445,784
$369,445,784
9/1/35 - 8/31/36
Year 15
---
$369,445,784
$369,445,784
9/1 /36 - 8/31/37
Total
$734,363,310
$4,788,165,456
$5,522,528,766
FH 11185097.1
EXHIBIT M-2: MAXIMUM ANNUAL REMEDIATION PAYMENT SCHEDULE Payment Year
Maximum
Maximum
Maximum
Maximum
Maximum
Base Payments
Incentive
Incentive
Incentive
Annual
(41%)
Payment A
Payment BC
Payment D
Remediation
(59%)
(56%)
(10%)
Payment '
Year 1
$369,445,784
---
---
---
$369,445,784
The later of
December 31, 2022
or five business
days after
Preliminary
Agreement Date
Year 2
$99,982,150
$143,876,750
$143,876,750
---
$243,858,900
December 31, 2023
Year 3
$99,982,150
$143,876,750
$143,876,750
---
$243,858,900
March 31, 2025
Year 4
$99,982,150
$143,876,750
$143,876,750
---
$243,858,900
March 31, 2026
Year 5
$99,982,150
$143,876,750
$143,876,750
---
$243,858,900
March 31, 2027
Year 6
$99,982,150
$143,876,750
$129,512,255
$47,881,655
$243,858,900
March 31, 2028
Year 7
$99,982,150
$143,876,750
$129,512,255
$47,881,655
$243,858,900
March 31, 2029
Year 8
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2030
Year 9
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2031
Year 10
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2032
Year 11
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2033
Year 12
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2034
Year 13
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2035
Year 14
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
March 31, 2036
Year 15
$124,226,144
$245,219,640
$230,855,143
$47,881,655
$369,445,784
December 31, 2036
Total
$1,963,147,836
$2,825,017,620
$2,681,372,654
$478,816,550
$4,788,165,456
FH 11185097.1
NOTES TO EXHIBIT M-2:
All figures for the Maximum Base Payment, Maximum Incentive A Payment, and Maximum Incentive Payment BC are maximum figures that reflect the following:
An assumption that all Eligible States are Settling States.
An assumption that all Settling States earn the full amount of the relevant incentive payment.
2. All figures for the Maximum Incentive Payment D show the amount earned based on all Settling States obtaining its maximum value of 10%, and reflect the following:
An assumption that all Eligible States are Settling States.
An assumption that all Settling States are eligible for Incentive Payment D in every Payment Year in which Incentive D is paid.
All figures for the Maximum Annual Remediation Payment reflect the following:
The credit amount of $361,834,542 for Florida's prior settlements have already been applied. The credit amount for Suffolk and Nassau Counties in New York in the amount of 15.31% of New York State's Allocation has not been applied against New York's allocation.
An assumption that all Eligible States are Settling States.
An assumption that each Settling State earn the maximum amount of the available Incentive Payment by either qualifying for Incentive Payment A, or the combination of obtaining a 100% participation percentage for Incentive Payment BC and earning Incentive Payment D at a value of 3%).
4. Any offsets for Eligible States that are Non -Settling States would be deducted from the Maximum Base Payment, Maximum Incentive Payments (A, BC, and D), and Maximum Annual Remediation Payment by subtracting the amount of the payment times the Overall State Allocation Percentage for each Non -Settling State.
FH 11185097.1
EXHIBIT M-3: ANNUAL FEES PAYMENT SCHEDULE
Payment
Maximum
Common
State Cost
Maximum
Maximum
Maximum
Exhibit R
Year
Benefit Fee 'i
Fund '
State
Additional
Annual Fees
Attorney
on Credits
Outside
Remediation
Payment
Fee and
Counsel
Amount
Cost Funds
Fee Fund
Year 2
$98,955,419
$7,477,914
$7,980,276
$3,990,138
$3,990,138
$122,393,885
December
31, 2023
Year 3
$98,955,419
$7,477,914
$7,980,276
$3,990,138
$3,990,138
$122,393,885
December
31, 2024
Year 4
$98,955,419
$7,477,914
$7,980,276
$3,990,138
$3,990,138
$122,393,885
December
31, 2025
Year 5
$98,955,420
$7,477,914
$7,980,275
$3,990,138
$3,990,138
$122,393,885
December
31, 2026
Year 6
$98,955,420
$7,477,914
---
$7,980,275
$7,980,276
$122,393,885
December
31, 2027
Year 7
$98,955,421
$7,477,913
---
$7,980,276
$7,980,275
$122,393,885
December
31, 2028
Total
$593,732,518
$44,867,483
$31,921,103
$31,921,103
$31,921,103
$734,363,310
FH 11185097.1
Exhibit N
Additional Remediation Amount Allocation Percentages
Alabama
2.0094047523%
American Samoa
0.0215590674%
Arizona
2.9911870812%
California
12.4923284542%
Colorado
2.0922099886%
Connecticut
1.6290775863%
District of Columbia
0.2266153628%
Georgia
3.5107212404%
Guam
0.0604844794%
Hawaii
0.4087756176%
Idaho
0.6193769970%
Illinois
4.1882957440%
Indiana
2.7913607538%
Iowa
0.9341820978%
Kansas
0.9872591950%
Louisiana
1.8447419766%
Maine
0.6664875621%
Maryland
2.6575348718%
Massachusetts
2.9005058228%
Minnesota
1.6334209688%
Missouri
2.5253744735%
Montana
0.3935393398%
N. Mariana Islands
0.0210349545%
Nebraska
0.5252526469%
New Jersey
3.4690785339%
New York
6.7872003052%
North Carolina
4.0924962523%
North Dakota
0.2140841267%
Ohio
5.4856657801%
Oklahoma
1.9292810204%
Oregon
1.7302239375%
Pennsylvania
Rhode Island
5.7772011360%
0.5622563667%
South Carolina
1.9381920268%
Tennessee
3.3847318704%
Texas
7.9239877394%
Vermont
1 0.3204352512%
FH 11185097.1
Virgin Islands
0.0397474619%
Virginia
2.8709652916%
Washington
2.9198056809%
Wisconsin
2.2138760297%
Wyoming
0.2100401547%
FH 11185097.1
Exhibit O
Adoption of a State -Subdivision Agreement
A State -Subdivision Agreement shall be applied if it meets the requirements of Section V and is approved by the State and by the State's Subdivisions as follows:
1. Requirements for Approval. A State -Subdivision Agreement shall be deemed as agreed to when it has been approved by the State and either (a) Subdivisions whose aggregate "Population Percentages," determined as set forth below, total more than sixty percent (60%), or (b) Subdivisions whose aggregate Population Percentages total more than fifty percent (50%) provided that these Subdivisions also represent fifteen percent (15%) or more of the State's counties or parishes (or, in the case of Settling States whose counties and parishes do not function as local governments, 15% of or more of the Settling State's non -county Subdivisions), by number.
2. Approval Author-ity. Approval by the State shall be by the Attorney General. Approval by a Subdivision shall be by the appropriate official or legislative body pursuant to the required procedures for that Subdivision to agree to a legally binding settlement.
3. Population Percentage Calculation. For purposes of this Exhibit O only, Population Percentages shall be determined as follows: For States with functional counties or parishes the Population Percentage of each county or parish shall be deemed to be equal to (a) (1) two hundred percent (200%) of the population of such county or parish, minus (2) the aggregate population of all. Primary Incorporated Municipalities located in such county or parish, divided by (b) two hundred percent (200%) of the State's population. A "Primary Incorporated Municipality" means a city, town, village or other municipality incorporated under applicable state law with a population of at least 25,000 that is not located within another incorporated municipality. The Population Percentage of each Primary Incorporated Municipality shall be equal to its population (including the population of any incorporated or unincorporated municipality located therein) divided by two hundred percent (200%) of the State's population; provided that the Population Percentage of a Primary Incorporated Municipality that is not located within a county shall be equal to two hundred percent (200%) of its population (including the population of any incorporated or unincorporated municipality located therein) divided by two hundred percent (200%) of the State's population. For all States that do not have functional counties or parishes, the Population Percentage of each non -county Subdivision (including any incorporated or unincorporated municipality located therein), shall be equal to its population divided by the State's population.
3 Certain states do not have counties or parishes that have functional governments, including:
Alaska, Connecticut, Massachusetts, Rhode Island, and Vermont.
FH 11185097.1
4. Preexisting Agreements and Statutory Provisions. A State may include with the notice to its Subdivisions an existing agreement, a proposed agreement, or statutory provisions regarding the distribution and use of settlement funds and have the acceptance of such an agreement or statutory provision be part of the requirements to be an Initial Participating Subdivision.
FH 11185097.1
FYHIRIT P
Pharmacy Controlled Substance Compliance Program & Anti - Diversion Injunctive Terms
1. Except where these Injunctive Terms specify a different implementation period, Walgreens shall implement the Injunctive Terms set forth below in Sections II through XVII by the Injunctive Terms Implementation Date (defined below).
2. To the extent that Walgreens already has in place positions, committees, departments, policies or programs that satisfy the Injunctive Terms, no re -naming or other change is required by these Injunctive Terms.
3. Overview
a. Walgreens will implement or maintain a Controlled Substance Compliance Program ("CSCP").
b. The CSCP must include written standard operating procedures and/or corporate policies (the "CSCP Policies and Procedures") required by these Injunctive Terms.
c. The CSCP shall apply during the term of these Injunctive Terms, to each of Walgreens' retail pharmacy stores that dispense Schedule II Designated Controlled Substances and are registered or licensed with each Settling State. d. Walgreens shall provide a copy of the relevant CSCP Policies and Procedures to each Settling State within sixty (60) days of the Injunctive Terms Implementation Date. To the extent any implementation is expected to require additional time, the Parties agree to work together in good faith to establish a timeline for implementation. No later than thirty (30) days after the Injunctive Terms Implementation Date, each Settling State shall identify the person or office to whom Walgreens must provide a copy of the relevant CSCP Policies and Procedures and any other State -specific reporting required under these Injunctive Terms.
e. Settling States shall form the States Injunctive Relief Committee to serve as a point of contact for Walgreens and to perform such other roles as set forth herein. Upon the committee's formation, Settling States shall provide notice to Walgreens of the members of the committee.
4. Compliance with Laws
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a. Walgreens acknowledges and agrees that its pharmacies must comply with applicable state and federal laws, regulations, and rules, including those regarding the dispensing of Controlled Substances. The requirements of these Injunctive Terms are in addition to, and not in lieu of, any other requirements of federal, state, or local law. Nothing in the Injunctive Terms shall be construed as relieving Walgreens of the obligation of its pharmacies to comply with all federal, state and local laws, regulations or rules, nor shall any of the provisions of the Injunctive Terms be deemed as permission for Walgreens to engage in any acts or practices prohibited by such laws, regulations or rules. b. The Injunctive Terms are not intended to and shall not be interpreted to prevent Walgreens from taking or implementing any other compliance or policy steps that are more restrictive or that are necessary to conform with federal, state, or local legal requirements, unless such steps would conflict with State or local law. The Injunctive Terms are not intended to and shall not be interpreted to require Walgreens to inventory any Controlled Substances or any particular Controlled Substances or to require dispensing of any Controlled Substances or of any individual, types, subsets or categories of Controlled Substances prescriptions.
c. In the event that Walgreens determines that there may be a conflict between the Injunctive Terms and the express requirements of federal, state, or local laws, or interpretations of such laws articulated by an agency responsible for enforcing such laws or a court ("Express Interpretations"), such that Walgreens determines that it cannot comply with the Injunctive Terms without violating these express requirements or Express Interpretations, Walgreens shall follow the express requirements of the federal, state or local law or Express Interpretation thereof and shall provide notice to the Settling State(s). Within thirty (30) days after receipt of a notification from Walgreens referenced above, Walgreens and the State shall meet and discuss the potential conflict, and Walgreens shall comply with any reasonable requests from the Settling State as necessary to determine whether there is a conflict between the Injunctive Terms and the express requirements of federal, state, or local laws, or Express Interpretations. In the event that Walgreens believes a court or administrative action brought by a governmental body in a Settling State has commenced against it or its pharmacists for actions required by the Injunctive Terms, then Walgreens may notify the Attorney General of the Settling State of such pending action. If the State agrees that the court or administrative action is a result of actions required by the Injunctive Terms, the State will engage in best efforts to resolve the conflict or assist in achieving resolution of the court or administrative action. Nothing in this paragraph shall (i) limit the right of the Settling State to disagree with Walgreens as to the conflict; (ii) be deemed to relieve Walgreens from following any subsequently enacted law or regulation, P - 2
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or judicial decisions from a regulatory authority with jurisdiction over controlled substances that is more restrictive than the provisions of the Injunctive Terms, or from following the Injunctive Terms if they are more restrictive than applicable laws at issue in the administrative action if there is no conflict; (iii) be deemed to relieve Walgreens from adhering to the outcome of a court or administrative action when it is determined that there is no conflict; or (iv) limit a Settling State's ability to relieve Walgreens of a duty under these Injunctive Terms if that Settling State determines that that term is in conflict with that Settling State's express legal requirements.
d. Walgreens shall retain all records it is required to create pursuant to its obligations hereunder for a period no shorter than three years, unless otherwise specified. Nothing in these Injunctive Terms shall prevent a Settling State from issuing a lawful subpoena or Civil Investigative Demand (CID) for records pursuant to an applicable law.
5. No Admission and No Use as Evidence. Walgreens does not admit liability or wrongdoing. These Injunctive Terms shall not be considered, construed, or represented to be (1) an admission, concession, or evidence of liability, wrongdoing, or to impose the existence of any legal obligations or requirements other than the requirement to follow these Injunctive Terms, or (2) a waiver or limitation of any defense otherwise available to Walgreens. These Injunctive Terms shall not be offered or received in evidence or otherwise relied on in any action or proceeding for any purpose other than in an action or proceeding to modify or enforce or monitor compliance with these Injunctive Terms.
II. TERM AND SCOPE
1. The term of these Injunctive Terms shall be from the Injunctive Terms Implementation Date until August 15, 2032, unless otherwise specified herein.
2. Except as otherwise stated herein, the Injunctive Terms shall apply to Walgreens' retail pharmacy stores located in, and registered or licensed with, each Settling State that dispense Schedule II Designated Controlled Substances to Patients, including any Schedule II Designated Controlled Substances dispensed by any such retail pharmacy stores that are mailed or shipped to patients in a Settling State. Should Walgreens operate an online pharmacy that is registered or licensed to dispense Schedule II Designated Controlled Substances in any Settling State while these Injunctive Terms are in effect, the Injunctive Terms shall apply to such pharmacy as well.4 4 Walgreens' specialty and mail order pharmacies are not subject to, and are not online pharmacies for purposes of, these Injunctive Terms.
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3. These Injunctive Terms may be amended by mutual agreement of a majority of the States Injunctive Relief Committee and Settling Pharmacy. Any such amendments must be in writing.
III. DEFINITIONS
1. The term "Distributor Injunctive Terms" means Exhibit P of the Settlement Agreement, dated as of July 21, 2021, between McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation and certain States and subdivisions.
2. The term "Block" means an action taken by Walgreens preventing or otherwise prohibiting any Settling Pharmacy pharmacist from filling prescriptions for Controlled Substances from a specific identified Prescriber.
3. The term "Clearinghouse" means the system established by Section XVII of the Distributor Injunctive Terms.
4. The term "Controlled Substances" means those substances designated under schedules II-V pursuant to the federal Controlled Substances Act.
5. The term "Designated Controlled Substances" shall be limited to: (a) oxycodone; (b) hydrocodone; (c) hydromorphone; (d) tramadol; (e) oxymorphone; (f) morphine; (g) methadone; and (h) fentanyl.
6. The term "Injunctive Terms Implementation Date" means thirty (30) days after the Effective Date of the Settlement Agreement as defined in Section LV of the Walgreens Settlement Agreement.
7. The term "National Arbitration Panel" is defined in Section I.LL of the Walgreens Settlement Agreement.
8. The term "Patient" means any individual who receives a prescription for a Designated Controlled Substance from a Prescriber, whether legally valid or not, and attempts to fill it at one of Walgreens' pharmacy stores in a Settling State.
9. The term "Prescriber" means any individual that has written a prescription for a Designated Controlled Substance, whether legally valid or not, that is presented to Walgreens in a Settling State.
1.0. The term "Red Flag(s)" means the enumerated Patient Red Flags, Prescription Red Flags, and Prescriber Red Flags set out in Section IX.
11. The term "Settling State(s)" means each State that is a signatory to the Walgreens Settlement Agreement.
1.2. The term "States Injunctive Relief Committee" means a committee representing the Settling States composed of between four and eight members designated by the Settling States. The members of the States Injunctive Relief Committee shall be employees of P - 4
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a Settling State's Office of Attorney General and/or employees of another agency of a Settling State.
13. The term "Walgreens Settlement Agreement" means the settlement agreement dated as of December [ ] between and among the Settling States, the Participating Subdivisions and Walgreens.
IV. CONTROLLED SUBSTANCE COMPLIANCE PERSONNEL
1. Walgreens shall designate a Controlled Substance Compliance Director, or other appropriately titled position, to be a member of the Controlled Substance Compliance Committee (described below in Section VI), and to oversee a Controlled Substance Compliance Department and Walgreens' compliance with 21 C.F.R. 1306.04 and these Injunctive Terms. As used in these Injunctive Terms, the terms "Controlled Substance Compliance Committee" and "Controlled Substance Compliance Department" refer to the entity or entities, however titled, that carry out the functions required by these Injunctive Terms. Notwithstanding the preceding sentence, to the extent an existing position, committee or department carries out the functions required by these Injunctive Terms, any other functions undertaken by such position, committee or department shall not be subject to these Injunctive Terms or oversight by the Settling States pursuant to these Injunctive Terms. The position, committee and department discussed in these Terms may bear different names and need not be limited to the roles and functions set forth herein.
2. The Controlled Substance Compliance Director shall have knowledge of and experience with the laws and regulation of Controlled Substances, in particular the regulations in 21 C.F.R. § 1306.04.
3. The Controlled Substance Compliance Director shall provide at least quarterly reports to the Controlled Substance Compliance Committee (described below in Section VI) regarding Walgreens' compliance with these Injunctive Terms, including the implementation of any changes to the CSCP Policies and Procedures required by these Injunctive Terms.
4. Staffing levels of Walgreens' Controlled Substance Compliance Department shall be reviewed periodically, but at least on an annual basis, by Walgreens' Controlled Substance Compliance Committee to assess whether such staffing levels are sufficient for the Controlled Substance Compliance Department to comply with this Agreement.
This review shall include consideration of relevant developments in technology, law, and regulations.
5. Throughout the term of these Injunctive Terms, Walgreens shall maintain a telephone and electronic submission hotline(s) (the "Hotline") to permit employees and/or Patients and/or members of the public to anonymously report suspected inappropriate or illegitimate dispensing, prescribing or diversion of Designated Controlled Substances, violations of the CSCP Policies and Procedures, these Injunctive Terms, P - 5
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Walgreens' company policy, or other applicable law. The Hotline may be implemented by adding a dedicated option to existing systems that includes reporting regarding Designated Controlled Substances. Walgreens shall publish its Hotline contact information to its employees and Patients in the Settling States. Walgreens shall maintain for the duration of Injunctive Terms a record of each complaint made to the Hotline regarding Designated Controlled Substances and documentation regarding any investigation or response to such complaints. Nothing herein shall require Walgreens to investigate a pharmacist's professional judgment to refuse a prescription that the pharmacist believes was prescribed or is being used for other than a legitimate medical purpose or that the pharmacist believes was not prescribed by an individual Prescriber acting in the usual course of his or her professional practice.
V. INDEPENDENCE
1. Walgreens' Controlled Substance Compliance Department personnel, pharmacists and pharmacist technicians who work at Walgreens' pharmacies within the Settling States, and field personnel who supervise pharmacists and pharmacist technicians (together, "CSCP Employees"), shall not be compensated in whole or in part by commissions, bonuses, incentives or any other monetary or non -pecuniary benefit that depends in material part on revenue or profitability targets or expectations to sales of Controlled Substances. Nothing in these Injunctive Terms shall be interpreted to prevent compensation of employees based on sales volume, revenue or profitability targets/expectations for enterprise-, store-, or pharmacy -wide sales that include Controlled Substances.
2. No CSCP Employees may be terminated, suspended, threatened with or face any other negative employment consequence for failing to meet any revenue or profitability targets or expectations that depends in material part on sales of Controlled Substances.
Nothing in these Injunctive Terms shall be interpreted to prevent Walgreens from taking employment action based on sales volume, revenue or profitability targets/expectations for enterprise-, store-, or pharmacy -wide sales that include Controlled Substances.
3. Personnel in Walgreens' Controlled Substance Compliance Department shall not report to Walgreens' sales, marketing, or business development departments, and sales, marketing, or business development departments shall not be authorized to make decisions regarding the promotion, compensation, demotion, admonition, discipline, commendation, periodic performance reviews, hiring, or firing of Controlled Substance Compliance Department personnel. This provision does not apply to an officer or executive to whom both the Controlled Substance Compliance Department and sales, marketing and/or business development departments report.
4. Walgreens' sales, marketing and business development departments are prohibited from interfering with, obstructing, or otherwise exerting control over any Controlled Substance Compliance Department or Controlled Substance Committee decision- P-6
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making. This provision does not apply to an officer or executive to whom both the Controlled Substance Compliance Department and sales, marketing and/or business development departments report.
5. To the extent necessary to comply with this section, Walgreens' Controlled Substance Compliance Committee shall review, modify, and direct any changes to any compensation and non -retaliation policies specific to the sale or dispensing of Designated Controlled Substances.
VI. OVERSIGHT
1. To the extent not already established, within thirty (30) business days of the Injunctive Terms Implementation Date, Walgreens shall establish a compliance committee, however titled, that includes representatives from its respective legal, compliance, pharmacy operations and asset protection departments, however named, to provide oversight over the CSCP and its compliance with the Injunctive Terms. For the purposes of reference herein, this committee, however named, shall be referred to as the "Controlled Substance Compliance Committee." Walgreens shall maintain its Controlled Substance Compliance Committee for the duration of the term of the Injunctive Terms. The Controlled Substance Compliance Director shall be a member of the Controlled Substance Compliance Committee.
2. Walgreens' Controlled Substance Compliance Committee shall have quarterly meetings during which the Controlled Substance Compliance Director shall report on, and the Controlled Substance Compliance Committee shall review, among other things, (a) the Prescription Validation Process, including the CSCP Policies and Procedures on identifying and resolving Patient, Prescriber and Prescription Red Flags; (b) the training required under the Injunctive Terms; (c) proactive due diligence and site visits; (d) the Prescriber Review Processes; (e) significant new national and regional diversion trends involving Controlled Substances; (f) Walgreens' adherence to the Injunctive Terms and applicable laws and regulations; and (g) any technology, staffing, or other resource needs for the CSCP. The Controlled Substance Compliance Committee shall have access to all CSCP reports described in the following subsection.
3. On an annual basis, Walgreens' Controlled Substance Compliance Committee shall provide a written report to the President of the Settling Pharmacy's Retail Division, the Chief Financial Officer of the Settlement Pharmacy's Retail Division, the Chief Legal Officer of the Settling Pharmacy's Retail Division, and the corporate Chief Compliance Officer, outlining (a) the Settling Pharmacy's adherence to, and any material deviations from these Injunctive Terms; (b) the allocation of resources sufficient to comply with these Injunctive Terms; and (e) any revisions to the CSCP that the Controlled Substance Compliance Committee has approved. The corporate Chief Compliance Officer shall determine if and when it is appropriate to make a report to the Board or any subcommittee thereof, but shall report at least annually.
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4. Walgreens, through its Controlled Substance Compliance Department and Committee, shall, at least once every year, review and oversee any enhancements to the CSCP Policies and Procedures and systems for dispensing activity that the Controlled Substance Compliance Committee deems necessary.
5. The Controlled Substance Compliance Committee shall be responsible for the approval of all material revisions to the CSCP Policies and Procedures, provided that nothing herein shall prevent Walgreens from implementing changes to the CSCP Policies and Procedures pending such review and approval.
VII. MANDATORY TRAINING
1. The CSCP Policies and Procedures shall be published in a form and location readily accessible to all pharmacy and compliance personnel at each of Walgreens' retail pharmacy locations in the Settling States. Online availability is sufficient, so long as pharmacy and compliance personnel have access to a computer with access to the CSCP Policies and Procedures.
2. Walgreens shall launch training for all existing CSCP Employees, to the extent practical (for example, accounting for employee leave), on the CSCP Policies and Procedures required under these Injunctive Terms, including the Prescription Validation Process and corresponding responsibility. The training shall be launched within one hundred twenty (120) days of the Injunctive Terms Implementation Date.
All CSCP Employee new hires, to the extent practical, shall be required to participate in such trainings within sixty (60) days of hiring or six (6) months of the Injunctive Terms Implementation Date, whichever is later. Walgreens will further require that every CSCP Employee, to the extent practical, receive such training at least once every three (3) years for the term of these Injunctive Terms.
3. On an annual basis for the duration of these Injunctive Terms, Walgreens shall test its CSCP Employees on their knowledge regarding the CSCP Policies and Procedures required under these Injunctive Terms, including the Prescription Validation Process and corresponding responsibility.
4. It shall be a part of the CSCP Policies and Procedures and all trainings of all CSCP Employees required under these Injunctive Terms that pharmacists shall refuse to dispense Controlled Substances that they believe were prescribed or are being used for other than a legitimate medical purpose or that they believe were not prescribed by an individual Prescriber acting in the usual course of his or her professional practice.
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5. All trainings required under these Injunctive Terms shall also make clear that (1) Walgreens' compensation and non -retaliation policies, including pursuant to these Injunctive Terms, prevent CSCP Employees from being compensated or penalized in any way related to revenue or profitability targets or expectations specific to sales of Controlled Substances; and ii) pharmacists will not be penalized in any way for exercising their professional judgment to refuse to fill prescriptions for Controlled Substances pursuant to their corresponding responsibility. To the extent that trainings designed and launched prior to the Effective Date of these Injunctive Terms do not reference these policies, they shall be added by the end of 2023.
VIII. THE PRESCRIPTION VALIDATION PROCESS
1. As part of its CSCP, Walgreens shall maintain a Prescription Validation Process in the CSCP Policies and Procedures, as further described and set forth in this section, that each pharmacist employed by Walgreens in a Settling State must follow when dispensing a prescription for a Controlled Substance. The inclusion of an enumerated Red Flag in these Injunctive Terms shall not be considered, construed, or represented to be an admission, concession, or evidence of any factual or legal contention related to such Red Flag. A Red Flag shall not be interpreted to mean that a prescription is, or is more likely than not, illegitimate and/or not issued in the usual course of professional practice or treatment.
2. A Red Flag will be considered "resolved" if, after further investigation as described below, and given other facts and circumstances surrounding the prescription, a pharmacist determines, in his or her professional judgment, that the facts that triggered the Red Flag do not lead him or her to believe that the prescription was written or is being submitted for an illegitimate medical purpose or outside the usual course of a Prescriber's professional practice.
3. Walgreens' CSCP Policies and Procedures shall provide that if a pharmacist identifies any "Patient Red Flags" associated with a Controlled Substances prescription (described in Section IX(3) below), before filling the prescription the pharmacist must resolve them; and that the method of resolution falls within the judgment of the pharmacist and may include reviewing the Patient's profile and history with the Settling Pharmacy, calling the Prescriber or Prescribers if appropriate, speaking with the Patient if appropriate, calling on the pharmacist's pre-existing knowledge of the Patient or Prescriber, reviewing available Prescription Monitoring Program ("PMP" or "PDMP") data, and/or reviewing other data or information available to the pharmacist.
4. Walgreens' CSCP Policies and Procedures shall provide that if forgery or fraud is suspected, or if the pharmacist identifies any other "Prescription Red Flags" associated with a Controlled Substances prescription (described in Section IX(4) below), the pharmacist must resolve the Prescription Red Flags before filling the prescription; and that the method of resolution falls within the judgment of the pharmacist and may P - 9
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include reviewing the Patient's profile and history with Walgreens, calling the Prescriber or Prescribers if appropriate, speaking with the Patient if appropriate, calling on the pharmacist's pre-existing knowledge of the Patient or Prescriber, reviewing available PMP or PDMP data, and/or reviewing other data or information available to the pharmacist.
5. Walgreens' CSCP Policies and Procedures shall require that if a pharmacist identifies any "Prescriber Red Flags" associated with a Controlled Substances prescription (described in Section IX(5) below), the pharmacist must resolve them before filling the prescription; and that the method of resolution falls within the judgment of the pharmacist and may include reviewing any Walgreens records regarding the Prescriber, calling the Prescriber if appropriate, speaking with the Patient if appropriate, calling on the pharmacist's pre-existing knowledge of the Patient or Prescriber, reviewing available PMP or PDMP data, and/or reviewing other data or information available to Walgreens.
6. Walgreens' CSCP Policies and Procedures related to Schedule II Designated Controlled Substances shall provide that the resolution of all Red Flags identified by the pharmacist, as well as any prescriptions that were rejected pursuant to Red Flags identified by the pharmacist, and the reasons why they were rejected, must be documented by the pharmacist, unless if based on the pharmacist's pre-existing knowledge of the Patient or Prescriber. Any such records shall be maintained for the duration of these Injunctive Terms. To the extent that a Red Flag is resolved based upon facts or circumstances that are already reflected or documented in Walgreens' records, further documentation of those facts or circumstances is not required for resolution of substantially the same Red Flag on subsequent prescriptions. For example, if a Patient lives fifty-five (55) miles from a Walgreens but works near the pharmacy and that fact is reflected in pharmacy records, no documentation for the resolution of the Red Flag addressing the Patient's distance from the pharmacy is required in connection with individual prescriptions dispensed for that Patient. A lack of documentation shall not be interpreted to create a presumption that a pharmacist did not resolve any identified Red Flags. Nothing in these Injunctive Terms shall require Walgreens to create a record in those instances where the pharmacist rejects a prescription when presented without an effort to resolve any red flags, including but not limited to instances where the pharmacist rejects a prescription for clinical reasons, or where the pharmacist identifies on the face of the prescription a Prescription Red Flag (defined in Section IX below) that causes the pharmacist to conclude without further inquiry that the prescription is invalid.
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7. Walgreens' CSCP Policies and Procedures shall provide that, even if all Red Flags are resolved, a pharmacist shall reject a prescription if, in his or her professional judgment, he or she believes that it was written or is being submitted for other than a legitimate medical purpose and/or was written outside the usual course of an individual Prescriber's professional practice.
1. Upon request by the Settling States, but no more than annually, and no earlier than four months after the Injunctive Terms Implementation Date, Walgreens shall provide to the Settling States a report (the "Annual Data Report") that sets forth: (1) the total number of prescriptions for Controlled Substances dispensed annually, aggregated nationally and by state; (2) the top twenty-five prescribers of Designated Controlled Substances in each Settling State; (3) the list of prescribers subject to disclosure in section X.5; (4) the specific process, system, metrics or algorithms (if any) sufficient to demonstrate the operational system's ability to identify each category of Red Flag listed in this section; and (5) the total number of prescriptions that pharmacists at the Settling Pharmacy refused to dispense using Walgreens' Good Faith Dispensing worksheet. The Settling States acknowledge that the Good Faith Dispensing worksheet documents the resolution of some Red Flags listed in this section, but does not document the resolution of every Red Flag listed in this section. Upon request, the State Injunctive Relief Committee may request a reasonable sample of completed Good Faith Dispensing worksheets. Unless otherwise required by law, if a Settling State seeks to disclose any data and/or information provided under this provision as part of a proceeding to enforce these Injunctive Terms or otherwise, it shall first provide ten (10) days' notice to Walgreens unless doing so would conflict with applicable law. A Settling State shall not otherwise disclose or provide any data provided under this provision to third parties during or after the Term of these Injunctive Terms unless required to do so by law. If a Settling State is required to disclose or provide any data under this provision to third parties during or after the Term of these Injunctive Terms, it shall first provide ten (10) days' notice to Walgreens unless doing so would conflict with applicable law. All data and/or information provided under this paragraph shall be deemed confidential law enforcement material, to the extent state law permits, and shall not be subject to production unless required by law. Nothing in this paragraph shall be deemed to prevent a Settling State from sharing this material with other State or federal law enforcement agencies.
2. Within the three months following the provision of the Annual Data Reports, either Walgreens or the States Injunctive Relief Committee may propose in writing a meet and confer to discuss potential changes to the scope of one or more categories of Red Flags. At such a meeting, Walgreens or the States Injunctive Relief Committee may provide additional research, information or data available to them beyond that provided in the Annual Data Reports. For example, Walgreens might propose reducing the P-11
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threshold for triggering a particular category of Red Flag or consolidating certain Red Flags or subcategories of Red Flags into a single metric, or the States Injunctive Relief Committee might propose increasing the threshold for triggering a particular Red Flag or expanding that Red Flag to include multiple subcategories (e.g., number of prescriptions, distance thresholds).
a. If Walgreens and the States Injunctive Relief Committee agree on such changes to one or more Red Flags, they shall document those changes in writing and they shall become a part of these Injunctive Terms for all intents and purposes. b. If Walgreens and the States Injunctive Relief Committee cannot agree on the proposed changes during their meeting and confer, the Party seeking the change(s) to the Red Flag(s) may seek a 5-day mediation of the issue at its own expense. If the mediation fails to resolve the dispute between the parties, the party seeking the proposed change(s) may appeal to the National Arbitration Panel to have the National Arbitration Panel modify the Red Flags on the basis that the change(s) would be consistent both with avoiding unnecessary material costs of identifying and resolving Red Flags and materially reducing the diversion of Controlled Substances. In such a proceeding, the Parry seeking the proposed change(s) may provide evidence from Annual Data Reports or from other research, data and information.
c. In any such proceedings, there shall be a presumption against imposition of any proposed Red Flags, or proposed modifications to pre-existing Red Flags, that have not been identified by the United States Drug Enforcement Administration (DEA) or other law enforcement agencies tasked with the regulation of Controlled Substances.
d. The Red Flags required by these Injunctive Terms shall at no point be too numerous or complex to be reasonably workable for pharmacists in the context of protecting patient safety, performing corresponding responsibility, drug utilization review, and their other responsibilities. Any dispute over whether the Red Flags required by these Injunctive Terms have become too numerous or complex to be reasonably workable for pharmacists shall be submitted to the National Arbitration Panel. In the event a dispute is submitted to the National Arbitration Panel, it shall be Walgreens' burden to prove that the Red Flag(s) at issue are overly burdensome and that their burdensome nature outweighs any public health benefit.
3. Walgreens' CSCP Policies and Procedures shall direct its pharmacists to treat the following circumstances as "Patient Red Flags":
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a. A Patient seeks to fill a Schedule II Designated Controlled Substance prescription more than three days prior to the contemplated exhaustion date of an earlier prescription of the same Schedule II Designated Controlled Substance (e.g., exhaustion of the days' supply assuming the prescription has been taken in accordance with the prescribers' directions on the face of the prescription), provided the previous prescription was also dispensed by the same Settling Pharmacy;
b. A Patient seeks to fill a Designated Controlled Substance prescription from a Prescriber after having filled Designated Controlled Substance prescriptions at the same Walgreens from more than four other Prescribers, from separate practices, in a given 6-month period;5
c. To the extent personally known by the dispensing pharmacist, Prescriber has been the subject of more than ten (10) documented refusals to fill within a six- month period;
d. A Patient seeks to fill a Designated Controlled Substance prescription after having filled three other Designated Controlled Substance prescriptions written by multiple Prescribers with overlapping days of supply at Walgreens' pharmacies within thirty (30) days;
e. The distance between a Patient's residence and the Walgreens receiving the Designated Controlled Substance prescription is farther than 50 miles; f. The Patient resides more than one hundred (100) miles from the Prescriber who issued the Designated Controlled Substances prescription; g. To the extent personally known by the dispensing pharmacist, a Patient seeks to fill a Designated Controlled Substance prescription after having two other prescriptions for Designated Controlled Substances subjected to documented refusals to fill by a Walgreens pharmacist within the past thirty (30) days; h. A patient pays in cash for a Designated Controlled Substance despite having prescription drug insurance on file for that medication; i. Three or more Patients come to the pharmacy together to fill prescriptions for the same Designated Controlled Substances;
j. A Patient requests a Designated Controlled Substance by its slang or street description, such as "Mallinckrodt blues," "M's" or "the blue pill"; and 5 In Walgreens' sole discretion, for administrative convenience Walgreens may implement this Red Flag without regard to whether Prescribers are at separate practices, thereby resulting in more instances in which the flag occurs.
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k. A Patient presenting a prescription for a Designated Controlled Substance appears visibly altered, intoxicated, or incoherent.
4. Walgreens' CSCP Policies and Procedures shall direct its pharmacists to treat the following circumstances as "Prescription Red Flags:"
a. A Controlled Substance prescription fails to meet the requirements of law; b. A Controlled Substance prescription that appears altered, including but not limited to, a photocopied prescription or a prescription in which an altering agent, such as white out, was used;
c. A Controlled Substance prescription written with misspellings suggesting the prescription may not have been written by a valid Prescriber; d. A Controlled Substance prescription using atypical abbreviations suggesting the prescription may not have been written by a valid Prescriber; and e. A Controlled Substance prescription written with multiple colors of ink or in multiple different handwritings.
5. Walgreens' CSCP Policies and Procedures shall direct its pharmacists to treat the following circumstances as "Prescriber Red Flags:"
a. A Prescriber provides a Patient with prescriptions for all three of a Schedule II Designated Controlled Substance, a benzodiazepine, and carisoprodol; b. A Prescriber has no office within fifty (50) miles of the retail pharmacy store where a Designated Controlled Substance prescription is submitted; and c. A Prescriber of Designated Controlled Substances uses prescriptions that are preprinted or stamped with drug type and amount.
X. PRESCRIBER REVIEW
1. Walgreens shall regularly review the prescribing patterns and practices of Prescribers of Designated Controlled Substances (the "Prescriber Review Process"). The Prescriber Review Process shall employ algorithms, or other means, to review data on Walgreens' retail dispensing for potential Prescribers of concern.
2. Walgreens shall initiate Prescriber Review Process in the following circumstances:
a. Personnel implementing the Prescriber Review Process become aware that a Prescriber of Designated Controlled Substances located in a Settling State has been the subject of a blanket refusal to fill by one or more of Walgreens' retail pharmacy stores in the Settling States;
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b. Personnel implementing the Prescriber Review Process become aware that a Prescriber of Designated Controlled Substances located in a Settling State has been charged or indicted with a crime related to prescribing Designated Controlled Substances by the Federal Government or law enforcement in a Settling State; or
c. Walgreens has received a Hotline complaint that has been investigated and substantiated concerning a Prescriber's illegitimate prescribing of Designated Controlled Substances.
3. Based on the professional judgment of the employees operating the Prescriber Review Process, Walgreens may also initiate the Prescriber Review Process when:
a. Personnel implementing the Prescriber Review Process are notified in writing by law enforcement that a Prescriber of Designated Controlled Substances located in a Settling State is the target of an investigation regarding the prescribing of Controlled Substances;
b. A Prescriber of Designated Controlled Substances was flagged for review by a Walgreens pharmacist in a Settling State (other than through a refusal to fill or blanket refusal to fill) or by field personnel who supervise Walgreens' pharmacies in a Settling State; or
c. A Prescriber of Designated Controlled Substances located in a Settling State was identified through the running of algorithms on. Walgreens' retail dispensing.
4. Once Walgreens identifies a Prescriber for further investigation, Walgreens shall review pertinent and available data or information pertaining to the Prescriber, which may include interviews or other information gathered in the discretion of the employees operating the Prescriber Review Process. All data and information collected or created as part of the Prescriber Review Process shall be maintained by Walgreens for the length of these Injunctive Terms. When permitted by law, nothing contained in this Section prevents Walgreens from taking immediate action to Block a Prescriber.
5. If after the Prescriber Review Process those making the decision have not resolved the circumstances that caused Walgreens to further investigate the Prescriber, then the Prescriber shall be Blocked from having Controlled Substance prescriptions filled at Walgreens' retail pharmacies in the Settling States, when permitted by law. A Prescriber may have an opportunity at the discretion of Walgreens to seek future reinstatement by providing information to Walgreens that may resolve its concerns.
Nothing in this Section shall limit the right or ability of Walgreens pharmacists to either refuse to fill a given prescription or refuse to fill all prescriptions for Controlled P-15
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Substances from a given Prescriber independent of any decision by Walgreens to Block or not Block a given Prescriber. On written demand, on an annual basis, Walgreens shall provide to each Settling State the names of and DEA registration or NPI numbers of Prescribers of Designated Controlled Substances within that Settling State that it has Blocked. Each Settling State shall provide contact information in order to receive such information. For each of the Settling States, on an annual basis, Walgreens shall provide to the Injunctive Relief Committee the number, names and DEA registration or NPI numbers of Prescribers who were: (a) blocked, and (b) the number of prescribers who were reviewed but not blocked.
XI. PROACTIVE DUE DILIGENCE AND SITE VISITS
1. During the term of these Injunctive Terms, Walgreens shall conduct periodic proactive compliance reviews of its retail pharmacy stores in the Settling States to assist with the identification of potential compliance issues related to the dispensing of Designated Controlled Substances at its retail pharmacy stores in the Settling States. This may be satisfied by the use of algorithms, or other electronic means, to analyze data associated with each pharmacy's dispensing of Designated Controlled Substances to identify particular pharmacies for review as required under this Section XI. Documentation of any resulting reviews shall be maintained by Walgreens and made accessible to all Controlled Substance Compliance Department personnel upon request for the duration of these Injunctive Terms.
2. During the term of these Injunctive Terms, Walgreens personnel or qualified third - party compliance consultants shall conduct site visits to each pharmacy in a calendar year. These site visits shall at a minimum consist of a review of Controlled Substance dispensing documentation and recordkeeping; and a review of physical surroundings and other circumstances for any indications of potential non-compliance with these Injunctive Terms or the CSCP Policies and Procedures, or any violations of other applicable laws and regulations related to the dispensing of Controlled Substances.
3. During site visits, Walgreens' personnel or qualified third -party compliance consultants shall interview relevant pharmacy employees, if appropriate, about any potential areas or issues of concern, including potential violations of laws related to the dispensing of Controlled Substances, the CSCP Policies and Procedures, and these Injunctive Terms.
4. Walgreens' personnel or qualified third -party compliance consultants who conduct site visits shall complete a report reflecting the findings of any site visit pursuant to this section. This report shall document areas or issues of concern, including potential violations of law related to the dispensing of Controlled Substances, the CSCP Policies and Procedures, and these Injunctive Terms.
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5. The site visit reports described above shall be maintained by Walgreens and made accessible to all Controlled Substance Compliance Department personnel for the duration of these Injunctive Terms. Upon its request, the States Injunctive Relief Committee shall be provided sample reports or a report for a particular store.
XII. THEFT AND LOSS PREVENTION
1. In addition to complying with all theft and loss procedures, policies and precautions required by state and federal law, Walgreens shall maintain for at least three years information regarding the receipt and disposition of inventory of all Designated Controlled Substances at each retail pharmacy store.
2. In addition to any other reporting obligations under state and federal law, Walgreens must provide to each Settling State on a quarterly basis any reports it has made to the DEA regarding the theft or significant loss of Designated Controlled Substances in that Settling State pursuant to 21 C.F.R. § 1301.76(b). Each Settling State shall provide contact information in order to receive such reports. There shall be no obligation to provide these reports to Settling States that receive contemporaneous reporting of thefts or significant losses of Designated Controlled Substances to a Settling State's board of pharmacy.
XIII. REPORTING TO LAW ENFORCEMENT
1. The Settling States shall inform Walgreens to what extent their law enforcement authorities would like to receive reports, other than those already required by law or regulation, of any confirmed forged prescriptions. To the extent not already in place, Walgreens shall implement standard operating procedures directing its employees to report any confirmed forged prescriptions for Designated Controlled Substances to those Settling States who have indicated that they want to accept it, within five (5) days of completing any review of such prescription or conduct. The Settling States shall provide contact information in order to receive such reports.
2. Walgreens shall document and for at least two (2) years maintain records of any such reports that are made to Settling States regarding confirmed fraudulent or forged prescriptions, which are maintained centrally.
1. Notice of Potential Violations and Opportunity to Cure. a. A "Potential Violation" occurs when the Settling State determines, after appropriate investigation and due diligence, that Walgreens is not in substantial compliance with a material aspect of the Injunctive Terms. A Potential P-17
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Violation may be for a single retail pharmacy. A violation of this Agreement is not presumed to occur when a pharmacist, pharmacist technician, or other field personnel who supervise pharmacists and/or pharmacist technicians employed by Walgreens violates Walgreens' CSCP Policies and Procedures. b. Potential Violation Discovered by Settling State.
i. In the event of a Potential Violation identified by a Settling State, the Settling State shall notify Walgreens in writing (the "State's Notice"). ii. Within thirty (30) days of receipt of the State's Notice, Walgreens shall provide a written response to the Settling State. The response shall include Walgreens' position as to the act(s) of non-compliance, including, possibly, a statement setting forth why Walgreens believes it is in substantial compliance with the relevant provision(s) or a statement explaining how the Potential Violation has been addressed. iii. If the Settling State wishes to meet with Walgreens, Walgreens shall promptly make itself available for such a meeting.
c. If, after review of a written response and any meeting, the Settling State believes that a Potential Violation is ongoing or has not been substantially addressed, it will provide written notice to Walgreens and work in conjunction with Walgreens to devise, within thirty (30) days, a corrective action plan ("Corrective Action Plan") to remedy such Potential Violation, including a reasonable period for implementation of such plan.
d. Within sixty (60) and one hundred twenty (120) days after implementing the Corrective Action Plan, Walgreens will provide a written compliance update to the Settling State and make itself available to meet with the Settling State if requested. If after reviewing the compliance update and any meeting, the Settling State believes a Potential Violation remains ongoing or has not been substantially addressed, the Settling State may commence a 30-day mediation period. If mediation fails to resolve the dispute between the parties, the Settling State may take whatever action it deems necessary, including but not limited to bringing an action to enforce these Injunctive Terms, filing a new action (administrative or civil action) for violation of the Injunctive Terms as allowed by state law, conducting further investigation, or attempting to negotiate an updated Corrective Action Plan with Walgreens. But the Settling State may not seek to reinstate claims that have been released as part of the Settlement Agreement.
e. If Walgreens fails or refuses to provide a written response, to devise or P-18
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implement a Corrective Action Plan or to provide a compliance update as required by subsections l (b), l (c) and/or l (d), a Settling State may bring an action to enforce these Injunctive Tenns, filing a new action (administrative or civil action) for violation of the Injunctive Terms as allowed by state law, conduct further investigation, or attempt to negotiate an updated Corrective Action Plan with Walgreens. But the Settling State may not seek to reinstate claims that have been released as part of the Settlement Agreement. f. If, after review of a written response and any meeting, pursuant to subsections lb. or lc., above, the Settling State concludes that a Potential Violation is not ongoing or has been substantially addressed, the Settling State will provide written notice of this conclusion to the Settling Pharmacy within thirty (30) days of reaching its conclusion.
2. Enforcement Action. Each Settling State agrees that prior to taking any court or administrative action, other than an action that the Settling State concludes is necessary to address an immediate threat to the health, safety, or welfare of the citizens of the Settling State, or that a public emergency requiring immediate action exists, it will follow the process outlined above. If the Settling State concludes that action is necessary to address an immediate threat to the health, safety, or welfare of the citizens of the Settling State or that a public emergency requiring immediate action exists, it will make best efforts to provide reasonable notice to a Settling Pharmacy prior to initiating any such action.
XV. COMPLIANCE CERTIFICATION
1. Walgreens' Controlled Substance Compliance Director shall, after diligent inquiry, complete an annual compliance certification as set out in Section XV(4).
2. The certification shall be filed annually for the duration of these Injunctive Terms with a Settling State's appropriate licensing and/or regulatory agency and its Attorney General.
3. The certification shall state:
"I understand the compliance requirements and responsibilities as they relate to [insert name of department], an area under my supervision. My job responsibilities include attempting to achieve compliance with regard to the [insert name of department] with all applicable statutory requirements, obligations of the Injunctive Terms, and applicable policies, and I have taken steps to promote such compliance. To the best of my knowledge, the [insert name of department] is in compliance with the obligations of these Injunctive Terms. I understand that this certification is being provided to and relied upon by the State of [Settling State]."
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4. If the Controlled Substance Compliance Director is unable to provide such a certification, the Controlled Substance Compliance Director shall provide a written explanation of the reasons why he or she is unable to provide the certification outlined above.
XVI. DATA SHARING
Walgreens shall consent to the provision by its distributors of Walgreens' unblended "867 Data" (data sent from the distributor to the manufacturer concerning the sale of its products to Walgreens) to opioid manufacturers on any particular Designated Controlled Substances manufactured by them as soon as commercially reasonable and at no cost to the manufacturers, provided that, pursuant to a prior written agreement with Walgreens, the opioid manufacturers agree (a) to ensure the confidentiality of the 867 Data, except as required by law; (b) to implement safeguards and procedures to limit access to and use of the 867 Data, except as required by law; (c) that the 867 Data shall be used solely for compliance purposes as part of their Suspicious Order Monitoring programs; and (d) that the 867 Data shall be shared only with specified personnel and shall not be shared with business or sales personnel.
2. To the extent that Walgreens provide McKesson Corporation, Cardinal Health, Inc., or AmerisourceBergen Corporation (the "Settling Distributors") with Pharmacy Customer Data (as defined in the Distributor Injunctive Terms) for use in their Controlled Substance Monitoring Programs, Walgreens agree that the Settling Distributor(s) may share such Pharmacy Customer Data with the Monitor appointed pursuant to the Distributor Injunctive Terms, provided that the Monitor agrees, pursuant to a prior written agreement with Walgreens, (a) to ensure the confidentiality of the Pharmacy Customer Data; (b) to implement safeguards and procedures to limit access to and use of the Pharmacy Customer Data; (c) that the Pharmacy Customer Data is used solely for the purpose of ensuring the Settling Distributors' compliance with the Distributor Injunctive Terms; and (d) that the Pharmacy Customer Data shall be shared only with specified personnel.
XVII. CLEARINGHOUSE
1. Walgreens will confer with any Settling Distributor that distributes Designated Controlled Substances to its retail pharmacies and the States Injunctive Relief Committee for a period not to exceed six (6) months from the Injunctive Terms Implementation Date to determine: what additional deidentified information, if any, is needed from Walgreens for a Settling Distributor to perform suspicious order monitoring; if additional deidentified information is needed, how the Settling Pharmacy shall provide it to a Settling Distributor; and what information provided by Walgreens to a Settling Distributor may be deposited by the Settling Distributor into the Clearinghouse. For the avoidance of doubt "deidentified" does not refer to Prescribers. If agreements are not reached, the matters in dispute shall be submitted to P-20
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arbitration. Due to patient privacy and legal restrictions and other confidentiality and commercial concerns, in connection with any meet and confer described above, Walgreens may not be compelled to provide individual patient -level or prescription - level data, de -identified or otherwise, to the Settling Distributors.
2. Walgreens and Settling Distributors will also determine whether and in what amount each Settling Pharmacy will contribute to the cost of the operation of the Clearinghouse. When Walgreens contributes to the costs of the Clearinghouse, Settling Pharmacy, Settling Distributors and all other participants in the Clearinghouse shall determine an equitable amount of Walgreens' contribution. If agreements are not reached, the matters in dispute shall be submitted to arbitration.
3. Any data provided by Walgreens to a Settling Distributor and/or the Clearinghouse pursuant to these Injunctive Terms shall be treated in compliance with state and federal law, including but not limited to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and all applicable state and federal privacy laws.
4. No Settling Distributor or other participant in the Clearinghouse shall receive from the Clearinghouse information specific to Walgreens.
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EXHIBIT Q
Intentionally Omitted
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EXHIBIT R
Agreement on Attorneys' Fees, Costs, and Expenses
This Agreement on Attorneys' Fees, Costs, and Expenses ("Fee Agreement") is entered between Walgreens and the Plaintiffs' Executive Committee appointed in the multidistrict litigation in the Northern District of Ohio, In re National Prescription Opiate Litigation, No. 1:17-MD-2804 ("MDL PEC"), in connection with the Walgreens Global Opioid Settlement Agreement ("Walgreens Agreement"). This Fee Agreement becomes effective on the Effective Date of the Walgreens Agreement or the date that the Consent Judgments anticipated under the Walgreens Agreement become final in 25 Settling States (whichever is later).
L Definitions
A. This Fee Agreement incorporates all defined terms in the Walgreens Agreement, unless otherwise defined herein, and shall be interpreted in a manner consistent with the Walgreens Agreement.
B. "Applicant." Any Attorney or MDL Participating Counsel who seeks an award of attorneys' fees from the Attorney Fee Fund pursuant to the procedures established by the MDL Court and the Fee Panel.
C. "Attorney." Any of the following retained through a legal contingency fee or hourly fee contract: a solo practitioner, multi -attorney law firm, or other legal representative of a Participating Subdivision or MDL Participating Counsel. This does not include Subdivision in-house attorneys.
D. "Attorney Fee Fund." An account consisting of up to $563,732,518.00 allocated to pay attorneys' fees approved pursuant to Section II.B. of this Fee Agreement, established by Order of and under the ongoing jurisdiction of the MDL Court, as provided below.
E. "Common Benefit." Work performed for the benefit of all Participating Subdivisions and Tribal Nations, including, but not limited to, pretrial matters, discovery, trial preparation, trial, settlement negotiations, and all other work that advances the interests of the Participating Subdivisions.
F. "Common Benefit Fund." The sub fund of the Attorney Fee Fund described in Section ILC.
G. "Common Benefit Order." The Ongoing Common Benefit Order (Dkt. #4428) in In re National Prescription Opiate Litigation, Case No. 1:17-and-2804, any subsequent amendments or modifications to that order, and any successor orders on Common Benefit.
M
H. "Contingency Fee Fund." The sub fund of the Attorney Fee Fund described in Section H.D.
I. "Cost and Expense Fund Administrator." The administrator appointed by the MDL Court on August 12, 2021 (MDL Docket No. 3828), to administer the Cost Fund and its sub funds as provided in the Fee Agreement.
J. "Cost Fund." An account consisting $30,000,000, composed of the MDL Direct Cost Fund and the Subdivision Cost and Expense Fund, as provided below.
K. "Court Common Benefit Fund." The Common Benefit Fund established by the MDL Court in its orders of July 22, 2021, MDL Docket No. 3794, and May 9, 2022, MDL Docket No. 4428.
L. "Fee Entitlement." Any right, entitlement, or expectation, including but not limited to a fee contract, contingent fee contract, agreement, referral arrangement, co -counsel arrangement, State Back -Stop Agreement, or any other arrangement by which counsel could receive compensation or other consideration. For the avoidance of doubt, the scope of Fee Entitlement under paragraph II.G.3.a. does not include any Attorneys' fees associated with representation of a State.
M. "Fee Panel." The three -person panel appointed by the MDL Court on August 12, 2021 (MDL Docket No. 3828), to administer and make recommendations for the allocation and distribution of the Attorney Fee Fund and its sub funds as provided in the Fee Agreement.
N. "Later Litigating State." A State that first files a lawsuit bringing a Released Claim against a Released Entity after December 9, 2022.
O. "MDL Court." United States District Court for the Northern District of Ohio Eastern Division, Case No. 1:17-and-2804, Judge Dan Aaron Polster.
P. "MDL Expense Fund." The cost fund described in Section III below.
Q. "MDL Participating Counsel. " MDL Participating Counsel includes an attorney or firm authorized by MDL 2804 Lead Counsel to perform work for the Common Benefit of Participating Subdivisions. By way of example, it would include insurance counsel and appellant counsel.
R. "MDL PEC." The Plaintiffs' Executive Committee appointed by the MDL Court.
S. "Non -Participating Litigating Subdivision." A Litigating Subdivision that is not a Participating Subdivision.
T. "Non -Participating State." A State that is not a Participating State.
U. "Participating Litigating Subdivision." A Litigating Subdivision that is also a Participating Subdivision.
V. "Participation Agreement." An agreement executed by an Attorney that acknowledges the obligation to pay an appropriate MDL Common Benefit Assessment.
W. "Qualified Tribal Representation." Representation by an attorney of a Participating Tribal Government regarding Released Claims against Released Entities. Such counsel are eligible for Common Benefit Fee consideration. The Walgreens Tribal Global Settlement provides for the contribution to the Common Benefit Fund as shall be determined by the MDL Court.
X. "Qualifying Representation." Legal services provided for representation of the MDL PEC or Participating Litigating Subdivision regarding Released Claims against Released Entities.
Y. "State Back -Stop Agreement." Any agreement by a Settling State and private counsel for Participating Subdivisions in that State (or legislation enacted in that State) to provide, adjust, or guarantee attorneys' fees and costs, whether from the Attorney Fee Fund or any other source recognized in the agreement or legislation.'
Z. "Subdivision Cost and Expense Fund. " The fund created to pay approved Subdivision and Tribal Nations costs and expenses as set forth in Section II.E.
AA. "Walgreens." Walgreen Co. and all of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, and assigns.
II. Fees and Costs
A. Total Attorneys' Fees and Costs
Total attorneys' fees and costs to be paid by Walgreens to Attorneys under this Fee Agreement shall be up to, but in no event more than, $593,732,518.00, subject to the reductions and provisions set forth below. The total attorneys' fees and costs consists of up to $563,732,51.8 for the Attorney Fee Fund, as set forth in Section II, and $30,000,000 in total for the Cost Fund, divided between the Subdivision Cost and Expense Fund and MDL Expense Fund, as set forth in Sections II.E and ILF, respectively. Additionally, Walgreens shall also pay $44,867,483.00 into the Court Common Benefit Fund as a common benefit fund assessment on the Credit set forth in Ex. M-3, and shall be paid on the schedule set forth in Ex. M-3. The ' Nothing herein shall be understood to indicate approval for additional State Back -Stop Agreements or modifications of existing State Back -Stop Agreements.
Maximum Attorney Fees and Costs, subject to the reductions set forth herein, are set forth in Ex. M-3 and shall be paid on the schedule in Ex. M-3.
2. If an Eligible State does not join the Agreement by the State Participation Date and is accordingly not a Settling State, the total attorneys' fees and costs to be paid under this Fee Agreement by Walgreens shall be reduced by twelve point four percent (12.4%) times the Remediation Payment amount that would have been allocated to that Non -Settling State as set forth in Section IV.B of the Walgreens Agreement.
3. The total attorneys' fees and costs to be paid under this Fee Agreement by Walgreens shall also be reduced by the amount of the Contingency Fee Fund for Attorneys representing Litigating Subdivisions in any Settling State that do not participate in the Walgreens Agreement ("Non -Participating Litigating Subdivisions"), as set forth in Section II.D.4 and II.H.7 below.
4. If Walgreens settles with any Non -Settling State after December 9, 2022, and such settlement allows for the Subdivision(s) in such Non -Settling State to join the settlement, Walgreens agrees to withhold from the attorney fee portion of such settlement a Common Benefit Fund assessment, to be deposited in the Court Common Benefit Fund, of 7.5% times the portion of the Remediation Payment that would have been due to such State if it had participated in the Walgreens Settlement and been awarded its full portion of the Remediation Payment (the "Walgreens State Settlement CBF Assessment"). If Walgreens settles with any Subdivision(s) in a Non -Settling State other than in connection with a statewide settlement that includes the relevant State after December 9 2022, then Walgreens agrees to withhold from the attorney fee portion of such settlement a Common Benefit Fund assessment, to be deposited in the Court Common Benefit Fund, of
7.5% times the portion of the Remediation Payment that would have been due to such Subdivision under this Agreement (the "Walgreens Subdivision CBF Assessment," and, along with the Walgreens State Settlement CBF Assessment, each a "Walgreens CBFAssessment"). If (a) Walgreens settles with a Non -Settling State after December 9, 2022, (b) such settlement does not allow for the Subdivision(s) in such Non -Settling State to join the settlement, and (c) Walgreens later prevails in asserting that Released Claims of Primary Subdivisions in such Non -Settling State were released as a result of such settlement, Walgreens agrees to deposit the Walgreens State Settlement CBF Assessment in the Common Benefit Fund. Any Walgreens CBF Assessment is inclusive of any assessment related to such settlement that would be required by the Common Benefit Order.
To the extent that Walgreens is required to pay any additional and/or separate assessment on such settlement as a result of the Common Benefit Order, the Walgreens CBF Assessment shall be reduced by the amount required to be paid pursuant to the Common Benefit Order.
B. Attorney Fee Fund and Sub Funds
I. The Attorney Fee Fund shall consist of the Contingency Fee Fund and the Common Benefit Fee Fund. There shall be a split of the Attorney Fee Fund into ,
the Contingency Fee Fund and the Common Benefit Fund. The split shall be 40% to the Contingency Fee Fund and 60% to the Common Benefit Fund.
2. The Cost Fund shall include the MDL Expense Fund and the Subdivision Cost and Expense Fund. The State Counsel Fee Fund and the State Cost Fund shall be separate funds under the control of the Settling States .
3. It is the intention of the Parties that the Contingency Fee Fund and the Common Benefit Fund shall be administered by the Fee Panel appointed under MDL Docket No. 3828, which will be governed by the provisions of this Fee Agreement and shall design the process and procedures for the allocation of fees pursuant to this Fee Agreement and the MDL Court's Order. The Cost Funds shall be administered by the Cost and Expense Fund Administrator appointed under MDL Docket No. 3828, who will be governed by the provisions of this Agreement and shall design the process and procedures for the allocation of costs pursuant to this Agreement and the MDL Court's Order.
4. The fees to be paid under this Fee Agreement are available for Attorneys engaged in Qualifying Representations and Qualified Trial Representations only. Fees to be paid under this Fee Agreement are not available prior to the Effective Date of the Walgreens Agreement. Fees to be paid under this Fee Agreement are not available for representation of States, Non -Participating Subdivisions, or Non - Litigating Subdivisions and are not available for representation of private hospitals, third -party payors, NAS claimants, personal injury/wrongful death claimants, or any entity other than Participating Litigating Subdivisions. In addition, fees under this Fee Agreement are not available for representation of any individual or entity in matters other than those claims against Released Entities, but may include a reasonable share of representations that involve development of facts for pursuit of opioid-related claims against multiple defendants in the pharmacy, manufacturing, and distribution chain.
5. In no event shall Walgreens be required to pay more into the Attorney Fee Fund than the maximum amount specified in paragraph II.A.1. The amounts allocated to the Contingency Fee Fund and the Common Benefit Fund set by the Fee Panel shall be subject to the reductions set forth in Section II.A.2 and the reductions and refunds set forth below.
6. Awards of fees from the Contingency Fee Fund shall be available to Attorneys with Qualifying Representations of Participating Litigating Subdivisions eligible to receive an allocation under the Walgreens Agreement, as set forth in Exhibit G to the Walgreens Agreement, and shall be made by applying the Mathematical Model attached as Exhibit "A" to this Fee Agreement. The collection of the data and calculations for the Mathematical Model has been a cooperative effort among private counsel for a large number of Litigating Subdivisions. The analysis has been spearheaded by Joseph Tann and Andrew Arnold. The Fee Panel is encouraged to continue working with those counsel in application of the Model.
The Fee Panel shall oversee the application of the Model and resolve any questions or disputes concerning the eligibility of a Counsel to participate as required in Kam
Section II.G. The Panel is empowered to hear disputes concerning and ensure the accuracy of the mathematical calculation.
7. As to awards from the Contingency Fee Fund, there shall be no right of appeal.
8. Any appeal of an award of the Fee Panel from the Common Benefit Fund will be made to the MDL Court and be reviewed under an abuse of discretion standard.
C. Common Benefit Fund (60% of the Attorney Fee Fund)
The maximum potential total Common Benefit Fund payment to be made by Walgreens into the Attorney Fee Fund is $338,239,510.80, and in no event shall it exceed that amount. Walgreens' maximum potential Common Benefit Fund payments are subject to the reductions set forth in Section II.A.2. for Non -Settling States and to the adjustments set forth below and, subject to those reductions, shall be paid on the following yearly schedule:
Walgreens Shall Pay Common Benefit
Year 2
December 31, 2023
$50,373,251.40
Year 3
December 31, 2024
$50,373,251.40
Year 4
December 31, 2025
$59,373,251.40
Year 5
December 31, 2026
$59,373,250.00
Year 6
December 31, 2027
$59,373,250.00
Year 7
December 31, 2028 $59,373,250.60
Total $338,239,510.80
Additionally, Walgreens shall pay $44,867,483.00 into the Court Common Benefit Fund as a common benefit fund assessment on the Credit set forth in Ex. M-3 and shall be paid on the schedule set forth in Ex. M-3.'
2. The Common Benefit Fund shall be available to compensate Attorneys engaged in Qualifying Representations of Participating Litigating Subdivisions and Qualified Tribal Representation of Tribal Participating Governments who:
a. have performed work for the Common Benefit of all Participating Subdivisions and/or Tribal Nations consistent with the provisions to the guidelines established by Judge Polster set forth in MDL 2804 and the Order dated May 1, 2018, under docket number 358, which is included herein by reference; and b. satisfy the eligibility criteria set forth in Section II.G.
For purposes of Common Benefit Fund distribution, notwithstanding paragraph II.A.5, Attorneys representing Tribal Nations litigating against Walgreens have also reached a settlement for Released Claims with Walgreens, and these settlements are the subject of agreements with Walgreens. Attorneys are eligible for Common Benefit consideration provided such agreement with Walgreens became effective under their terms. Such Attorneys must meet the eligibility criteria in Section II.G.
For purposes of Common Benefit Fund distribution, notwithstanding paragraph II.A.5, MDL Participating Counsel not engaged in Qualifying Representations of Participating Litigating Subdivisions but who performed work for the Common Benefit pursuant to authorization from the MDL Co -Leads and meet the eligibility criteria in Section II.G. shall be eligible.
Walgreens' Common Benefit Fund payments under this Fee Agreement satisfy any assessments or withholdings for the Walgreens Agreement that are or could be required under the Common Benefit Order for Settling States and their Participating ' For the avoidance of doubt, Walgreens is not required to pay any sums under this Agreement for matters settled prior to December 6, 2022, other than the $44,867,483.00 payment referenced above.
K:
Subdivisions. The Common Benefit Fund shall be overseen by the Fee Panel, which shall determine the allocation of funds to eligible Attorneys consistent with this Fee Agreement and the Common Benefit Order.
4. In assessing the benefits that an Applicant has conferred to Participating Subdivisions (including non -Litigating Subdivisions) and/or Tribes for purposes of any compensation decision, the Fee Panel shall give significant weight to the extent to which (i) the Applicant and his or her clients have contributed to increasing (or reducing) Subdivision Participation in the Walgreens Agreement as of the Initial Participation Date, and (ii) the Applicant and his or her clients have contributed to increasing (or reducing) the amounts achieved under Incentive Payments A-D through participation in the Walgreens Agreement, including the Walgreens Tribal Agreement.
The Fee Panel shall also consider additional fee recoveries the Applicant may potentially obtain, including, but not limited to, from attorney fee funds under other settlement agreements, State Back -Stop Agreements, representations of States or Tribal Nations, representations of other clients in opioids-related matters, or through the representation of Subdivision clients, whether they participated in the Walgreens Agreement or not. It is the intent of this provision to recognize that the goal of the Walgreens Agreement is to provide for maximum participation by the Subdivisions, maximum abatement funding for all Subdivisions nationally, and the maximum peace for Released Entities. Therefore, representing one or more Non -Participating States or Non -Participating Subdivision does not further the goal of the Walgreens Agreement, and should not be considered Common Benefit because it does not increase funds available to Participating Subdivisions' abatement programs. Representing one or more Later Litigating Subdivisions is antithetical to the Walgreens Agreement and detracts from Common Benefit; the Fee Panel shall consider this concept of "common detriment" set forth in this paragraph in all of its decision making with respect to the allocation of the Attorney Fee Fund among Applicants, as well as, in its discretion, any reductions provided to Walgreens as set forth in Section II.H.8 The Fee Panel shall consider the totality of the Applicant's Participating Litigating Subdivisions as compared to the Applicant's Non -Participating Litigating Subdivisions; the Parties recognize that, although the goal is for 100% participation, Applicants with a greater number of clients have a greater probability of having one or more Non -Participating Litigating Subdivisions. As used in this paragraph II.C.4, "client" or "representing" a Subdivision shall include any Litigating Subdivision as to which the Applicant has a Fee Entitlement.
5. As set forth in Section IM, the Fee Panel must consider the factors described in paragraph II.C.4 to determine how and whether to reduce the amounts to be paid by Walgreens under this Fee Agreement and to determine how to allocate funds among Applicants. They may also, at their discretion, consider other factors. Any reduction in payment obligation or credit to be given Walgreens in this Fee Agreement shall be applied against the last Payment Year and then working backwards. Any reduction to an Applicant not credited to Walgreens shall be allocated to attorneys whose Litigating Subdivision clients participated in the settlement by the Initial Participation Date. 8 Notwithstanding any provisions set forth herein, it is expressly understood and agreed that continued representation of CT-3 Bellwether jurisdictions, Lake County or Trumbull County, shall not be considered by the Fee Panel as common detriment or adverse to the stated purposes of the Master Settlement Agreement and will not in any way prejudice counsel in seeking common benefit for the work related to the representations of these counties or in any other respect.
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D. Contingency Fee Fund (40% of the Attorney Fee Fund)
l . The maximum potential total Contingency Fee Fund payment to be made by Walgreens into the Attorney Fee Fund is $225,493,007.20, and in no event shall it exceed that amount. Walgreens' maximum potential Contingency Fee Fund payment shall be subject to the reductions set forth in Section II.A.2 for Non -Settling States and to the adjustments set forth below and, subject to those reductions, shall be paid on the following yearly schedule:
Walgreens Shall Pay Contingency Fee Fund
Year 2
December
31,
$33,582,167.60
2023
Year 3
December
31,
$33,582,167.60
2024
Year 4
December
31,
$39,582,167.60
2025
Year 5
December
31,
$39,582,168.00
2026
Year 6
December
31,
$39,582,168.00
2027
Year 7
December
31,
$39,582,168.00
2028
Total
$225,493,007.20
2. The Contingency Fee Fund shall be available to compensate Attorneys engaged in Qualifying Representations of Participating Litigating Subdivisions that meet the criteria set forth in Section II.G.
a. The Contingency Fee Fund shall be available to Attorneys who represent Litigating Subdivisions that are Participating Subdivisions, whether their actions are filed in state or federal court, and meet the eligibility criteria of Section II.G. b. Participation in the Contingency Fee Fund by counsel that have a case that is not subject to the jurisdiction of the MDL Court shall not create, provide, or waive jurisdiction of the MDL Court over that Litigating Subdivision, that case or Attorneys, other than to oversee the fairness of the distribution process, and enforcement of this Fee Agreement.
3. The amount owed by Walgreens to the Contingency Fee Fund shall be reduced to reflect the non joinder of Litigating Subdivisions in Settling States by subtracting the amounts identified by the Fee Panel, pursuant to paragraph II.H.7, that would have been owed to counsel for Non -Participating Litigating Subdivisions in Settling States had such Litigating Subdivisions been Participating Subdivisions.
4. In the event that after the date of the Walgreens Agreement, Walgreens, prior to the Effective Date of the Walgreens Agreement, settles with any Litigating Subdivision that would have been eligible to participate in the Settlement Agreement, and, under such settlement agreement pays attorneys' fees, the Fee Panel shall treat those Litigating Subdivisions as Participating Litigating Subdivisions and, applying the same criteria applicable to all Attorneys for Participating Litigating Subdivisions, determine what amount they would have been paid from the Contingency Fee Fund if they had become Participating Subdivisions under the Walgreens Agreement without such prior settlement. That sum, rather than being paid to the Attorney for the previously settling Litigating Subdivision, shall be returned to Walgreens, except that such refund shall not be greater than the amount paid to the Attorneys under the Litigating Subdivision's prior settlement agreement.
E. Subdivision Cost and Expense Fund
Walgreens shall pay $22,500,000 into the Subdivision Cost and Expense Fund on the schedule set forth below.
Cost Fund
Year 2
December
$11,250,000
31, 2023
Year 3
December $11,250,000
31, 2024
2. The Subdivision Cost and Expense Fund shall be available to compensate Attorneys for costs and expenses arising out of representation of Participating Litigating Subdivisions. No funds in the Subdivision Cost and Expense Fund may be used to compensate the costs incurred by Non -Participating Subdivisions or Non -Litigating Subdivisions or costs and expenses arising out of representation of any such Subdivision. In allocating the Subdivision Cost and Expense Fund, the Administrator shall not allocate any funds for costs incurred after December 9, 2022.
3. During the period between December 9, 2022 and the Effective Date of the Walgreens Agreement, the MDL PEC, as well as Litigating Subdivisions eligible to claim costs from the Subdivision Cost and Expense Fund, shall make best efforts to cease litigation activity against Walgreens, including by jointly seeking stays or severance of claims against Walgreens, where feasible, or postponements if a motion to stay or sever is not feasible or is denied, so long as such actions are not otherwise detrimental to the Litigating Subdivision.
4. In the event that Walgreens, prior to the Effective Date of the Walgreens Agreement, settles with any Litigating Subdivision and, under such settlement agreement, pays costs to the Litigating Subdivision or its Attorney, the MDL Cost and Expense Fund Administrator shall treat those Litigating Subdivisions as Participating Litigating Subdivisions and, using the same criteria applicable to all applicants to the Subdivision Cost and Expense Fund, determine what amount in costs the Litigating Subdivision or its Attorney would have been paid from the Subdivision Cost and Expense Fund if they had settled under the Walgreens Agreement. That sum, rather than being paid to the Attorney or the previously settling Litigating Subdivision, shall be credited and/or returned to Walgreens, except that such sum shall not be greater than the amount paid under the previously settled Litigating Subdivision's settlement agreement.
5. The Cost Fund shall be administered by the Cost Fund and Expense Fund Administrator (MDL Docket No. 3828), who will be governed by the provisions of this Agreement and shall design the process and procedures for the allocation of costs pursuant to this Agreement and the MDL Court's Order.
6. The costs of the Cost and Expense Fund Administrator shall be paid from the Cost Fund and allocated by the Cost and Expense Fund Administrator between the MDL Direct Cost Fund and the Subdivision Cost and Expense Fund to fairly charge each fund the cost incurred in implementing and supervising the specific fund.
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7. The Cost and Expense Fund Administrator shall set the process and procedures for submission of and criteria for applications for payment of Subdivisions' and Tribal Nations' costs and expenses. The Cost and Expense Fund Administrator shall receive and evaluate applications from Participating Litigating Subdivisions and litigating Tribal Nations, whether filed in Federal Court or State Court, to seek reimbursement for eligible costs under Section II.E.2 in pursuit of claims against Walgreens. The process shall require a showing that the costs or expenses sought were reasonably incurred in furtherance of active litigation of a designated state or federal bellwether trial -set case, or Common Benefit. The Cost and Expense Fund Administrator shall require transparency from all applicants as to any other sources for compensating Attorneys for Subdivisions and Tribal Nations for costs incurred.
If funds remain after the reimbursement of approved out-of-pocket costs, the Cost and Expense Fund Administrator may consider reasonable and appropriate payment for client time, costs, or expenses incurred by recognized trial bellwether plaintiffs. At the conclusion of the process, any funds not allocated by the Cost and Expense Fund Administrator shall be transferred to the Common Benefit Fund established in this Exhibit R.
8. In the event that States and Subdivisions enter into an additional global settlement with a parry or parties other than Walgreens that is (a) under the jurisdiction of the MDL Court in MDL No. 2804, (b) creates a separate cost fund, and (c) unless the parties agree to another date, such agreement has an effective date prior to June 30, 2023, the Cost and Expense Fund Administrator shall have the authority to aggregate the Cost Fund with the cost fund created under that global settlement agreement. The Cost and Expense Fund Administrator shall have the authority to address the appropriate procedures and required information to allow the costs to be funded from the appropriate cost fund or shared by two or more cost funds; provided, however, that the Subdivision Cost and Expense Fund shall remain subject to the requirements set forth in Section II.E.2. For the avoidance of doubt, the Subdivision Cost and Expense Fund is available only to compensate Attorneys for costs and expenses arising out of representation of Participating Litigating Subdivisions, and no funds in the Subdivision Cost and Expense Fund may be used to compensate the costs incurred by Non -Participating Subdivisions or Non - Litigating Subdivisions or costs and expenses arising out of representation of any such Subdivision.
F. MDL Expense Fund
l . Walgreens shall pay $7,500,000 into the MDL Expense Fund on the schedule set forth below.
MDL Expense Fund
Year 2 $3,750,000
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December
31, 2023
Year 3
December
$3,750,000
31, 2024
2. The MDL Expense Fund shall be released following the Effective Date of this Fee Agreement without any delay to reimburse the MDL Counsel for an agreed -to portion of the expenses incurred, as approved by the Cost and Expense Fund Administrator. The sum deposited into the MDL Expense Fund will be paid directly to the MDL Opiate Capital Account. No funds may be used to compensate the costs incurred by Non -Participating Subdivisions or Non -Litigating Subdivisions, or to compensate any Attorney for costs incurred in representing one or more Non -Participating Subdivisions or Non -Litigating Subdivisions.
3. In allocating the MDL Expense Fund, the Administrator shall not allocate any funds for costs incurred after December 9, 2022, unless the Administrator determines that there are sufficient funds to cover all Subdivision costs incurred prior to December 9, 2022 and that special circumstances exist to justify costs incurred following the public announcement of the Walgreens Agreement, including reasonable costs related to the implementation of the Walgreens Agreement.
G. Eligibility
I. It is the intention of all parties participating in the Fee Panel process that there should be total transparency to the Fee Panel and to all fund participants. In connection with the process to be developed by the Fee Panel, any and all monies in attorney's fees received or awarded, including prior or future Contingency Fees, Common Benefit Fees, referral fees, expenses paid, promises for payment, or any other Fee Entitlement, to any Applicant in any opioid litigation shall be disclosed to the Fee Panel as a condition of participating in the Attorney Fee Fund and prior to an award from the Fee Panel. Any payment, expectation of payment or perceived entitlement to participate in a State Back -Stop Agreement or any other agreement reached with a Settling State or any Subdivision or any other source regarding payment of fees must be disclosed to the Fee Panel. Similarly, any right to payment from any other fund, for example a fund for payment to lawyers representing Settling States or Tribal Nations or Subdivisions shall be disclosed to the Fee Panel. Because it is anticipated that there will be multiple firms listed on contingent fee agreements with Litigating Subdivisions, the Fee Panel shall establish procedures, with input from. Attorneys for Participating Litigating Subdivisions, for which party or parties should petition for fees from such groups and to whom the fee shall be paid and thereafter distributed to co -counsel in accordance with applicable agreements. For the avoidance of doubt, all Attorneys that are part of such groups must meet the eligibility criteria in paragraph II.G.3, must be subject to the criteria set forth in paragraph II.C.4, and must be disclosed to the Fee Panel.
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2. An Applicant may apply for and recover attorneys' fees from the Common Benefit Fund, the Contingency Fee Fund, and any fund created by a past or future State Back - Stop Agreement, provided the Applicant satisfies the requirements relevant to each such fund and requirements for disclosure to the Fee Panel.
3. An Attorney may not receive any payment from the Attorney Fee Fund (which includes both the Contingency Fee Fund and the Common Benefit Fund) unless the following eligibility criteria are met and annually certified by the Attorney:
a. The Attorney must expressly waive the enforcement against the Litigating Subdivision client of all Fee Entitlements (other than under State Back -Stop Agreements) arising out of or related to any or all Qualifying Representations of any Participating Litigating Subdivision prior to applying for attorneys' fees from the Attorney Fee Fund. All applications for attorneys' fees under this Fee Agreement shall include an affirmation by the Attorney of such waiver and notice to the client(s) of such waiver. Such waiver shall not preclude the Attorney from submitting such Fee Entitlements to the Fee Panel as a factor for consideration in allocating payments from the Attorney Fee Fund or in connection with a State Back -Stop Agreement. For the avoidance of doubt, no Attorney may recover fees under this Fee Agreement unless the Attorney expressly agrees not to enforce Fee Entitlements as to each and every Participating Litigating Subdivision represented by that Attorney, but such Attorneys may participate in and receive funds from a State Back -Stop Agreement.
b. The Attorney must represent that s/he has no present intent to represent or participate in the representation of any Later Litigating Subdivision or Later Litigating State with respect to Released Claims against Released Entities. c. The Attorney must represent that s/he has not and will not engage in any advertising or solicitation related to Released Claims against Released Entities where such advertising or solicitation relates to a representation of a Subdivision eligible to be a Participating Subdivision after the Reference Date unless the Attorney is recommending participation in the Agreement.. d. The Attorney must represent s/he will not charge or accept any referral fees for any Released Claims brought against Released Entities by Later Litigating Subdivisions or Later Litigating States. This representation shall not prohibit Attorneys from receiving allocated shares of any future common benefit assessments arising out of settlements or judgments with Later Litigating Subdivisions or Later Litigating States that are the result of the MDL Court's Common Benefit Order.
e. The Attorney may not have and must represent that s/he does not have a Fee Entitlement related to a Later Litigating Subdivision or Later Litigating State, other than a potential Common Benefit Fee.
f. The Attorney must fully disclose the participation, or the anticipation of participation, in any agreement with a Settling State or Participating Subdivision concerning fees arising out of or related to the Walgreens Agreement, including any fees paid or anticipated to be paid or any State Back -Stop Agreement. g. The Attorney must identify for the Fee Panel whether s/he utilized state litigation work product or MDL work product, including but not limited to ARCOS data, document repositories, experts developed in the MDL, trial transcripts, or deposition transcripts. The Attorney must identify whether s/he signed the MDL Participation Agreement.
h. Any Attorney who applies for fees from one or both Funds must represent that, having exercised his/her independent judgment, s/he believes the Walgreens Agreement to be fair and will make or has made best efforts to recommend the Agreement to his or her Subdivision clients in Settling States. For avoidance of doubt, each Attorney is expected to exercise his or her independent judgment in the best interest of each client individually before determining whether to recommend joining the settlement. All applications for attorneys' fees or costs under this Section shall include an affirmation by the Attorney in compliance with this Subsection.
4. No Attorney receiving fees under this Fee Agreement may apply for or recover from the Attorney Fee Fund fees arising from representing a Non -Settling State or a Non - Participating Subdivision, provided, however, that this provision is not intended to prohibit Attorneys who do not represent or otherwise have a contractual agreement with such Non -Settling State or Non -Participating Subdivision from receiving allocated shares of any future common benefit assessments that arise out of settlements or judgments involving such Non -Settling State or Non -Participating Subdivision. All applications for attorneys' fees under this Section shall include an affirmation by the Attorney of compliance with this Section.
5. An Attorney who has filed an application under this section and received an award of attorneys' fees shall provide a certification of compliance with the Sections of this Fee Agreement annually during the years upon which they are still entitled to receive attorneys' fee payments under this Agreement. This certification will be done as directed by the Panel.
6. If, at any time, the Attorney is unable to make the representations set forth in this Section, such representations become untrue, or the Attorney falsely represents compliance with the eligibility criteria, the Attorney shall cease to be eligible to receive funds from the Attorney Fee Fund until further review by the Fee Panel of the Attorney's eligibility under and compliance with this Section 11.
7. If an Attorney has a Fee Entitlement with a Later Litigating Subdivision or Later Litigating State or otherwise becomes unable to reaffirm compliance with the eligibility criteria set forth above, the Attorney shall notify the Fee Panel. For the R- 15
avoidance of doubt, any Attorney who undertakes any new representation of, or has a Fee Entitlement with, a Later Litigating Subdivision or Later Litigating State shall be prohibited from receiving any future funds from the Attorney Fee Fund and be subject to additional obligations as set forth in Subsection 8 below.. If an Attorney fails to notify the Fee Panel of such Fee Entitlement with a Later Litigating Subdivision or Later Litigating State, the Attorney shall be required to refund amounts previously paid. The Fee Panel shall notify Walgreens when it receives notification.
8. To the extent an Attorney who has received compensation from the Attorney Fee Fund based on Qualifying Representations of Participating Litigating Subdivisions under the Walgreens Agreement represents a Later Litigating Subdivision or Later Litigating State, such Attorney shall be obligated to refund such amounts received as compensation from the Attorney Fee Fund to Walgreens. Walgreens or such Attorney may bring any dispute as to whether such Attorney shall be obligated to refund such amounts received from the Attorney Fee Fund to Walgreens, to the Fee Panel. Nothing herein shall require a multi -attorney law firm that has received compensation from the Attorney Fee Fund to refund such amounts if an attorney of the firm that is no longer affiliated with such law firm, after such departure, represents a Later Litigating Subdivision or Later Litigating State, provided that (a) neither the law firm nor any of its other attorneys have any contractual or financial arrangement regarding, stand to benefit directly or indirectly from, or directly or indirectly provide financial or other support of any kind to, the former attorney's representation of the Later Litigating Subdivision or Later Litigating State and (b) if the former attorney was a partner or owner of the multi -attorney law firm at the time that the law firm received compensation from the Attorney Fee Fund, the former attorney shall be obligated to refund such amounts as the former attorney earned as a result of the compensation that the law firm received from the Attorney Fee Fund.
9. In the event that an Attorney is deemed ineligible by the Fee Panel (whether based on its initial application or subsequent recertification), the Fee Panel shall provide notice to the Attorney and give the Attorney 30 days to provide additional information such that the Fee Panel could re -consider the Attorney's eligibility.
10. To the extent that an Attorney has a Fee Entitlement with a Participating Subdivision and is authorized to bring Released Claims against Released Entities, but such authorization is, in scope, less broad than the category of Released Claims set forth in the Walgreens Agreement, such Attorney may participate fully in both the Contingency Fee Fund and the Common. Benefit Fund, without any reduction imposed by the Fee Panel due to the scope of the authorization, so long as the Participating Subdivision fully releases all Released Claims against Released Entities.
11. Attorneys applying to the Attorney Fee Fund knowingly and expressly agree to be bound by the decisions of the Fee Panel, subject to the limited appeal rights set forth in this Fee Agreement, and waive the ability to assert the lack of enforceability of the allocation reached through the procedures outlined herein.
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12. Applicants are under an ongoing obligation to inform the Fee Panel in writing of any additional fees earned, expected, or received related to any Opioid litigation throughout the period of the Fee Panel's operation.
H. Calculation of Amounts Due
The Fee Panel shall be solely responsible for determining the amount of fees to be paid to each Applicant. None of the Released Entities shall have any responsibility, obligation, or liability of any kind whatsoever with respect to how attorneys' fees are calculated under this Section, except that the Fee Panel may receive information from Walgreens as to (a) the identity of Participating, Non -Participating, Litigating, Later Litigating, and Non -Litigating Subdivisions; (b) the impact of non participation by a Litigating Subdivision as is relevant to the Fee Panel's determination in paragraph II.C.4; and (c) such other information as Walgreens may voluntarily elect to provide.
2. The Fee Panel shall establish procedures for making determinations under this Fee Agreement consistent with this Fee Agreement and orders of the MDL Court. Such procedures may include submission of documentary and/or other evidence, interviews with Applicants and/or other counsel (including counsel for Walgreens) that the Fee Panel deems appropriate, and/or other means of creating a record upon which fee awards will be based.
In making determinations under this Fee Agreement, the Fee Panel must apply the eligibility criteria set forth in Section II.G of this Fee Agreement and the criteria set forth in Section II. The Fee Panel shall ensure that payments are only made for Qualifying Representations of Participating Litigating Subdivisions. In addition, the Fee Panel will give consideration in regard to Common Benefit Fund awards to the Johnson factors, as well as the following factors (which factors may be applied and given relative weight in the Fee Panel's discretion):
a. The Applicant's contemporaneously recorded time and labor dedicated to Qualifying Representations along with the Applicant's financial commitment to such Qualifying Representations. Claimed "time" will not be automatically accepted by the Fee Panel but will be critically reviewed and given substantially more weight and consideration if such time was subject to the audit process described in any Pretrial Order(s) governing the collection of common benefit time;
b. The novelty, time, and complexity of the Qualifying Representations; c. The skill requisite to perform legal services properly and undesirability of the case; d. The preclusion of other employment by the Applicant due to time dedicated to Qualifying Representations;
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e. The Common Benefit, if any, alleged to have been conferred by the Applicant and whether such Common Benefit work product by that Applicant was used by others in parallel litigations against Released Entities whether within or outside the MDL, provided that any Applicant claiming that s/he substantially benefited cases other than those in which s/he entered an appearance as counsel must substantiate such claims by proffering factual support, such as proper supporting affidavits or other documents as determined by the Fee Panel with input from Attorneys for Participating Litigating Subdivisions;
f. Any "common detriment," as set forth in paragraph II.C.4; g. Any contingent fee agreement or other Fee Entitlement with Participating Subdivisions, enforcement of which, except for State Back -Stop Agreements, are waived in conjunction with the application, the nature and extent of any work for those Participating Subdivisions, whether such Participating Subdivisions actively litigated and, if so, the nature and procedural history of such case(s); h. The experience, reputation, and ability of the Applicant; i. Whether the Applicant's clients brought Released Claims against Released Entities;
The status of discovery in cases primarily handled by the Applicant; k. The nature of any work by the Applicant on "bellwether" cases or cases that were similarly active in litigation;
1. Any pressure points successfully asserted by the Applicant in cases against Walgreens or any risk for Walgreens created by the Applicant in cases against Walgreens;
in. Any risk for defendants created by Applicants in cases against Walgreens; n. Successful and unsuccessful motion practice in cases worked on by the Applicant; o. The date of filing of any cases filed by the Applicant; p. Obtaining consolidation of the litigation in the Applicant's jurisdiction; q. The number and population of entities represented by the Applicant and the fees that would have been awarded under extinguished contingent fee arrangements;
r. Whether the Applicant's clients brought claims against Walgreens prior to the announcement of this settlement on December 9, 2022;
s. Whether the Applicant has had a leadership role in the litigation, whether in state or federal court;
t. Whether the Applicant has had a leadership role in any negotiations aimed at resolving the litigation;
u. Whether the Applicant's cases have survived motions to dismiss; v. The extent to which the Applicant contributed to the work product used for the common benefit of opioids litigants, including, without limitation, work on ARCOS data, Prescription Data Monitoring Programs, IQVIA data, depositions, document production and analysis experts, motions, briefs and pleadings, trial preparations, and trials;
w. The extent to which litigation occurred prior to and contributed to completion of settlement negotiations, as distinct from litigation that occurred after the announcement of the Walgreens Agreement on December 9, 2022, such latter litigation both being of less value and, the case of litigation filed after the announcement of the Walgreens Agreement on December 9, 2022, resulting in a common detriment to the settlement process, which in both cases should be viewed less favorably; and
x. Any other factors that the Fee Panel finds to be appropriate to consider after input from Applicants to the Attorney Fee Fund.
4. It is possible that the States and Subdivisions that are litigating Opioid cases will enter additional settlements in close proximity of the time for processing the Walgreens Agreement. If there are additional settlements and these settlements create a Common Benefit Attorney Fee Fund to be administered by the Fee Panel, the Fee Panel may:
a. Consolidate the Common Benefit approval process to include evaluation of all Common Benefit Applications for all settlements entered after November 14, 2022;
b. Determine the fair and equitable allocation of the Aggregate Common Benefit Fees that come after December 9, 2022, including consideration of beneficial or detrimental actions taken with respect to any Settling Defendant contributing to the Common Benefit Attorney Fee Fund;
c. Give consideration to the amount and timing of each settlement, including the amount and timing of Common Benefit Fees;
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d. The Fee Panel shall abide by the applicable Attorney Fee Agreement in each of the Settlements in Allocating the Common Benefit Fees provided for in the Settlement; and
e. Be guided in their work by the Orders of the Court related to Fees and Costs.
The Fee Panel shall develop procedures for receiving a single application, which may be updated or amended based on new information (such as participation by additional Litigating Subdivisions) from each Applicant seeking compensation from each sub fund of the Attorney Fee Fund pursuant to processes and procedures developed by the Fee Panel, which shall not be inconsistent with this Fee Agreement. Any request for attorneys' fees not included on the single application or through the updating/amendment process designed by the Fee Panel shall be deemed waived. For purposes of transparency and to permit the Fee Panel to conduct its work, the application from each Applicant shall, at a minimum, require each Applicant to:
a. Identify all Litigating Subdivisions for which s/he is seeking payment from the Attorney Fee Fund;
b. Identify all Subdivisions in both Settling and Non -Settling States (and, where applicable, Tribal Nations) with respect to which s/he has a Fee Entitlement with respect to Relevant Claims against Released Entities, and identify all co -counsel in such cases;
c. Identify which of those Subdivisions are Participating Subdivisions and which are not (with similar information for Tribal Nations, where applicable); d. Specify the specific fund or funds within the Attorney Fee Fund from which the Attorney is seeking compensation;
e. Demonstrate his or her eligibility for compensation from the relevant sub funds within the Attorney Fee Fund pursuant to the criteria set forth for the relevant sub fund;
f. Identify any and all Fee Entitlements from representations of States, Tribal Nations, or other plaintiffs related to Released Claims against Released Entities or in opioids-related matters;
g. Notwithstanding "a-f ' above, the Panel may consider a supplemental application if the Applicant shows good cause why circumstances exist that will lead to consideration for additional Common Benefit award. Examples would include, but are not limited to, an Applicant having Non -Participating Litigating Subdivision clients that subsequently become Participating Subdivisions, a Bar Date passes that increases participation or an Allocation Agreement is reached.
6. With respect to the Common Benefit Fund, the Fee Panel shall (subject to any applicable MDL Court Order):
a. Review the applications of all Applicants seeking compensation from the Common Benefit Fund, including determining eligibility for each Applicant as set forth in Section II.G.
b. Using criteria set forth in Sections ILC and ILG, allocate amounts from the Common Benefit Fund to eligible Applicants, including payment amounts for each Payment Year. In making such allocations, the Panel shall apply the principles set forth in paragraph II.C.5 to the amounts paid to Applicants with a Common Benefit Fee Entitlement.
7. With respect to the Contingency Fee Fund, the Fee Panel shall:
a. Review the applications of all Attorneys seeking compensation from the Litigating Subdivision Fee Fund, including determining eligibility for each Attorney as set forth in Section II.G.
b. Apply the Mathematical Model in Exhibit A.
c. Use such allocations to determine refund amounts owed to Walgreens from the Attorney Fee Fund, and inform Walgreens and the MDL PEC of all such adjustments.
8. To the extent that there is a dispute about the calculations of the Fee Panel related to the amount that Walgreens is required to pay (including application of any reductions or refunds under this Fee Agreement), such disputes shall be presented to the Fee Panel and any disputed funds be paid into/held in escrow. The Fee Panel shall resolve such disputes expeditiously, with either Party having the right to seek review from the MDL Court.
9. For purposes of determination of fee or cost awards, allocations, reductions, and possible reversions under this Fee Agreement, unless specified otherwise a Subdivision will be considered a Non -Participating Subdivision if it is not a Participating Subdivision as of the deadline for the application for the fee at issue (or, if the determination does not involve a specific application, the date on which the record for such determination closes).
1.0. In the event that the Fee Panel, through the use of the Mathematical Model set forth in Exhibit A, allocates funds from the Contingency Fee Fund for an Attorney based on a Qualifying Representation of a Participating Litigating Subdivision and that Subdivision is in a Settling State in which the Consent Judgment has not been R-21
approved, such funds shall be placed into escrow until the Consent Judgment is approved, after which time they shall be released.
L Miscellaneous
1. The Fee Panel shall charge an hourly rate approved by the Court. The Pre -Effective Date costs associated with the Cost and Expense Fund Administrator shall be paid from funds in the Cost Fund. Post -Effective Date, the cost of the Fee Panel shall be charged against the applicable Fee Fund based on allocation by the Fee Panel and shall not be otherwise funded by Walgreens.
2. The MDL PEC will seek, and the Attorneys General for Settling States and the Walgreens will not oppose, a Common Benefit Fee Order requiring an assessment of
7.5% on the gross recovery (by judgment or settlement) of any Non -Participating Subdivision that is subject to the federal court jurisdiction, represented by a MDL PEC firm, represented by any Attorney receiving fees from the Common Benefit Fund, represented by any Attorney that signed a Participation Agreement or had been paid in a case otherwise under the jurisdiction of the MDL Court.
3. The MDL PEC shall provide to Walgreens information the PEC has that identifies Attorneys who represent Litigating Subdivisions who are not Participating Subdivisions and who have an obligation to pay a common benefit assessment, either due to the MDL Court's orders or pursuant to a Participation Agreement.
4. The MDL PEC and Walgreens agree that it is a conflict of interest for an Attorney that had represented a Participating Subdivision to represent a Later Litigating Subdivision or Later Litigating State. This Subsection shall be enforceable to the extent permitted by the equivalent to Rules 1.16 and 5.6 of the ABA Model Rules of Professional Conduct in the relevant jurisdictions. The MDL PEC represents that it will comply with this provision in the case of the Walgreens Agreement until the Effective Date of the Walgreens Agreement, as well as thereafter, if the Walgreens Agreement proceeds.
5. Participating Subdivisions agree to instruct their counsel to treat information, work product and expert materials as confidential under Rule 1.6 of the ABA Model Rules of Professional Conduct. Accordingly, an Attorney shall not share information or work product with, or experts or materials to, non -participants (other than the Attorney's own current clients or their lawyers, consultants, experts or other representatives or agents). However, nothing herein shall prevent MDL Leadership or PEC Counsel from fulfilling their obligations in any MDL and the MDL Court Order. 111. Miscellaneous
A. Termination. If the Walgreens Agreement does not proceed past the Reference Date, whether because Walgreens does not determine to proceed or for any other reason, this Fee Agreement shall be null and void, Walgreens shall have no obligation to make any payments under this om
Fee Agreement, and Walgreens and the MDL PEC shall take such steps as are necessary to restore the status quo ante.
B. MDL Court Consideration. This Fee Agreement shall be attached as an exhibit to the Walgreens Agreement. This Fee Agreement shall also be submitted by Walgreens and the MDL PEC to the MDL Court for approval pursuant to the motion and order that shall be attached.
In the event that the MDL Court, through an order, makes any change to the amounts potentially to be paid by Walgreens under this Fee Agreement, makes any change to the Fee Panel's consideration of the factors set forth in paragraph II.C.4, or any other material change to the draft Order attached as part of Exhibit B or the terms of this Fee Agreement, Walgreens and the MDL PEC shall meet and confer concerning such changes. The MDL Court shall have no authority to increase the payments made by Walgreens related to fees and costs beyond the amounts described in this Fee Agreement.
2. If Walgreens and the MDL PEC are unable to reach agreement and revisions to this Fee Agreement, this Fee Agreement shall be null and void, Walgreens shall have no obligation to make any payments under this Fee Agreement, and Walgreens and the MDL PEC shall take such further steps as are necessary to restore the status quo ante.
C. Amendment. Once the MDL Court has entered an order implementing this Fee Agreement, this Fee Agreement can only be amended by (1) written agreement of Walgreens and the MDL PEC and (2) approval by the MDL Court.
D. Jurisdiction and Enforcement. The MDL Court shall have exclusive and ongoing jurisdiction over the enforcement and implementation of this Fee Agreement as set forth herein. The MDL PEC shall be the Authorized Party to enforce this Fee Agreement, as to the payment obligations of Walgreens as set forth in this Fee Agreement and as to Attorneys making application to the Funds under this Fee Agreement. Solely for purposes of assessing or allocating common benefit fees, the MDL Court will continue to have jurisdiction over the work product developed in the MDL Court by and under the direction of the MDL PEC with respect to claims against Walgreens, including data and documents, depositions, expert reports, briefs and pleadings; and the MDL Court's protective orders, management orders, and other decisions regarding such discovery and other work product, including but not limited to, conditions on its use, will continue in full force and effect. Nothing in this paragraph authorizes the MDL Court to act contrary to this Agreement or to share any of the work product, or provides the MDL Court with jurisdiction over the Walgreens Agreement.
R-23
Description of Mathematical Model for the Allocation of the Contingency Fee Funds Walgreens Settlement Agreement
This document describes the Mathematical Model for allocation of the Contingency Fee Fund described in Exhibit R (Agreement of Attorneys' Fees, Costs, and Expenses) to the Walgreens Settlement Agreement.' Awards of fees from the Contingency Fee Funds shall be available to Attorneys with Qualifying Representations of Participating Litigating Subdivisions eligible to receive an allocation under the Walgreens Settlement Agreement.10 A Fee Panel shall oversee the application of the Model and resolve any questions or disputes concerning the eligibility of a counsel to participate. The Panel is empowered to hear disputes concerning and ensure the accuracy of the mathematical calculations.
In general terms, allocation of the Contingency Fee Fund shall be made by (1) determining the amount of the Settlement Fund that is attributable to each Participating Litigating Subdivision; (2) making certain adjustments to these amounts based on when the Subdivision filed suit and the terms of the applicable fee contract; and (3) dividing the Contingency Fee Fund proportionately among counsel for each Participating Litigating Subdivision based on the amounts calculated in subpart 2.
To collect a fee award from the Contingency Fee Fund, a Participating Litigating Subdivision must have named Walgreens (or any Released Entity) in its lawsuit. The total maximum amount of the Contingency Fee Fund in the Walgreens Settlement Agreement is $225,493,007.20." Allocation of the Contingency Fee Fund shall be made according to the following steps. These calculations are made only for purpose of determining the percentage share of the Contingency Fee Fund that Attorneys for each Participating Litigating Subdivision should receive, not for determining the dollar amount each Subdivision will receive.
(1) For each Settling State, attribute 50% of the settlement funds for that State to its Subdivisions according to the Subdivision Allocation Percentage in Exhibit G to the Walgreens Settlement Agreement.
Illustrative example:
• Assume that State A is allocated 1.00000% of the $ 4, 7 8 8, 16 5, 4 5 8 Remediation amount [see Exhibit M of the Walgreens Settlement Agreement]. • 50% of the 1% share allocated to State A is $23, 940, 827.29. • Assume that, per Exhibit G of the Agreement, the Subdivision Allocation Percentage for City B in State A is 1.00000000%.
'See Walgreens Settlement Agreement, Exhibit R § H.D.2. 10 Walgreens Settlement Agreement, Exhibit R § II.13.2. " Walgreens Settlement Agreement, Exhibit R § II.A.1 & II.D.1. 1 • For purposes of determining its counsel's share of the Contingency Fee Fund, City B is attributed 1.00000000% of $ 2 3, 94 0, 82 7 .2 9, or $ 2 3 9, 4 0 8 .2 7. (2) Adjust the amounts in paragraph 1 as follows:
a. Upward Adjustment for Early Filers. Increase the amount calculated in paragraph 1 above by 10% for any Litigating Subdivision that named Walgreens in a suit before December 5, 2017, the date the National Prescription Opiate Litigation MDL was formed. If the Litigating Subdivision did not name Walgreens in a suit before December 2, 2022, then fees from the Contingency Fee Fund will not be awarded to Attorneys with otherwise Qualifying Representations of that Participating Litigating Subdivision.
Illustrative Example:
• Assume City C is attributed $1,000,000 under paragraph 1 above. • If City C named Walgreens before 12/5/2017, the attributed amount would be adjusted to $1,100,000.
b. Determine Amount Due under Contingency Fee Contract. Determine the amount that would be due to Attorneys with Qualifying Representations of each Participating Litigating Subdivision under the terms of the applicable fee contract if the Participating Litigating Subdivision were to receive the amount calculated in paragraph 2.a. This amount can be referred to as the Contingency Fee Assumption.
Illustrative Example:
• Continuing the example driven in paragraph 2.a, if Attorneys have a 20% contingency fee contract with City C for the relevant litigation, the amount calculated in this step would be 20% of $1,100,000, or $220,000.
In the next step, the Contingency Fee Assumption is used to determine the percentage share of the Contingency Fee Fund due to Attorneys for each Participating Litigating Subdivision. (3) Divide the Contingency Fee Fund proportionately among Attorneys for each Participating Litigating Subdivision in two ways:
a. National Fee Pool Calculation. Determine each Litigating Subdivision's percentage share of all amounts due under contingency fee contracts nationwide by dividing the Contingency Fee Assumption calculated for each Subdivision in paragraph 2.b by the sum of all Contingency Fee Assumptions. Then multiply that percentage by the Contingency Fee Fund to figure each Subdivision's dollar share of the Contingency Fee 2 Fund (but only if the Subdivision timely named Walgreens in a lawsuit).
Illustrative example:
• $220,000 [frompara. 2.b] _ $280,000,000 [total amount owed under contingency fee contracts nationwide] = 0.0785714%12
• 0.0785714% * $225,493,007.20 [Contingency Fee Fund] _ $177,173.01
b. Separate State Fee Pools Calculation. Determine each Litigating Subdivision's percentage share of all amounts due under contingency fee contracts statewide by dividing the Contingency Fee Assumption calculated for each Subdivision in paragraph
2.b by the sum of all Contingency Fee Assumptions in the same State. Then multiply that percentage by the portion of the Contingency Fee Fund that corresponds to that State's Overall Allocation Percentage, shown in Exhibit F of the Walgreens Settlement Agreement, to figure each Subdivision's dollar share of the Contingency Fee Fund (but only if the Subdivision timely named Walgreens in a lawsuit).
Illustrative example:
• 1% * $225,493,007.20 = $2,254,930.072 [amount of the Contingency Fee Fund corresponding to State A]
• Assume a total of $2,500,000 is owed under contingency fee contracts for State A.
• $220,000 [from para. 2.b] _ $2,500,000 = 8.8%
• 8.8% * $2,254,930.072 = $198,433.85
The award of fees to Attorneys with Qualifying Representations of Participating Litigating Subdivisions will be the average of the final amounts calculated in paragraphs 3.a and 3.b above, less any amounts the Fee Panel is authorized to, and does, withhold.13 Paragraph 3.a represents allocation based on a proportional share of a National Fee Pool, while paragraph 3.b represents allocation based on a proportional share of the Separate State Fee Pools.
In other words, for the National Fee Pool described above in paragraph 3.a, the contingency fee contract rate is compared to all other contingency fee contract rates in the nation. For the Separate State Fee Pools described above in paragraph 3.b, the contingency fee contract terms are 12 In this example, $280 million is the amount theoretically owed under all contingency fee contracts for litigation against Walgreens as calculated in paragraph 2.b. This amount is illustrative only; the actual amount will not be known until all litigating subdivisions are identified and the terms of their contingency fee contracts are collected. 13 The model also enforces a maximum fee award of 20% of the amount calculated in paragraph 2.b. The description in this document of the Mathematical Model is by necessity an abstraction; the precise contours of the calculations are defined in the model itself.
compared to the other contingency fee contract terms in that same State. The National Fee Pool and the Separate State Fee Pools are given equal weighting.
Using the first methodology, Attorneys for two Subdivisions in different States with the same amount calculated under paragraph 2.b would be assigned the same amount under paragraph 3.a.
Using the second methodology, Attorneys for the same two Subdivisions would be assigned different amounts under paragraph 3.b because they are in different States. Specifically, the Subdivision in the State with a smaller proportion of Participating Litigating Subdivisions would be allocated more than the Subdivision in the State with a greater proportion of Participating Litigating Subdivisions.
VI
On behalf of Walgreens
11 RM
By:
Name: Jayne Conroy
Date:
By:
Name: Joseph F. Rice
Date:
On behalf of Plainti, ffs' Executive Committee
FH 11185097.1
Agreement on the State Outside Counsel Fee Fund
for Chain Pharmacy Settlements
1. Definitions.
a. "Chain Pharmacy" means any of CVS, Walgreens, and Walmart, and "Chain Pharmacies" means all of the foregoing.
b. "Multistate Chain Pharmacy Settlement Agreement" means This Settlement Agreement along with any other settlement of opioids-related claims among 30 or more states and a Chain Pharmacy.
c. "This Settlement Agreement" means the settlement agreement between the Settling States and the Chain Pharmacy to which this Agreement is attached as an Exhibit.
d. "Settling Chain Pharmacy" means the Chain Pharmacy that is a party to This Settlement Agreement.
e. "SettlingStates" tates" has the meaning given such term in the relevant Multistate Chain Pharmacy Settlement Agreement.
2. Creation of a State Outside Counsel Chain Pharmacies Fee Fund. The Settling States have agreed to the creation of a state outside counsel fee fund to pay reasonable attorneys' fees of Settling States which have retained outside counsel in connection with litigation against one or more Chain Pharmacies (such fund, the "State Outside Counsel Chain Pharmacies Fee Fund").
3. State Outside Counsel Chain Pharmacies Fee Fund Administration. The State Outside Counsel Chain Pharmacies Fee Fund shall be administered separately from any other funds for the payment of attorneys fees or costs in connection with This Settlement Agreement, including any common benefit fund, contingency fee fund for subdivision counsel, state cost fund, or MDL expense fund. If necessary, a committee of Attorneys General shall be convened to oversee the State Outside Counsel Chain Pharmacies Fee Fund (the "Chain Pharmacies Fee Fund Committee"). The Chain Pharmacies Fee Fund Committee shall be appointed by the Settling State Members of the Enforcement Committee and shall be comprised solely of Attorneys General of Settling States that engaged outside counsel to pursue litigation against one or more Chain Pharmacies. The Settlement Fund Administrator (the "Fee Fund Administrator") shall administer the State Outside Counsel Chain Pharmacies Fee Fund according to this Exhibit and, if convened, the guidelines and directives of the Chain Pharmacies Fee Fund Committee.
4. State Outside Counsel Chain Pharmacies Fee Eligibility. a. To receive any amount from the State Outside Counsel Chain Pharmacies Fee Fund, an outside counsel to a Settling State must have filed and maintained an action in the name of a Settling State or its Attorney General against a Chain S-1
FH 11185097.1
Pharmacy in a state or federal court as of November 1, 2022. No Settling State (or its outside counsel) shall receive funds from both the State Outside Counsel Chain Pharmacies Fee Fund and any "Additional Remediation Amount" as may be provided for in This Settlement Agreement. b. In addition to the eligibility criteria set forth in Paragraph 4.a, above, and for the avoidance of doubt, only Settling States under This Settlement Agreement are eligible to receive any funds paid into the State Outside Counsel Chain Pharmacies Fee Fund as a result of This Settlement Agreement.
5. State Outside Counsel Chain Pharmacies Fee Fund Amount. The Settling Chain Pharmacy shall pay funds into the State Outside Counsel Chain Pharmacies Fee Fund in an amount equal to, and on the schedule identified in, Exhibit M (the "Contribution"). The Settling Chain Pharmacy's Contribution shall subject to a reduction as described in Paragraph 8, below.
6. State Outside Counsel Chain Pharmacies Fee Fund Availability and Calculation of Amount.
a. The State Outside Counsel Chain Pharmacies Fee Fund shall be available to compensate private outside counsel for Settling State Attorneys General for approved fees arising out of representation of the Settling State pursuant to the schedule attached to this agreement as Schedule I (the "Fee Schedule"). b. The Fee Schedule is intended to reflect the fee calculation in subparagraph
6.c, below (the "Fee Calculation"). Subject to adjustments required by Paragraph 8, below, in the event of any discrepancy between the Fee Schedule and the Fee Calculation, the Fee Schedule shall control. Each.
Settling State, by becoming a Participating State in This Settlement Agreement, agrees that the Fee Schedule reflects the Fee Calculation and waives any right to contest the accuracy of the Fee Schedule, absent manifest error, the exclusion of a Settling State, or the inclusion of a Non -Settling State. The version of the Fee Schedule reflecting any necessary adjustments shall be the "Final Fee Schedule."
c. Fees shall be aggregated across the Multistate Chain Pharmacy Settlement Agreements and be calculated by adding two components: (a) a fixed amount consisting of fifty percent (50%) of the amount of remediation funds allocated to a Settling State and its Subdivisions pursuant to the Multistate Chain Pharmacy Settlement Agreements multiplied by 4.5% (or, if lower, the applicable contingency fee percentage in the Settling State's outside counsel contract); and (b) a proportional percentage of the remaining fee due under that Settling State's contract with its outside counsel assuming that fifty percent (50%) of the Settling State's recovery is allocable to a Settling State (rather than allocable to the Settling State's Participating Subdivisions) so that the fees of all eligible Settling States (minus the fixed amount that would have been allocated to any Non -Settling States had they become Settling States) exhausts the State Outside Counsel Chain Pharmacies Fee Fund. The proportional share percentage will be the same for each Settling State S-2
FH 11185097.1
included in the State Outside Counsel Chain Pharmacies Fee Fund. Fees shall be split proportionally among each Multistate Chain Pharmacy Settlement Agreement, as set forth on the Fee Schedule.
d. All amounts paid will be less any costs or fees of the Fee Fund Administrator.
The Fee Schedule reflects a holdback amount of $50,000 for such administrative expenses of the Fee Fund Administrator. The remainder of any unused administrative expenses shall be disbursed pro rata to States receiving monies from the State Outside Counsel Chain Pharmacies Fee Fund at the conclusion of such administration.
Payment by the Fee Fund Administrator.
a. The Fee Fund Administrator shall hold the Contribution in escrow until the earlier of (1) the last of the three Multistate Chain Pharmacy Settlement Agreements becomes effective or (2) when instructed by the Settling State Members of the Enforcement Committee.
b. Subject to eligibility pursuant to Paragraph 4, above, a Settling State's outside counsel may receive funds from the State Outside Counsel Chain Pharmacies Fee Fund in the following scenarios ("Payment Scenarios"):
1. The Settling State's outside counsel agrees that the amount listed for such state on the Final Fee Schedule either satisfies in full or exceeds the amounts owed to all such Settling State's outside counsel and such counsel has provided written notice waiving all entitlement to additional fee in respect of any Multistate Chain Pharmacy Settlement Agreement.
2. The Settling State and its outside counsel enter into a signed writing establishing the amount owed to the counsel, which includes an agreement on the payment of the amount listed for such state on the Final Fee Schedule and waives any right of the State or its outside counsel to additional amounts from the State Outside Counsel Chain Pharmacies Fee Fund.
3. A final judgment is entered that is no longer appealable, which judgement adjudicates the amount owed to the Settling State's counsel in respect of This Settlement Agreement and directs the Chain Pharmacies Fee Fund Committee how to pay the amount listed on the Final Fee Schedule for such State.
If no Payment Scenario is applicable with respect to a Settling State, then the Settling State's share shall be placed in an interest -bearing escrow account (less reasonable expenses of the Fee Fund Administrator) and held unless and until a Payment Scenario is applicable.
c. Upon the applicability of a Payment Scenario 1 with respect to a Settling State, the Fee Fund Administrator shall pay that Settling State's outside counsel the amount identified on the Final Fee Schedule for such state or such lesser amount that satisfies the Settling State's obligation to its outside counsel in full. Any remaining allocation to such State shall be paid to the Settling State.
d. Upon the applicability of a Payment Scenario 2 or 3 with respect to a S-3
FH 11185097.1
Settling State, the Fee Fund Administrator shall release monies from the State Outside Counsel Chain Pharmacies Fee Fund in either the amount held by the Fee Fund Administrator, if the amount of the agreement or judgment is equal to or more than the amount held, or the amount indicated in the agreement or in the final judgment, if the amount in the agreement or judgment is less than the amount held.
e. Nothing herein, including the amounts listed in Paragraph 6 above or on any Fee Schedule, shall prevent a Settling State from arguing in any proceeding with its outside counsel that (i) its recovery was less than fifty percent (50%) of the recovery in the settlement agreement down to and including fifteen percent (15%) of the total recovery; (ii) any payment should be discounted by an appropriate discount rate commensurate to the risk of the settlement agreement and the timeline that the Settling State is receiving its payments; (iii) the settlement amount should be lower because the amount a Settling State receives was reduced because such Settling State's outside counsel failed to obtain joinder from a Settling State's Subdivision(s) that the outside counsel also represented; or (iv) any limitation placed by the Settling Chain Pharmacy bars payment of a higher fee to outside counsel. f. In the event the amount due to the Settling State's outside counsel from an escrow account is less than the total amount of funds escrowed on the account of the Settling State, the balance shall be paid to the Settling State. In no event, other than a State becoming a Non -Settling State, shall funds revert to a Chain Pharmacy.
8. Reduction of Amounts owed
a. Non -Settling States; Reversion and Redistribution. Amounts owed by the Settling Chain Pharmacy to the State Outside Counsel Chain Pharmacies Fee Fund shall be reduced by amounts allocated to the fixed amount for such State under This Settlement Agreement in the event that a listed State becomes a Non -Settling State. Specifically, the reduction in the amount owed by the Settling Chain Pharmacy shall be calculated as 2.25% times the total Remediation Payments that would have been allocated to the Non -Settling State had it been a Settling State. The payments for the other Settling States reflected in the Fee Schedule shall be adjusted by the Fee Fund Administrator to reflect a recalculated proportional percentage under the Fee Calculation. b. Settling States; Redistribution. If a Settling State under This Settlement Agreement (i) would otherwise be entitled to a payment from the State Outside Counsel Chain Pharmacies Fee Fund and (ii) is eligible to be a "Settling State" under either of the two other Multistate Chain Pharmacy Settlement Agreements but does not become such a "Settling State", then that Settling State's payment from the State Outside Counsel Chain Pharmacies Fee Fund shall be reduced to an amount equal to the Contribution times the Settling State's allocation percentage on Exhibit F, which shall be treated as an additional remediation payment in lieu of a fee payment. The payments for the other Settling States reflected in the Fee Schedule shall be adjusted by S-4
FH 11185097.1
the Fee Fund Administrator to reflect a recalculated proportional percentage under the Fee Calculation.
c. If either or both of the other Chain Pharmacies fail to enter into a Multistate Chain Pharmacy Settlement Agreement, or if such Multistate Chain Pharmacy Settlement Agreements fail to take effect by December 1.5, 2023, then the Settling Chain Pharmacy and the Enforcement Committee shall renegotiate the terms of Paragraph 8.b in order to permit prompt payment to Settling States that terminated contested litigation with the Settling Chain Pharmacy, and permitting additional time if necessary to finalize payments to the other Settling States. In no event will such renegotiation result in additional reversion of monies in the State Outside Counsel Chain Pharmacies Fee Fund to the Settling Chain Pharmacy.
9. Interpretation.
a. This Agreement shall be an Exhibit to each Multistate Chain Pharmacy Settlement Agreement and shall include the Fee Schedule setting forth the presumptive payment calculations for each eligible Settling State. By joining This Settlement Agreement, each State agrees on the presumptive accuracy of the Fee Schedule, absent manifest error, the inclusion of a Non -Settling State, or the exclusion of a Settling State.
b. It is the intent of all parties that the State Outside Counsel Chain Pharmacies Fee Fund function in a similar manner, with similar calculations and mechanics, as the "State Outside Counsel Fee Fund" established in Exhibit S of that certain settlement agreement dated as of July 21, 2021 setting forth the terms of settlement between and among McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation, on the one hand, and certain settling states and certain participating subdivisions, on the other hand.
S-5
FH 11185097.1
Schedule I to Exhibit S
Fee Schedule
State
Total Fee
Walgreens Share
Walmart Share
CVS Share
Alaska
$1,851,826.21
$691,943.15
$416,884.80
$742,998.26
Arkansas
$4,873,566.77
$1,821,030.03
$1,097,141.78
$1,955,394.96
Delaware
$3,726,440.37
$1,392,401.12
$838,899.65
$1,495,139.61
Kentucky
$7,773,195.40
$2,904,489.25
$1,749,908.82
$3,118,797.34
Michigan
$22,162,404.67
$8,281,081.68
$4,989,220.69
$8,892,102.29
Mississippi
$4,641,790.38
$1,734,425.75
$1,044,964.07
$1,862,400.56
Nevada
$9,363,802.33
$3,498,826.64
$2,107,987.70
$3,756,987.99
New
Hampshire
$5,985,080.61
$2,236,352.15
$1,347,366.79
$2,401,361.67
New Mexico
$2,748,895.55
$2,748,895.55
$-
$-
Puerto Rico
$6,893,516.73
$2,575,793.38
$1,551,874.76
$2,765,848.60
South Dakota
$1,101,349.40
$41.1,524.13
$247,936.78
$441,888.49
Utah
$2,884,152.67
$1,204,171.82
$603,818.18
$1,076,162.67
West Virginia
$2,399,292.74
$2,399,292.74
$-
$-
Admin Expense Holdback
$20,875.66
$10,467.86
$18,656.48
Total
$31,921,103.05
$16,006,471.88
$28,527,738.91
Excluded States:
• Florida (Walgreens; Walmart; CVS)
New Mexico (Walmart; CVS)
West Virginia (Walmart; CVS)
S-6
FH11185097.1
1. Definitions.
EXHIBIT T
Agreement on the Joint State Cost Fund
a. "Opioids Defendant" means Walmart, or such other defendant in opioids- related litigation that enters into a Multistate Settlement after November 1, 2022, and "Opioids Defendants" means all of the foregoing. b. "Multistate Settlement" means this Settlement Agreement along with any other settlement of opioids-related claims among 30 or more states and an Opioids Defendant.
c. "Settlement Agreement" means the settlement agreement between the Settling States and the Opioids Defendant to which this Agreement is attached as an Exhibit.
d. "Settling Opioids Defendant" means the Opioids Defendant that is a party to the Settlement Agreement.
e. "Settling States" has the meaning given such term in the Settlement Agreement.
2. Creation of a State Cost Fund. The Settling Opioids Defendant and the Settling States agree to the creation of a fund to pay costs and expenses associated with litigation and investigations related to the opioids litigation (such fund, the "State Cost Fund"). The State Cost Fund shall be administered separately from any other funds for the payment of attorneys fees or costs in connection with the Settlement Agreement, including any common benefit fund, contingency fee fund for subdivision counsel, subdivision cost fund, or MDL expense fund. However, the State Cost Fund shall be administered jointly with similar "State Cost Funds" created in other Multistate Settlements after November 1, 2022; any state cost funds jointly administered in this manner shall be referred to as the "Joint State Cost Fund." To the extent permissible and feasible, the Joint State Cost Fund may also be jointly administered with any fund for reimbursement of states' litigation and investigation costs established by a bankruptcy plan, including the Mallinckrodt bankruptcy plan, any plans that may emerge from the bankruptcies of Purdue and Endo, and any similar bankruptcies of opioids defendants. To the extent feasible, the Joint State Cost Fund may also be jointly administered with the State Cost Funds established pursuant to the Distributors Multistate Settlement and the Janssen Multistate Settlement.
State Cost Fund Amount. The Settling Opioids Defendant shall pay into the State Cost Fund in the amount listed on, and on the schedule set forth in, Exhibit M (the "Settling Opioids Defendant's Contribution") for the purpose paying States' costs and expenses associated with to the opioid litigation.
4. Joint State Cost Fund Committee. A committee of Attorneys General or their designated representatives (such committee, the "Joint State Cost Fund Committee") shall oversee the Joint FH 11185097.1
State Cost Fund. The committee shall be appointed by the Settling State Members of the Enforcement Committee, who shall aim to (i) have equal representation between states that retained contingency fee outside counsel and states that did not retain contingency fee outside counsel with respect to opioids-related litigation, and (ii) maintain consistency of committee membership across state cost funds that compose the Joint State Cost Fund. The Settling State Members of the Enforcement Committee may by majority vote add to or change the composition of the Joint State Cost Fund Committee.
Joint State Cost Fund Administrator.
a. The Joint State Cost Fund Committee may select an administrator (the "Joint State Cost Fund Administrator"), who shall administer the Joint State Cost Fund and direct payments to Settling States according to the guidelines and directives of the Joint State Cost Fund Committee. While the expenses of the Joint State Cost Fund Administrator shall be reimbursable pursuant to the principles and guidelines listed below, the Joint State Cost Fund Administrator shall first rely on any separate funds that may be set aside for such purpose in any Multistate Settlement.
b. The Joint State Cost Fund Administrator shall be responsible, under the direction and supervision of the Joint State Cost Fund Committee, for receiving and reviewing applications for reimbursement from the Joint State Cost Fund. This may include the creation of an audit process to ensure the integrity of submissions, as well as reimbursement rules to incentivize accurate submissions.
6. State Cost Fund Guidelines and Principles.
a. Monies in the State Cost Fund shall be released without any delay to reimburse Settling States for documented costs incurred or paid in connection with litigation and investigation related to the opioid litigation. b. In allocating the Joint State Cost Fund, the Joint State Cost Fund Committee shall seek to comply with the following principles:
Each State Cost Fund should be used to reimburse costs incurred by States that are Settling States in the Multistate Settlement from which funds are paid. (However, the foregoing sentence does not preclude a Non -Settling State that joins a separate Multistate Settlement from participating in the Joint State Cost Fund with respect to contributions made by other Opioids Defendants.)
2. Funds in any State Cost Fund shall be primarily used to reimburse costs incurred prior to the date on which the relevant Multistate Settlement was first made available for participation to eligible States. Regardless of other factors considered in prioritizing payments, all costs incurred prior to January 1, 2023, shall be paid before any costs incurred after that date are paid.
FH 11185097.1
3. The Joint State Cost Fund shall prioritize the reimbursement of the following over reimbursement of any State's litigation or investigation costs:
• the reasonable costs of the Joint State Cost Fund
Administrator;
repayment of National Association of Attorneys General
grants made in connection with opioid litigation, without regard to when the grants were made;
• repayment of state -attributable costs of any mediator in connection with negotiations of a Multistate Settlement;
4. The Joint State Cost Fund shall seek to prioritize costs in the following order:
• litigation -related costs; then
• investigation -related costs; then
• settlement and negotiation related costs; then
• cost shares.
Costs incurred by a State's outside counsel that the State is contractually obligated to reimburse shall be treated as costs incurred by a State.
6. As between similar categories of costs (e.g., defendant -specific litigation -related costs), the Joint State Cost Fund shall first reimburse costs incurred by a State's outside counsel that the State is contractually obligated to reimburse out of its recovery, and then reimburse costs directly incurred by States.
7. The Joint State Cost Fund shall be available to reimburse only those costs which have not yet been reimbursed to a State from any other source, including any other fund set aside in a Multistate Settlement or bankruptcy plan for the reimbursement of costs or any individual state settlements.
The Joint State Cost Fund should not reimburse expenses that are expected to be reimbursed from another source, such as a bankruptcy debtor, unless such expected reimbursements do not come to fruition within a reasonable amount of time. This includes cost shares paid by states.
9. When coordinating among different state cost funds that each could FH 11185097.1
be used to reimburse a given expense, the Joint State Cost Fund Committee may set guidelines to equitably distribute
reimbursements across all state cost funds in a manner that prioritizes costs unlikely to be otherwise reimbursed to a similarly situated State.
10. The Joint State Cost Fund may deny reimbursement of costs, on either an individual basis or a categorical basis, that a supermajority (75%+) of the Joint State Cost Fund Committee determines to be unreasonable.
11. After all costs identified in the foregoing have been reimbursed, the remaining funds in the Joint State Cost Fund shall be distributed to states in proportion to their allocation of remediation payments in the Mallinckrodt bankruptcy plan. Such distribution shall be treated as a reimbursement for States' unenumerated costs of administering the Multistate Settlements and no subdivision shares shall be carved out of such disbursement, nor shall any attorney's fees be assessed against such distribution (unless individually agreed to by a State). c. In applying the foregoing principles, the Joint State Cost Fund Committee shall have the discretion to vary their application in order to ensure equity among similarly situated states and to facilitate the ease and speed of administering the Joint State Cost Fund. The Joint State Cost Fund Committee may also apply percentages to approximate costs attributable to a particular Opioids Defendant (or categories of Opioids Defendants) in a manner that seeks to treat similarly situated states equitably. d. The Joint State Cost Fund Committee shall establish guidelines for the submission and approval of expenses eligible for reimbursement from the Joint State Cost Fund, which guidelines may be coordinated and consolidated with any similar cost funds in other state opioid settlements for purposes of joint administration and efficiency.
e. Unless waived by the Joint State Cost Fund Committee, the Joint State Cost Fund Administrator shall, in accordance with such guidelines, receive from Settling States records sufficient to demonstrate the incurrence and payment of each expense.
£ Where the Joint State Cost Fund Committee determines by a supermajority vote (75%+) that outside counsel for a Settling State has failed to exercise reasonable diligence in reviewing submitted costs for allowability, and such failure has resulted in the reimbursement of unallowed costs to such outside counsel, the Committee shall have the discretion to reduce or recover payments made to such outside counsel in an amount calculated to incentivize the exercise of reasonable diligence.
7. State Undertakings. Each State submitting for reimbursement of costs from the Joint State Cost FH 11185097.1
Fund agrees:
a. to only submit costs allowable under this Joint State Cost Fund Agreement; b. to provide all back-up documentation that may be requested with respect to any submitted cost and to make itself available for any questions related to such costs;
c. to exercise reasonable diligence to ensure that all submitted costs are allowable under (1) this Joint State Cost Fund Agreement, (ii) the State's contract with its outside counsel, if relevant, (iii) state law, and (iv) the policies and procedures applicable to the State's retention of outside counsel, if relevant; and
d. to promptly return any excess payments made to the State or its outside counsel from the Joint State Cost Fund, including payments made for costs that were reimbursed from another source or are not allowable hereunder.
FH 11185097.1
EXHIBIT U
IRS Form 1098-F
H CORRECTED
FILER'S name, strool address, c" or town, state or province, country, ZIP I TMal armunt waquied to be paid OMS No. 1545-2284 or foreign postal code, and telephone no, $
2 Amount to be died for • Form 1098-F Fines, Penalties, and ffiviolation or potential vidation Rev, January 2022) Other Amounts [Appropriate Official]
[Designated State] Restilution,'rennediation For catendar year [Address] amount 20 22 1
FILER'S TIN PAYER'STIN 6 Date oforcerfagreement Copy B
xx-xxxxxxx 36-1924025 4 Compliance amount For Payer
PAYER'S name $ XX/X)U2022
Walgreen Co 0 Court or entl
SITW address iltrioludling apt. mr)
City or town, state or provincecountry, and ZIP or foreign Postal code Form 100-F pev. 1-2o22,i
7 Case number
8 Case nanre or names oi" ies to Wt, order, or agreement Nati—w-al Prestripfion Opiate Lftation
www,im.gov/F,ormIO98F Department of the Treasury Internet Revenue Service FH 11185097.1
EXHIBIT V
Intentionally Omitted
FH 11185097.1
Exhibit W
Non -Litigating Threshold Subdivisions Exhibit
FH 11185097.1
Exhibit X
Governor's Release of Opioid-Related Claims Pursuant to the Walgreens Settlement Agreement
1, [NAME], Governor of the [Commonwealth]/[State]/[Territory] of [Commonwealth]/[State]/[Territory], hereby authorize Attorney General [NAME] to settle and release, to the maximum extent of my power as Governor, all Released Claims of (1) all of [Commonwealth]/[State]/[Territory]'s past and present executive departments, agencies, divisions, boards, commissions and instrumentalities with regulatory authority to enforce state and federal controlled substances acts and (2) all of [Commonwealth]/[ State] /[Territory]'s past and present executive departments, agencies, divisions, boards, commissions and instrumentalities that have the authority to bring Claims related to Covered Conduct seeking money (including abatement and/or remediation) or revocation or suspension of a pharmaceutical distribution or dispensing license. The foregoing authorization is given in connection with Section XY of that certain settlement agreement dated as of December [9], 2022 setting forth the terms of settlement between and among Walgreens, on the one hand, and certain Settling States and certain Participating Subdivisions on the other hand. This release is intended to be a "release from a State's Governor" as contemplated in such section. Capitalized terms used herein and defined in such settlement agreement have the meanings given to them in such settlement agreement.
Governor of the [Commonwealth]/[ State] /[Territory] of [Commonwealth]/[State]/[Territory] Date:
FH 11185097.1