Yuba City City Council
April 4, 2023

The City has adopted a Reasonable Accommodations Policy that provides a procedure for receiving and resolving requests for accommodation to participate in this meeting. Please visit yubacity.net ADA & Accessibility Resources page. If you need assistance in order to attend the City Council meeting, or if you require auxiliary aids or services, e.g., hearing aids or signing services to make a presentation to the City Council, the City is happy to help. Accommodations should be requested as early as possible as additional time may be required in order to provide the requested accommodation; 72 hours in advance is suggested. Please contact City offices at (530) 822-4817 or (TTY: 530-822-4732), so such aids or services can be arranged. Requests may also be made by email at [email protected] or [email protected] or mail City Clerk, 1201 Civic Center Blvd, Yuba City, CA 95993.

AGENDA
APRIL 4, 2023

REGULAR MEETING

CITY COUNCIL, CITY OF YUBA CITY

AND THE BOARD OF DIRECTORS OF THE

TIERRA BUENA COMMUNITY SERVICES DISTRICT

CITY COUNCIL

CITY OF YUBA CITY
6:00 P.M. REGULAR MEETING

COUNCIL CHAMBERS/VIRTUAL
MAYOR ● Wade Kirchner
VICE MAYOR ● Shon Harris
COUNCILMEMBER ● Marc Boomgaarden
COUNCILMEMBER ● Michael Pasquale
COUNCILMEMBER ● Dave Shaw
CITY MANAGER ● Diana Langley
CITY ATTORNEY ● Shannon L. Chaffin
1201 Civic Center Blvd
Yuba City CA 95993
Wheelchair Accessible

AGENDA

REGULAR MEETING

CITY COUNCIL, CITY OF YUBA CITY

AND THE BOARD OF DIRECTORS OF THE

TIERRA BUENA COMMUNITY SERVICES DISTRICT

CITY COUNCIL - CITY OF YUBA CITY
APRIL 4, 2023
6:00 P.M. REGULAR MEETING

COUNCIL CHAMBERS/VIRTUAL
Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the City Clerk’s office at 1201 Civic Center Blvd., Yuba City, during normal business hours. Such documents are also available on the City of Yuba City’s website at www.yubacity.net, subject to staff’s availability to post the documents before the meeting.

The Council Chambers will be open for public attendance and participation. The meeting will also be live streamed for public viewing, but not participation, at the following link:
https://us06web.zoom.us/webinar/register/WN_eoJXOOTcRJiREZeMGolnBQ. Emailed comments sent to [email protected] at least 24 hours before the meeting will be distributed to the City Council prior to the meeting. Please identify the Agenda item(s) addressed by the comments.

Public Comment:

Any member of the public wishing to address the City Council on any item listed on the closed session agenda will have an opportunity to present testimony to the City Council in the Council Chamber prior to the City Council convening into closed session. Comments from the public will be limited to three minutes. No member of the public will be allowed to be present once the City Council convenes into closed session.

Regular Meeting
Call to Order
Roll Call
__ Mayor Kirchner
__ Vice Mayor Harris
__ Councilmember Boomgaarden
__ Councilmember Pasquale
__ Councilmember Shaw
Invocation/Inspiration
Pledge of Allegiance to the Flag

City Attorney's Report on Closed Session Items, City Attorney Shannon Chaffin Agenda Modifications/Approval of Agenda
Ceremonial Presentations

1. Ethan Conrad Properties Commendation

2. National Public Safety Telecommunications Week Proclamation Public Communication

3. Appearance of Interested Citizens
You are welcome and encouraged to participate in this meeting. Public comment is taken on action items appearing on the Consent Calendar or Business Items on the Agenda when they are called. Public comment on any other items within the scope of the City’s jurisdiction, including items not listed on the Agenda will be considered at this time. Public comment is limited to three minutes per speaker. Members of the public submitting written requests at least 24 hours prior to the meeting will be allotted five minutes to comment per speaker. Repetitive comments may be limited, and large groups are encouraged to select representatives to express the opinions of the group.

Consent Calendar
All matters listed under Consent Calendar are considered to be routine and can be enacted in one motion. There will be no separate discussion of these items prior to the time that Council votes on the motion unless members of the City Council request specific items to be discussed or removed from the Consent Calendar for individual action.

4. Minutes of the March 21, 2023 meeting
Recommendation: Approve the mintues of the March 21, 2023 meeting

5. Opposition of California Assembly Bill 742 - Use of Police K-9's Recommendation: Adopt a Resolution opposing proposed California Assembly Bill 742, which if passed, would remove the ability of California law enforcement agencies to utilize Police K-9's as a non-lethal force option

6. Support of California Senate Bill 14 - Human Trafficking - Serious Felony Recommendation: Adopt a Resolution supporting Senate Bill 14, which if passed, would make human trafficking a serious felony

7. Yuba City and Sutter County Planning Commissioner Appointments Recommendation: A. Confirm the appointment of Justine Gill, Yuba City Planning Commissioner, to the Sutter County Planning commission and forward the recommendation to the Sutter County Board of Supervisors.

B. Confirm the anticipated reappointment of Karri Campbell to the Yuba City Planning Commission for a second year subject to confirmation by the Sutter County Board of Supervisors.

8. Tierra Buena Community Services District – Dissolution Recommendation: Adopt a Resolution of the City Council of the City of Yuba City for itself and in its capacity as the Board of Directors of the Tierra Buena Community Services District requesting the Sutter County Local Agency Formation Commission undertake proceedings for the dissolution of the district

9. 3300 Brandywine Drive Well Demolition – Sale of Surplus Property Recommendation: Adopt a Resolution authorizing the Public Works Director to execute all documents necessary to transfer real property interest in the City’s former Well #21 property to the owner of the adjacent parcel to the west (3300 Brandywine Drive, APN 62- 180-046). [no address, APN 62-180-043]

10. Deed Restriction - Didar S. Bains Park
Recommendation: Adopt a Resolution authorizing the City Manager to execute a Deed Restriction for the Didar S. Bains Park Parcel, APN 62- 310-021 on behalf of the City

11. National Opioid Settlement
Recommendation:

A. Approve Settlement Agreements and Participation Forms for the City’s participation in the National Opioid
Settlement Agreements with Teva, Allergan, Walmart,
Walgreens, and CVS.

B. Approve the California State-Subdivision Agreements
Regarding Distribution and Use of Settlement Funds
relating to the National Opioid Settlement Agreements
with Teva, Allergan, Walmart, Walgreens, and CVS.

C. Adopt a Resolution approving and authorizing the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements with Teva, Allergan, Walmart, Walgreens, and CVS, including
signing necessary documents and transmittal thereof as
necessary.

D. Authorize the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements, including, but not limited to, the transmittal of the executed documents in Recommendations A and B
and all future settlements (as necessary and applicable) through the National Opioid Settlements process
Business Items

12. Yuba-Sutter Economic Development Corporation
2022 CEDS Annual Performance Evaluation and CEDS Appendices I, IV, and V updates
Recommendation: Adopt a Resolution approving the 2022 Comprehensive Economic Development Annual Performance Report and the
updated Appendices I, IV, and V as prepared by the Yuba-Sutter Economic Development Corporation and authorize its submittal to the United States Department of Commerce, Economic
Development Administration

13. Unfunded Accrued Pension Liability Management Policy Recommendation: Adopt a Resolution to approve the Unfunded Accrued Pension Liability Management Policy for the City of Yuba City
Future Agenda Items

14. Future Agenda Items

- Councilmember Pasquale
- Councilmember Boomgaarden
- Councilmember Shaw
- Vice Mayor Harris
- Mayor Kirchner
Reports and Communications
The following reports and communication items are provided for the Council’s information. No action can be taken on items under this section unless the Council agrees to include it on a subsequent agenda

15. City Manager's Report

16. City Council Reports
Adjournment

Commendation
of the City Council
Ethan Conrad Properties
Owner of the Yuba Sutter Marketplace
Commendation to be presented at the Council Meeting

Proclamation
of the City Council
Yuba City Police Department
Communications Division
National Public Safety Telecommunicators Week
Proclamation will be presented at the
Council Meeting

CITY OF YUBA CITY
Public Communication
Members of the public may address the City Council on items of interest that are within the City’s jurisdiction. Individuals addressing general comments are encouraged to limit their statements.

Procedure
You are welcome and encouraged to participate in this meeting. Complete a Speaker Card located in the lobby and give to the Clerk, public comment is taken on action items appearing on the Consent Calendar or Business Items on the Agenda when they are called. Public comment on any other items within the scope of the City’s jurisdiction, including items not listed on the Agenda, will be considered at this time.

When a matter is announced, wait to be recognized by the Mayor to provide your comments to the Council. Comments should begin by providing your name and place of residence. A three minute limit is requested when addressing Council.

Request for additional time to address Council
Members of the public submitting written requests at least 24 hours prior to the meeting will be allotted 5 minutes to comment per speaker. Repetitive comments may be limited, and large groups are encouraged to select representatives to express the opinions of the group.

Procedure
When requesting to comment, please indicate your name and the topic and mail to:

City of Yuba City
Attn: City Clerk
1201 Civic Center Blvd
Yuba City CA 95993
Or email to:

Jackie Sillman, City Clerk
[email protected]

Agenda Item 4

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Administration Department
Presentation By: Ciara Wakefield, City Clerk Administrator Summary
Subject: Minutes of the March 21, 2023 meeting
Recommendation: Approve the mintues of the March 21, 2023 meeting Fiscal Impact: None
Attachments:

1. 03-21-2023 - Regular Meeting Minutes (DRAFT)
Prepared By: Submitted By:

Ciara Wakefield
City Clerk Admininstrator
Diana Langley
City Manager

ATTACHMENT 1

MINUTES (DRAFT)

REGULAR MEETING

CITY COUNCIL - CITY OF YUBA CITY
MARCH 21, 2023
6:00 P.M. REGULAR MEETING

COUNCIL CHAMBERS/VIRTUAL
Regular Meeting
Call to Order
The Regular Meeting of the City Council called to order by Mayor Kirchner at 6:00 PM Roll Call

Present: Mayor Kirchner and Councilmembers Boomgaarden, Harris, Pasquale and Shaw

Absent: None
Invocation/Inspiration
Rev. Rick Laughman from St. James of Jerusalem Episcopal Church Pledge of Allegiance to the Flag
Pastor Michael Ciociola, Calvary Christian Center – Yuba City Agenda Modifications/Approval of Agenda
No changes were made
Ceremonial Presentations

1. Women's Day Recognition
Mayor Kirchner and Councilmember presented certificates to:

Justine Gill Jackie Bumpus
Eileen Safford Angie Gates

2. Harkey House 40th Anniversary Proclamation
Mayor Kirchner presented a proclamation to Bob and Lee Jones, Owners of the Harkey House Bed and Breakfast Inn

3. Project Hope Presentation
Presentation by: Chris Champlin, President – Adventist Health and Rideout

Public Communication

4. Appearance of Interested Citizens
Heather Esemann spoke
Consent Calendar
Vice-Mayor Harris moved and Councilmember Shaw seconded the motion to:

5. Approve minutes of the March 7 and 14, 2023 meeting
Approve the minutes from March 7 and 14, 2023

6. Presentation of Investment Report - Quarter Ended December 31, 2022 Note and file quarterly investment report

7. Fiscal Year 22/23 Mid-Year Budget Adjustments
Adopt Resolution 23-033 authorizing the Finance Director to make supplemental appropriations and related transfers for the following items:

A. Temporary Relief Public Safety Dispatchers - Add three (3) parttime Relief Public Safety Dispatchers to the Communications Division budget in the amount of $5,800 to Expenditure Account No. 2170-61310;
B. Planning Manager - Add a Planning Manager position back into the Planning Division budget;
C. Park Equipment Donation - Receipt and expenditure of the Didar S. Bains Park equipment donation from the Early Risers Kiwanis Club in the amount of $33,000 to General Fund CIP Revenue Account No. 301-49010 and expenditure account no. 901207- 65501;
D. Contract Janitorial Services - Increase budget amounts from unallocated General Fund Account 301 for contract janitorial services to Account Nos. 5120-63603 (Senior Center) - $18,400, 5130-63603 (Gauche Aquatic Park) - $5,400, and 7410-63601 (Sutter Animal Services Authority) - $18,900.

8. Appointments to the City of Yuba City Youth Commission Approve the Recommendations for Appointments to the Youth Commission The motion was passed with a unanimous vote
Business Items

9. Yuba City Lighting and Landscape Maintenance District No. 6, Zone of Benefit A_1 (Spirit Drive Parcel Map)

Mayor Kirchner opened a Public Hearing
No public comment
Mayor Kirchner closed the Public Hearing
Councilmember Shaw moved and Councilmember Boomgaarden seconded the motion to:

Adopt Resolution 23-034 confirming and ordering annexation of the Parcel associated with the Spirit Drive Parcel Map Development, APN 63-010-141, into existing Yuba City Lighting and Landscape Maintenance District No. 6, Zone of Benefit A_1 and establishing a levy of assessments for the annexed territory The motion was passed with a unanimous vote

10. Bridge Street Widening – Gray Avenue to Cooper Avenue Project (Amendment to Construction Management Professional Services Agreement) Councilmember Shaw moved and Councilmember Pasquale seconded the motion to:

Adopt Resolution 23-035 which takes the following actions:

A. Authorize Amendment No. 1 to the Professional Services Agreement with Knight CM Group of Gold River, CA for Construction Management and Inspection Services in the amount of $458,300.00, for a total contract amount of $1,272,725.36, subject to material terms, with the finding that it is in the best interest of the City
B. Authorize the Finance Director to make a supplemental appropriation in the amount of $458,300.00 from unallocated Transportation Development Act funds to CIP Account No. 911187 (Bridge Street Widening) The motion was passed with a unanimous vote

11. Walton Avenue Improvements Preliminary Engineering Services (Award) Heather Esemann spoke
Vice-Mayor Harris moved and Councilmember Shaw seconded the motion to:

Adopt Resolution 23-036 awarding a Professional Services Agreement to MHM Inc. of Marysville, CA for the Walton Avenue Improvements Preliminary Engineering Services in the amount of $263,844.38, subject to material terms, with the finding that it is in the best interest of the City The motion was passed with a unanimous vote

12. Merriment Village Apartments - Proposed Habitat for Humanity Homekey 3.0 Project
Lawrence Mertz spoke
Council received a presentation related to Habitat for Humanity's proposed Merriment Village Apartment Project. Staff will bring this item back for further consideration at a future meeting.

Future Agenda Items

13. Future Agenda Items
No suggestions were made
Reports and Communications

14. City Manager's Report

15. City Council Reports
- Councilmember Boomgaarden
- Councilmember Pasquale
- Councilmember Shaw
- Vice Mayor Harris
- Mayor Kirchner
Adjournment
Mayor Kirchner adjourned the Regular Meeting of the City Council at 8:33 PM _____________________________
Wade Kirchner, Mayor
ATTEST:
____________________________
Ciara Wakefield, Deputy City Clerk

Agenda Item 5

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Police Department
Presentation By: Brian Baker, Police Chief
Summary
Subject: Opposition of California Assembly Bill 742 - Use of Police K-9's Recommendation: Adopt a Resolution opposing proposed California Assembly Bill 742, which if passed, would remove the ability of California law enforcement agencies to utilize Police K-9's as a non-lethal force option
Fiscal Impact: None
Purpose:

To oppose Assembly Bill 742, which if passed, would remove the ability of California law enforcement agencies to utilize Police K-9's as a non-lethal force option.

Council's Strategic Goal:

This item supports the City Council's goal of Public Safety.

Background:

On February 13, 2023, Assemblyman Corey Jackson (D-Moreno Valley) introduced California Assembly Bill 742 (AB 742) to "prohibit the use of unleashed police canine by law enforcement to apprehend a person, and any use of a police canine for crowd control. The bill would prohibit law enforcement agencies from authorizing any use or training of a police canine that is inconsistent with the bill." AB 742 proposes to add Section 13653 to the California Penal Code and would include the following:
13653.
(a) It is the intent of the Legislature to prevent the use of police canines for the purpose of arrest, apprehension, or any form of crowd control.
(b) A peace officer shall not use an unleashed police canine to arrest or apprehend a person. (c) A police canine shall not be used for crowd control at any assembly, protest, or demonstration. (d) A police canine shall not be used in any circumstance to bite. (e) A law enforcement agency shall not authorize any use or training of a police canine that is inconsistent with this section.
(f) This section shall not be interpreted as to prevent the use of police canines by law enforcement for the purpose of search and rescue, explosive detection, and narcotics detection that do not involve

biting.

Analysis:

Police K-9 units are an important non-lethal force option and an effective de-escalation tool. K-9 units may be deployed in situations to limit risk and danger to their human counterparts, and they are the only remaining force option which can be "called off" after being deployed.

The Yuba City Police Department currently has three (3) K-9 officers, and has had a long history of a successful K-9 program. The K-9 officers have been an effective non-lethal tool in many situations.

Yuba City Police Department staff strongly oppose AB 742 and encourage the City Council to do the same.

Fiscal Impact:

None associated with opposing AB 742. Should AB 742 pass, then staff will have to evaluate the alternatives and costs to modifying the current K-9 program and evaluating other non-lethal sources for apprehension.

Alternatives:

Do not oppose AB 742.

Recommendation:

Adopt a Resolution opposing proposed California Assembly Bill 742, which if passed, would remove the ability of California law enforcement agencies to utilize Police K-9's as a non-lethal force option.

Attachments:

1. AB 742 Opposition Resolution
Prepared By: Submitted By:

Diana Langley
City Manager
Diana Langley
City Manager

ATTACHMENT 1

RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY OPPOSING PROPOSED CALIFORNIA ASSEMBLY BILL 742, WHICH IF PASSED, WOULD

REMOVE THE ABILITY OF CALIFORNIA LAW ENFORCEMENT AGENCIES TO UTILIZE POLICE K-9’S AS A NON-LETHAL FORCE OPTION
WHEREAS, on February 13, 2023, Assemblyman Corey Jackson (D-Moreno Valley) introduced California Assembly Bill 742 (AB 742) which, if adopted, would prohibit the use of police K-9 units for apprehension and crowd control, as specified in the bill; and WHEREAS, the City Council actively opposes AB 742 as it attempts to eliminate a lawful, effective, and legitimate non-lethal force option; and
WHEREAS, the City Council advocates for and promotes the use of controlled and necessary non-lethal force options versus lethal force options when appropriate; and WHEREAS, the City Council understands the value of police K-9’s and the invaluable non-lethal force option that police K-9’s provide for police officers.

NOW, THEREFORE, the City Council of the City of Yuba City does hereby resolve as follows:

1. Police K-9’s provide an effective de-escalation tool and non-lethal force option for California law enforcement agencies.

2. The City of Yuba City strongly opposes AB 742.

The forgoing Resolution of the City Council of the City of Yuba City was duly introduced, passed and adopted at a regular meeting thereof held on the 4th day of April, 2023.

AYES:

NOES:

ABSENT:

Wade Kirchner, Mayor
ATTEST:

Ciara Wakefield, Deputy City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
________________________
Shannon Chaffin
City Attorney

Agenda Item 6

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Police Department
Presentation By: Brian Baker, Police Chief
Summary
Subject: Support of California Senate Bill 14 - Human Trafficking - Serious Felony Recommendation: Adopt a Resolution supporting Senate Bill 14, which if passed, would make human trafficking a serious felony
Fiscal Impact: None
Purpose:

To support Senate Bill 14, which if passed, would include human trafficking in the lists of crimes that are defined as serious under California law, making the crime a strike under the Three Strikes law.

Council's Strategic Goal:

This item supports the City Council's goal of Public Safety.

Background:

On December 5, 2022, Senators Grove, Caballero, and Rubio introduced Senate Bill 14 (SB 14), which was later amended on February 23, 2023, to amend the Penal Code to make human trafficking a serious felony. Penal Code section 1192.7(c) lists the 42 crimes that are defined as serious crimes under California law, and are considered a strike under California's Three Strikes law. Human trafficking is currently defined as a non-serious crime which means that the act of human trafficking cannot be considered a strike under California's Three Strikes law.

According to a Fact Sheet prepared for SB 14 by Senator Grove's office, California consistently ranks number one in the nation in the number of human trafficking cases reported to the National Human Trafficking Hotline. The California Attorney General notes that California is one of the largest sites for human trafficking in the United States.

Human trafficking often exploits children and young adults, which can lead to long-term physical and psychological trauma.

Analysis:

SB 14, if passed, will amend the Penal Code to add human trafficking to the list of serious crimes under

California law, thereby making it a strike offense, and will make those convicted subject to the same penalties that apply to all serious crimes.

Fiscal Impact:

None.

Alternatives:

Do not support SB 14.

Recommendation:

Adopt a Resolution supporting Senate Bill 14, which if passed, would make human trafficking a serious felony.

Attachments:

1. SB 14 Support Resolution 4-4-23

2. SB 14 Fact Sheet
Prepared By: Submitted By:

Diana Langley
City Manager
Diana Langley
City Manager

ATTACHMENT 1

RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY SUPPORTING PROPOSED CALIFORNIA SENATE BILL 14, WHICH IF PASSED, WOULD

MAKE HUMAN TRAFFICKING A SERIOUS FELONY, THEREBY MAKING THE CRIME A

STRIKE UNDER THE THREE STRIKES LAW
WHEREAS, on December 5, 2022, Senator Shannon Grove (R-Bakersfield), Senator Anna Caballero (D-Merced), and Senator Susan Rubio (D-Baldwin Park) introduced California Senate Bill 14 (SB 14) and later amended it on February 23, 2023, which, if adopted, would make human trafficking a serious felony under California law; and
WHEREAS, human trafficking is currently defined as a non-serious crime which means that the act of human trafficking cannot be considered a strike under California’s Three Strikes law; and WHEREAS, under SB 14, Penal Code section 1192.7(c) would be amended to define human trafficking as a serious felony, thereby making the crime a strike under California’s Three Strikes law; and
WHEREAS, the City Council actively supports SB 14 as human trafficking often exploits children and young adults, which can lead to long-term physical and psychological trauma.

NOW, THEREFORE, the City Council of the City of Yuba City does hereby resolve as follows:

1. Human trafficking should be considered a serious felony under California law.

2. The City of Yuba City strongly supports SB 14.

The forgoing Resolution of the City Council of the City of Yuba City was duly introduced, passed and adopted at a regular meeting thereof held on the 4th day of April, 2023.

AYES:

NOES:

ABSENT:

Wade Kirchner, Mayor
ATTEST:

Ciara Wakefield, Deputy City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
________________________
Shannon Chaffin
City Attorney

ATTACHMENT 2

SB 14
Human Trafficking – Serious Felony
Office of Senator Shannon Grove, Room 7150 Page 1

SUMMARY
SB 14 will include human trafficking in the lists of
crimes that are defined as serious under California law, making the crime a strike under the Three Strikes law.

SB 14 will help strengthen protections for the millions of victims of sex and labor trafficking.

PROBLEM
Currently human trafficking is defined as a non-serious crime which means the act of human trafficking cannot
be considered a strike under California’s Three Strikes law.

California consistently ranks number one in the nation
in the number of human trafficking cases reported to
the National Human Trafficking Hotline. The
California Attorney General notesthat California is one of the largest sites for human trafficking in the United States, recognizes the serious nature of this crime, and has defined it as “modern day slavery.” “Human
trafficking is among the world's fastest growing
criminal enterprises and is estimated to be a $150
billion-a-year global industry. It is a form of modern
day slavery that profits from the exploitation of our
most vulnerable populations.”
(https://oag.ca.gov/human-trafficking).

Children as young as 11 and 12 years old are exploited
by traffickers who force them to sell their bodies for the trafficker’s financial gain. Trafficking victims are
frequently forced to have sex with upwards of 15
strangers a day or face beatings at the hands of their
traffickers. Trafficking victims must meet daily sex or labor quotas before they are permitted to sleep, eat, rest, or receive other basic life necessities. Traffickers use a combination of physical violence and psychological
manipulation to gain compliance over their victims.

These tactics include death threats to the victim, threats to harm the victim’s family, food deprivation, physical beatings, rape, and burning the victim, among other
acts of violence. Trafficking victims are treated as
property by their traffickers and are subject to their
physically exhausting and exploitive demands. In
many instances, traffickers will also brand their victims with facial or body tattoos to signify their ownership
over the victim and the victim’s status as mere
property.

Human trafficking victims often suffer long-term
physical and psychological trauma. The American
Academy of Pediatrics recognized the severe trauma
human trafficking victims suffer and stated the
following, “violence and psychological manipulation
are common, and victims are at increased risk of injury, sexual assault, infectious diseases, substance misuse,
untreated chronic medical conditions, malnutrition,
post-traumatic stress disorder (PTSD), major
depression and other mental health disorders,
homicide, and suicide.” The US Department of Health
and Human Services Administration on Children,
Youth, and Families further noted, “young people who
are sexually trafficked typically experience physical
violence, both at the hands of their traffickers and those who purchase sex, and often acquire sexually
transmitted infections (STIs) through their
exploitation.”

EXISTING LAW
The Penal Code defines the crimes that are considered
serious under California law. Penal Code section
1192.7(c) lists the 42 crimes that are defined as serious crimes under California law. Serious crimes are
considered a strike under California law. Existing
California law defines human trafficking as a nonserious crime.

SOLUTION
SB 14 amends the Penal Code to add human trafficking
to the list of serious crimes under California law. SB
14 also classifies human trafficking as a strike offense and makes those convicted of this crime subject to the
same penalties that apply to all serious crimes. It is

SB 14
Human Trafficking – Serious Felony
Office of Senator Shannon Grove, Room 7150 Page 2
about time that California starts to prosecute these
horrendous acts as serious crimes.

CONTACT:

Elizabeth Watson
(916) 651-4012
[email protected]

Agenda Item 7

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Development Services Department
Presentation By: Doug Libby, Deputy Director of Development Services Summary
Subject: Yuba City and Sutter County Planning Commissioner Appointments Recommendation: A. Confirm the appointment of Justine Gill, Yuba City Planning Commissioner, to the Sutter County Planning commission and forward the recommendation to the Sutter County Board of Supervisors.

B. Confirm the anticipated reappointment of Karri Campbell to the Yuba City Planning Commission for a second year subject to confirmation by the Sutter County Board of Supervisors.

Fiscal Impact: None.

Purpose:

To appoint a Planning Commissioner to the Sutter County Planning Commission in accordance with the Yuba City Municipal Code and Planning Commission By-Laws and to confirm the anticipated reappointment of Karri Campbell to Yuba City Planning Commission.

Council’s Strategic Goal:

This item does not directly meet one of the Council’s strategic goals but is necessary to comply with Municipal Code Section 8-1.02 and Sutter County Ordinance Code Chapter 72.

Background:

Both the Yuba City and Sutter County Codes require that a Planning Commissioner from each jurisdiction sit on each other’s Planning Commission. Additionally, through the Election of Officers proceedings established in the Planning Commission Bylaws, the Mayor is to annually make a recommended appointment of an active Yuba City Planning Commissioner, to the Sutter County Planning Commission.

It is beneficial for the community when the City and County governmental bodies cooperate on various projects that impact both jurisdictions. Having a member of the Yuba City Planning Commission serving as a representative on the Sutter County Planning Commission and a member of the Sutter County Planning Commission serving on the Yuba City Planning Commission ensures that the interests, perspectives and priorities of each jurisdiction are voiced and considered, thus resulting in more informed decision making. These projects may include regional environmental analysis, the expansion

of infrastructure, the conversion of agricultural land to urban uses, and the distribution of natural resources.

After consideration, Mayor Kirchner has selected Planning Commissioner Justine Gill to serve as the representative on the Sutter County Planning Commission. Although Commissioner Gill is a new Planning Commissioner, she was raised in the community and has served on other Commissions and will bring a well-rounded perspective to the Sutter County Planning Commission.

On March 15, 2023, the Sutter County Planning Commission nominated Supervisorial District 4 Planning Commissioner Karri Campbell to the Yuba City Planning Commission for a second year.

Commissioner Campbell has demonstrated a depth of planning knowledge and has provided a valuable perspective on the City Planning Commission. It is anticipated this nomination will be taken to the Board of Supervisors for confirmation in late April or early May. This reappointment must be approved by the City Council. Staff recommends conditional confirmation of this anticipated reappointment to avoid bringing forward a similar item in the near future.

Analysis:

Municipal Code Section 8-1.02 and Yuba City Planning Commission By-Laws require the Planning Commission’s recommendation be transmitted to the City Council who, in turn, shall forward that recommendation to the Sutter County Board of Supervisors for consideration. Term limits for the appointment end February 28th of each year.

Fiscal Impact:

None.

Alternatives:

Do not confirm the appointment and the Council should provide direction of how it desires to proceed.

Recommendations:

A. Confirm the appointment of Justine Gill, Yuba City Planning Commissioner, to the Sutter County Planning commission and forward the recommendation to the Sutter County Board of Supervisors.

B. Confirm the anticipated reappointment of Karri Campbell to the Yuba City Planning Commission subject to confirmation by the Sutter County Board of Supervisors.

Attachments:

1. Justine Gill Planning Commissioner Application
Prepared By: Submitted By:

Doug Libby, AICP
Deputy Director of Development Services
Diana Langley
City Manager

ATTACHMENT 1

Agenda Item 8

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council; for itself and as the Board of the Tierra Buena Community Services District
From: Public Works Department
Presentation By: Ben Moody, Public Works & Development Services Director Summary
Subject: Tierra Buena Community Services District – Dissolution Recommendation: Adopt a Resolution of the City Council of the City of Yuba City for itself and in its capacity as the Board of Directors of the Tierra Buena Community Services District requesting the Sutter County Local Agency Formation Commission undertake proceedings for the dissolution of the district Fiscal Impact: $3,000 – Account No. 1155 (Stonegate Treatment Works Demolition) Purpose:

To facilitate the eventual disposal of surplus property located at 3086 Stonegate Drive (APN 62-020- 064).

Council’s Strategic Goal:

This item addresses the City Council’s Strategic Goal of operating our City government in a fiscally responsible manner.

Background:

The Tierra Buena Community Services District (District) was originally formed by Sutter County to provide wastewater services to the Stonegate subdivision, which was originally located in the County.

The development consisted of approximately 96 single family residences between Jefferson Avenue on the north, Monroe Road on the south, and east of Royo Ranchero Drive to the Live Oak Canal (see Attachment 2).

In 2004, the Stonegate subdivision was annexed to the City as part of annexation proceedings of the larger Tierra Buena area. The City, pursuant to Resolution No. 04-039, consented to the transfer of the District to the City as a Subsidiary District, with the City Council acting as the Board of Directors for the District. The District has limited powers for the purpose of collection, treatment and disposal of sewage waste generated by the District’s residents only. The District no longer provides such services, as the Stonegate subdivision is now connected to the City’s wastewater system. The District owns one piece of property located at 3086 Stonegate Drive (APN 62-020-064; PIN 062020064000) and has no liabilities. The District does not receive any share of the property taxes and has no revenues.

The District-owned property at 3086 Stonegate Drive is the site of the former Stonegate wastewater treatment works. The treatment works have primarily been abandoned, however lined disposal ponds, underground tanks, an outbuilding, and other miscellaneous facilities remain. The property is approximately 2.7 acres and zoned for low density residential development. It is in the City’s best interest to dispose of this property, in accordance with Surplus Land Act, to reduce associated ongoing liabilities and utilize the land for the highest and best use. To facilitate disposal of the property the District must first be dissolved. Earlier last year, Council asked staff to look into dissolving the District.

Analysis:

The procedure to dissolve the District is pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. The procedure commences with the District’s Board of Directors adopting a Resolution of Application requesting the Sutter County Local Agency Formation Commission (LAFCo) commence dissolution proceedings. The Resolution will request that LAFCo dissolve the District and transfer any assets to the City.

All costs to complete the dissolution, including LAFCo, State Board of Equalization and City’s costs will need to be paid by the City, as the District has no funds. Following adoption of the Resolution, the City Manager will file the Application with LAFCo and pay a processing fee of $3,000.

The City Attorney’s office has been coordinating with City Staff and the Executive Officer of LAFCo regarding this matter. Following receipt of the application, LAFCo will process the dissolution of the District, which could take up to six months. Part of the process will include notice to residents and a public hearing on the dissolution. However, since this is a simple dissolution, with no property tax exchange agreements, it could be completed within an earlier timeframe.

Fiscal Impact:

Fees associated with the dissolution are estimated to be approximately $3,000. Minimal staff time to coordinate the process will also be required. These costs will need to be paid for by the City, as the District has no revenues. The costs will be paid for through Capital Improvement Program Account No. 1155 (Stonegate Treatment Works Demolition). There is approximately $470,000 available in this account.

The City will receive the single property owned by the District and then will begin coordination to dispose of the property in accordance with the Surplus Land Act. Disposal of the property may require demolition of the remaining treatment works facilities, which would have additional fiscal impacts that would be presented to Council at a later date.

Alternatives:

1. Do nothing. In this case, the District will retain ownership of the property and City staff will continue to be responsible for maintenance and liability.

2. Have the District sell the property it owns and then dissolve.

Recommendation:

Adopt a Resolution of the City Council of the City of Yuba City for itself and in its capacity as the Board of Directors of the Tierra Buena Community Services District requesting the Sutter County Local Agency Formation Commission undertake proceedings for the dissolution of the district.

Attachments:

1. Resolution - Tierra Buena Community Services District – Dissolution with Exhibits

2. Location Map
Prepared By: Submitted By:

Kevin Bradford
Deputy Public Works Director – Engineering
Diana Langley
City Manager

ATTACHMENT 1

1 RESOLUTION NO. ____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY

ACTING FOR ITSELF AND IN ITS CAPACITY AS THE BOARD OF

DIRECTORS OF THE TIERRA BUENA COMMUNITY SERVICES DISTRICT

ADOPTING A RESOLUTION OF APPLICATION TO THE SUTTER COUNTY

LOCAL AGENCY FORMATION COMMISSION REQUESTING

PROCEEDINGS TO DISSOLVE THE TIERRA BUENA COMMUNITY

SERVICES DISTRICT
WHEREAS, the Tierra Buena Community Services District (the “District”) is a duly organized district and a Subsidiary District of the City of Yuba City (the “City”); and WHEREAS, the District was originally formed to provide wastewater services to the Stonegate subdivision, which was originally located in the unincorporated County of Sutter prior to annexation to the City; and
WHEREAS, the District no longer provides wastewater services for the Stonegate subdivision because the subdivision is now connected to the City’s municipal wastewater system; and
WHEREAS, the District desires to initiate proceedings pursuant to the Cortese-Knox Local Government Reorganization Act of 2000, commencing with Section 56000 of the California Government Code, for the dissolution of the District and the transfer of all its assets upon dissolution to the City; and
WHEREAS, at the time and in the manner provided by law, the City Clerk gave notice of the date, time, and place of a public hearing by the District Board of Directors to initiate these proceedings; and
WHEREAS, a notice of intent to adopt this resolution of application has been given to each interested and subject agency (i.e., the City); and
WHEREAS, there are no affected cities or districts within the meaning of Subdivision (2) of Section 56700 of the Government Code other than the City; and WHEREAS, the territory of the District proposed to be dissolved is inhabited and a map and description of the boundaries of the property are set forth in Exhibits A and B attached hereto and by this reference incorporated herein; and
WHEREAS, this proposal is consistent with the sphere of influence of the District and the City; and
WHEREAS, it is desired to provide that the proposed dissolution be subject to the following terms and conditions:

2 1. All costs incurred to complete the District dissolution, including but not limited to, Sutter County Local Agency Formation Commission (LAFCo), Sutter County, and the State Board of Equalization costs will be born by the City.

2. All property and assets of the District shall be transferred to the City, as Successor Agency; and
WHEREAS, the reasons for the proposed District dissolution is as follows: The District no longer provides wastewater services to the Stonegate subdivision because the development has connected to the City’s municipal wastewater system and the District no longer provides any services.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Yuba City hereby resolves and orders as follows:

Section 1. That the recitals above are true and correct and incorporated herein by this reference.

Section 2. That the District requests LAFCo commence proceedings to dissolve the District and transfer any remaining assets to the City of Yuba City, as the successor agency.

Section 3. This resolution of application to dissolve the District is hereby approved for submission and execution by the Mayor, as Chair of the Board of the District.

Section 4. That the City hereby authorizes payment of the filing fee for the District application, and any other fees related to the dissolution.

Section 5. This Resolution shall be effective immediately upon passage. The City Clerk Administrator is hereby directed to forward a certified copy of this resolution, together with the application for dissolution and any fees, to LAFCo.

The foregoing resolution was duly and regularly introduced, passed, and adopted by the City Council of the City of Yuba City at a regular meeting thereof held on the 4th day of April, 2023, by the following vote:

AYES:

NOES:

ABSENT:
__
Wade Kirchner, Mayor
ATTEST:

Ciara Wakefield, Deputy City Clerk

3 APPROVED AS TO FORM
COUNSEL FOR YUBA CITY:

Shannon Chaffin, City Attorney
Aleshire & Wynder, LLP
Exhibit “A” – Map of the District
Exhibit “B” – Description of the District
I, Ciara Wakefield, Deputy City Clerk of the City of Yuba City, California, DO HEREBY CERTIFY that the foregoing is a true and accurate copy of the Resolution passed and adopted by the City Council of the City of Yuba City on the date and by the vote indicated herein.

EXHIBIT A

JEFFERSON AVE

LA MANTIA DR
R
O
Y
O
R
A
N
C
HER
O
R
D

MONROE DR MONROE RD

PARIS WAY

TEAL HOLLO
W
D
R

YORKTOWN DR

KENNEDY DR

JOHN PL
C
YND
A LN

JOHN FREEMONT WAY
T
O
MBI W
AY
®

44.18 acres

EXHIBIT B

APN ADDRESS
62-290-048 3170 STONEGATE DR
62-270-046 3050 STONEGATE DR
62-290-025 3110 STONEGATE DR
62-290-049 3240 GRANITE DR
62-290-047 3162 STONEGATE DR
62-290-044 3119 MONROE RD
62-290-043 3129 MONROE RD
62-290-042 3139 MONROE RD
62-290-037 3209 MONROE RD
62-290-050 3224 GRANITE DR
62-270-047 3040 STONEGATE DR
62-270-044 3070 STONEGATE DR
62-270-045 3060 STONEGATE DR
62-270-048 3030 STONEGATE DR
62-270-012 3010 STONEGATE DR
62-270-011 3004 STONEGATE DR
62-290-024 3120 STONEGATE DR
62-290-023 3130 STONEGATE DR
62-290-045 3140 STONEGATE DR
62-270-049 3020 STONEGATE DR
62-270-043 3080 STONEGATE DR
62-020-064 3086 STONEGATE DR
62-290-038 3189 MONROE RD
62-290-039 3173 MONROE RD
62-290-040 3157 MONROE RD
62-290-041 3149 MONROE RD
62-290-046 3150 STONEGATE DR
62-290-010 3115 STONEGATE DR
62-290-011 3125 STONEGATE DR
62-290-051 3135 STONEGATE DR
62-290-052 3145 STONEGATE DR
62-290-053 3155 STONEGATE DR
62-290-009 3095 STONEGATE DR
62-290-054 3184 GRANITE DR
62-290-012 3112 GRANITE DR
62-290-013 3130 GRANITE DR
62-290-014 3154 GRANITE DR
62-290-015 3160 GRANITE DR
62-290-016 3172 GRANITE DR
62-290-004 1415 STONEY DR
62-270-033 1410 MARBLE CT
62-270-034 1409 MARBLE CT
62-270-041 3055 STONEGATE DR
62-270-040 3045 STONEGATE DR
62-270-035 1421 MARBLE CT
62-270-032 1422 MARBLE CT

62-290-003 1427 STONEY DR
62-290-008 3075 STONEGATE DR
62-270-042 3065 STONEGATE DR
62-290-007 3089 GRANITE DR
62-290-006 3113 GRANITE DR
62-290-005 3129 GRANITE DR
62-270-039 3035 STONEGATE DR
62-270-036 1435 MARBLE CT
62-270-031 1436 MARBLE CT
62-290-002 1439 STONEY DR
62-270-037 1451 MARBLE CT
62-270-038 3023 STONEGATE DR
62-270-030 1452 MARBLE CT
62-290-001 1451 STONEY DR
62-270-015 1466 MARBLE CT
62-270-014 1467 MARBLE CT
62-270-016 1463 STONEY DR
62-270-013 3007 STONEGATE DR
62-290-019 1416 STONEY DR
62-270-025 1412 PEBBLE CT
62-270-026 1413 PEBBLE CT
62-290-058 3225 STONEGATE DR
62-270-024 1424 PEBBLE CT
62-270-027 1425 PEBBLE CT
62-290-059 3235 STONEGATE DR
62-290-020 1428 STONEY DR
62-290-056 3185 GRANITE DR
62-290-057 3215 STONEGATE DR
62-290-055 3179 GRANITE DR
62-290-018 3159 GRANITE DR
62-290-017 3171 GRANITE DR
62-270-023 1436 PEBBLE CT
62-270-028 1437 PEBBLE CT
62-290-021 1440 STONEY DR
62-290-060 3245 STONEGATE DR
62-270-019 1460 PEBBLE CT
62-290-022 1452 STONEY DR
62-270-029 1449 PEBBLE CT
62-270-022 1448 PEBBLE CT
62-290-061 3265 STONEGATE DR
62-270-017 1464 STONEY DR
62-270-018 1461 PEBBLE CT
62-270-020 3271 STONEGATE DR
62-270-010 3059 JEFFERSON AVE
62-270-009 3085 JEFFERSON AVE
62-270-008 3117 JEFFERSON AVE
62-270-007 3139 JEFFERSON AVE

62-270-006 3163 JEFFERSON AVE
62-270-005 3183 JEFFERSON AVE
62-270-004 3203 JEFFERSON AVE
62-270-003 3219 JEFFERSON AVE
62-270-001 3271 JEFFERSON AVE
62-270-002 3247 JEFFERSON AVE
62-280-037 1270 DONA WAY
62-280-042 1269 ROYO RANCHERO DR
62-280-038 1300 DONA WAY
62-280-041 1299 ROYO RANCHERO DR
62-280-039 1350 DONA WAY
62-280-040 1351 ROYO RANCHERO DR
62-280-036 1267 DONA WAY
62-280-032 3305 PARIS WAY
62-280-031 3319 PARIS WAY
62-280-030 3341 PARIS WAY
62-290-030 3230 STONEGATE DR
62-290-035 3343 GRANITE DR
62-280-035 1285 DONA WAY
62-290-036 3355 GRANITE DR
62-290-034 3233 GRANITE DR
62-280-034 1321 DONA WAY
62-290-029 3240 STONEGATE DR
62-280-033 1355 DONA WAY
62-290-031 3220 STONEGATE DR
62-290-028 3250 STONEGATE DR
62-290-027 3260 STONEGATE DR
62-270-021 3272 STONEGATE DR
62-290-033 3223 GRANITE DR
62-290-032 3210 STONEGATE DR
62-280-043 3377 PARIS WAY
62-280-048 3376 PARIS WAY
62-280-049 1340 ROYO RANCHERO DR
62-280-045 3378 MARCOS CT
62-280-044 3375 MONROE DR

ATTACHMENT 2

20 JEFFERSON AVE
R
O
Y
O
R
ANCHER
O
R
D

LA MANTIA DR

COLUSA FRONTAGE RD

ROOSEVELT RD

MONROE DR MONROE RD

PARIS WAY

LIBBY LN

TEAL HOLLO
W
D
R
YO
R
KT
O
W
N
D
R
C
YND
A LN
T
O
MBI W
AY

LYLE CT
KEN
NED
Y
D
R
C
A
R

OLE GI H WAY

COLONIAL CT

SAM BRANNAN WAY
LO
RET
TA
C
T

NANTUCKET CT
20 ¶
Location Map: Tierra Buena Community Services District
Tierra Buena Community
Services District
1 inch = 400 feet

Agenda Item 9

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Public Works Department
Presentation By: Ben Moody, Public Works & Development Services Director Summary
Subject: 3300 Brandywine Drive Well Demolition – Sale of Surplus Property Recommendation: Adopt a Resolution authorizing the Public Works Director to execute all documents necessary to transfer real property interest in the City’s former Well #21 property to the owner of the adjacent parcel to the west (3300 Brandywine Drive, APN 62-180-046). [no address, APN 62-180-043]
Fiscal Impact: Minimal staff time executing and recording the necessary documents Purpose:

To transfer surplus City property to an adjacent property owner thereby reducing the City’s maintenance responsibilities and potential liability.

Council’s Strategic Goal:

The transfer of this property addresses the City Council’s Strategic Goals of maintaining a businessfriendly environment while also assuring maintenance of the City’s infrastructure.

Background:

The City’s former Well #21 was located on a 0.04-acre parcel adjacent to the northeast corner of 3300 Brandywine Drive (Attachment 1, Exhibit A). This well was initially constructed in 1986 as part of the Ranchero Estates Unit Two and Three, Phase One development at Royo Ranchero Drive and Butte House Road. The City acquired the well and distribution system upon annexation to the City in 2004.

The City subsequently extended its surface water distribution system to the Tierra Buena area, including Royo Ranchero Drive, eliminating the need for the well.

In 2016, the City officially abandoned Well #21 per Sutter County Department of Environmental Health requirements.

In September 2020, Council adopted Resolution No. 20-099 (Attachment 2) declaring this property to be exempt from the Surplus Land Act per Government Code Section 54221(f)(1)(B) as it is less than 5,000 square feet and therefore not suitable for affordable housing.

Analysis:

The good neighbor fence between the City’s property and 3300 Brandywine Drive needs to be replaced. The owner of 3300 Brandywine Drive has approached the City requesting to purchase the City’s former well site “as-is”.

City staff have inspected the site and confirmed that the remaining piping is not connected to the City’s water system. The City has no use for the former well site property. Additionally, the property requires periodic maintenance, including future fence replacement costs, and could represent a potential liability.

The well site was essentially “carved out of” 3300 Brandywine Drive at the time of development, so it is best suited to be combined with that parcel. The adjacent orchard property to the east and residential property to the north could not utilize the City’s well site property as effectively as the 3300 Brandywine Drive property.

Staff is requesting authorization for the Public Works Director to execute all documents necessary to transfer real interest in this property. Upon Council approval to transfer this property to the contiguous 3300 Brandywine Drive property, staff will notify the California Department of Housing and Community Development in accordance with Surplus Land Act requirements.

Fiscal Impact:

Minimal staff time executing and recording the necessary documents, to be funded out of Public Works operating budgets, which would be more than offset by the savings in maintenance of the property.

Alternatives:

1. Require the City Manager or Mayor to execute the required property transfer documents.

2. Direct staff to allow all adjacent property owners to bid on the property. The property is “landlocked” and would not be useful to any other potential buyers.

3. Do not approve the property transfer at this time.

Recommendation:

Adopt a Resolution authorizing the Public Works Director to execute all documents necessary to transfer real property interest in the City’s former Well #21 property to the owner of the adjacent parcel to the west (3300 Brandywine Drive, APN 62-180-046). [no address, APN 62-180-043] Attachments:

1. Resolution – Authorizing Transfer of Property with Exhibit A - Location Map

2. Resolution – Determining Property is Exempt with Exhibits Prepared By: Submitted By:

Kevin Bradford
Deputy Public Works Director – Engineering
Diana Langley
City Manager

ATTACHMENT 1

RESOLUTION NO. _________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY

AUTHORIZING THE PUBLIC WORKS DIRECTOR TO EXECUTE ALL DOCUMENTS NECESSARY TO TRANSFER REAL PROPERTY INTEREST IN THE CITY’S FORMER WELL #21 PROPERTY TO THE OWNER OF THE ADJACENT PARCEL TO THE WEST (APN 62-180-046)
WHEREAS, through Capital Improvement Program (CIP) number 04-01, the City connected the Ranchero Estates water system to the City’s surface water distribution system, thereby eliminating the need for Well #21 located at APN 62-180-043; and WHEREAS, through CIP number 16-13, the City abandoned Well #21 in accordance with Sutter County Department of Environmental Health requirements; and WHEREAS, the owner of 3300 Brandywine Drive has approached the City requesting to purchase the former Well #21 property as-is; and
WHEREAS, City staff have inspected the former Well #21 property and determined that all piping remaining on the site are not physically connected to the City’s water distribution system; and WHEREAS, City staff have determined that the property is no longer needed for City services and instead represents an unnecessary maintenance burden on City resources; and WHEREAS, the former Well #21 property was essentially “carved out of” 3300 Brandywine Drive at the time of development, thereby making 3300 Brandywine Drive best suited to be combined with the City’s former Well #21 property; and
WHEREAS, disposal of City-owned property is governed by the Surplus Land Act, which requires the City’s governing body to declare any properties that are exempt from the Surplus Land Act as being exempt; and
WHEREAS, Council adopted Resolution No. 20-099 declaring the former Well #21 property to be exempt from the Surplus Land Act per Government Code Section 54221(f)(1)(B) as it is less than 5,000 square feet and therefore not suitable for affordable housing; and WHEREAS, the City desires to transfer its real property interest in the former Well #21 property to the owners of the adjacent parcel to the west (3300 Brandywine Drive, APN 62-180-046); and WHEREAS, the City Council desires to delegate signing authority for all documents necessary to transfer real property interest in said property to the Public Works Director.

NOW, THEREFORE, the City Council of the City of Yuba City resolves as follows:

1. That all of the facts set forth in the recitals above are true and correct and incorporated herein.

2. The Public Works Director is authorized to execute all documents necessary to transfer real property interest in said property to the owner of the adjacent parcel to the west (3300 Brandywine Drive, APN 62-180-046).

The foregoing resolution was duly and regularly introduced, passed, and adopted by the City Council of the City of Yuba City at a regular meeting thereof held on the 4th day of April, 2023.

AYES:

NOES:

ABSENT:
_____________________________
Wade Kirchner, Mayor
ATTEST:

Ciara Wakefield, Deputy City Clerk

APPROVED AS TO FORM
COUNSEL FOR YUBA CITY:

Shannon Chaffin, City Attorney
Aleshire & Wynder, LLP
Exhibit “A” – Location Map

EXHIBIT “A”

3300

BUTTE HOUSE RD
R
O
Y
O
R
A
N
CHER
O
R
D
BR
A
N
D
Y
W
NI E D
R

LEXINGTON WAY LEXINGTON CT

CANFIELD CT
¶
Exhibit A: well location map
3300 Brandywine Drive
Former Well #21 Property
1 inch = 200 feet

ATTACHMENT 2

Agenda Item 10

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Community Services Department
Presentation By: Joshua Wolffe, Associate Engineer
Summary
Subject: Deed Restriction - Didar S. Bains Park
Recommendation: Adopt a Resolution authorizing the City Manager to execute a Deed Restriction for the Didar S. Bains Park Parcel, APN 62-310-021 on behalf of the City Fiscal Impact: Receipt of $800,000 in construction fund reimbursement for Didar S. Bains Park Purpose:

To secure construction funding reimbursement for the City’s newest community park.

Council Strategic Goal:

Filing a deed restriction on the park addresses the City’s Council Strategic Goal of fiscal responsibility, as the deed restriction will ensure that the City meets necessary grant requirements to be eligible for funding reimbursement for a portion of the Park’s construction costs.

Background:

In February of 2018, the City submitted a grant application to the Land and Water Conservation Fund (LWCF) for $800,000 to construct the Didar S. Bains Park Project (Project). In August of 2019, the City received notification that grant funds were awarded in the amount of $800,000, with a required Citymatch of $800,000. In December of 2021, City Council awarded a construction contract to Marina Landscape of Orange, CA for the Project’s construction. Since the contract award, City staff have been working diligently with the Project’s construction management team, and contractors to deliver the Project.

Analysis:

To be eligible for receipt of grant funding, LWCF requires that the City file a 6(f)(3) deed restriction on the Project’s parcel. Section 6(f)(3) of Public Law 88-578 states, “No property acquired or developed with assistance under this section shall, without the approval of the National Secretary of the Interior, be converted to other than public outdoor recreation uses. The secretary shall approve such conversion only if he finds it to be in accord with the then existing comprehensive statewide outdoor recreation plan and only upon such conditions as he deems necessary to assure the substitution of other recreation properties of at least equal fair market value and of reasonably equivalent usefulness and location.”

If staff fails to file a deed restriction over the property, as required by the Grant’s conditions, the City will not receive an $800,000 reimbursement for construction costs, through LWCF. If authorized, staff will immediately prepare, execute, file the deed restriction documents with Sutter County, and submit executed documents to LWCF’s representatives, securing the grant funding.

Fiscal Impact:

The filing of this deed restriction will ensure that the City is eligible for receipt of $800,000 in grant funding through LWCF for the construction of the Project. Minimal costs for staff time will be incurred for the execution and recordation of the deed restriction documents.

Alternatives:

Do not authorize the City Manger to execute the Deed Restriction for the Project. Staff does not recommend this, as it would make the City ineligible for the $800,000 LWCF funding reimbursement.

Attachments:

1. Attachment 1 - Resolution

2. Exhibit A - Deed Restriction
Prepared By: Submitted By:

Josh Wolffe
Associate Civil Engineer
Diana Langley
City Manager

ATTACHMENT 1

RESOLUTION NO. _________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY

AUTHORIZING THE CITY MANAGER TO EXECUTE A DEED
RESTRICTION FOR THE DIDAR S. BAINS PARK PARCEL, APN
62-310-02, ON BEHALF OF THE CITY
WHEREAS, the Congress under Public Law 88-578 has authorized the establishment of a federal Land and Water Conservation Fund Grant-in-Aid program, providing Matching funds to the State of California and its political subdivisions for acquiring lands and developing facilities for public outdoor recreational purposes; and, WHEREAS, the California Department of Parks and Recreation is responsible for administration of the program in the State, setting up necessary rules and procedures governing applications by local agencies under the program; and, WHEREAS, in February of 2018, the City of Yuba City submitted an application to the California Department of Parks and Recreation for the Land and Water Conservation Fund Grant-in-Aid program; and,
WHEREAS, in August of 2019, the City received notification of $800,000 in grant funding through the Land and Water Conservation Fund Grant-in-Aid program; and, WHEREAS, as required by the Land and Water Conservation Fund Grant-in-Aid program, the City must file a 6(f)(3) deed restriction over the Project’s parcel to be eligible for receipt of grant funding; and,
NOW, THEREFORE, be it resolved and ordered by the City Council of Yuba City as follows:

Section 1. The City Manager is hereby authorized to execute a deed restriction for the Didar S. Bains Park Parcel, APN 62-310-021, on behalf of the City Section 2. This Resolution shall take effect immediately.

The foregoing resolution was duly and regularly introduced, passed, and adopted by the City Council of the City of Yuba City at a regular meeting thereof held on the 4th day of April, 2023.

AYES:

NOES:

ABSENT:

Wade Kirchner, Mayor

ATTEST:

Ciara Wakefield, Deputy City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
Shannon L. Chaffin, City Attorney
Aleshire & Wynder, LLP
Attachment(s):

Exhibit A – Deed Restriction

EXHIBIT A

1 RECORDING REQUESTED BY:

California Department of Parks and Recreation
Office of Grants and Local Services
WHEN RECORDED MAIL TO:

Office of Grants and Local Services
PO Box 942896
Sacramento, CA 94296-0001
Attn: Lydia Willett
SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE

DEED RESTRICTION
I. WHEREAS, CITY OF YUBA CITY, A MUNICIPAL CORPORATION (hereinafter referred to as “Owner(s)” is/are recorded owner(s) of the real property described in Exhibit A, attached and incorporated herein by reference (hereinafter referred to as the “Property”); and II. WHEREAS, the California Department of Parks and Recreation (hereinafter referred to as “DPR”) is a public agency created and existing under the authority of section 5001 of the California Public Resources Code (hereinafter referred to as the “PRC”). And III. WHEREAS, Owner(s) (or Grantee) applied to DPR for grant funds available pursuant to the Land and Water Conservation Fund, Competitive Program for improvements on the Property; and IV. WHEREAS, on _May 1, 2019 , DPR’s Office of Grants and Local Services and the National Park Service approved Grant 06-01823 , (hereinafter referred to as “Grant”) for improvements on the Property, subject to, among other conditions, recordation of this Deed Restriction on the Property; and
V. WHEREAS, but for the imposition of the Deed Restriction condition of the Grant, the Grant would not be consistent with the public purposes of the Land and Water Conservation Fund, Competitive Program and the funds that are the subject of the Grant could therefore not have been granted; and

2 VI. WHEREAS, Owner(s) has/have elected to comply with the Deed Restriction of the Grant, so as to enable Owner(s), to receive the Grant funds and perform the work described in the Grant; NOW, THEREFORE, in consideration of the issuance of the Grant funds by DPR, the undersigned Owner(s) for himself/herself/themselves and for his/her/their heirs, assigns, and successorsin-interest, hereby irrevocably covenant(s) with DPR that the condition of the grant (set forth at paragraph(s) 1 through 5 and in Exhibit B hereto) shall at all times on and after the date on which this Deed Restriction is recorded constitute for all purposes covenants, conditions and restrictions on the use and enjoyment of the Property that are hereby attached to the deed to the Property as fully effective components thereof.

1. DURATION. (a) This Deed Restriction shall remain in full force and effect and shall bind Owner(s) and all his/her/their assigns or successors-in-interest for the period running from May 1, 2019 through perpetuity.

2. TAXES AND ASSESMENTS. It is intended that this Deed Restriction is irrevocable and shall constitute an enforceable restriction within the meaning of a) Article XIII, section 8, of the California Constitution; and b) section 402.1 of the California Revenue and Taxation Code or successor statue. Furthermore, this Deed Restriction shall be deemed to constitute a servitude upon and burden to the Property within the meaning of section 3712(d) of the California Revenue and Taxation Code, or successor statue, which survives a sale of tax-deeded property.

3. RIGHT OF ENTRY. DPR or its agent or employees may enter onto the Property at times reasonably acceptable to Owner(s) to ascertain whether the use restrictions set forth above are being observed.

4. REMEDIES. Any act, conveyance, contract, or authorization by Owner(s) whether written or oral which uses or would cause to be used or would permit use of the Property contrary to the terms of this Deed Restriction will be deemed a violation and a breach hereof. DPR may pursue any and all available legal and/or equitable remedies to enforce the terms and conditions of this Deed Restriction.

3 In the event of a breach, any forbearance on the part of DPR to enforce the terms and provisions hereof shall not be deemed a waiver of enforcement rights regarding any subsequent breach.

5. SEVERABILITY. If any provision of these restrictions is held to be invalid, or for any reason becomes unenforceable, no other provision shall be affected or impaired.

Dated: ______________________, 20 ____
Business Name (if property is owned by a business): __________________________________________ Owner(s) Name(s): ____________________________________________________________________ _____________________________________________________________________________________ Signed: ________________________________ Signed: ________________________________ ________________________________ ________________________________

PRINT/TYPE NAME & TITLE OF ABOVE PRINT/TYPE NAME & TITLE OF ABOVE (GRANTEE’S AUTHORIZED REPRESENTATIVE) (ADDITIONAL SIGNATURE, AS REQUIRED) **NOTARY ACKNOWLEDGEMENT ON THE NEXT PAGE**

4 State of California
County of _______________
On __________________ before me, __________________________, a Notary Public, personally appeared _____________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ______________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

Agenda Item 11

CITY OF YUBA CITY

STAFF REPORT
Date: April 4, 2023
To: Honorable Mayor & Members of the City Council;
From: Finance/IT Department
Presentation By: Spencer Morrison, Finance Director
Summary
Subject: National Opioid Settlement
Recommendation:

A. Approve Settlement Agreements and Participation Forms for the City’s participation in the National Opioid Settlement Agreements with Teva, Allergan, Walmart, Walgreens, and CVS.

B. Approve the California State-Subdivision Agreements Regarding Distribution and Use of Settlement Funds relating to the National Opioid Settlement Agreements with Teva, Allergan, Walmart, Walgreens, and CVS.

C. Adopt a Resolution approving and authorizing the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements with Teva, Allergan, Walmart, Walgreens, and CVS, including signing necessary documents and transmittal thereof as necessary.

D. Authorize the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements, including, but not limited to, the transmittal of the executed documents in Recommendations A and B and all future settlements (as necessary and applicable) through the National Opioid Settlements process Fiscal Impact: None. Any funds allocated will automatically be remitted to the County of Sutter.

Purpose:

To declare the City’s continued participation in the National Opioid Settlement Council's Strategic Goal:

This item supports the City Council priority of fiscal responsibility by bringing additional funding to the community to assist in the opioid crisis.

Background:

In 2021, the City entered into settlement agreements with McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation. (collectively, the “Distributors”) and Johnson & Johnson,

Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutica, Inc. (collectively, the “Manufacturer”) (for purposes of this submittal, the Distributors and Manufacturer are collectively referred to as the “2021 Settling Defendants”). The 2021 settlement agreement related to litigation (the City was not a party to this litigation) by various States, cities, and counties relating to the 2021 Settling Defendants’ manufacture and distribution of opioids and, in particular, the impact of such activities upon the national opioid epidemic (“2021 Settlement Agreements”). The 2021 Settlement Agreements required that a “critical mass” of public agencies participate in order for it to become effective, which was achieved in 2022.

At this time, a new settlement is proposed with Teva, Allergan, Walmart, Walgreens, and CVS, who are additional defendants that are retailers and manufacturers of opioids (for the purposes of this submittal, Teva, Allergan, Walmart, Walgreens, and CVS are collectively referred to as the “2023 Settling Defendants”). The terms of the 2023 Settlement Agreements are similar to the 2021 Settlement Agreements, which includes the requirement that a critical mass of participation is required, provides for a broad release of the 2023 Settling Defendants from liability relating to opioids, and, further, direct or indirect payment of settlement funds to the various local agencies agreeing to participate. Additional information about these settlements can be found here: www.nationalopioidsettelment.com.

With respect to the release, as indicated above, it is a very broad release covering any activities by the 2023 Settling Defendants relating to opioids. It arguably also includes a release from liability relating to land use matters for facilities that manufactured, distributed, or sold opioids within the city.

Analysis:

With respect to the settlement funds, the 2023 Settlement Agreements could provide up to approximately $1.8 billion to California. This amount assumes maximum participation. Like the 2021 Settlement Agreements, the more local agencies that participate, the more funds will be available to California. Further, the City’s share of this amount is approximately $100,000, which is distributed over a 5-to-15-year period depending on the settlement agreement. It must be emphasized that this amount is an estimate of what the City may receive and assumes a best-case scenario where all local agencies participate. The actual amount will not be known until the process has been completed. Similarly to the 2021 Settlement Agreements, the use of the funds is restricted to opioid remediation (e.g., addiction treatment programs). By default, these funds are allocated to the County, but the City can elect to receive a direct distribution; however, use of the funds also requires strict accounting requirements.

These requirements only apply to the City if it elects to receive direct distribution and does not apply to the City if the funds go to the County. In terms of enforcement, the State enforces the expenditure requirements. Because of this, it is recommended that the funds be allocated to the County.

Approval of Recommendation A and B would authorize the City to participate in the National Opioid Settlements with the 2023 Settling Defendants on the terms and conditions of those settlement agreements and, further, approve agreements with the State of California on the distribution of settlement funds, consistent with the 2023 Settlement Agreements. (Attachments 1, 2, and 3).

Approval of Recommendation C would approve and authorize the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements with Teva, Allergan, Walmart, Walgreens, and CVS, including signing necessary documents and transmittal thereof as necessary.

Council approval and authorization to execution, submission, and receipt of all required documents must be completed before April 18, 2023.

Fiscal Impact:

None. Any funds allocated will automatically be remitted to the County of Sutter.

Alternatives:

1. Approve with modifications as desired by the Council.

2. Choose not to participate and forfeit potential local funding to the state of California.

Recommendation:

A. Approve Settlement Agreements and Participation Forms for the City’s participation in the National Opioid Settlement Agreements with Teva, Allergan, Walmart, Walgreens, and CVS.

B. Approve the California State-Subdivision Agreements Regarding Distribution and Use of Settlement Funds relating to the National Opioid Settlement Agreements with Teva, Allergan, Walmart, Walgreens, and CVS.

C. Adopt a Resolution approving and authorizing the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements with Teva, Allergan, Walmart, Walgreens, and CVS, including signing necessary documents and transmittal thereof as necessary.

D. Authorize the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements, including, but not limited to, the transmittal of the executed documents in Recommendations A and B and all future settlements (as necessary and applicable) through the National Opioid Settlements process Attachments:

1. Resolution

2. Settlement Agreements

3. Settlement Participation Forms

4. State Subdivision Agreements
Prepared By: Submitted By:

Spencer Morrison
Finance Director
Diana Langley
City Manager

ATTACHMENT 1

2 RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY,

CALIFORNIA, AUTHORIZING THE CITY OF YUBA CITY TO ENTER INTO THE MASTER

SETTLEMENT AGREEMENTS WITH CVS, ALLERGAN, TEVA, WALMART, AND WALGREENS (INCLUDING THE RELATED PARTICIPATION AGREEMENTS); AGREE TO

THE TERMS OF THE RELATED STATE-SUBDIVISION AGREEMENTS AND AUTHORIZE

ENTRY INTO THE RELATED STATE-SUBDIVISION ALLOCATION AGREEMENTS WITH THE ATTORNEY GENERAL; AND AUTHORIZING THE CITY MANAGER TO CARRY OUT

FURTHER RELATED ACTS
WHEREAS, the United States is facing an ongoing public health crisis of opioid abuse, addiction, overdose, and death, forcing the State of California and California counties and cities to spend billions of dollars each year to address the direct consequences of this crisis; and, WHEREAS, pending in the U.S. District Court for the Northern District of Ohio is a multidistrict litigation (“MDL”) being pursued by numerous public entity plaintiffs against the manufacturers and distributors of various opioids based on the allegation that the defendants’ unlawful conduct caused the opioid epidemic; and,
WHEREAS, on or about November 14, 2022, a proposed nationwide tentative settlement was reached between the plaintiffs in the MDL and Walmart Inc. (“Walmart”); and, WHEREAS, on or about November 22, 2022, a proposed nationwide tentative settlement was reached between the plaintiffs in the MDL and Teva Pharmaceutical Industries Ltd. and all of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, assigns, including but not limited to Teva Pharmaceuticals USA, Inc., Actavis LLC (f/k/a Actavis Inc.), Actavis Elizabeth LLC, Actavis Kadian LLC, Actavis Pharma, Inc. (f/k/a Watson Pharma, Inc.), Actavis Kadian LLC, Actavis Laboratories UT, Inc. (f/k/a Watson Laboratories, Inc. – Utah), Actavis Mid Atlantic LLC, Actavis Totowa LLC, Actavis Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. – Florida), Actavis South Atlantic LLC, Warner Chilcott Company LLC, and Watson Laboratories, Inc., and Anda Inc. (collectively, “Teva”); and,
WHEREAS, on or about November 22, 2022, a proposed nationwide tentative settlement was reached between the plaintiffs in the MDL and Allergan Finance, LLC (f/k/a Actavis, Inc., which in turn was f/k/a Watson Pharmaceutics, Inc.) and Allergan Limited (f/k/a Allergan plc, which, in turn, was f/k/a Actavis plc)(collectively, “Allergan”); and, WHEREAS, on or about December 9, 2022, a proposed nationwide tentative settlement was reached between the plaintiffs in the MDL and CVS Health Corporation and CVS Pharmacy, Inc. and all of their past and present direct and indirect parent and subsidiaries (collectively, “CVS”); and,
WHEREAS, on or about December 9, 2022, a proposed nationwide tentative settlement was reached between the plaintiffs in the MDL and Walgreen Co. (“Walgreens”); and, WHEREAS, CVS, Teva, Walgreens, Walmart, and Allergan shall be referred in this Resolution as “Settling Defendants”; and
WHEREAS, as part of the settlements with the Settling Defendants, local subdivisions,

3 including certain cities, that are not plaintiffs in the MDL may participate in the settlements in exchange for a release of the Settling Defendants (“Participating Subdivision”); and, WHEREAS, copies of the proposed terms of those proposed nationwide settlements have been set forth in the Master Settlement Agreements with the Settling Defendants; and, WHEREAS, copies of the Master Settlement Agreements have been made available to the City Council with this Resolution (“Master Settlement Agreements”); and, WHEREAS, the Settlement Agreements provide, among other things, for the payment of a certain sum to settling government entities in California including to the State of California and Participating Subdivisions upon occurrence of certain events as defined in the Settlement Agreements (“California Opioid Funds”); and,
WHEREAS, in order to become a Participating Subdivision, the City must enter into “Participation Agreements” which allow participation in the Master Settlement Agreements; and, WHEREAS, California local governments in the MDL have engaged in extensive discussions with the State Attorney General’s Office (“AGO”) as to how the California Opioid Funds will be allocated, which has resulted in the Proposed California State-Subdivision Agreements Regarding Distribution and Use of Settlement Funds (“Allocation Agreements”) from the settlements with the Settling Defendants; and,
WHEREAS, copies of the Allocation Agreements for all of the settlements with the Settling Defendants have been made available to the City Council with this Resolution; and, WHEREAS, the Allocation Agreements allocate the California Opioid Funds as follows:
15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund.

For the avoidance of doubt, all funds allocated to California from the Settlements shall be combined pursuant to the Allocation Agreements, and 15% of total from each settlement shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”); and,
WHEREAS, under the Master Settlement Agreements, certain local subdivisions that did not file a lawsuit against the Settlement Defendants may qualify to participate in the settlements and obtain funds from the Abatement Account Fund; and,
WHEREAS, the City is eligible to participate in the Settlement and become a CA Participating Subdivision; and,
WHEREAS, the funds in the CA Abatement Accounts Fund (the 70% allocation) will be allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision (those above 10,000 in population). The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 to the Allocation Agreements and provided to the City Council with this Resolution. The City’s share of the CA Abatement Accounts Fund will be a product of the total in the CA Abatement Accounts Fund multiplied by the City’s percentage set forth in Appendix 1 of the Allocation Agreements (the “Local Allocation”); and,

4 WHEREAS, a CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, unless the city elects to take a direct election of the settlement funds, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date; and, WHEREAS, it the intent of this Resolution is to authorize the City to enter into the Master Settlement Agreements with the Settling Defendants by executing the Participation Agreements and to enter into the Allocation Agreements by executing the signature pages to those agreements.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Yuba City hereby approves and authorizes the City Manager to settle and release the City’s claims against the Settling Defendants in exchange for the consideration set forth in the Settlement Agreements, Allocation Agreements and all exhibits thereto, including, without limitation, taking the following measures:

Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

Section 2. Approval and Authorization. The City Manager is hereby approved and authorized to settle and release the City’s claims against the Settling Defendants in exchange for the consideration set forth in the Master Settlement Agreements, Participation Agreements, Allocation Agreements, and all exhibits thereto.

Section 3. Further Acts. The City Manager is hereby authorized to carry out all necessary acts such that the City can participate in the Master Settlement Agreements, including, without limitation, execution (as necessary) of the Participation Agreements, Master Settlement Agreements, Allocation Agreements; and all related documents and the transmittal of thereof as necessary and appropriate.

Section 4. Ratification. All actions heretofore taken by the City Council and other appropriate public officers and agents of the City with respect to the matters contemplated under this Resolution are hereby ratified, confirmed and approved.

Section 5. It is anticipated that there will be further National Opioid settlements in the future. The City Council further authorizes, and delegates authority to, the City Manager to carry out all necessary acts to participate in, and effectuate, the National Opioid Settlements, including, but not limited to, execution of all future settlements and related documents subject to approval as to legal form from the City Attorney.

Section 6. Effective Date. This Resolution shall immediately take effect upon passage.

BE IT FURTHER RESOLVED that all actions heretofore taken by the City Council and other appropriate public officers and agents of the City with respect to the matters contemplated under this Resolution are hereby ratified, confirmed and approved.

The forgoing Resolution of the City Council of the City of Yuba City was duly introduced, passed and adopted at a regular meeting thereof held on the 4th day of April, 2023.

5 AYES:

NOES:

ABSENT:

Wade Kirchner, Mayor
Ciara Wakefield, Deputy City Clerk
Approved as to form
Counsel for Yuba City:
_____________________________
Shannon Chaffin, Esq.,
City Attorney

ATTACHMENT 2

1 December 20, 2022

ALLERGAN PUBLIC GLOBAL OPIOID SETTLEMENT AGREEMENT
I. Definitions........................................................................................................................................ 2 II. Participation by States and Condition to Preliminary Agreement........................................... 18 III. Cessation of Litigation Activities................................................................................................. 19 IV. Injunctive Relief............................................................................................................................ 20 V. Release............................................................................................................................................ 20 VI. Monetary Relief Overview and Maximum Payments................................................................ 25 VII. Annual Payments to Settlement Fund......................................................................................... 26 VIII. Allocation and Use of Settlement Funds ..................................................................................... 38 IX. Participation by Subdivisions and Special Districts .................................................................. 44 X. Condition to Effectiveness of Agreement and Filing of Consent Judgment ............................ 49 XI. Potential Payment Adjustments................................................................................................... 49 XII. Additional Restitution Amount.................................................................................................... 50 XIII. Plaintiffs’ Attorneys’ Fees and Costs .......................................................................................... 51 XIV. Enforcement and Dispute Resolution.......................................................................................... 51 XV. Judgment and Settlement Set-Off Related to Teva.................................................................... 57 XVI. Miscellaneous................................................................................................................................. 58

2 December 20, 2022

ALLERGAN PUBLIC GLOBAL OPIOID SETTLEMENT AGREEMENT
Whereas, the Settling States, Participating Subdivisions, Participating Special Districts, and Allergan (as those terms are defined below) share a common desire to resolve disputes between them relating to opioid medications according to the terms set out in this agreement dated as of November 22, 2022 (the “Agreement”);
Whereas, the Parties, Participating Subdivisions, and Participating Special Districts agree and understand that upon satisfaction of the conditions set forth in Sections II and XI, this Agreement will be binding on the Settling States, Allergan, Participating Subdivisions, and Participating Special Districts;
Whereas, the Parties, Participating Subdivisions, and Participating Special Districts agree and understand that this Agreement will then be filed as part of Consent Judgments in the respective courts of each of the Settling States, pursuant to the terms set forth in Section III; Whereas, the Parties, Participating Subdivisions, and Participating Special Districts agree and understand that they shall at all times act in good faith to implement and execute their obligations under this Agreement and shall not act in any way to purposefully frustrate the right of any party to receive the benefits due under the Agreement; Whereas, the Parties, Participating Subdivisions, and Participating Special Districts to this Agreement now desire to avoid further expense and proceedings and to settle their disputes under the terms and conditions of this Agreement as set forth below; NOW, THEREFORE, IT IS HEREBY AGREED by and between the Parties, Participating Subdivisions, and Participating Special Districts by and through their respective counsel, as follows:

I. Definitions
Unless otherwise specified, the following definitions apply:

1. “Abatement Accounts Fund” means a component of the Settlement Fund described in subsection VIII.F.

2. “Additional Restitution Amount” means the amount available to Settling States listed in Exhibit M of $16,192,680.76.

3. “Affiliated Company(ies)” means (1) when used with respect to AbbVie Inc. (“AbbVie”) all of the entities listed in Exhibit J-1; (2) when used with respect to Allergan all of the entities listed in Exhibit J-2; and (3) additionally shall include other entities owned now or in the past either wholly or partially and either directly or indirectly by either AbbVie or Allergan and/or each of their respective past parents, but only to the extent those other entities played any role relating to Covered Conduct and/or Released Claims during the period when they were owned

3 December 20, 2022
either wholly or partially and either directly or indirectly by either AbbVie or Allergan and/or each of their respective past parents.

4. “Agreement” means this Allergan Public Global Opioid Settlement Agreement, inclusive of all exhibits.

5. “Alleged Harms” means the alleged past, present, and future financial or societal and related expenditures arising out of the alleged misuse and abuse of opioid products, non-exclusive examples of which are described in the documents listed on Exhibit A, that have allegedly arisen as a result of the physical and bodily injuries sustained by individuals suffering from opioid-related addiction, abuse, death, and other related diseases and disorders, and that have allegedly been caused by Allergan.

6. “Allergan” means Allergan Finance, LLC (f/k/a Actavis, Inc., which, in turn, was f/k/a/ Watson Pharmaceuticals, Inc.) and Allergan Limited (f/k/a Allergan plc, which, in turn, was f/k/a Actavis plc). Allergan does not include Teva Pharmaceuticals Industries Ltd. (“Teva Ltd.”), Teva Pharmaceuticals USA, Inc. (“Teva USA”), Cephalon, Inc. (“Cephalon”), Actavis LLC (f/k/a Actavis Inc.) (“Actavis LLC”), Watson Laboratories, Inc. (“Watson”), Actavis Pharma, Inc. (f/k/a Watson Pharma, Inc.) (“Actavis Pharma”), Actavis Elizabeth LLC (“Actavis Elizabeth”), Actavis Kadian LLC (“Actavis Kadian”), Actavis Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. - Florida) (“Actavis Labs FL”), Actavis Laboratories UT, Inc. (f/k/a Watson Laboratories, Inc. - Utah) (“Actavis Labs UT”), Actavis Mid Atlantic LLC (“Actavis Mid”), Actavis South Atlantic LLC (“Actavis South”), Actavis Totowa LLC (“Actavis Totowa”), or Anda, Inc. (“Anda”).

7. “Allocation Statute” means a state law that governs allocation, distribution, and/or use of some or all of the Settlement Fund amounts allocated to that State and/or its Subdivisions and/or its Special Districts. In addition to modifying the allocation, as set forth in subsection VIII.E.2, an Allocation Statute may, without limitation, contain a Statutory Trust, further restrict expenditure of funds, form an advisory committee, establish oversight and reporting requirements, or address other default provisions and other matters related to the funds. An Allocation Statute is not required to address all three (3) types of funds comprising the Settlement Fund or all default provisions.

8. “Annual Payment” means the total amount of the Net Abatement Amount payable into the Settlement Fund by Allergan on each Payment Date (including the Initial Year Payment), as calculated by the Settlement Fund Administrator pursuant to Section VII or agreed to pursuant to Section VII.B.6, which shall not exceed the maximum payment for any given year as set forth in Exhibit M. This term does not include the Additional Restitution Amount or amounts paid pursuant to Section XIII.

9. “Appropriate Official” means the official defined in subsection XVI.F.4.

4 December 20, 2022

10. “Attorney Fee and Cost Payment” means the total amount of the Global Settlement Attorney Fee Amount payable by Allergan on the Payment Date of each year into the (1) Attorney Fee and Cost Fund described in Exhibit R, (2) the State Cost Fund described in Exhibit T, and (3) the State Outside Counsel Fee Fund described in Exhibit S, for attorneys’ fees, expenses, and costs of the Settling States and Participating Subdivisions.

11. “Attorney Fee and Cost Fund” means an account consisting of $187,115,422.10 to pay attorneys’ fees and costs of Litigating Subdivisions that become Participating Subdivisions and the MDL Expense Fund, amounts pursuant to the agreement on attorneys’ fees and costs attached as Exhibit R.

12. “Bar” means either (1) a ruling by the highest court of the State, or the intermediate court of appeals when not subject to further review by the highest court of the State in a State with a single intermediate court of appeals, setting forth the general principle that no Subdivisions or Special Districts in the State may maintain Released Claims against Released Entities, whether on the ground of the Agreement (or the release in it) or otherwise; (2) a law barring Subdivisions and Special Districts in the State from maintaining or asserting Released Claims against Released Entities (either through a direct bar or through a grant of authority to release claims and that authority is exercised in full); or (3) a Settlement Class Resolution in the State with full force and effect. For the avoidance of doubt, a law or ruling that is conditioned or predicated upon payment by a Released Entity (apart from payments by Allergan incurred under the Agreement) shall not constitute a Bar.

13. “Base Payment” means the payments made pursuant to Section VII.D.

14. “Case-Specific Resolution” means either (1) a law barring specified Subdivisions or Special Districts from maintaining Released Claims against Released Entities (either through a direct Bar or through a grant of authority to release claims and that authority is exercised in full) or (2) a ruling by a court of competent jurisdiction over a particular Subdivision or Special District that has the legal effect of barring the Subdivision or Special District from maintaining any Released Claims at issue against Released Entities, whether on the ground of the Agreement (or the release in it) or otherwise. For the avoidance of doubt, a law, ruling, or release that is conditioned or predicated upon a post-Effective Date payment by a Released Entity (apart from payments by Allergan incurred under the Agreement or injunctive relief obligations incurred by it) shall not constitute a Case-Specific Resolution.

15. “Claim” means any past, present or future cause of action, claim for relief, crossclaim or counterclaim, theory of liability, demand, derivative, claim, request, assessment, charge, covenant, damage, debt, lien, loss, fine, penalty, restitution, reimbursement, disgorgement, expenses, judgment, right, obligation, dispute, suit, contract, controversy, agreement, parens patriae claim, promise, performance, warranty, omission, or grievance of any nature whatsoever, whether legal, equitable, statutory, regulatory or administrative, whether arising under federal,

5 December 20, 2022
state or local common law, statute, regulation, guidance, ordinance or principles of equity, whether filed or unfiled, whether asserted or unasserted, whether known or unknown, whether accrued or unaccrued, whether foreseen, unforeseen or unforeseeable, whether discovered or undiscovered, whether suspected or unsuspected, whether fixed or contingent, and whether existing or hereafter arising, in all such cases, including but not limited to any request for declaratory, injunctive, or equitable relief, compensatory, punitive, or statutory damages, absolute liability, strict liability, restitution, subrogation, contribution, indemnity, apportionment, disgorgement, reimbursement, attorney fees, expert fees, consultant fees, fines, penalties, expenses, costs or any other legal, equitable, civil, administrative, or regulatory remedy whatsoever. Claim does not include any individuals’ personal injury or wrongful death cause of action.

16. “Claim Over” means a Claim asserted by a Non-Released Entity against a Released Entity on the basis of contribution, indemnity, or other claim over on any theory relating to a Non-Party Covered Conduct Claim asserted by a Releasor.

17. “Compensatory Restitution Amount” means the aggregate amount of payments by Allergan hereunder other than amounts paid as attorneys’ fees and costs or identified pursuant to subsection VIII.C as being used to pay attorneys’ fees and investigation costs or litigation costs.

18. “Consent Judgment” means a state-specific consent judgment, the general terms of which shall be agreed by the Settling States and Allergan prior to the Reference Date and shall include (1) approval of this Agreement and (2) the release set forth in Section V, including the full and final resolution of any Released Claims that the Settling State has brought against Released Entities.

19. “Court” means the respective court for each Settling State to which the Agreement and the Consent Judgment are presented for approval and/or entry as to that Settling State, or the Northern District of Ohio for purposes of administering the Attorney Fee and Cost Fund and any related fee and cost agreements.

20. “Covered Conduct” means any actual or alleged act, failure to act, negligence, statement, error, omission, breach of any duty, conduct, event, transaction, agreement, service, work, misstatement, misleading statement, or other activity of any kind whatsoever from the beginning of time through the Reference Date of this Agreement (and any past, present, or future consequence of any such act, failure to act, negligence, statement, error, omission, breach of duty, conduct, event, transaction, agreement, service, work, misstatement, misleading statement, or other activity) arising from or relating in any way to (a) the availability, discovery, research, development, manufacture, packaging, repackaging, marketing, promotion, advertising, labeling, relabeling, recall, withdrawal, distribution, delivery, monitoring, reporting, supply, sale, prescribing, dispensing, physical security, warehousing, use or abuse of, or operating procedures relating to, any Product, or any system, plan, policy, procedure, or advocacy relating to any Product or class of Products, including, but not limited to, any unbranded or branded

6 December 20, 2022
promotion, marketing, or advertising, unbranded information, patient support or assistance, educational programs, consultancy, research, or other programs, campaigns, lobbying, or grants, sponsorships, charitable donations, or other funding relating to any Product or class of Products; (b) the characteristics, properties, risks, or benefits of any Product or class of Products; (c) the monitoring, reporting, disclosure, non-monitoring, non-reporting, or non-disclosure to federal, state, or other regulators of orders for any Product or class of Products; (d) the selective breeding, harvesting, extracting, purifying, exporting, importing, applying for quota for, procuring quota for, handling, promoting, manufacturing, processing, packaging, supplying, distributing, converting, or selling of, or otherwise engaging in any activity relating to, a precursor or component of Product, including but not limited to natural, synthetic, semi-synthetic, or chemical raw materials, starting materials, finished active pharmaceutical ingredients, drug substances, or any related intermediate of Product; and/or (e) diversion control programs or suspicious order monitoring related to any Product. The foregoing is not intended to apply to claims alleging contamination of products.

21. “Covered Special Districts” means a Special District that is (1) a school district with K-12 student enrollment of at least 25,000 or 0.12% of a State’s population, whichever is greater; (2) a fire district that covers a population of 25,000, or 0.20% of a State’s population if a State’s population is greater than 18 million (though, if a fire district’s population is not easily calculable from state data sources and agreed to between the State and Allergan, it is calculated by dividing the population of the county or counties a fire district serves by the number of fire districts in the county or counties); or (3) a healthcare district or hospital district with at least 125 hospital beds in one or more hospitals rendering services in that district.

22. “Designated State” means New York.

23. “Divested Actavis Generic Entity(ies)” means Actavis LLC, Watson, Actavis Pharma, Actavis Elizabeth, Actavis Kadian, Actavis Labs FL, Actavis Labs UT, Actavis Mid, Actavis South, and Actavis Totowa.

24. “Divested Entity(ies)” means those companies listed on Exhibit J-3, which includes the Divested Actavis Generic Entities.

25. “Effective Date” means the date sixty (60) days after the Reference Date.

26. “Eligible State” means a State that is not a Prior Settling State and is thus eligible to participate in this Agreement and become a Settling State.

27. “Enforcement Committee” means a committee consisting of representatives of the Settling States and of the Participating Subdivisions. Exhibit B contains the organizational bylaws of the Enforcement Committee. Notice pursuant to subsection XVI.P shall be provided when there are changes in membership or contact information.

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28. “Exhibit G Participant” means a Participating Subdivision or Participating Special District that appears in Exhibit G at the relevant point in time. Nothing about the use of the term Exhibit G Participant changes the ability to amend the list of entities listed on Exhibit G pursuant to this Agreement.

29. “Global Settlement Abatement Amount” means the total abatement amount of $2,149,873,027.00. (This figure does not reflect the application of the Prior Settlements Credit or potential offsets. It also does not include amounts paid to the Additional Restitution Amount, which may be used for abatement.)

30. “Global Settlement Amount” means $2,372,972,184.12 and consists of the Global Settlement Abatement Amount, the Global Settlement Attorney Fee Amount, and the Additional Restitution Amount.

31. “Global Settlement Attorney Fee Amount” means $206,906,476.36, which consists of the Attorney Fee and Cost Fund, the State Outside Counsel Fee Fund, and the State Cost Fund.

32. “Implementation Administrator” means the vendor agreed to by the Parties and retained by Teva and Allergan to provide notice pursuant to Section X.A and to manage the initial joinder period for Subdivisions and Special Districts, including the issuance and receipt of Settlement Participation Forms.

33. “Implementation Costs” means the costs for the Implementation Administrator, which shall be paid for pursuant to subsection VI.D.

34. “Incentive A” means the incentive payment described in subsection VII.E.5.

35. “Incentive B” means the incentive payment described in subsection VII.E.6.

36. “Incentive C” means the incentive payment described in subsection VII.E.7.

37. “Incentive D” means the incentive payment described in subsection VII.E.8.

38. “Incentive Payment” means the payments made pursuant to Section VII.E.

39. “Initial Participating Special District” means a Special District that meets the requirements set forth in subsection IX.L.

40. “Initial Participating Subdivision” means a Subdivision that meets the requirements set forth in subsection IX.D.

41. “Initial Participation Date” means the date ninety (90) days after the Preliminary Agreement Date, unless it is extended by written agreement of Allergan and the Enforcement Committee.

42. “Initial Year Payment” means the first Annual Payment of the Net Abatement Amount payable into the Settlement Fund by Allergan on the Payment Date as

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calculated by the Settlement Fund Administrator pursuant to Section VII or agreed to pursuant to Section VII.B.6, which shall not exceed the maximum payment for the Initial Year Payment as set forth in Exhibit M.

43. “Injunctive Relief Terms” means the terms described in Section IV and set forth in Exhibit P.

44. “Later Litigating Special District” means a Special District (or Special District official asserting the right of or for the Special District to recover for Alleged Harms to the Special District and/or the people thereof) that is not a Litigating Special District and that files a lawsuit bringing a Released Claim against a Released Entity, or that adds such a Claim to a pre-existing lawsuit, after the Preliminary Agreement Date. It may also include a Litigating Special District whose Claims were resolved by a Bar or Case-Specific Resolution, which is later revoked following the execution date of this Agreement, when such Litigating Special District takes any affirmative step in its lawsuit other than seeking a stay, removal or dismissal with prejudice.

45. “Later Litigating Subdivision” means a Subdivision (or Subdivision official asserting the right of or for the Subdivision to recover for Alleged Harms to the Subdivision and/or the people thereof) that is not a Litigating Subdivision and that files a lawsuit bringing a Released Claim against a Released Entity, or that adds such a Claim to a pre-existing lawsuit, after the Preliminary Agreement Date. It may also include a Litigating Subdivision whose Claims were resolved by a Bar or Case-Specific Resolution, which is later revoked following the execution date of this Agreement, when such Litigating Subdivision takes any affirmative step in its lawsuit other than seeking a stay, removal, or dismissal with prejudice.

46. “Later Participating Special District” means a Participating Special District that meets the requirements of subsection IX.M but is not an Initial Participating Special District.

47. “Later Participating Subdivision” means a Participating Subdivision that meets the requirements of subsection IX.E but is not an Initial Participating Subdivision.

48. “Litigating Special District” means a Special District (or Special District official asserting the right of or for the Special District to recover for Alleged Harms to the Special District and/or the people thereof) that brought any Released Claims against any Released Entities on or before the Preliminary Agreement Date that were not separately resolved prior to that date. Exhibit C includes an agreed list of the Litigating Special Districts. Exhibit C will be updated (including with any corrections) periodically, and a final version of Exhibit C will be attached hereto as of the Effective Date.

49. “Litigating Subdivision” means a Subdivision (or Subdivision official asserting the right of or for the Subdivision to recover for Alleged Harms to the Subdivision and/or the people thereof) that brought any Released Claims against any Released

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Entities on or before the Preliminary Agreement Date that were not separately resolved prior to that date. A Prior Settling Subdivision shall not be considered a Litigating Subdivision. Exhibit C includes an agreed list of the Litigating Subdivisions. Exhibit C will be updated (including with any corrections) periodically, and a final version of Exhibit C will be attached hereto as of the Effective Date.

50. “National Arbitration Panel” means the panel described in subsection XIV.G.4.

51. “National Disputes” means the disputes described in subsection XIV.G.

52. “Net Abatement Amount” means $1,799,186,751.00, which is the Global Settlement Abatement Amount adjusted for the Prior Settlements Credit pursuant to subsection VI.C.2.

53. “Non-Litigating Covered Special District” means a Covered Special District that is not a Litigating Special District.

54. “Non-Litigating Special District” means a Special District that is neither a Litigating Special District nor a Later Litigating Special District.

55. “Non-Litigating Subdivision” means a Subdivision that is not (1) a Litigating Subdivision, (2) a Later Litigating Subdivision, or (3) a Prior Settling Subdivision.

56. “Non-Participating Special District” means a Special District that is not a Participating Special District.

57. “Non-Participating Subdivision” means a Subdivision that is not a Participating Subdivision. For the avoidance of doubt, Non-Participating Subdivision also includes Prior Settling Subdivisions.

58. “Non-Party Covered Conduct Claim” means a Claim against any Non-Released Entity involving, arising out of, or related to Covered Conduct (or conduct that would be Covered Conduct if engaged in by a Released Entity).

59. “Non-Party Settlement” means a settlement by any Releasor that settles any NonParty Covered Conduct Claim and includes a release of any Non-Released Entity.

60. “Non-Released Entity” means an entity that is not a Released Entity.

61. “Non-Settling State” means a State that is an Eligible State but not a Settling State.

62. “Opioid Remediation” means care, treatment, and other programs and expenditures (including reimbursement for past such programs or expenditures except where this Agreement restricts the use of funds solely to future Opioid Remediation) designed to (1) address the misuse and abuse of opioid products, (2) treat or mitigate opioid use or related disorders, or (3) mitigate other alleged effects of the opioid abuse crisis, including on those injured as a result of the opioid abuse crisis. Exhibit E

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provides a non-exhaustive list of expenditures that qualify as being paid for Opioid Remediation. Qualifying expenditures may include reasonable related administrative expenses.

63. “Participating Special District” means a Special District that signs the Settlement Participation Form annexed hereto as Exhibit K and meets the requirements for becoming a Participating Special District under Section IX. Participating Special Districts include both Initial Participating Special Districts and Later Participating Special Districts.

64. “Participating Subdivision” means a Subdivision that signs a Settlement Participation Form annexed hereto as Exhibit K and meets requirements for becoming a Participating Subdivision under Section IX. Participating Subdivisions include both Initial Participating Subdivisions and Later Participating Subdivisions.

65. “Parties” means Allergan and the Settling States (each, a “Party”).

66. “Payment Date” means the date on which Allergan makes its Annual Payments (including its Initial Year Payment), Additional Restitution Payments, and Attorney Fee and Cost Payments, pursuant to Section VII and XIII and Exhibits M-1 and M2. The first Payment Date is thirty (30) days after the Effective Date. The second Payment Date is July 15, 2024, the third Payment Date is July 15, 2025, the fourth Payment Date is July 15, 2026, the fifth Payment Date is July 15, 2027, the sixth Payment Date is July 15, 2028, and the seventh Payment Date is July 15, 2029.

67. “Payment Year” means the calendar year during which the applicable Annual Payment is due pursuant to subsection VII.B. Payment Year 1 is 2023, Payment Year 2 is 2024, and so forth. References to payment “for a Payment Year” mean the Annual Payment due that year. References to eligibility “for a Payment Year” mean eligibility in connection with the Annual Payment due during that year.

68. “Preliminary Agreement Date” means the date on which Allergan gives notice to the Settling States and MDL Plaintiffs’ Executive Committee of its determination that a sufficient number of States have agreed to be Settling States to proceed with notice pursuant to Section IX.A. This date shall be no more than fourteen (14) days after the end of the notice period to States (as set forth in Section II.A) unless it is extended by written agreement of Allergan and the Enforcement Committee.

69. “Primary Subdivision” means a Subdivision that has a population of 30,000 or more. A list of Primary Subdivisions in each State is provided in Exhibit I, and such list shall be updated if any Primary Subdivision is inadvertently missed or included.

70. “Prior Settlements Credit” means the credit of $350,686,276.00, reflecting that the allocations for Prior Settling States and Prior Settling Subdivisions for Claims related to the Covered Conduct against Allergan and/or other Released Entities were or will be separately settled. The credit is applied pursuant to subsection VI.A.1.

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71. “Prior Settling State(s)” means Florida, Louisiana, New York, Rhode Island, and West Virginia and all Subdivisions and Special Districts within those States whose Claims were released as part of those States’ settlements.

72. “Prior Settling Subdivision(s)” means the City and County of San Francisco, California, Cuyahoga County, Ohio, and Summit County, Ohio.

73. “Product” means any chemical substance, whether used for medicinal or nonmedicinal purposes, and whether natural, synthetic, or semi-synthetic, or any finished pharmaceutical product made from or with such substance, that is an opioid or opiate, as well as any product containing any such substance. It also includes: 1) the following when used in combination with opioids or opiates: benzodiazepine, carisoprodol, zolpidem, gabapentin, diazepam, estazolam, quazepam, alprazolam, clonazepam, oxazepam, flurazepam, triozolam, temazepam, midazolam; and 2) a combination or “cocktail” of any stimulant or other chemical substance prescribed, sold, bought, or dispensed to be used together that includes opioids or opiates. For the avoidance of doubt, “Product” does not include benzodiazepine, carisoprodol, zolpidem, or gabapentin when not used in combination with opioids or opiates. “Product” includes but is not limited to any substance consisting of or containing buprenorphine, codeine, fentanyl, hydrocodone, hydromorphone, meperidine, methadone, morphine, naloxone, naltrexone, oxycodone, oxymorphone, pentazocine, propoxyphene, tapentadol, tramadol, opium, heroin, carfentanil, any variant of these substances, or any similar substance. “Product” also includes any natural, synthetic, semi-synthetic or chemical raw materials, starting materials, finished active pharmaceutical ingredients, drug substances, and any related intermediate products used or created in the manufacturing process for any of the substances described in the preceding sentence. Further, “Product(s)” includes, but is not limited to, the following: (a) Anexsia, Bancap HC, Combunox, Dilaudid, Dilaudid HP, Duradyne, Esgic with Codeine, Fiorinal with Codeine, Fioricet with Codeine, Kadian, Lorcet, Lorcet Plus, Maxidone, MoxDuo, Norco, Procet, Reprexain, Vicodin, Vicodin ES, Vicodin HP, and Vicoprofen, and any type, version, strength, or dosage of the foregoing; and (b) Aspirin + butalbital + caffeine + codeine phosphate, Fentanyl citrate injection, Fentanyl citrate tablet, Fentanyl transdermal, Homatropine methylbromide + hydrocodone bitartrate, Hydrocodone + acetaminophen, Hydrocodone + ibuprofen, Hydromorphone tablet, Meperidine hydrochloride injection, Meperidine hydrochloride tablet, Morphine sulfate capsule, Morphine sulfate injection, Morphine sulfate tablet, Oxycodone, Oxycodone + acetaminophen, Oxycodone + aspirin, Oxycodone + hydrochloride, Oxycodone + ibuprofen, Oxymorphone tablet, Tramadol hydrocholoride, and any type, version, strength, or dosage of the foregoing.

74. “Reference Date” means the date on which Allergan is to inform the Settling States and MDL Plaintiffs’ Executive Committee of its determination whether there is sufficient resolution of Claims and potential Claims at the Subdivision level to go forward with the settlement. The Reference Date shall be no later than thirty (30) days after the Initial Participation Date, unless it is extended by written agreement of Allergan and the Enforcement Committee.

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75. “Released Claims” means any and all Claims that directly or indirectly are based on, arise out of, or in any way relate to or concern the Covered Conduct occurring prior to the Reference Date. Without limiting the foregoing, “Released Claims” include any Claims that have been asserted against the Released Entities by any Settling State or any of its Litigating Subdivisions or Litigating Special Districts in any federal, state, or local action or proceeding (whether judicial, arbitral, or administrative) based on, relating to, in whole or in part, the Covered Conduct, or any such Claims that could be or could have been asserted now or in the future in those actions or in any comparable action or proceeding brought by a State or any of its Subdivisions or Special Districts or any Releasors (whether or not such State, Subdivision, Special District, or Releasor has brought such action or proceeding).

Released Claims also include all Claims against Released Entities asserted in any proceeding to be dismissed pursuant to the Agreement, whether or not such claims relate to Covered Conduct. “Released Claims” shall be interpreted broadly. This Agreement does not release Claims by private individuals. Claims by private individuals shall be treated in accordance with applicable law. Released Claims is also used herein to describe Claims brought by a Later Litigating Subdivision, Later Litigating Special District, or other non-party Subdivision or Special District that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date.

76. “Released Entities” means Allergan and (1) all of Allergan’s past and present direct or indirect parents, subsidiaries, divisions, joint ventures, predecessors, successors, affiliates, business units, assigns, agents (all of the foregoing solely in their capacity as such with respect to the Released Claims), and insurers (solely in their role as insurers, if any, with respect to the Released Claims), including, but not limited to, (a) AbbVie and (b) Divested Actavis Generic Entities and other Divested Entities (and their respective past and current parents, subsidiaries, and affiliates, including but not limited to Teva Ltd., Teva USA, and their subsidiaries and affiliates) but solely as to the branded opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and other Divested Entities and the operation of the Divested Actavis Generic Entities and other Divested Entities related to those branded opioid drugs that are Products before August 2, 2016; (2) any person or entity to the extent, and only to the extent, that such person or entity may have a Claim based on such person or entity having a business relationship with Allergan or AbbVie and/or any of Allergan or AbbVie’s Affiliated Companies, including, but not limited to, for contractual indemnity, equitable or implied indemnity, contribution, comparative fault, reimbursement, or apportionment (including, but not limited to, the respective past and present direct or indirect parents, subsidiaries, divisions, joint ventures, predecessors, successors, affiliates, business units, assigns, partners, manufacturers, contractors, agents, and insurers (all of the foregoing solely in their capacity as such with respect to the Released Claims) of any of the foregoing in (1), including Abbott Laboratories and Abbott Laboratories Inc. (“Abbott”), provided that, for avoidance of doubt, Abbott is not a Released Entity for purposes of Claims related to OxyContin, Purdue Pharma, or Purdue Pharma Inc.; and (ii) Halo Pharmaceuticals, Inc., Shionogi Inc., Mikart, LLC, PDI, Inc., TMS Health, LLC, National Health Information Network,

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Inc., Ventiv Commercial Services, LLC, inVentiv Commercial Services, LLC, UPS Supply Chain Solutions, Inc., and King Pharmaceuticals, Inc., and their respective past and current parents, subsidiaries, and affiliates) against Allergan or AbbVie and/or any of Allergan or AbbVie’s Affiliated Companies relating to any Covered Conduct, Products, class of Products, and/or Released Claims arising from such business relationship; and (3) the respective past and present employees, officers, directors, members, shareholders, partners, trustees, contractors, consultants, and agents (all of the foregoing solely in their capacity as such with respect to the Released Claims) of any of the foregoing in (1) and (2). Notwithstanding the foregoing (and subject to certain provisions, including, but not limited to, the NonParty Settlement at Section V.B.2 and the Set-Off at Section XV below), Released Entities shall exclude Divested Actavis Generic Entities and other Divested Entities (and their respective past and current parents, subsidiaries, and affiliates, including but not limited to Teva Ltd., Teva USA, and their subsidiaries and affiliates, but not Allergan and other Released Entities), but solely as to: (i) their generic opioid drugs that are Products, and/or (ii) the operation of Divested Actavis Generic Entities and other Divested Entities related to those generic opioid drugs that are Products for which Releasors have also sought to hold Allergan (and/or other Released Entities) liable. For the avoidance of doubt, any entity acquired, or joint venture entered into by Allergan after the Reference date is not a Released Entity.

77. “Releasors” means (1) each Settling State; (2) each Participating Subdivision; (3) each Participating Special District; and (4) without limitation and to the maximum extent of the power of each Settling State’s Attorney General and/or Participating Subdivision and Participating Special District to release Claims, (a) the Settling State’s, Participating Subdivision’s, and Participating Special District’s departments, agencies, divisions, boards, commissions, Subdivisions, districts, instrumentalities of any kind and attorneys, including its Attorney General, and any person in their official capacity whether elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, (b) any public entities, public instrumentalities, public educational institutions, unincorporated districts, fire districts, irrigation districts, water districts, emergency services districts, school districts, healthcare districts, hospital districts, Sheriffs and law enforcement districts, library districts, coroner’s offices, and public transportation authorities, and other Special Districts in a Settling State, including those with the regulatory authority to enforce state and federal controlled substances acts or the authority to bring Claims related to Covered Conduct seeking money (including abatement (or remediation and/or restitution)) or revoke a pharmaceutical distribution license, and (c) any person or entity acting in a parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer, or other capacity seeking relief, including but not limited to, fines, penalties, or punitive damages, on behalf of or generally applicable to the general public with respect to a Settling State or a Subdivision or Special District in a Settling State, whether or not any of them participate in the Agreement. “Releasors” does not include persons acting in an individual capacity, regardless of the type of relief sought. In addition to being a Releasor as provided herein, Participating Subdivisions and Participating Special Districts shall also provide a Settlement

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Participation Form, which is attached as Exhibit K. Each Settling State’s Attorney General represents that he or she has or has obtained (or will obtain no later than the Effective Date) the authority set forth in the Representation and Warranty subsection of Section V.

78. “Revocation Event” means with respect to a Bar, Settlement Class Resolution, or Case-Specific Resolution, a legislative amendment or a revocation, rescission, reversal, overruling, or interpretation that in any way limits the effect of such Bar, Settlement Class Resolution, or Case-Specific Resolution on Released Claims or any other action or event that otherwise deprives the Bar, Settlement Class Resolution or Case-Specific Resolution of force or effect in any material respect.

79. “Settlement Class Resolution” means a class action resolution in a court of competent jurisdiction in a Settling State with respect to a class of Subdivisions and Special Districts in that State that (1) conforms with that Settling State’s statutes, case law, and/or rules of procedure regarding class actions; (2) is approved and entered as an order of a court of competent jurisdiction in that State and has become final as defined in “State-Specific Finality”; (3) is binding on all Non-Participating Subdivisions and Non-Participating Special Districts in that State (other than opt outs as permitted under the next sentence); (4) provides that all such NonParticipating Subdivisions or Non-Participating Special Districts may not bring Released Claims against Released Entities, whether on the ground of the Agreement (or the releases herein) or otherwise; and (5) does not impose any costs or obligations on Allergan other than those provided for in the Agreement, or contain any provision inconsistent with any provision of the Agreement. If applicable state law requires that opt-out rights be afforded to members of the class, a class action resolution otherwise meeting the foregoing requirements shall qualify as a Settlement Class Resolution unless Subdivisions collectively representing more than 1% of the total population of all of that State’s Subdivisions listed in Exhibit G opt out. In seeking certification of any Settlement Class, the applicable State and Participating Subdivisions shall make clear that certification is sought solely for settlement purposes and shall have no applicability beyond approval of the settlement for which certification is sought. Nothing in this Agreement constitutes an admission by any Party that class certification would be appropriate for litigation purposes in any case.

80. “Settlement Fund” means the interest-bearing fund established under the Agreement into which Annual Payments by Allergan are made pursuant to subsection VII. The Settlement Fund comprises the Abatement Accounts Fund, State Fund, and Subdivision Fund.

81. “Settlement Fund Administrator” means the entity that determines the Annual Payments (including calculating Incentive Payments pursuant to Section VII and any amounts subject to offset pursuant to Sections VII.C and XI), and administers and distributes amounts into the Settlement Fund. It shall also administer and distribute the Additional Restitution Amount pursuant to Section XII. The duties of the Settlement Fund Administrator shall be governed by this Agreement. Prior to

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the Initial Participation Date, the Parties shall agree to selection and removal processes for and a detailed description of the Settlement Fund Administrator’s duties all of which shall be appended to the Agreement as Exhibit L.

82. “Settlement Fund Administrator Costs” means any costs and fees associated with or arising out of the duties of the Settlement Fund Administrator with regard to Teva and Allergan’s payments to the Settlement Fund as described in Exhibit L and elsewhere in this Agreement, including those arising from the use of a bank or other financial institution to receive and disburse payments.

83. “Settlement Fund Escrow” means the interest-bearing escrow fund established pursuant to this Agreement to hold disputed payments made under this Agreement.

84. “Settlement Participation Form” means the form attached as Exhibit K that Participating Subdivisions and Participating Special Districts must execute and provide to Allergan and the Implementation Administrator or Settlement Fund Administrator, and which shall (1) make such Participating Subdivisions and Participating Special Districts signatories to this Agreement, (2) include a full and complete release of any and all of such Participating Subdivisions’ and Participating Special Districts’ Claims and (3) require prompt cessation of litigation activity as set forth in Section III, and request for dismissal with prejudice of any Released Claims that have been filed against Released Entities by any such Participating Subdivisions or Participating Special Districts within fourteen (14) business days after the Reference Date.

85. “Settlement Payment Schedule” means the schedule of payments attached to this Agreement as Exhibit M. Actual payment amounts are subject to adjustments consistent with this Agreement.

86. “Settling State” means any Eligible State that has entered into this Agreement.

87. “Special District” means (1) formal and legally recognized sub-entities of a State recognized by the U.S. Census Bureau1and those listed on Exhibit C; and (2) any person, official, or entity thereof acting in an official capacity on behalf of the Special District. Special Districts do not include sub-entities of a State that provide general governance for a defined area that would qualify as a Subdivision. Entities that include any of the following words or phrases in its name shall not be considered a Special District: mosquito, pest, insect, spray, vector, animal, air quality, air pollution, clean air, coastal water, tuberculosis, and sanitary.

88. “State” means any state of the United States of America, the District of Columbia, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S.

Virgin Islands. Additionally, the use of non-capitalized “state” to describe 1 All such entities are found on the “Special District,” “School District,” and “DEP School District” tabs of the Census Bureau’s 2017 Government Units Listing spreadsheet available at https://www2.census.gov/programs-surveys/gus/datasets/2017/govt_units_2017.ZIP.

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something (e.g., “state court”) shall also be read to include parallel entities in commonwealths, territories, and the District of Columbia (e.g., “territorial court”).

89. “State Allocation Percentage” means the allocation percentages for Eligible States as set forth in Exhibit F-2, which have been adjusted from the State Global Allocation Percentages to account for the Prior Settlements Credit.

90. “State Cost Fund” means the fund totaling $3,598,373.50 and described in Exhibit T.

91. “State Global Allocation Percentage” means the allocation percentages for all States as set forth in Exhibit F-1, which represents allocations before the Prior Settlements Credit is applied.

92. “State Fund” means a component of the Settlement Fund described in subsection VIII.D.

93. “State Outside Counsel Fee Fund” means the fund totaling $16,192,680.76 described in Exhibit S.

94. “State-Specific Finality” means, with respect to the Settling State in question:
a. the Agreement and the Consent Judgment have been approved and entered by the Court as to Allergan, including the release of all Released Claims against Released Entities as provided in this Agreement; b. for all lawsuits brought by the Settling State against Released Entities for Released Claims, either previously filed or filed as part of the entry of the Consent Judgment, the Court has stated in the Consent Judgment or otherwise entered an order finding that all Released Claims against Released Entities asserted in the lawsuit have been resolved by agreement; and
c. (1) the time for appeal or to seek review of or permission to appeal from the approval and entry as described in subsection (a) hereof and entry of such order described in subsection (b) hereof has expired; or (2) in the event of an appeal, the appeal has been dismissed or denied, or the approval and entry described in (a) hereof and the order described in subsection (b) hereof have been affirmed in all material respects (to the extent challenged in the appeal) by the court of last resort to which such appeal has been taken and such dismissal or affirmance has become no longer subject to further appeal (including, without limitation, review by the United States Supreme Court).

95. “State-Subdivision Agreement” means an agreement that a Settling State reaches with the Subdivisions in that State regarding the allocation, distribution, and/or use of funds allocated to that State and to Exhibit G Participants in that State. A StateSubdivision Agreement shall be effective if approved pursuant to the provisions of Exhibit O or if adopted by statute. Preexisting agreements addressing funds other

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than those allocated pursuant to this Agreement shall qualify if the approval requirements of Exhibit O are met. A State and its Subdivisions may revise, supplement, or refine a State-Subdivision Agreement if approved pursuant to the provisions of Exhibit O or if adopted by statute.

96. “Statewide Payment Amount” means the amount from an Annual Payment to be paid to a Settling State, its separate types of funds (if applicable), and its Exhibit G Participants.

97. “Statutory Trust” means a trust fund established by state law to receive funds allocated to a State’s Abatement Accounts Fund and restrict their expenditure to Opioid Remediation purposes subject to reasonable administrative expenses. A State may give a Statutory Trust authority to allocate one or more of the three Settlement Funds, but this is not required.

98. “Subdivision” means (1) a formal and legally recognized sub-entity of a State that provide general governance for a defined area, such as a municipality, county, parish, city, town, incorporated township, village, borough, or any other entities that provide municipal-type government within a State, and (2) any person, official, or entity thereof acting in an official capacity on behalf of the Subdivision (including, without limitation, district attorneys, county attorneys, city attorneys, Sheriffs, and any other official, employee, or representative). Unless otherwise specified, “Subdivision” includes all functional counties and parishes and other functional levels of sub-entities of a State that provide general governance for a defined area. Historic, non-functioning sub-entities of a State (such as Connecticut counties) are not Subdivisions, unless the entity has filed a lawsuit that includes a Released Claim against a Released Entity in a direct, parens patriae, or any other capacity. For purposes of this Agreement, the term Subdivision does not include Special Districts.

99. “Subdivision and Special District Allocation Percentage” means for Subdivisions and Special Districts in a Settling State that are eligible to receive an allocation from the Subdivision Fund pursuant to subsection VIII.D or subsection VIII.E, the percentage as set forth in Exhibit G. The aggregate Subdivision and Special District Allocation Percentage of all Subdivisions and Special Districts receiving a Subdivision and Special District Allocation Percentage in each State shall equal 100%. Immediately upon the effectiveness of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3 (or upon the effectiveness of an amendment to any StateSubdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3) that addresses allocation from the Subdivision Fund, whether before or after the Initial Participation Date, Exhibit G will automatically be amended to reflect the allocation from the Subdivision Fund pursuant to the State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section VIII.E.3. The Subdivision and Special District Allocation Percentages contained in Exhibit G may not change once notice is distributed pursuant to subsection X.A, except upon the effectiveness

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of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3 (or upon the effectiveness of an amendment to any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by subsection VIII.E.3) that addresses allocation from the Subdivision Fund. For the avoidance of doubt, no Subdivision or Special District not listed on Exhibit G shall receive an allocation from the Subdivision Fund and no provision of this Agreement shall be interpreted to create such an entitlement.
100. “Subdivision Fund” means a component of the Settlement Fund described in subsection VIII.A.
101. “Teva” means (i) Teva Pharmaceutical Industries Ltd. and, (ii) all of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, assigns, including but not limited to the Divested Actavis Generic Entities and Anda Inc.
102. “Teva Global Opioid Settlement Agreement” means the settlement agreement between and among the Settling States, Participating Subdivisions, Participating Special Districts, and Teva to resolve opioid-related Claims against Teva and the other Released Entities (as defined therein).
103. “Threshold Motion” means a motion to dismiss or equivalent dispositive motion made at the outset of litigation under applicable procedure. A Threshold Motion must include as potential grounds for dismissal, any applicable Bar or the relevant release by a Settling State, Participating Subdivision, or Participating Special District provided under this Agreement and, where appropriate under applicable law, any applicable limitations defense.

II. Participation by States and Condition to Preliminary Agreement A. Notice to States. On November 22, 2022 this Agreement shall be distributed to all Eligible States. The Eligible States’ Attorneys General shall then have a period of thirty (30) days to decide whether to become Settling States. Eligible States will decide whether to become Settling States for both this Agreement and the Teva Global Opioid Settlement Agreement, or decline participation in both settlements. However, if Teva enters bankruptcy prior to the Effective Date, Eligible States can choose to only join this Agreement. If a State is only an Eligible State with respect to one of the Agreements, the State need only decide whether to become a Settling State with respect to the Agreement for which it is an Eligible State.

States that determine to become Settling States shall so notify the Enforcement Committee and Allergan within thirty (30) days after November 22, 2022 and shall further commit to obtaining any necessary additional State releases prior to the Effective Date. This notice

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period for States may be extended by written agreement of Allergan and the Enforcement Committee.

B. Ineligible States. Non-Settling States and Prior Settling States shall not be eligible for any payments or have any rights in connection with this Agreement.

C. Condition to Preliminary Agreement. Following the notice period to Eligible States set forth in subsection II.A above, Allergan shall determine on or before the Preliminary Agreement Date whether, in its sole discretion enough States have agreed to become Settling States to proceed with notice to Subdivisions as set forth in Section X below. The determination to proceed shall be in the sole discretion of Allergan and may be based on any criteria or factors deemed relevant by Allergan. If Allergan determines that this condition has been satisfied, and that notice to the Subdivisions should proceed, it will so notify the Settling States by providing notice to the Enforcement Committee on the Preliminary Agreement Date. If Allergan determines that this condition has not been satisfied, it will so notify the Settling States by providing notice to the Enforcement Committee, and this Agreement will have no further effect and all releases and other commitments or obligations contained herein will be void, other than Allergan’s funding of Implementation Costs to date. The Preliminary Agreement Date may be extended by written agreement of Allergan and the Enforcement Committee.

D. Later Joinder by States. After the Preliminary Agreement Date, an Eligible State may only become a Settling State with the consent of Allergan, in its sole discretion. If a State becomes a Settling State more than thirty (30) days after the Preliminary Agreement Date, the Subdivisions and Special Districts in that State that become Participating Subdivisions and Participating Special Districts within ninety (90) days of the State becoming a Settling State shall be considered Initial Participating Subdivisions or Initial Participating Special Districts.

III. Cessation of Litigation Activities
A. Following the Preliminary Agreement Date, if Allergan has determined to proceed with notice pursuant to Section II, all Litigating States that intend to become Settling States and that are engaged in or have engaged in discovery and/or substantive motion practice (“Active Litigation”) against a Released Entity shall make reasonable efforts to immediately cease litigation activity (e.g., written and document discovery, depositions, expert disclosures, and motion practice) against Allergan where feasible, or to minimize litigation activity by means of agreed deadline extensions and agreed postponement of depositions, document productions, and motion practice. Allergan shall cooperate in such efforts. The obligations under this subsection do not extend past the Reference Date if Allergan determines it is not going forward with the Agreement. This paragraph III.A does not apply to Litigating States with a trial date within six (6) months of the Preliminary Agreement Date, though such Litigating States and Allergan shall engage in good faith discussions regarding the potential cessation of litigation activity.

B. Following the execution of the Settlement Participation Form, attached as Exhibit K, a Litigating Subdivision or Litigating Special District that is engaged in active litigation

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against a Released Entity shall make all reasonable efforts to immediately cease all litigation activity (e.g., written and document discovery, depositions, expert disclosures, and motion practice) against Allergan, where feasible, or to minimize litigation activity by means of agreed deadline extensions and agreed postponement of litigation activity by means of agreed deadline extensions and agreed postponement of depositions, document productions, and motion practices. Allergan shall cooperate in such efforts. The obligations under this subsection do not extend past the Reference Date if Allergan determines it is not going forward with the settlement. This paragraph III.B does not apply to Litigating Subdivisions or Litigating Special Districts with a trial date within six (6) months of the Preliminary Agreement Date, though such Litigating Subdivisions or Litigating Special Districts and Allergan shall engage in good faith discussions regarding the potential cessation of litigation activity. Notwithstanding this provision no Litigating Subdivision is required to cease its litigation if it determines such action would be detrimental to its litigation.

C. Following the Reference Date, the Settling States shall endeavor to file Consent Judgments (the contents of which must be agreed upon with Allergan) within thirty (30) days of the Reference Date. Participating Subdivisions and Participating Special Districts, as applicable, shall request dismissal of their actions with prejudice within fourteen (14) days of the Reference Date. The Settling States, Participating Subdivisions, and Participating Special Districts shall use best efforts to get Consent Judgments or orders of dismissal with prejudice, as applicable, entered promptly after filing.

IV. Injunctive Relief
A. Entry of Injunctive Relief. As part of the Consent Judgment, the Parties agree to the Injunctive Relief Terms attached as Exhibit P.

V. Release
A. Scope. As of the Effective Date, the Released Entities will be released and forever discharged from all of the Releasors’ Released Claims. Each Settling State (for itself and its Releasors) and Participating Subdivision (for itself and its Releasors), and Participating Special District (for itself and its Releasors) will, on or before the Effective Date, absolutely, unconditionally, and irrevocably covenant not to bring, file, or claim, or to cause, assist in bringing, 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 Agreement are intended 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 each Settling State, its Attorney General, each Participating Subdivision, and each Participating Special District to release Claims. The release shall be a complete bar to any Released Claim of all Releasors. Nothing in this Agreement shall release or impair any Claims against Teva Ltd., Teva USA, Cephalon, or Anda, except to the extent expressly set forth in this Agreement.

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B. Claim Over and Non-Party Settlement.

1. Statement of Intent. It is the intent of the Parties that:
a. Released Entities should not seek contribution or indemnification (other than pursuant to an insurance contract) from other parties for their payment obligations under this Agreement;
b. the payments made under this Agreement shall be the sole payments made by the Released Entities to the Releasors involving, arising out of, or related to Covered Conduct (or conduct that would be Covered Conduct if engaged in by a Released Entity);
c. Claims by Releasors against non-Parties should not result in additional payments by Released Entities, whether through contribution, indemnification or any other means; and
d. the Settlement meets the requirements of the Uniform Contribution Among Joint Tortfeasors Act and any similar state law or doctrine that reduces or discharges a released party’s liability to any other parties. e. The provisions of this subsection V.B are intended to be implemented consistent with these principles. This Agreement and the releases and dismissals provided for herein are made in good faith.

2. Contribution/Indemnity Prohibited. No Released Entity shall seek to recover for amounts paid under this Agreement based on indemnification, contribution, or any other theory from a manufacturer, pharmacy, hospital, pharmacy benefit manager, health insurer, third-party vendor, trade association, distributor, or health care practitioner, provided that a Released Entity shall be relieved of this prohibition with respect to any entity that asserts a Claim Over against it. However, and notwithstanding the foregoing, this provision shall not preclude any Released Entity from seeking indemnification, contribution, or any other theory from and against Teva Ltd., Divested Entities, Pfizer Inc., King Pharmaceuticals, Inc., and Alpharma Inc., and/or each of their respective past and current parents, subsidiaries, and/or affiliates. For the avoidance of doubt, nothing herein shall prohibit a Released Entity from recovering amounts owed pursuant to insurance contracts.

3. Non-Party Settlement. To the extent that, on or after the Reference Date, any Releasor enters into a Non-Party Settlement, including in any bankruptcy case or through any plan of reorganization (whether individually or as a class of creditors), the Releasor will include (or in the case of a Non-Party Settlement made in connection with a bankruptcy case, will cause the debtor to include), unless prohibited from doing so under applicable law, in the Non-Party Settlement a prohibition on contribution or indemnity of any kind substantially equivalent to that required from Allergan in subsection V.B.2, or a release from such Non-Released Entity in favor of the Released Entities (in a form equivalent to the releases

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contained in this Agreement) of any Claim Over. The obligation to obtain the prohibition and/or release required by this subsection is a material term of this Agreement. The sole remedy for a Releasor’s failure to include such a provision in a Non-Party Settlement shall be the application of Section V.B.4 below. NonReleased Entities include, but are not limited to, Teva Ltd., Teva USA, Divested Actavis Generic Entities or other Divested Entities, and Anda.

4. Claim Over. In the event that any Releasor obtains a judgment with respect to NonParty Covered Conduct against a Non-Released Entity that does not contain a prohibition like that in subsection V.B.3, or any Releasor files a Non-Party Covered Conduct Claim against a Non-Released Entity in bankruptcy or a Releasor is prevented for any reason from obtaining a prohibition/release in a Non-Party Settlement as provided in subsection V.B.3, and such Non-Released Entity asserts a Claim Over against a Released Entity, then Releasor and Allergan shall take the following actions to ensure that the Released Entities do not pay more with respect to Covered Conduct to Releasors or to Non-Released Entities than the amounts owed under this Agreement by Allergan:
a. Allergan shall notify that Releasor of the Claim Over within sixty (60) days of the assertion of the Claim Over or sixty (60) days of the Effective Date of this Agreement, whichever is later;
b. Allergan and that Releasor shall meet and confer concerning the means to hold Released Entities harmless and ensure that it is not required to pay more with respect to Covered Conduct than the amounts owed by Allergan under this Agreement;
c. That Releasor and Allergan shall take steps sufficient and permissible under the law of the State of the Releasor to hold Released Entities harmless from the Claim Over and ensure Released Entities are not required to pay more with respect to Covered Conduct than the amounts owed by Allergan under this Agreement. Such steps may include, where permissible:
(i) Filing of motions to dismiss or such other appropriate motion by Allergan or Released Entities, and supported by Releasors, in response to any Claim filed in litigation or arbitration; (ii) Reduction of that Releasor’s Claim and any judgment it has obtained or may obtain against such Non-Released Entity by whatever amount or percentage is necessary to extinguish such Claim Over under applicable law, up to the amount that Releasor has obtained, may obtain, or has authority to control from such Non-Released Entity;
(iii) Placement into escrow of funds paid by the Non-Released Entities such that those funds are available to satisfy the Claim Over;

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(iv) Return of monies paid by Allergan to that Releasor under this Agreement to permit satisfaction of a judgment against or settlement with the Non-Released Entity to satisfy the Claim Over; (v) Payment of monies to Allergan by that Releasor to ensure it is held harmless from such Claim Over, up to the amount that Releasor has obtained, may obtain, or has authority to control from such NonReleased Entity; (vi) Credit to Allergan under this Agreement to reduce the overall amounts to be paid under the Agreement such that it is held harmless from the Claim Over; and
(vii) Such other actions as that Releasor and Allergan may devise to hold Allergan harmless from the Claim Over.
d. The actions of that Releasor and Allergan taken pursuant to paragraph (c) must, in combination, ensure Allergan is not required to pay more with respect to Covered Conduct than the amounts owed by Allergan under this Agreement.
e. In the event of any dispute over the sufficiency of the actions taken pursuant to paragraph (c), that Releasor and Allergan may seek review by the National Arbitration Panel, provided that, if the Parties agree, such dispute may be heard by the state court where the relevant Consent Judgment was filed. The National Arbitration Panel shall have authority to require Releasors to implement a remedy that includes one or more of the actions specified in paragraph (c) sufficient to hold Released Entities fully harmless. In the event that the panel’s actions do not result in Released Entities being held fully harmless, Allergan shall have a Claim for breach of this Agreement by Releasors, with the remedy being payment of sufficient funds to hold Allergan harmless from the Claim Over. For the avoidance of doubt, the prior sentence does not limit or eliminate any other remedy that Allergan may have.

C. To the extent that the Claim Over is based on a contractual indemnity, the obligations under subsection V.B.4 shall extend solely to a Non-Party Covered Conduct Claim against a pharmacy, clinic, hospital or other purchaser or dispenser of Products, a manufacturer that sold or promoted Products, a consultant, and/or a pharmacy benefit manager or other thirdparty payor. Allergan shall notify the Settling States, to the extent permitted by applicable law, in the event that any of these types of Non-Released Entities asserts a Claim Over arising out of contractual indemnity against it.

D. General Release. In connection with the releases provided for in the Agreement, each Settling State (for itself and its Releasors), Participating Subdivision and Participating Special District 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

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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 thereafter 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 Settling State (for itself and its Releasors), Participating Subdivision and Participating Special District 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, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Settling States’ decision to enter into the Agreement, the Participating Subdivisions’ decision to participate in the Agreement, or the Participating Special District’s decision to participate in the Agreement.

E. Res Judicata. Nothing in the Agreement shall be deemed to reduce the scope of the res judicata or claim preclusive effect that the settlement memorialized in the Agreement, and/or any Consent Judgment or other judgment entered on the Agreement, gives rise to under applicable law.

F. Representation and Warranty. The signatories hereto on behalf of their respective Settling State, its Participating Subdivisions, and its Participating Special Districts, expressly represent and warrant that they will obtain on or before the Effective Date (or have obtained) the authority to settle and release, to the maximum extent of the State’s power, all Released Claims of (1) their respective Settling State; (2) any of the Settling State’s past and present executive departments, state agencies, divisions, boards, commissions and instrumentalities with the regulatory authority to enforce state and federal controlled substances acts; (3) any of their respective Settling State’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 of a pharmaceutical distribution license; (4) any Participating Subdivisions; and (5) any Participating Special District. For the purposes of clause (3) above, executive departments, agencies, divisions, boards, commissions, and instrumentalities are those that are under the executive authority or direct control of the State’s Governor. Also, for the purposes of clause (3), a release from a State’s Governor is sufficient to demonstrate that the appropriate releases have been obtained.

G. Effectiveness. The releases set forth in the Agreement shall not be impacted in any way by any dispute that exists, has existed, or may later exist between or among the Releasors. Nor shall such releases be impacted in any way by any current or future law, regulation, ordinance, or court or agency order limiting, seizing, or controlling the distribution or use

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of the Settlement Fund or any portion thereof, or by the enactment of future laws, or by any seizure of the Settlement Fund or any portion thereof.

H. Cooperation. Releasors (i) will not encourage any person or entity to bring or maintain any Released Claim against any Released Entity and (ii) will reasonably cooperate with and not oppose any effort by a Released Entity to secure the prompt dismissal of any and all Released Claims.

I. Non-Released Claims. Notwithstanding the foregoing or anything in the definition of Released Claims, the Agreement does not waive, release or limit any criminal liability, Claims for any outstanding liability under any tax or securities law, Claims against parties who are not Released Entities, Claims by private individuals, Claims for Medicaid rebates, Claims asserted, or that could be asserted, by any State, Subdivision, or Special District related to the causes of action in In re: Generic Pharmaceuticals Pricing Antitrust Litigation, in the United States District court for the District of Pennsylvania, MDL No. 2724, and any related action (such excluded claims include, but are not limited to, all antitrust claims and any claims related to any non-opioid generic drugs), and any claims arising under the Agreement for enforcement of the Agreement.

VI. Monetary Relief Overview and Maximum Payments
A. Excluding Allergan’s share of Implementation Costs and costs of the Settlement Fund Administrator, there are three main categories of monetary payments:

1. Annual Payments to the Settlement Fund. These payments are generally addressed in Section VII. The maximum amount Allergan shall pay in Annual Payments to the Settlement Fund is the Net Abatement Amount of $1,799,186,751.00, which reflects the application of the Prior Settlements Credit to the Global Settlement Abatement Amount. Annual Payments will be made over seven (7) years on the Payment Dates. The actual amount paid will depend on, among other things, the level of participation of Eligible States, their Subdivisions, and their Special Districts.

2. Additional Restitution Amount. These payments are generally addressed in Section XII. The maximum amount Allergan shall pay for the Additional Restitution Amount is $16,192,680.76. Payments for the Additional Restitution Amount will be made over four (4) years on the Payment Dates. The actual amount paid will depend on the number of Eligible States listed in Exhibit N that become Settling States.

3. Attorney Fee and Cost Payments. These payments are generally addressed in Section XII and Exhibits M, R, S, and T. They consist of payments for the State Outside Counsel Fee Fund, the State Cost Fund, and the Attorney Fee and Cost Fund. These payments will be made over four (4) on the Payment Dates. The maximum amount Allergan shall pay into these funds is the Global Settlement Attorney Fee Amount of $206,906,476.36.

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B. The aggregate maximum amount Allergan shall pay for these for these payment categories is $2,022,285,908.12 (the “Post-Credit Global Settlement Amount”). This figure does not include costs related to injunctive relief and document disclosure addressed in Exhibit P, Implementation Costs, and Settlement Fund Administrator Costs addressed in this Agreement. AbbVie agrees to satisfy the obligations to make the payments due in this Section VI if for any reason Allergan fails to fulfill its payment obligations under Section VI (the “Payment Obligations”).

C. For purposes of this Agreement only, Releasors represent that fifty-six percent (56%) of the Post-Credit Global Settlement Amount payable by Allergan constitutes consideration for the settlement of Claims involving, arising from, or related to generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and other Divested Entities and the operation of Divested Actavis Generic Entities and other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016 that the Releasors are asserting or might otherwise assert or could assert that Allergan (or any other Released Entity) is directly or indirectly and/or jointly or severally liable, including but not limited to, based on parent or control liability or a substantially similar theory. Releasors represent that forty-four percent (44%) of the PostCredit Global Settlement Amount payable by Allergan constitutes consideration for the settlement of Claims involving, arising from, or related to branded opioid drugs that are Products of or attributable to Allergan or any other Released Entity (including but not limited to branded opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and other Divested Entities and the operation of the Divested Actavis Generic Entities and the other Divested Entities related to those branded opioid drugs that are Products before August 2, 2016) that the Releasors are asserting or might otherwise assert or could assert against Allergan or any other Released Entity, of which seventy-seven percent (77%) is specifically involving, arising from, or related to Kadian® (including but not limited to Kadian® manufactured, distributed, marketed, and/or sold from 1997 through 2008 by King Pharmaceuticals, Inc. and/or Alpharma Inc.).

D. Settlement Fund Administrator and Implementation Costs. If this Agreement becomes effective, Allergan shall be responsible for one-third of the Implementation Costs. The full amount of the Implementation Costs shall be jointly advanced by Teva and Allergan. If this Agreement becomes effective, then Allergan shall deduct from Allergan’s Initial Year Payment the difference between the excess amount it advanced for Implementation Costs and its one-third obligation for such costs. Settlement Fund Administrator Costs shall be paid out of interest accrued on the Settlement Fund. Should such interest prove insufficient to fully cover the costs, the remaining cost amounts shall be paid one-third by Teva, onethird by Allergan and one-third from the Settlement Fund through the disbursement of Allergan’s final Payment Allergan shall not be responsible for any costs incurred by the Settlement Fund Administrator after the disbursement of its final Payment.

VII. Annual Payments to Settlement Fund

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A. Structure of Payments to Settlement Fund

1. All payments under this Section VII shall be made into the Settlement Fund, except that where specified, they shall be made into the Settlement Fund Escrow. The Settlement Fund shall be allocated and used only as specified in Section VIII.

2. Allergan shall pay into the Settlement Fund the Net Abatement Amount consisting of $1,799,186,751.00 minus: (1) any offsets specified in subsection VII.C below; (2) any unearned Incentive Payments under subsection VII.E below; and (3) any adjustments under Section XI below.

3. The payments to the Settlement Fund shall be divided into Base Payments and Incentive Payments as provided in subsections VII.D and VII.E below and set out in Exhibit M.

B. Settlement Fund Payment Process

1. Except as otherwise provided in this Agreement, Allergan shall make one Initial Year Payment (the first Annual Payment) and six (6) additional Annual Payments of equal installments of the Net Abatement Amount (after all applicable offsets) into the Settlement Fund. The Settlement Payment Schedule is set forth in Exhibit M. Annual Payments shall be made on the Payment Date, provided that the necessary wire instructions, W-9 form, and Allergan’s Bank Verification Form process is completed for the Settlement Fund at least twenty-one (21) days before the relevant payment is due and Allergan has completed any process required by the Settlement Fund Administrator and/or its financial institution(s) to complete the transaction. If there is a delay in making a payment because any of these conditions were not completed at least twenty-one (21) days in advance of the Payment Date, then the Annual Payment will be made within twenty-one (21) days of the completion of these conditions.

2. The Initial Year Payment shall consist of only Base Payments (after all applicable offsets). The other six (6) Annual Payments shall each consist of Base Payments (after all applicable offsets) and Incentive Payments (after all applicable offsets).

The amount of the Initial Year Payment and each other Annual Payment, payable by Allergan shall not exceed the maximum amounts allocated to each Payment Year in Exhibit M.

3. To determine each Annual Payment for Payment Year 2 forward, the Settlement Fund Administrator shall use the data in its records sixty (60) days prior to the Payment Date for each payment. Prior to the Effective Date, the Parties will include an exhibit to the Agreement setting forth in detail the process for the Settlement Fund Administrator obtaining relevant data and for distributing funds to Settling States and Exhibit G Participants consistent with the terms of this Agreement as quickly as practical.

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4. The Settlement Fund Administrator shall determine the Annual Payment and the Statewide Payment Amount for each Settling State, consistent with the provisions in Exhibit L, by:
a. determining, for each Settling State, the amount of Base Payments and Incentive Payments to which the State is entitled by applying the criteria in this Section;
b. applying any reductions, or offsets required by Sections VII and XI; and c. determining the total amount owed by Allergan to all Settling States and Exhibit G Participant.

5. If, no later than fifty (50) days prior to the Payment Date for each payment for Payment Year 2 forward, Allergan and the Enforcement Committee inform the Settlement Fund Administrator that they agree on the amount of the Annual Payment and the Statewide Payment Amount for each Settling State, Allergan shall pay the agreed-upon Annual Payment amount on the Payment Date and the Settlement Fund Administrator shall treat those amounts as the determination described in subsection VII.B.4. If the Settlement Fund Administrator is not so informed, it shall give notice to Allergan, the Settling States, and the Enforcement Committee of the amount of the Annual Payment, and the Statewide Payment Amount for each Settling State, following the determination described in subsection VII.B.4, and the following timeline shall apply:
a. Within twenty-one (21) days of the notice provided by the Settlement Fund Administrator, Allergan, any Settling State or the Enforcement Committee may dispute, in writing, the calculation of the Annual Payment, or the Statewide Payment Amount for a Settling State. Such disputing party must provide a written notice of dispute to the Settlement Fund Administrator, the Enforcement Committee, any affected Settling State, and Allergan identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected.
b. Within twenty-one (21) days of the sending of a written notice of dispute, any affected party may submit a response, in writing, to the Settlement Fund Administrator, the Enforcement Committee, any affected Settling State, and Allergan identifying the basis for disagreement with the notice of dispute. c. If no response is filed, the Settlement Fund Administrator shall adjust the amount calculated consistent with the written notice of dispute, and Allergan shall pay the adjusted amount as the Annual Payment on the Payment Date. If a written response to the written notice of dispute is timely sent to the Settlement Fund Administrator, the Settlement Fund Administrator shall notify Allergan of the preliminary amount to be paid, which shall be the greater of the amount originally calculated by the Settlement Fund Administrator or the amount that would be consistent with

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the notice of dispute, provided, however that in no circumstances shall the preliminary amount to be paid be higher than the maximum amount of Base Payments and Incentive Payments for that payment as set forth in Exhibit M. For the avoidance of doubt, a transfer of payments from the Settlement Fund Escrow for other Payment Years does not count toward determining whether the amount to be paid is higher than the maximum amount of Base Payments and Incentive Payments for that payment as set forth in Exhibit M.
d. The Settlement Fund Administrator shall place any disputed amount of the preliminary amount paid by Allergan into the Settlement Fund Escrow and shall disburse any undisputed amount to each Settling State and its Exhibit G Participants.

6. If a Settling State informs the Settlement Fund Administrator that it and its Exhibit G Participants have reached consensus on the amount of its Statewide Payment Amount, determined pursuant to subsection VII.B.3 or VII.B.4, to be distributed to the Settling State, among its separate types of funds (if applicable), and among its Exhibit G Participants, the Settlement Fund Administrator shall disburse the Statewide Payment Amount pursuant to the consensus distribution amounts provided by the Settling State. For a Settling States that does not so notify the Settlement Fund Administrator, the Settlement Fund Administrator shall allocate the Settling State’s Statewide Payment Amount, pursuant to Section VII, among the separate types of funds for the Settling State (if applicable), and among its Exhibit G Participants using the following procedures:
a. As soon as possible for each payment and following the determination described in subsection VII.B.3 and VII.B.4, the Settlement Fund Administrator shall give notice to the relevant Settling States and their Exhibit G Participants of the amount to be received by each Settling State, the amount to be received by the separate types of funds for each Settling State (if applicable), and the amount to be received by each Settling State’s Exhibit G Participants.
b. Within twenty-one (21) days of the notice provided by the Settlement Fund Administrator, any Settling State or Exhibit G Participant may dispute, in writing, the calculation of the amount to be received by a Settling State and/or its Exhibit G Participants. A dispute will be deemed invalid and disregarded if it challenges the allocations adopted by a State-Subdivision Agreement approved pursuant to the provisions of Exhibit O or by statute.

Such disputing party must provide a written notice of dispute to the Settlement Fund Administrator, any affected Settling State, and any affected Exhibit G Participant identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected. c. Within twenty-one (21) days of the sending of a written notice of dispute, any affected Settling State or any affected Exhibit G Participant may submit

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a response, in writing, to the Settlement Fund Administrator, any affected Settling State and any affected Exhibit G Participant identifying the basis for disagreement with the notice of dispute.
d. If no response is filed, the Settlement Fund Administrator shall adjust the amount calculated consistent with the written notice of dispute. e. The Settlement Fund Administrator shall place any disputed amount into the Settlement Fund Escrow and shall disburse any undisputed amount to the Settling State and its Exhibit G Participants.

7. Disputes described in this subsection (other than those for which no response is filed under subsection VII.B.5.c or VII.B.6.d) shall be resolved in accordance with the terms of Section XIV.

8. The Settlement Fund Administrator may combine the disbursements of Annual Payments with disbursement of funds under other comparable opioid settlements.

In determining when disbursements for each Annual Payment will be made, the Settlement Fund Administrator may take into account the timeline for the availability of disbursements under other comparable opioid settlements.

9. For the avoidance of doubt, Subdivisions and Special Districts not listed on Exhibit G shall not receive an allocation from the Subdivision Fund.

C. Offsets to Annual Payments to the Settlement Fund for Non-Settling States

1. An offset equal to the Net Abatement Amount of $1,799,186,751.00 times the State Allocation Percentage assigned to each Non-Settling State in Exhibit F-2 shall be deducted from the total amount to be paid by Allergan to the Settlement Fund.

2. Non-Settling States shall not be eligible for any payments or have any rights in connection with this Agreement. Accordingly, the stated maximum dollar amounts of the Annual Payments specified in Exhibit M are reduced by the aggregate State Allocation Percentage of Non-Settling States as set forth in Exhibit F-2.

D. Base Payments

1. Allergan shall make Base Payments into the Settlement Fund in an amount equal to 45% of the Net Abatement Amount of $1,799,186,751.00 minus any offsets for Non-Settling States specified in Section VII.C.I. The maximum total for Base Payments is $809,634,037.95. The Base Payments will be paid in accordance with the Settlement Payment Schedule specified by Exhibit M, subject to potential offsets for Non-Settling States as provided in Section VII.C.1.

2. The Base Payments will be allocated by Settling State proportionate to each Settling State’s State Allocation Percentage in Exhibit F-2, adjusted for any Non-Settling State.

31 December 20, 2022
E. Incentive Abatement Payments

1. Allergan shall make potential Incentive Payments totaling up to a maximum of 55% of the Net Abatement Amount of $1,799,186,751.00 for all Settling States with the actual amount depending on whether and the extent to which the criteria set forth below are met in each Settling State. The maximum total for Incentive Payments is $989,552,713.05.

2. The maximum total Incentive Payment for any Settling State shall be no more than the maximum total for Incentive Payments listed in Section VII.E.1 times the Settling State’s State Allocation Percentage specified in Exhibit F-2. Incentive Payments are state-specific, with each Settling State receiving an Incentive Payment based on the incentives for which it is eligible for that year under the criteria set forth below and any offset specified in Section XI.

3. The Incentive Payments shall be divided among four (4) categories, referred to as Incentives A–D. Incentives A–C will be due in installments over six (6) Payment Years beginning with Annual Payment 2 and Incentive D will be due in installments over four (4) years beginning with Annual Payment 4, as shown on Exhibit M. The total amount of Incentive Payments in an Annual Payment shall be the sum of the Incentive Payments for which individual Settling States are eligible for that Payment Year under the criteria set forth below. The Incentive Payments shall be made with respect to a specific Settling State based on its eligibility for that Payment Year under the criteria set forth below.

4. The maximum amount available for Incentive Payments, $989,552,713.05, is divided into two pools. The maximum amount of Incentive Payments for Incentives A-C shall be $863,609,640.48, which is 48% of the maximum Net Abatement Amount. A Settling State may be eligible for its full allocable share of this payment by either achieving Incentive A or by fully earning both Incentives B and C. The maximum amount of Incentive Payments for Incentive D shall be $125,943,072.57, which is 7% of the maximum Net Abatement Amount. (These figures represent maximum payments prior to being adjusted for any offsets and assumes every State is a Settling State and will satisfy the requirements specified below to earn its maximum incentive amount. The Incentive Payments will be paid in accordance with the payment schedule in Exhibit M, subject to potential deductions as provided herein.) A Settling State qualifies to receive Incentive Payments in addition to Base Payments if it meets the incentive eligibility requirements specified below. Settling States may qualify for Incentive Payments in four ways. If a Settling State qualifies for Incentive A, it will become entitled to receive the maximum payment allocable to the State for Incentives A-C as stated in subsection VII.E.5. If a Settling State does not qualify for Incentive A, it can alternatively qualify for Incentive B and/or Incentive C. A Settling State can qualify for Incentive D regardless of whether it qualifies for another Incentive Payment.

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5. Incentive A: Full Participation or Fully Released Claims of Litigating Subdivisions, Litigating Special Districts, Non-Litigating Subdivisions with Population Greater Than 10,000, and Non-Litigating Covered Special Districts. a. A Settling State’s total potential Incentive A payment allocation is $863,609,640.48 times the percentage allocation assigned that Settling State in Exhibit F-2.
b. A State qualifies for Incentive A by: (1) complete participation in the form of releases consistent with Section V above from all Litigating Subdivisions and Litigating Special Districts, Non-Litigating Subdivisions with population over 10,000, and Non-Litigating Covered Special Districts; (2) a Bar; or (3) a combination of approaches in clauses (1)-(2) that achieves the same level of resolution of Subdivision and Special District Claims (e.g., a law barring future litigation combined with full joinder by Litigating Subdivisions and Litigating Special Districts). For purposes of Incentive A, a Subdivision or Special District is considered a “Litigating Subdivision” or “Litigating Special District” if it has brought Released Claims against Released Entities on or before the Reference Date; all other Subdivisions and Special Districts are considered “Non-Litigating.” For purposes of Incentive A, Non-Litigating Covered Special Districts shall not include a Special District with any of the following words or phrases in its name:
mosquito, pest, insect, spray, vector, animal, air quality, air pollution, clean air, coastal water, tuberculosis, and sanitary.
c. If a Settling State qualifies for Incentive A after receiving an Incentive Payment under Incentives B or C, described below, the Settling State’s payments under Incentive A will equal the remainder of its total potential Incentive A payments less any payments previously received under Incentives B or C. A Settling State that receives all of its total potential Incentive A payment allocation shall not receive additional Incentive Payments under Incentives B or C.
d. A Settling State that is not eligible for Incentive A as of two (2) years after the Effective Date shall not be eligible for Incentive A for that Payment Year or any subsequent Payment Years.

6. Incentive B: Early Participation or Released Claims by Litigating Subdivisions and Litigating Special Districts.
a. If a Settling State does not qualify for Incentive A, it may still qualify to receive up to 60% of its total potential Incentive A payment allocation under Incentive B.
b. A Settling State can qualify for an Incentive B payment if Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of the Settling State’s litigating population are either Participating

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Subdivisions, Participating Special Districts, or have their claims resolved through Case-Specific Resolutions.
(i) A Settling State’s litigating population is the sum of the population of all Litigating Subdivisions and Litigating Special Districts. A Settling State’s litigating population shall include all Litigating Subdivisions and Litigating Special Districts whose populations overlap in whole or in part with other Litigating Subdivisions and Litigating Special Districts, for instance in the case of a Litigating Special District, city, or township contained within a county. (ii) For example, if School District A is a Litigating Special District in City B with a population of 1, City B is itself a Litigating Subdivision with a population of 8, and City B is located within County C, and County C is a Litigating Subdivision with a population 10, then each of their individual populations shall be added together (i.e., 1 + 8 +10) to determine the total litigating population (i.e., 19).
c. The following time periods apply to Incentive B payments:
(i) Period 1: Zero to two hundred ten (210) days after the Effective Date.
(ii) Period 2: Two hundred eleven (211) days to one year after the Effective Date.
(iii) Period 3: One year and one day to two years after the Effective Date. d. Within Period 1: If Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of a Settling State’s litigating population are Participating Subdivisions or Participating Special Districts, or have their Claims resolved through Case-Specific Resolutions during Period 1, then a sliding scale will determine the share of the funds available under Incentive B, with a maximum of 60% of the Settling State’s total potential Incentive Payment allocation available. Under that sliding scale, if Litigating Subdivisions and Litigating Special Districts collectively representing 75% of a Settling State’s litigating population become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status by the end of Period 1, a Settling State will receive 50% of the total amount available to it under Incentive B. If more Litigating Subdivisions and Litigating Special Districts become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status, the Settling State shall receive an increased percentage of the total amount available to it under Incentive B as shown in the table below.

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Participation or Case-Specific
Resolution Levels
(As percentage of litigating
population)
Incentive B Award
(As percentage of total
amount available to Settling State
for Incentive B)
75% 50%
76% 52%
77% 54%
78% 56%
79% 58%
80% 60%
85% 70%
90% 80%
95% 90%
100% 100%
e. Within Period 2: If a Settling State did not qualify for an Incentive B payment in Period 1 but Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of the Settling State’s litigating population become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status by the end of Period 2, then the Settling State qualifies for 75% of the Incentive B payment it would have qualified for in Period 1.
f. Within Period 3: If a Settling State did not qualify for an Incentive B payment in Periods 1 or 2, but Litigating Subdivisions and Litigating Special Districts collectively representing at least 75% of the Settling State’s litigating population become Participating Subdivisions or Participating Special Districts, or achieve Case-Specific Resolution status by the end of Period 3, then the Settling State qualifies for 50% of the Incentive B payment it would have qualified for in Period 1. g. A Settling State that receives the Incentive B payment for Periods 1 and/or 2 can receive additional payments if it secures participation from additional Litigating Subdivisions and/or Litigating Special Districts (or Case-Specific Resolutions of their Claims) during Periods 2 and/or 3. Those additional payments would equal 75% (for additional participation or Case-Specific Resolutions during Period 2) and 50% (for additional participation or CaseSpecific Resolutions during Period 3) of the amount by which the increased litigating population levels would have increased the Settling State’s Incentive B payment if they had been achieved in Period 1. h. The percentage of the available Incentive B amount for which a Settling State is eligible by the end of Period 3 shall cap its eligibility for that Payment Year and all subsequent Payment Years. If Litigating Subdivisions and Litigating Special Districts that have become Participating Subdivisions or Participating Special Districts, or achieved Case-Specific Resolution

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status collectively represent less than 75% of a Settling State’s litigating population by the end of Period 3, the Settling State shall not receive any Incentive B payment.
i. If there are no Litigating Subdivisions or Litigating Special Districts in a Settling State, and that Settling State is otherwise eligible for Incentive B, that Settling State will receive its full allocable share of Incentive B. j. Incentives earned under Incentive B shall accrue after each of Periods 1, 2, and 3. Calculations to increase Incentive Payments in later periods based on additional joinder shall not reduce any amount already vested at the end of a prior period.

7. Incentive C: Participation or Release of Claims by Primary Subdivisions a. If a Settling State does not qualify for Incentive A, it may still qualify to receive up to 40% of its total potential Incentive A payment allocation under Incentive C, which has two parts.
b. Part 1: Under Incentive C, Part 1, a Settling State can receive up to 75% of its Incentive C allocation. A Settling State can qualify for a payment under Incentive C, Part 1 only if Primary Subdivisions (whether Litigating Primary Subdivisions or Non-Litigating Primary Subdivisions as of the Reference Date) collectively representing at least 60% of the Settling State’s Primary Subdivision population become Participating Subdivisions or achieve Case-Specific Resolution status.
(i) A Settling State’s Primary Subdivision population is the sum of the population of all Primary Subdivisions (whether Litigating Primary Subdivisions or Non-Litigating Primary Subdivisions as of the Reference Date). A Settling State’s Primary Subdivision population shall include all Primary Subdivisions whose populations overlap in whole or in part with other Primary Subdivisions, for instance in the case of a Primary Subdivision that is a city contained within a Primary Subdivision that is a county. Because Primary Subdivisions include Subdivisions whose populations overlap in whole or in part with other Subdivisions, the Settling State’s Primary Subdivision population may be greater than the Settling State’s total population. (Special Districts are not relevant for purposes of Incentive C calculations.)
(ii) For example, if City A is a Primary Subdivision with a population of 1 within County B, and County B is a Primary Subdivision with a population of 10, then each of their individual populations shall be added together (i.e., 1+10) to determine the total Primary Subdivision population (i.e., 11).

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c. A sliding scale will determine the share of the funds available under Incentive C, Part 1 to Settling States meeting the minimum 60% threshold.

Under that sliding scale, if a Settling State secures participation or CaseSpecific Resolutions from Primary Subdivisions representing 60% of its total Primary Subdivision population, it will receive 40% of the total amount potentially available to it under Incentive C, Part 1. If a Settling State secures participation or Case-Specific Resolutions from Primary Subdivisions representing more than 60% of its Primary Subdivision population, the Settling State shall be entitled to receive a higher percentage of the total amount potentially available to it under Incentive C, Part 1, on the scale shown in the table below. If there are no Primary Subdivisions, and that Settling State is otherwise eligible for Incentive C, that Settling State will receive its full allocable share of Incentive C, Part 1.

Participation or Case-Specific
Resolution Levels
(As percentage of total Primary
Subdivision population)
Incentive C, Part 1 Award
(As percentage of total
amount available to Settling State
for Incentive C, Part 1)
60% 40%
70% 45%
80% 50%
85% 55%
90% 60%
91% 65%
92% 70%
93% 80%
94% 90%
95% 100%
d. Part 2: If a Settling State qualifies to receive an incentive under Incentive C, Part 1, the Settling State can also qualify to receive an additional incentive amount equal to 25% of its total potential Incentive C allocation by securing 100% participation of the ten (10) largest Subdivisions by population in the Settling State. (Special Districts are not relevant for purposes of this calculation.) If a Settling State does not qualify for any amount under Incentive C, Part 1, it cannot qualify for Incentive C, Part 2. e. Incentives earned under Incentive C shall accrue on an annual basis up to three years after the Effective Date. At one, two, and three years after the Effective Date, the Settlement Fund Administrator will conduct a lookback to assess which Subdivisions had agreed to participate or had their Claim resolved through a Case-Specific Resolution that year. Based on the lookback, the Settlement Fund Administrator will calculate the incentives accrued under Incentive C for the year. The percentage of the available Incentive C amount, for both Part 1 and Part 2, for which a Settling State is

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eligible three years after the Effective Date shall cap its eligibility for that Payment Year and all subsequent Payment Years.

8. Incentive D: No Qualifying Lawsuits Surviving Threshold Motions at Two LookBack Dates. a. A Settling State’s total potential Incentive D payment allocation is $125,943,072.57 times the percentage allocation assigned that Settling State in Exhibit F-2.
b. If, at any time within five and one-half (5.5) years of the Preliminary Agreement Date, any Subdivision or Special District within a Settling State files litigation pursuing Released Claims against any Released Entity (a “Qualifying Lawsuit”), then Allergan shall, within thirty (30) days of Allergan or any Released Entity being served or otherwise informed of the prosecution of such Released Claims, provide notice to the Settling State in which such Released Claims are being pursued and shall give the relevant Settling State a reasonable opportunity to extinguish the Released Claims without any payment or any other obligations being imposed upon any Released Entities (apart from the Global Settlement Amount payable by Allergan under the Agreement or the Injunctive Relief Terms incurred by it). The relevant Settling State and Allergan shall confer and use reasonable efforts to promptly resolve a Qualifying Lawsuit so that it is dismissed with prejudice. Nothing in this subsection creates an obligation for a Settling State to make a monetary payment or incur any other obligation to an entity filing a Qualifying Lawsuit.
c. Part 1: Under Incentive D, Part 1, a Settling State shall receive 50% of its total potential Incentive D payment allocation if, at two years after the Effective Date (the “First Look-Back Date”), there are no pending Released Claims from a Qualifying Lawsuit that survived a Threshold Motion within the Settling State against any Released Entities.
d. Part 2: Under Incentive D, Part 2, a Settling State shall receive 50% of its total potential Incentive D payment allocation if, at five and one-half (5.5) years after the Preliminary Agreement Date (the “Second Look-Back Date”), there are no pending Released Claims from a Qualifying Lawsuit that survived a Threshold Motion within the Settling State against any Released Entities.
e. After the First Look-Back Date, a Settling State can become re-eligible for Incentive Payment D Part 1 if the lawsuit that survived a Threshold Motion is dismissed pursuant to a later motion on grounds included in the Threshold Motion, in which case the Settling State shall become eligible for Incentive Payment D less any litigation fees and cost incurred by the Released Entity in the interim, except that if the dismissal motion occurs after the

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completion of opening statements in such action, the Settling State shall not be eligible for Incentive Payment D.

VIII. Allocation and Use of Settlement Funds
A. Components of Settlement Fund. The Settlement Fund shall be comprised of an Abatement Accounts Fund, a State Fund, and a Subdivision Fund for each Settling State. The payments under Section VI into the Settlement Fund shall be initially allocated among those three (3) sub-funds and distributed and used as provided below or as provided for by a StateSubdivision Agreement (or other State-specific allocation of funds). Unless otherwise specified herein, payments placed into the Settlement Fund do not revert back to Allergan.

B. Use of Settlement Payments. It is the intent of the Parties that the payments disbursed from the Settlement Fund to Settling States and Exhibit G Participants be for Opioid Remediation, subject to limited exceptions that must be documented in accordance with subsection VII.C. In no event may less than 85% of Allergan’s payments pursuant to Section VI.A.1-3 over the entirety of all Payment Years (but not any single Payment Year) be spent on Opioid Remediation.

C. While disfavored by the Parties, a Settling State or Exhibit G Participant may use monies from the Settlement Fund (that have not been restricted by this Agreement solely to future Opioid Remediation) for purposes that do not qualify as Opioid Remediation. If, at any time, a Settling State or Exhibit G Participant uses any monies from the Settlement Fund for a purpose that does not qualify as Opioid Remediation, such Settling State or Exhibit G Participant shall identify such amounts and report to the Settlement Fund Administrator and Allergan how such funds were used, including if used to pay attorneys’ fees, investigation costs, litigation costs, or costs related to the operation and enforcement of this Agreement, respectively. It is the intent of the Parties that the reporting under this subsection VIII.C shall be available to the public. For the avoidance of doubt, (a) any amounts not identified under this subsection VIII.C as used to pay attorneys’ fees, investigation costs, or litigation costs shall be included in the “Compensatory Restitution Amount” for purposes of subsection VIII.G and (b) Participating Subdivisions not listed on Exhibit G or Participating Special Districts that receive monies from the Settlement Fund indirectly may only use such monies from the Settlement Fund for purposes that qualify as Opioid Remediation.

D. Allocation of Settlement Fund. The allocation of the Settlement Fund allows for different approaches to be taken in different states, such as through a State-Subdivision Agreement.

Given the uniqueness of States and their Subdivisions, Settling States and Participating Subdivisions are encouraged to enter into State-Subdivision Agreements in order to direct the allocation of their portion of the Settlement Fund. As set out below, the Settlement Fund Administrator will make an initial allocation to three (3) state-level sub-funds. The Settlement Fund Administrator will then, for each Settling State and its Exhibit G Participants, apply the terms of this Agreement and any relevant State-Subdivision Agreement, Statutory Trust, Allocation Statute, or voluntary redistribution of funds as set out below before disbursing the funds.

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1. Base Payments. The Settlement Fund Administrator will allocate Base Payments under subsection VII.D among the Settling States in proportion to their respective State Allocation Percentages. Base Payments for each Settling State will then be allocated 15% to its State Fund, 70% to its Abatement Accounts Fund, and 15% to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in subsection VIII.E.

2. Incentive Payments. The Settlement Fund Administrator will treat Incentive Payments under subsection VII.E on a State-specific basis. Incentive payments for which a Settling State is eligible under subsection VII.E will be allocated 15% to its State Fund, 70% to its Abatement Accounts Fund, and 15% to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in subsection VIII.E.

3. Application of Adjustments. If any offset under Section XI applies with respect to a Settling State, the offset shall be applied proportionally to all amounts that would otherwise be apportioned and distributed to the State Fund, the Abatement Accounts Fund, and the Subdivision Fund for that State.

4. Settlement Fund Administrator. Prior to the Initial Participation Date, Allergan and the Enforcement Committee will agree to a detailed mechanism consistent with the foregoing for the Settlement Fund Administrator to follow in allocating, apportioning, and distributing payments, which shall be appended hereto as Exhibit L.

E. Settlement Fund Reallocation and Distribution. As set forth below, within a particular Settling State’s account, amounts contained in the Settlement Fund sub-funds may be reallocated and distributed per a State-Subdivision Agreement or other means. If the apportionment of amounts is not addressed and controlled under subsections VIII.E.1-2, then the default provisions of subsection VIII.E.4 apply. It is not necessary that a StateSubdivision Agreement or other means of allocating funds pursuant to subsections VIII.E.1-2 address all of the Settlement Fund sub-funds. For example, a Statutory Trust might only address disbursements from a Settling State’s Abatement Accounts Fund.

1. Distribution by State-Subdivision Agreement. If a Settling State has a StateSubdivision Agreement, amounts apportioned to that State’s State Fund, Abatement Accounts Fund, and Subdivision Fund under subsection VIII.D shall be reallocated and distributed as provided by that agreement. Any State-Subdivision Agreement entered into or amended after July 26, 2022 shall be applied only if it requires: (1) that all amounts be used for Opioid Remediation except as allowed by subsection VIII.C, and (2) that at least 70% of amounts be used solely for future Opioid Remediation (references to “future Opioid Remediation” include amounts paid to satisfy any future demand by another governmental entity to make a required reimbursement in connection with the past care and treatment of a person related to the Alleged Harms). For a State-Subdivision Agreement to be applied to the relevant portion of an Annual Payment, notice must be provided to Allergan

40 December 20, 2022
and the Settlement Fund Administrator at least sixty (60) days prior to the Payment Date.

2. Distribution by Allocation Statute. If a Settling State has an Allocation Statute and/or a Statutory Trust that addresses allocation or distribution of amounts apportioned to such State’s State Fund, Abatement Accounts Fund, and/or Subdivision Fund and that, to the extent any or all such sub-funds are addressed, requires (1) all amounts to be used for Opioid Remediation except as allowed by subsection VIII.C, and (2) at least 70% of all amounts to be used solely for future Opioid Remediation, then, to the extent allocation or distribution is addressed, the amounts apportioned to that State’s State Fund, Abatement Accounts Fund, and Subdivision Fund under subsection VIII.D shall be allocated and distributed as addressed and provided by the applicable Allocation Statute or Statutory Trust. For the avoidance of doubt, an Allocation Statute or Statutory Trust need not address all three (3) sub-funds that comprise the Settlement Fund, and if the applicable Allocation Statute or Statutory Trust does not address distribution of all or some of these three (3) sub-funds, the applicable Allocation Statute or Statutory Trust does not replace the default provisions in subsection VIII.E.4 of any such unaddressed fund. For example, if an Allocation Statute or Statutory Trust that meets the requirements of this subsection VIII.E only addresses funds restricted to abatement, then the default provisions in this Agreement concerning allocation among the three (3) sub-funds comprising the Settlement Fund and the distribution of the State Fund and Subdivision Fund for that State would still apply, while the distribution of the applicable State’s Abatement Accounts Fund would be governed by the qualifying Allocation Statute or Statutory Trust.

3. Voluntary Redistribution. A Settling State may choose to reallocate all or a portion of its State Fund to its Abatement Accounts Fund. An Exhibit G Participant may choose to reallocate all or a portion of its allocation from the Subdivision Fund to the State’s Abatement Accounts Fund or to another Participating Subdivision or Participating Special District. The Settlement Fund Administrator is not required to honor voluntary redistribution for which notice is provided to it less than sixty (60) days prior to the Payment Date.

4. Distribution in the Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust. If subsections VIII.E.1-2 do not apply, and subject to any voluntary redistribution pursuant to subsection VIII.E.3, amounts apportioned to that State’s State Fund, Abatement Accounts Fund, and Subdivision Fund under subsection VIII.D shall be distributed as follows:
a. Amounts apportioned to that State’s State Fund shall be distributed to that State.
b. Amounts apportioned to that State’s Abatement Accounts Fund shall be distributed consistent with subsection VIII.F. Each Settling State shall submit to the Settlement Fund Administrator a designation of a lead state agency or other entity to serve as the single point of contact for that Settling

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State’s funding requests from the Abatement Accounts Fund and other communications with the Settlement Fund Administrator. The designation of an individual entity is for administrative purposes only and such designation shall not limit funding to such entity or even require that such entity receive funds from this Agreement. The designated entity shall be the only entity authorized to request funds from the Settlement Fund Administrator to be disbursed from that Settling State’s Abatement Accounts Fund. If a Settling State has established a Statutory Trust then that Settling State’s single point of contact may direct the Settlement Fund Administrator to release the State’s Abatement Accounts Fund to the Statutory Trust.
c. Amounts apportioned to that State’s Subdivision Fund shall be distributed to Participating Subdivisions in that State listed on Exhibit G per the Subdivision Allocation Percentage listed in Exhibit G. Subsection X.I shall govern amounts that would otherwise be distributed to Non-Participating Subdivisions listed in Exhibit G.
d. Special Districts shall not be allocated funds from the Subdivision Fund, except through a voluntary redistribution allowed by subsection VIII.E.3. A Settling State may allocate funds from its State Fund or Abatement Accounts Fund for Special Districts.

5. Restrictions on Distribution. No amounts may be distributed from the Subdivision Fund contrary to Section IX, i.e., no amounts may be distributed directly to NonParticipating Subdivisions or to Later Participating Subdivisions in excess of what is permissible under subsection IX.E. Amounts allocated to the Subdivision Fund that cannot be distributed by virtue of the preceding sentence shall be distributed into the sub-account in the Abatement Accounts Fund for the Settling State in which the Subdivision is located, unless those payments are redirected elsewhere by a State-Subdivision Agreement described in subsection VIII.E.1 or by an Allocation Statute or a Statutory Trust described in subsection VIII.E.2.

F. Provisions Regarding Abatement Accounts Fund.

1. State-Subdivision Agreement, Allocation Statute, and Statutory Trust Fund Provisions. A State-Subdivision Agreement, Allocation Statute, or Statutory Trust may govern the operation and use of amounts in that State’s Abatement Accounts Fund so long as it complies with the requirements of subsection VIII.E.1 or VIII.E.2 as applicable, and all direct payments to Subdivisions comply with subsections IX.E-H.

2. Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust.

In the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust that addresses distribution, the Abatement Accounts Fund will be used solely for future Opioid Remediation and the following shall apply with respect to a Settling State:

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a. Regional Remediation.
(i) At least 50% of distributions for remediation from a State’s Abatement Accounts Fund shall be annually allocated and tracked to the regional level. A Settling State may allow the Advisory Committee established pursuant to subsection VIII.F.2.d to define its regions and assign regional allocations percentages. Otherwise, a Settling State shall (1) define its initial regions, which shall consist of one (1) or more Subdivisions and which shall be designated by the State agency with primary responsibility for substance abuse disorder services employing, to the maximum extent practical, existing regions established in that State for opioid abuse treatment or other public health purposes; and (2) assign initial regional allocation percentages to the regions based on the Subdivision Allocation Percentages in Exhibit G and an assumption that all Subdivisions listed on Exhibit G will become Participating Subdivisions.
(ii) This minimum regional expenditure percentage is calculated on the Settling State’s initial Abatement Accounts Fund allocation and does not include any additional amounts a Settling State has directed to its Abatement Accounts Fund from its State Fund, or any other amounts directed to the fund. A Settling State may dedicate more than 50% of its Abatement Accounts Fund to the regional expenditure and may annually adjust the percentage of its Abatement Accounts Fund dedicated to regional expenditures as long as the percentage remains above the minimum amount. (iii) The Settling State (1) has the authority to adjust the definition of the regions, and (2) may annually revise the percentages allocated to each region to reflect the number of Subdivisions in each region that are Non-Participating Subdivisions.
b. Subdivision Block Grants. Certain Subdivisions listed on Exhibit G shall be eligible to receive regional allocation funds in the form of a block grant for future Opioid Remediation. A Participating Subdivision listed on Exhibit G eligible for block grants is a county or parish (or in the case of States that do not have counties or parishes that function as political subdivisions, a city) that (1) does not contain a Litigating Subdivision or a Later Litigating Subdivision for which it has the authority to end the litigation through a release, Bar, or other action; (2) either (i) has a population of 400,000 or more or (ii) in the case of California has a population of 750,000 or more; and (3) has funded or otherwise managed an established health care or treatment infrastructure (e.g., health department or similar agency). Each Subdivision listed on Exhibit G eligible to receive block grants shall be assigned its own region.

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c. Small States. Notwithstanding the provisions of subsection VIII.F.2.a, Settling States with populations under four (4) million that do not have existing regions described in subsection VIII.F.2.a shall not be required to establish regions. However, such a Settling State that contains one (1) or more Subdivisions listed on Exhibit G eligible for block grants under subsection VIII.F.2.b shall be divided regionally so that each block-grant eligible Subdivision listed on Exhibit G is a region and the remainder of the State is a region.
d. Advisory Committee. The Settling State shall designate an Opioid Settlement Remediation Advisory Committee (the “Advisory Committee”) to provide input and recommendations regarding remediation spending from that Settling State’s Abatement Accounts Fund. A Settling State may elect to use an existing advisory committee or similar entity (created outside of a State-Subdivision Agreement or Allocation Statute); provided, however, the Advisory Committee or similar entity shall meet the following requirements:
(i) Written guidelines that establish the formation and composition of the Advisory Committee, terms of service for members, contingency for removal or resignation of members, a schedule of meetings, and any other administrative details;
(ii) Composition that includes at least an equal number of local representatives as state representatives;
(iii) A process for receiving input from Subdivisions and other communities regarding how the opioid crisis is affecting their communities, their abatement needs, and proposals for abatement strategies and responses; and
(iv) A process by which Advisory Committee recommendations for expenditures for Opioid Remediation will be made to and considered by the appropriate state agencies.

3. Abatement Accounts Fund Reporting. The Settlement Fund Administrator shall track and assist in the report of remediation disbursements as agreed to among the Parties.

G. Nature of Payment. Allergan, the Settling States, the Participating Subdivisions, and the Participating Special Districts, acknowledge and agree that notwithstanding anything to the contrary in this Agreement, including, but not limited to, the scope of the Released Claims:

1. Allergan has entered into this Agreement to avoid the delay, expense, inconvenience, and uncertainty of further litigation;

2. The Settling States, the Participating Subdivisions, and the Participating Special Districts sought compensatory restitution (within the meaning of 26 U.S.C.

44 December 20, 2022
§ 162(f)(2)(A)) as damages for the Alleged Harms allegedly suffered by the Settling States, Participating Subdivisions and Participating Special Districts;

3. By executing this Agreement the Settling States, the Participating Subdivisions, and the Participating Special Districts certify that: (a) the Compensatory Restitution Amount is no greater than the amount, in the aggregate, of the Alleged Harms allegedly suffered by the Settling States, Participating Subdivisions and Participating Special Districts; and (b) the portion of the Compensatory Restitution Amount received by each Settling State, Participating Subdivision or Participating Special Districts is no greater than the amount of the Alleged Harms allegedly suffered by such Settling State, Participating Subdivision or Participating Special Districts;

4. The payment of the Compensatory Restitution Amount by Allergan constitutes, and is paid for, compensatory restitution (within the meaning of 26 U.S.C. § 162(f)(2)(A)) for alleged damage or harm (as compensation for alleged damage or harm arising out of alleged bodily injury) allegedly caused by Allergan;

5. The Compensatory Restitution Amount is being paid as compensatory restitution (within the meaning of 26 U.S.C. § 162(f)(2)(A)) in order to restore, in whole or in part, the Settling States, Participating Subdivisions and Participating Special Districts to the same position or condition that they would be in had the Settling States, Participating Subdivisions and Participating Special Districts not suffered the Alleged Harms;

6. No portion of the Compensatory Restitution Amount represents reimbursement to any Settling State, Participating Subdivision, Participating Special District, or other person or entity for the costs of any investigation or litigation. The entire Compensatory Restitution Amount is properly characterized as described in subsection VIII.G. No portion of the Compensatory Restitution Amount constitutes disgorgement or is properly characterized as the payment of statutory or other fines, penalties, punitive damages, other punitive assessments, or attorneys’ fees; and

7. The Designated State, on behalf of all Settling States, Participating Subdivisions, and Participating Special Districts (the “Form 1098-F Filer”) shall complete and file Form 1098-F with the Internal Revenue Service on or before February 28 (March 31 if filed electronically) of the year following the calendar year in which the order entering this Agreement becomes binding. On the Form 1098-F, the Form 1098-F Filer shall identify the entire Compensatory Restitution Amount received by the Form 1098-F Filer as remediation/restitution. The Form 1098-F Filer shall also, on or before January 31 of the year following the calendar year in which the order entering this Agreement becomes binding, furnish Copy B of such Form 1098-F (or an acceptable substitute statement) to Allergan.

IX. Participation by Subdivisions and Special Districts

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A. Notice. No later than fifteen (15) days after the Preliminary Agreement Date, the Settling States, with the cooperation of Allergan, shall send individual written notice (which may be delivered via e-mail or other electronic means) of the opportunity to participate in this Agreement and the requirements of participation to all Subdivisions and Special Districts in the Settling State that are (1) Litigating Subdivisions or Litigating Special Districts, or (2) Non-Litigating Subdivisions listed in Exhibit G. To the extent a Non-Litigating Special District is entitled to an allocation for a direct payment through its inclusion in Exhibit G pursuant to a State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution, the Settling States shall also send individual written notice (which may be delivered via e-mail or other electronic means) of the opportunity to participate in this Agreement and the requirements of participation to such Special District. Unless otherwise agreed by the Parties, the version of Exhibit G used for notice shall be the one in place as of the Preliminary Agreement Date. Allergan’s share of costs of the written notice shall be paid by Allergan as part of the Implementation Costs. Notice (which may be delivered via e-mail or other electronic means) shall also be provided simultaneously to counsel of record for Litigating Subdivisions, Litigating Special Districts, and known counsel for Non-Litigating Subdivisions listed on Exhibit G and Non-Litigating Special Districts listed on Exhibit G. The notice will include that the deadline for becoming an Initial Participating Subdivision or Initial Participating Special District is the Initial Participation Date. Nothing contained herein shall preclude a Settling State from providing further notice to or otherwise contacting any of its Subdivisions or Special Districts about becoming a Participating Subdivision or Participating Special District, including beginning any of the activities described in this paragraph prior to the Preliminary Agreement Date.

B. Requirements for Becoming a Participating Subdivision: Non-Litigating Subdivisions. A Non-Litigating Subdivision in a Settling State may become a Participating Subdivision by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) specifying (1) that the Subdivision agrees to the terms of this Agreement pertaining to Subdivisions, (2) that the Subdivision releases all Released Claims against all Released Entities, (3) that the Subdivision agrees to use monies it receives, if any, from the Settlement Fund pursuant to the applicable requirements of Section VIII, and (4) that the Subdivision submits to the jurisdiction of the Court where the Consent Judgment is filed for purposes limited to that Court’s role under the Agreement. The required Settlement Participation Form is attached as Exhibit K. A Non-Litigating Subdivision will decide whether to become a Participating Subdivision for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. However, if Teva enters bankruptcy prior to the Effective Date, a Non-Litigating Subdivision can choose to only join this Agreement.

C. Requirements for Becoming a Participating Subdivision: Litigating Subdivisions/Later Litigating Subdivisions. A Litigating Subdivision or Later Litigating Subdivision in a Settling State may become a Participating Subdivision by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) that, in addition to the requirements set out in subsection IX.B for Non-Litigating Subdivisions, commits it to

46 December 20, 2022
promptly dismissal its legal action. The required Settlement Participation Form is attached as Exhibit K. A Litigating Subdivision or Later Litigating Subdivision will decide whether to become a Participating Subdivision for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. However, if Teva enters bankruptcy prior to the Effective Date, a Litigating Subdivision or Later Litigating Subdivision can choose to only join this Agreement. Except for trials begun before the Initial Participation Date, a Litigating Subdivision or a Later Litigating Subdivision may not become a Participating Subdivision after the completion of opening statements in a trial of a legal action it brought that includes a Released Claim against a Released Entity.

D. Initial Participating Subdivisions. A Subdivision qualifies as an Initial Participating Subdivision if it meets the applicable requirements for becoming a Participating Subdivision set forth in subsections IX.B or IX.C by the Initial Participation Date. Provided however, all Subdivision Settlement Participation Forms shall be held by the Implementation Administrator until Allergan provides the notice in subsection X.B that it intends to proceed with the settlement, at which time the obligations created by such forms become effective. If Allergan determines not to proceed, all Settlement Participation Forms shall be returned to Counsel for Litigating Subdivisions or to the Subdivisions not represented by counsel or destroyed to the extent that such destruction is not prohibited by then existing document preservation obligations.

E. Later Participating Subdivisions. A Subdivision that is not an Initial Participating Subdivision may become a Later Participating Subdivision by meeting the applicable requirements for becoming a Participating Subdivision after the Initial Participation Date and agreeing to be subject to the terms of a State-Subdivision Agreement (if any) or any other structure adopted or applicable pursuant to subsections VIII.E or VIII.F. The following provisions govern what a Later Participating Subdivision can receive (but do not apply to Initial Participating Subdivisions):

1. A Later Participating Subdivision shall not receive any share of any Base or Incentive Payments paid to the Subdivision Fund that were due before it became a Participating Subdivision.

2. A Later Participating Subdivision that becomes a Participating Subdivision after the Initial Participation Date but before June 15, 2023 shall receive 75% of the share of the Initial Year Payment that it would have received had it become an Initial Participating Subdivision (unless the Later Participating Subdivision is subject to subsections IX.E.3 or IX.E.4 below). A Later Participating Subdivision that becomes a Participating Subdivision after June 15, 2023 shall receive no share of the Initial Year Payment.

3. A Later Participating Subdivision that, after the Initial Participation Date, maintains a lawsuit for a Released Claim(s) against a Released Entity and has judgment entered against it on every such Claim before it became a Participating Subdivision (other than a consensual dismissal with prejudice) shall receive 50% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Subdivision prior to such judgment; provided,

47 December 20, 2022
however, that if the Subdivision appeals the judgment and the judgment is affirmed with finality before the Subdivision becomes a Participating Subdivision, the Subdivision shall not receive any share of any Base Payments or Incentive Payments.

4. A Later Participating Subdivision that becomes a Participating Subdivision while a Bar or Case-Specific Resolution involving a different Subdivision exists in its State shall receive 25% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Subdivision without such Bar or Case-Specific Resolution.

F. No Increase in Payments. Amounts to be received by Later Participating Subdivisions or Later Participating Special Districts shall not increase the payments due from Allergan.

G. Ineligible Subdivisions and Special Districts. Prior Settling Subdivisions and Subdivisions and Special Districts in Non-Settling States or Prior Settling States are not eligible to be Participating Subdivisions or Participating Special Districts.

H. Non-Participating Subdivisions and Non-Participating Special Districts. NonParticipating Subdivisions and Non-Participating Special Districts shall not directly receive any portion of any Base Payments or Incentive Payments, including from the State Fund and direct distributions from the Abatement Accounts Fund; however, a Settling State may choose to fund future Opioid Remediation that indirectly benefits Non-Participating Subdivisions and Non-Participating Special Districts.

I. Unpaid Allocations to Later Participating and Non-Participating Subdivisions. Any Base Payments and Incentive Payments allocated pursuant to subsection VII.E to a Later Participating or Non-Participating Subdivision or a Later Participating or NonParticipating Special District that cannot be paid pursuant to Section IX, will be allocated to the Abatement Accounts Fund for the Settling State in which the Subdivision is located, unless those payments are redirected elsewhere by a State-Subdivision Agreement or by a Statutory Trust.

J. Requirements for Becoming a Participating Special District: Non-Litigating Special Districts. A Non-Litigating Special District in a Settling State may become a Participating Special District by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) specifying (1) that the Special District agrees to the terms of this Agreement pertaining to Special Districts, (2) that the Special District releases all Released Claims against all Released Entities, (3) that the Special District agrees to use monies it receives, if any, from the Settlement Fund pursuant to the applicable requirements of Section VIII, and (4) that the Special District submits to the jurisdiction of the Court where the Consent Judgment is filed for purposes limited to that Court’s role under the Agreement. The required Settlement Participation Form is attached as Exhibit K. A NonLitigating Special District will decide whether to become a Participating Special District for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither.

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However, if Teva enters bankruptcy prior to the Effective Date, a Non-Litigating Special District can choose to only join this Agreement.

K. Requirements for Becoming a Participating Special District: Litigating Special Districts/Later Litigating Special Districts. A Litigating Special District or Later Litigating Special District in a Settling State may become a Participating Special District by returning an executed Settlement Participation Form to the Implementation Administrator or Settlement Fund Administrator (which may be executed and returned by electronic means established by the Implementation Administrator or Settlement Fund Administrator) that, in addition to the requirements set out in subsection IX.J for Non-Litigating Special Districts, commits it to promptly dismiss its legal action. The required Settlement Participation Form is attached as Exhibit K. A Litigating Special District or Later Litigating Special District will decide whether to become a Participating Special District for both this Agreement and the Teva Global Opioid Settlement Agreement, or neither. However, if Teva enters bankruptcy prior to the Effective Date, a Litigating Special District or Later Litigating Special District can choose to only join this Agreement. Except for trials begun before the Initial Participation Date, a Litigating Special District or a Later Litigating Special District may not become a Participating Special District after the completion of opening statements in a trial of a legal action it brought that includes a Released Claim against a Released Entity.

L. Initial Participating Special Districts. A Special District qualifies as an Initial Participating Special District if it meets the applicable requirements for becoming a Participating Special District set forth in subsections IX.J or IX.K by the Initial Participation Date. Provided however, all Special District Settlement Participation Forms shall be held by the Implementation Administrator until Allergan provides the notice in subsection X.B that it intends to proceed with the settlement, at which time the obligations created by such forms become effective.

M. Later Participating Special Districts. A Special District that is not an Initial Participating Special District may become a Later Participating Special District by meeting the applicable requirements for becoming a Participating Special District after the Initial Participation Date and agreeing to be subject to the terms of a State-Subdivision Agreement (if any) or any other structure adopted or applicable pursuant to subsections VIII.E or VIII.F. or any agreement reached by the applicable Settling State with Initial Participating Special Districts. The following provisions govern what a Later Participating Special District can receive (but do not apply to Initial Participating Special Districts):

1. Except for the Initial Year Payment, a Later Participating Special District shall not receive any share of any Base or Incentive Payments paid to the Subdivision Fund that were due before it became a Participating Special District.

2. A Later Participating Special District that becomes a Participating Special District after Initial Participation Date but before June 15, 2023 shall receive 75% of the share of the Initial Year Payment that it would have received had it become an Initial Participating Special District (unless the Later Participating Special District is subject to subsections IX.M.3 or IX.M.4 below). A Later Participating Special

49 December 20, 2022
District that becomes a Participating Special District after June 15, 2023 shall receive no share of the Initial Year Payment.

3. A Later Participating Special District that, after the Initial Participation Date, maintains a lawsuit for a Released Claim(s) against a Released Entity and has judgment entered against it on every such Claim before it became a Participating Special District (other than a consensual dismissal with prejudice) shall receive 50% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Special District prior to such judgment; provided, however, that if the Special District appeals the judgment and the judgment is affirmed with finality before the Special District becomes a Participating Special District, the Special District shall not receive any share of any Base Payments or Incentive Payments.

4. A Later Participating Special District that becomes a Participating Special District while a Bar or Case-Specific Resolution involving a different Special District exists in its State shall receive 25% of the share of future Base Payments or Incentive Payments that it would have received had it become a Later Participating Special District without such Bar or Case-Specific Resolution.

X. Condition to Effectiveness of Agreement and Filing of Consent Judgment A. Determination to Proceed With Settlement. Allergan will determine on or before the Reference Date whether there has been a sufficient resolution of the Claims of the Subdivisions and Special Districts in the Settling States (through participation under Section IX, Case-Specific Resolution(s), and Bar(s)) to proceed with this Agreement. The determination shall be in the sole discretion of Allergan, in good faith, and may be based on any criteria or factors deemed relevant by Allergan.

B. Notice by Allergan. On or before the Reference Date, Allergan shall inform the Settling States and MDL Plaintiffs’ Executive Committee of its determination pursuant to subsection X.A. If Allergan determines to proceed, the Parties will proceed to file the Consent Judgments. If Allergan determines not to proceed, this Agreement will have no further effect and all releases (including those given by Participating Subdivisions and Participating Special Districts) and other commitments or obligations contained herein will be void and Settlement Participation Forms returned to the Subdivision or Special District or destroyed to the extent not prohibited by then existing legal obligations or document holds.

XI. Potential Payment Adjustments
A. Settlement Class Resolution Opt Outs. If a Settling State is eligible for Incentive A on the basis of a Settlement Class Resolution, and a Primary Subdivision that opted out of the Settlement Class Resolution maintains a lawsuit asserting a Released Claim against a Released Entity, the following shall apply. If the lawsuit asserting a Released Claim either survives a Threshold Motion or has an unresolved Threshold Motion fewer than sixty (60) days prior to the scheduled start of a trial involving a Released Claim, and is resolved with

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finality on terms requiring payment by the Released Entity, Allergan shall receive a dollarfor-dollar offset for the amount paid against its obligation to make remaining Incentive A payments that would be apportioned to that State or Participating Subdivisions listed on Exhibit G.

B. Revoked Bar, Settlement Class Resolution, or Case-Specific Resolution.

1. If Allergan made a payment as a result of the existence of a Bar, Settlement Class Resolution, or Case-Specific Resolution in a Settling State, and that Bar, Settlement Class Resolution, or Case-Specific Resolution is subject to a Revocation Event, Allergan shall receive a dollar-for-dollar offset against its obligation to make remaining payments that would be apportioned to that State or Participating Subdivisions or Participating Special Districts listed on Exhibit G. This offset will be calculated as the dollar amount difference between (1) the total amount of Incentive Payments paid by Allergan during the time the Bar, Settlement Class Resolution, or Case-Specific Resolution subject to the Revocation Event was in effect, and (2) the total amount of Incentive Payments that would have been due from Allergan during that time without the Bar, Settlement Class Resolution, or Case-Specific Resolution subject to the Revocation Event being in effect. The amount of Incentive Payments that would have been due, referenced in (2) above, will be calculated based on considering any Subdivision or Special District that provides a release within one hundred eighty (180) days after the Revocation Event as having been a Participating Subdivision or Participating Special District (in addition to all other Participating Subdivisions and Participating Special Districts) during the time that the Bar, Settlement Class Resolution, or Case-Specific Resolution subject to the Revocation Event was in effect. If a Revocation Event causes a Settling State to no longer qualify for one or both parts of Incentive D, the Settling State and its Exhibit G participants shall return to Allergan all relevant payments made under Incentive D through offsets as set forth above.

2. Notwithstanding anything to the contrary in paragraph 1 above, if a Bar or CaseSpecific Resolution is reinstated by the Settling State, either through the same or different means as the initial Bar or Case-Specific Resolution, Allergan’s right to an offset is extinguished and any amounts withheld to offset amounts paid on account of the revoked, rescinded, reversed, or overruled Bar or Case-Specific Resolution shall be returned to the Settling State, less and except any Incentive Payments that would have been paid during the period in which the Bar or CaseSpecific Resolution was revoked, rescinded, reversed, or overruled.

XII. Additional Restitution Amount
A. Additional Restitution Amount. Allergan shall pay an Additional Restitution Amount to each Settling State listed in Exhibit N in the amount and on the schedule set forth in Exhibit M. The maximum Additional Restitution Amount of $16,192,680.76 shall be reduced by the allocation set forth on Exhibit N for any Non-Settling States listed on Exhibit N. The Settlement Fund Administrator shall allocate such funds among and within the Settling

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States listed in Exhibit N at the same time as its allocation of Annual Payments pursuant to Section VII.B.

B. Additional Restitution Amount funds shall not be subject to allocation as provided in Sections VIII.D through VIII.F
XIII. Plaintiffs’ Attorneys’ Fees and Costs
A. Attorneys’ fees and costs are addressed in the following exhibits and are incorporated herein by reference:

1. The State Outside Counsel Fee Fund is addressed in Exhibit U.

2. The State Cost Fund is addressed in Exhibit S.

3. The Attorney Fee and Cost Fund is addressed and the Agreement on Attorneys’ Fees, Expenses and Costs is set forth in Exhibit R.

XIV. Enforcement and Dispute Resolution
A. Enforceability. The terms of the Agreement and Consent Judgment applicable to or in a Settling State will be enforceable solely by that Settling State and Allergan. Settling States or Participating Subdivisions shall not have enforcement rights with respect either to the terms of this Agreement that apply only to or in other States or to any Consent Judgment entered into by another Settling State. Participating Subdivisions shall not have enforcement rights against Allergan with respect to the Agreement or any Consent Judgment except as to payments that would be allocated to the Subdivision Fund or Abatement Accounts Fund pursuant to Section VII; provided, however, that each Settling State shall allow Participating Subdivisions in that State to notify it of any perceived violations of the Agreement or Consent Judgment.

B. Consent to Jurisdiction and Service of Process. Allergan consents to the jurisdiction of the Court in which the Consent Judgment is filed, and any appellate court thereof, limited to resolution of disputes identified in subsection XIV.G.2; for a civil action for any appropriate relief to enforce compliance with the Parties’ Agreement for Injunctive Relief pursuant to Exhibit P, Section K.5 herein; and for any proceedings for or related to the enforcement or collection of any payments on the Consent Judgment for resolution in the Court in which the Consent Judgment is filed. Allergan further agrees any service of process or notice required for such action or proceeding may be effectuated on Allergan through delivery of all required papers by hand or by a nationally recognized private courier on Allergan’s representatives identified in Section XVI.P herein. To be clear, for the purposes of this Agreement only, Allergan consents to personal jurisdiction before such courts, and will not contend service must be effectuated through personal service of the Hague Convention process.

C. Specific Terms Dispute Resolution.

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1. Any dispute that is addressed by the provisions set forth in the Injunctive Relief Terms in Exhibit P shall be resolved as provided therein and pursuant to Section VIII.E.3 herein.

2. In the event Allergan believes the 85% threshold established in subsection VIII.B is not being satisfied, any Party may request that Allergan and the Enforcement Committee meet and confer regarding the use of funds under subsection VIII.B.

The completion of such meet-and-confer process is a precondition to further action regarding any such dispute. Further action concerning subsection VIII.B shall: (i) be limited to Allergan seeking to reduce its Annual Payments by no more than 5% of the difference between the actual amount of Opioid Remediation and the 85% threshold established in subsection VIII.B; (ii) only reduce Annual Payments to those Settling States and its Participating Subdivisions that are below the 85% threshold established in subsection VIII.B; and (iii) not reduce Annual Payments restricted to future Opioid Remediation.

D. State-Subdivision Enforcement.

1. A Participating Subdivision shall not have enforcement rights against a Settling State in which it is located with respect to the Agreement or any Consent Judgment except: (1) as provided for in a State-Subdivision Agreement, Allocation Statute, or Statutory Trust with respect to intrastate allocation; or (2) in the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust, as to allegations that: (a) the Settling State’s use of Abatement Accounts Fund monies were not used for uses similar to or in the nature of those uses contained in Exhibit E; or (b) a Settling State failed to pay funds directly from the Abatement Accounts Fund to a Participating Subdivision eligible to receive a block grant pursuant to subsection VIII.F.2.b.

2. A Settling State shall have enforcement rights against a Participating Subdivision located in its territory: (1) as provided for in a State-Subdivision Agreement, Allocation Statute, or Statutory Trust; or (2) in the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust, as to allegations that the uses of Abatement Accounts Fund monies by Participating Subdivisions listed on Exhibit G were not for uses similar to or in the nature of those uses contained in Exhibit E.

3. As between Settling States and Participating Subdivisions, the above rights are contractual in nature and nothing herein is intended to limit, restrict, change, or alter any other existing rights under law.

E. Enforcement Committee Actions to Enforce Agreement.

1. The Parties agree that in the event of any failure by Allergan to make any required payments under this Agreement, the Enforcement Committee, on its own or through its designee such as a Settling State or Participating Subdivision acting by its authorization and on its behalf, shall have the ability and right to file an action or proceeding in any New York state court, or federal court of the United States of

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America, sitting in New York, for or related to the enforcement or collection of such payments.

2. If any National Dispute involving a Settling State, Participating Subdivision, and/or Allergan is pending before a National Arbitration Panel concerning a given year’s payment to all Settling States, any action or proceeding pursuant to this subsection XIV.E shall be stayed as to any disputed amounts only, but may proceed as to any and all undisputed amounts. In the event there is a dispute between the Parties as to the disputed amounts at issue, the Enforcement Committee or any party to that dispute may seek an expedited determination from the National Arbitration Panel for that proceeding as to the disputed and undisputed amounts.

3. The Parties further Agree that in the event of Allergan’s breach of the Parties’ Agreement for Injunctive Relief (Exhibit P attached hereto), the Enforcement Committee, on its own or through a single designee such as a Settling State shall have the ability and right to file a civil action pursuant to Exhibit P, after completing the processes laid out in Exhibit P, in any New York state court, or federal court of the United States of America, sitting in New York, seeking any appropriate relief to enforce compliance with such Agreement for Injunctive Relief.

4. Allergan and other Released Entities consent to the jurisdiction of the New York state court, or federal court of the United States of America, sitting in New York, and any appellate court from any thereof, in which any action or proceeding is initiated pursuant to this subsection XIV.E, and for enforcement or collection of any related judgment entered by such court. Allergan further agrees any service of process or notice required for such action or proceeding, including for any action or proceeding for enforcement or collection of any judgment entered thereon, may be effectuated on Allergan through delivery of all required papers by hand or by a nationally recognized private courier on Allergan’s representatives identified in Section XVI.P herein. For the purposes of this Agreement only, Allergan consents to personal jurisdiction before such courts and will not contend service must be effectuated through personal service or the Hague Convention process.

5. The enforcement rights under this subsection XIV.E are in addition to, and not in lieu of, any other enforcement and collection rights of the Parties herein, including but not limited to enforcement rights as to payments as allowed by subsection XV.A.

F. Subdivision Payment Enforcement. A Participating Subdivision shall have the same right as a Settling State pursuant to subsection XIV.G.4.a(iv) to seek resolution of any failure by Allergan to make its required Base Payments and/or Incentive Payments in a Payment Year.

G. Other Dispute Resolution Terms.

1. Except as provided in subsection VIII.C, the parties to a dispute shall promptly meet and confer in good faith to resolve any dispute prior to any filing or

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presentation to the Court or National Arbitration Panel. If the parties cannot resolve the dispute informally, and unless otherwise agreed in writing, they shall follow the remaining provisions of this Section XIV to resolve the dispute.

2. Except as provided in subsections XIV.C and XIV.G.4, disputes not resolved informally shall be resolved in either the Court that entered the relevant Consent Judgment or, if no Consent Judgment was entered, a state or territorial court with jurisdiction located wherever the seat of state government is located. State court proceedings shall be governed by the rules and procedures of the forum. For the avoidance of doubt, disputes to be resolved in state court include, but are not limited to, the following:
a. disputes concerning whether expenditures qualify for Opioid Remediation; b. disputes between a Settling State and Participating Subdivisions located in such Settling State as provided by subsection XIV.D, except to the extent the State-Subdivision Agreement provides for other dispute resolution mechanisms. For the avoidance of doubt, disputes between a Settling State and any Participating Subdivision shall not be considered National Disputes;
c. whether this Agreement and relevant Consent Judgment are binding under state law;
d. the extent of the Attorney General’s or other participating entity’s authority under state law, including the extent of the authority to release Claims; e. whether the requirements of a Bar, a Case-Specific Resolution, StateSpecific Finality, Later Litigating Subdivision, Litigating Subdivision, or a Threshold Motion have been met; and
f. all other disputes not specifically identified in subsections XIV.C and XIV.G.4.

3. Any Party may request that the National Arbitration Panel provide an interpretation of any provision of the settlement that is relevant to the state court determination, and the National Arbitration Panel shall make reasonable best efforts to supply such interpretation within the earlier of thirty (30) days or the time period required by the state court proceedings. Any Party may submit that interpretation to the state court to the extent permitted by, and for such weight provided by, the state court’s rules and procedures. If requested by a Party, the National Arbitration Panel shall request that its interpretation be accepted in the form of an amicus curiae brief, and any attorneys’ fees and costs for preparing any such filing shall be paid for by the requesting Party.

4. National Disputes involving a Settling State, Participating Subdivision, and/or Allergan shall be resolved by a National Arbitration Panel.

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a. “National Disputes” are disputes that are exceptions to subsection XIV.G.2’s presumption of resolution in state courts because they involve issues of interpretation of Agreement terms applicable to all Settling States without reference to a particular State’s law. Disputes between a State and any Participating Subdivisions shall not be considered National Disputes.

National Disputes are limited to the following:
(i) the amount of offset and/or credit attributable to Non-Settling States;
(ii) issues involving the scope and definition of “Product”; (iii) interpretation and application of the terms “Covered Conduct” and “Released Entities”;
(iv) disputes over a given year’s Annual Payment or the payment of the Additional Restitution Amount to all Settling States (for the avoidance of doubt, disputes between a Settling State and Allergan over the amounts owed to only that State shall not be considered National Disputes);
(v) questions regarding the performance and/or removal of the Settlement Fund Administrator;
(vi) disputes involving liability of successor entities; (vii) disputes that require a determination of sufficient Subdivision and Special District participation to qualify for Incentives A, B, C, or D,; (viii) disputes that require interpretation of Agreement terms (i) that concretely affect four (4) or more Settling States; and (ii) do not turn on unique definitions and interpretations under State law; and (ix) any dispute subject to resolution under subsection XIV.G.2 but for which all parties to the dispute agree to arbitration before the National Arbitration Panel under the provisions of this subsection XIV.G.4.
b. The “National Arbitration Panel” shall be comprised of three (3) neutral arbitrators. One (1) arbitrator shall be chosen by Allergan, one (1) arbitrator shall be chosen by the Enforcement Committee with due input from Participating Subdivisions, and the third arbitrator shall be agreed upon by the first two (2) arbitrators. The membership of the National Arbitration Panel is intended to remain constant throughout the term of this Agreement, but in the event that replacements are required, the retiring arbitrator shall be replaced by the party that selected him/her.

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(i) The National Arbitration Panel shall make reasonable best efforts to decide all matters within one hundred eighty (180) days of filing, and in no event shall it take longer than one (1) year. (ii) The National Arbitration Panel shall conduct all proceedings in a reasonably streamlined process consistent with an opportunity for the parties to be heard. Issues shall be resolved without the need for live witnesses where feasible, and with a presumption in favor of remote participation to minimize the burdens on the parties. (iii) To the extent allowed under state law, a Settling State, Participating Subdivision, and (at any party’s request) the National Arbitration Panel may certify to an appropriate state court any question of state law. The National Arbitration Panel shall be bound by a final state court determination of such a certified question. The time period for the arbitration shall be tolled during the course of the certification process.
(iv) The arbitrators will give due deference to any authoritative interpretation of state law, including any declaratory judgment or similar relief obtained by a Settling State, Participating Subdivision, or Allergan on a state law issue.
(v) The decisions of the National Arbitration Panel shall be binding on Settling States, Participating Subdivisions, Allergan, and the Settlement Fund Administrator. In any proceeding before the National Arbitration Panel involving a dispute between a Settling State and Allergan whose resolution could prejudice the rights of a Participating Subdivision(s) or Participating Special District(s) in that Settling State, such Participating Subdivision(s) or Participating Special District(s) shall be allowed to file a statement of view in the proceeding.
c. Nothing herein shall be construed so as to limit or otherwise restrict a State from seeking injunctive or other equitable relief in state court to protect the health, safety, or welfare of its citizens.
d. Each party shall bear its own costs in any arbitration or court proceeding arising under this subsection XIV.G. The costs for the arbitrators on the National Arbitration Panel shall be divided and paid equally by the disputing sides for each individual dispute, e.g., a dispute between Allergan and Settling States/Participating Subdivisions shall be split 50% by Allergan and 50% by the Settling States/Participating Subdivisions that are parties to the dispute; a dispute between a Settling State and a Participating Subdivision shall be split 50% by the Settling State and 50% by any Participating Subdivisions that are party to the dispute.

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5. Prior to initiating an action to enforce pursuant to this subsection XIV.G, the complaining party must:
a. Provide written notice to the Enforcement Committee of its complaint, including the provision of the Consent Judgment and/or Agreement that the practice appears to violate, as well as the basis for its interpretation of the disputed provision. The Enforcement Committee shall establish a reasonable process and timeline for obtaining additional information from the involved parties; provided, however, that the date the Enforcement Committee establishes for obtaining additional information from the parties shall not be more than forty-five (45) days following the notice. The Enforcement Committee may advise the involved parties of its views on the complaint and/or seek to resolve the complaint informally. b. Wait to commence any enforcement action until thirty (30) days after the date that the Enforcement Committee establishes for obtaining additional information from the involved parties.

6. If the parties to a dispute cannot agree on the proper forum for resolution of the dispute under the provisions of subsections XIV.G.2 or XIV.G.4, a committee comprising the Enforcement Committee and sufficient representatives of Allergan such that the members of the Enforcement Committee have a majority of one (1) member will determine the forum where the dispute will be initiated within twentyeight (28) days of receiving notification of the dispute relating to the proper forum.

The forum identified by such committee shall be the sole forum for determining where the dispute shall be heard, and the committee’s identification of such forum shall not be entitled to deference by the forum selected.

H. No Effect. Nothing in this Agreement shall be interpreted to limit the Settling State’s Civil Investigative Demand (“CID”) or investigative subpoena authority, to the extent such authority exists under applicable state law and the CID or investigative subpoena is issued pursuant to such authority, and Allergan reserves all of its rights in connection with a CID or investigative subpoena issued pursuant to such authority.

XV. Judgment and Settlement Set-Off Related to Teva
A. The Parties recognize that some of the Settling States, Participating Subdivisions, and Participating Special Districts are pursuing Claims against Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates. If any of them achieves a judgment by verdict, judicial decision, or means other than settlement against any of Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates, each plaintiff listed above shall represent and agree that any payment(s) that the Settling States, Participating Subdivisions, and Participating Special Districts or their counsel receives from Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates

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reflects the amount over and above 56% of the amount they or their counsel received from the Global Settlement Amount due under this Agreement that each and all of them deem to reflect a fair overall settlement value for liability attributable to the generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and/or other Divested Entities and/or attributable to the operation of the Divested Actavis Generic Entities and/or other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016.

B. The Settling States, Participating Subdivisions, and Participating Special Districts may reach a settlement agreement with Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates that resolves some or all of their respective Claims. In that event, the Releasors represent and agree that any payment(s) that the Settling States, Participating Subdivisions, and Participating Special Districts or their counsel receives from Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates reflects the amount over and above 56% of the amount they or they counsel received from the Global Settlement Amount due under this Agreement that each and all of them deem to reflect a fair overall settlement value for liability attributable to the generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and/or other Divested Entities and/or attributable to the operation of the Divested Actavis Generic Entities and/or other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016. In any such settlement agreement with Teva Ltd., Teva USA, Cephalon, Divested Actavis Generic Entities, and/or other Divested Entities, and/or each of their respective parents, subsidiaries, and/or affiliates, the Settling States, Participating Subdivisions, and Participating Special Districts agree that the agreed settlement amount reflects the value the parties to the agreement deem a fair settlement value over and above the payments made or due to be paid under the Allergan Public Global Opioid Settlement Agreement for generic opioid drugs that are Products distributed and/or sold before August 2, 2016 by Divested Actavis Generic Entities and/or other Divested Entities and/or relate to the operation of Divested Actavis Generic Entities and other Divested Entities related to those generic opioid drugs that are Products before August 2, 2016.

XVI. Miscellaneous
A. No Admission. Allergan does not admit liability or wrongdoing. Neither this Agreement nor the Consent Judgments shall be considered, construed, or represented to be (1) an admission, concession, or evidence of liability or wrongdoing or (2) a waiver or any limitation of any defense otherwise available to Allergan.

B. Population of Subdivisions. The population figures for Subdivisions shall be the published U.S. Census Bureau’s population estimates for July 1, 2019, released May 2020. These population figures shall remain unchanged during the term of this Agreement.

C. Population of Special Districts. For any purpose in this Agreement in which the population of a Special District is used: (a) School Districts’ population will be measured by the

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number of students enrolled who are eligible under the Individuals with Disabilities Education Act (“IDEA”) or Section 504 of the Rehabilitation Act of 1973; (b) Health Districts’ and Hospital Districts’ population will be measured at 25% of discharges; and (c) all other Special Districts’ (including Fire Districts’ and Library Districts’) population will be measured at 10% of the population served.

D. Population Associated with Sheriffs. For any purpose in this Agreement in which the population associated with a lawsuit by a sheriff is used, the population will be measured at 20% of the capacity of the jail(s) operated by the sheriff.

E. Most-Favored-Nation Provision.

1. If Allergan enters into any settlement agreement with any Non-Settling State after November 23, 2022 that resolves Claims similar in scope to the Claims released by a Settling State under this Agreement on overall payment terms that are more favorable to such Non-Settling State on a net present value basis (calculated with a 7% discount rate) on overall payment terms the Non-Settling State would have received under this Agreement based on the same level of participation, then the Settling States, individually or collectively, may elect to seek review, pursuant to Section XVI.E.3, of the overall payment terms of this Agreement and the NonSettling State agreement so that the Settling State(s) may obtain, with respect to Allergan, overall payment terms at least as favorable as those obtained by such Non-Settling State. “Overall payment terms” refers to consideration of all payment terms of the two agreements, taken together, including, but not limited to the amount of payments, the timing of payments, and conditions or contingencies on payments.

2. For any settlement with a Non-Settling State involving Released Claims, Allergan shall provide the Enforcement Committee with a copy of the settlement agreement or relevant Consent Judgment within thirty (30) calendar days of the consummation of such settlement. The Enforcement Committee will promptly distribute such copy to all Settling States.

3. In the event that one or more Settling State(s) believes that the overall payment terms of an agreement by Allergan with a Non-Settling State are more favorable to the Non-Settling State, when compared based on the totality of the considerations set forth in Section XVI.E.1, the Settling State(s) and Allergan shall engage in the following process:
a. The Settling State(s) shall provide notice, within sixty (60) calendar days of the date on which a settlement agreement or Consent Judgment is provided to the Enforcement Committee, to Allergan of its intent to seek revision of this Agreement to provide payment terms that are, on an overall basis, as favorable as those obtained by the Non-Settling State. Such notice shall be confidential and not disclosed publicly to the extent allowed by law and shall state, in detail, the basis for the Settling State’s belief that it is entitled to a revision of the Agreement.

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b. Allergan shall, within thirty (30) calendar days, provide a response to the Settling State(s), explaining its position, in detail, as to whether the Settling State(s) is entitled to more favorable overall payment terms than those provided for in this Agreement.
c. In the event the Settling State(s) and Allergan do not reach agreement as to the application of Section XVI.E.1, the Settling State(s) may petition the National Arbitration Panel to seek a ruling from the Panel as to the applicability of Section XVI.E.1, provided that the Settling State(s) may seek such review only if at least five (5) Settling States co-sign the petition.

The Panel shall consider submissions and argument by the parties pursuant to the procedures set forth in Section XIV.G.4.
d. The Settling State(s) and Allergan shall be bound by the determination of the National Arbitration Panel.

4. This Section XVI.E does not apply to, and there is no ability of any Settling State to seek or obtain revision of this Agreement based on, any Non-Settling State agreement with Allergan that is entered into: (a) either the earlier of (i) after the close of expert discovery or (ii) after a date ninety (90) calendar days prior to the scheduled start date of a trial between Allergan and the Non-Settling State or any severed or bifurcated portion thereof, provided that, where, in order to complete a settlement, a Non-Settling State and Allergan jointly request an adjournment of the scheduled start date of a trial within ninety (90) days of that date, this exception will apply as if the trial date had not been adjourned; (b) with a Non-Settling State that previously litigated to judgment a case related to opioids against any manufacturer, distributor, or pharmacy; or (c) the earlier of (i) after a Non-Settling State has obtained any court order or judicial determination that grants judgment (in whole or in part) against Allergan in the Non-Settling State’s case, (ii) after a sanctions ruling against Allergan in the Non-Settling State’s case against Allergan; or (iii) after any ruling has issued in the Non-Settling State’s case against any manufacturer, distributor, or pharmacy on the issue of joint and several liability.

The National Arbitration Panel shall have no power to review agreements that satisfy any of the conditions described in this paragraph.

5. This Section does not apply to, and there is no ability of any Settling State to seek or obtain revision of this Agreement based on, any agreement between Allergan and (a) federally-recognized tribe(s),(b) Non-Participating Subdivisions or (3) Non-Participating Special Districts. This Section XVI.E will not apply to any agreement entered into more than six (6) months after the Reference Date.

F. Tax Reporting and Cooperation.

1. The Parties agree that, unless otherwise required by law, Allergan’s payment of the Compensatory Restitution Amount (after all applicable offsets) payable by Allergan shall be directed to Opioid Remediation for restitution of Alleged Harms allegedly caused by Allergan. By executing this Agreement (or the Settlement

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Participation Form and thereby becoming a signatory to this Agreement), each Settling State, Participating Subdivision, and Participating Special District certify that: (1) the entity suffered Alleged Harms allegedly caused by Allergan; (2) the Compensatory Restitution Amount to be paid by Allergan to the entity represent an amount that is less than or equal to the actual monetary damage allegedly caused by Allergan; and (3) the entity shall use such payments for the sole purpose of Opioid Remediation.

2. Upon request by Allergan, the Settling States, Participating Subdivisions, and Participating Special Districts agree to perform such further acts and to execute and deliver such further documents as may be reasonably necessary for Allergan to establish the statements set forth in subsection VIII.G to the satisfaction of their tax advisors, their independent financial auditors, the Internal Revenue Service, or any other governmental authority, including as contemplated by Treasury Regulations Section 1.162-21(b)(3)(ii) and any subsequently proposed or finalized relevant regulations or administrative guidance.

3. Without limiting the generality of subsection XVI.F, each Settling State, Participating Subdivision, and Participating Special District shall cooperate in good faith with Allergan with respect to any tax claim, dispute, investigation, audit, examination, contest, litigation, or other proceeding relating to this Agreement.

4. The Designated State, on behalf of all Settling States, Participating Subdivisions, and Participating Special Districts, shall designate one of its officers or employees to act as the “appropriate official” within the meaning of Treasury Regulations Section 1.6050X-1(f)(1)(ii)(B) (the “Appropriate Official”).

5. Neither Allergan nor the Settling States, Participating Subdivisions, and Participating Special Districts make any warranty or representation to any Settling jurisdiction or Releasor as to the tax consequences of the payment of the Compensatory Restitution Amount (or any portion thereof).

G. No Third-Party Beneficiaries. Except as expressly provided in this Agreement, no portion of this Agreement shall provide any rights to, or be enforceable by, any person or entity that is not a Settling State or Released Entity. No Settling State may assign or otherwise convey any right to enforce any provision of this Agreement.

H. Calculation. Any figure or percentage referred to in this Agreement shall be carried to seven decimal places.

I. Construction. None of the Parties and no Participating Subdivision shall be considered to be the drafter of this Agreement or of any of its provisions for the purpose of any statute, case law, or rule of interpretation or construction that would or might cause any provision to be construed against the drafter of this Agreement. The headings of the provisions of this Agreement are not binding and are for reference only and do not limit, expand, or otherwise affect the contents or meaning of this Agreement.

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J. Cooperation. Each Party and each Participating Subdivision agrees to use its best efforts and to cooperate with the other Parties and Participating Subdivisions to cause this Agreement and the Consent Judgments to become effective, to obtain all necessary approvals, consents and authorizations, if any, and to execute all documents and to take such other action as may be appropriate in connection herewith. Consistent with the foregoing, each Party and each Participating Subdivision agrees that it will not directly or indirectly assist or encourage any challenge to this Agreement or any Consent Judgment by any other person, and will support the integrity and enforcement of the terms of this Agreement and the Consent Judgments.

K. Entire Agreement. This Agreement, its exhibits and any other attachments, including the attorneys’ fees and cost agreement in Exhibit R, embodies the entire agreement and understanding between and among the Parties and Participating Subdivisions relating to the subject matter hereof and supersedes (1) all prior agreements and understandings relating to such subject matter, whether written or oral and (2) all purportedly contemporaneous oral agreements and understandings relating to such subject matter.

L. Execution. This Agreement may be executed in counterparts and by different signatories on separate counterparts, each of which shall be deemed an original, but all of which shall together be one and the same Agreement. One or more counterparts of this Agreement may be delivered by facsimile or electronic transmission with the intent that it or they shall constitute an original counterpart hereof. One or more counterparts of this Agreement may be signed by electronic signature.

M. Good Faith and Voluntary Entry. Each Party warrants and represents that it negotiated the terms of this Agreement in good faith. Each of the Parties and signatories to this Agreement warrants and represents that it freely and voluntarily entered into this Agreement without any degree of duress or compulsion. The Parties state that no promise of any kind or nature whatsoever (other than the written terms of this Agreement) was made to them to induce them to enter into this Agreement.

N. No Prevailing Party. The Parties each agree that they are not the prevailing party in this action, for purposes of any Claim for fees, costs, or expenses as prevailing parties arising under common law or under the terms of any statute, because the Parties have reached a good faith settlement. The Parties each further waive any right to challenge or contest the validity of this Agreement on any ground, including, without limitation, that any term is unconstitutional or is preempted by, or in conflict with, any current or future law.

O. Non-Admissibility. The settlement negotiations resulting in this Agreement have been undertaken by the Parties and by certain representatives of the Participating Subdivisions in good faith and for settlement purposes only, and no evidence of negotiations or discussions underlying this Agreement shall be offered or received in evidence in any action or proceeding for any purpose. This Agreement shall not be offered or received in evidence in any action or proceeding for any purpose other than in an action or proceeding arising under or relating to this Agreement or in any litigation or arbitration concerning Allergan’s right to coverage under an insurance contract.

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P. Notices. All notices or other communications under this Agreement shall be in writing (including but not limited to electronic communications) and shall be given to the recipients indicated below:

1. For the Attorney(s) General:

Josh Stein, Attorney General
North Carolina Department of Justice
Attn: Daniel Mosteller
PO Box 629
Raleigh, NC 27602
[email protected]
Tom Miller, Attorney General
Office of the Attorney General of Iowa
Attn: Nathan Blake
1305 E. Walnut St.

Des Moines, IA 50319
Jonathan Skrmetti, Attorney General
Office of the Tennessee Attorney General
Attn: Michael Leftwich
P.O. Box 20207
Nashville, TN, 37202-0207

2. For the Plaintiffs’ Executive Committee:

Paul F. Farrell
Farrell Law
P.O. Box 1180
Huntington, WV 25714-1180
Jayne Conroy
Simmons Hanly Conroy LLC
112 Madison Avenue, 7th Floor
New York, NY 10016-7416
[email protected]
Joseph F. Rice
Motley Rice LLC
28 Bridgeside Blvd.

Mount Pleasant, SC 29464
[email protected]
Peter Mougey

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Levin Papantonio Rafferty
316 South Baylen St.

Pensacola, FL 32502
[email protected]
Paul J. Geller
Robbins Geller Rudman & Dowd LLP
120 East Palmetto Park Road
Boca Raton, FL 33432
[email protected]
Steven Skikos
Skikos, Crawford, Skikos & Joseph, LLC
One Sansom Street, Suite 2830
San Francisco, CA 94104
[email protected]

3. For Allergan:

Office of General Counsel
One North Waukegan Road
North Chicago, IL 60064
Copy to Allergan’s attorneys at:

James F. Hurst, P.C.

Kirkland & Ellis LLP
300 North LaSalle
Chicago, IL 60654
[email protected]
Any Party or the Plaintiffs’ Executive Committee may change or add the contact information of the persons designated to receive notice on its behalf by notice given (effective upon the giving of such notice) as provided in this subsection.

Q. No Waiver. The waiver of any rights conferred hereunder shall be effective only if made by written instrument executed by the waiving Party or Parties. The waiver by any Party of any breach of this Agreement shall not be deemed to be or construed as a waiver of any other breach, whether prior, subsequent, or contemporaneous, nor shall such waiver be deemed to be or construed as a waiver by any other Party.

R. Preservation of Privilege. Nothing contained in this Agreement or any Consent Judgment, and no act required to be performed pursuant to this Agreement or any Consent Judgment, is intended to constitute, cause, or effect any waiver (in whole or in part) of any attorneyclient privilege, work product protection, or common interest/joint defense privilege, and each Party agrees that it shall not make or cause to be made in any forum any assertion to the contrary.

S. Successors

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1. The Agreement shall be binding upon, and insure to the benefit of, Allergan and its respective successors and assigns.

2. Prior to Allergan’s last Payment Date, Allergan shall not sell the majority of its voting stock or substantially all its assets without obtaining the acquiror’s agreement that it will constitute a successor with respect to Allergan’s obligations under this Agreement.

3. Prior to Allergan’s last Payment Date, Allergan shall not in one (1) transaction, or a series of related transactions, sell, or transfer assets (other than sales or transfers of inventories, or sales or transfers to an entity owed directly or indirectly by Allergan) having a fair market value equal to twenty-five percent (25%) or more of the consolidated assets of Allergan where the sale or transfer transaction is announced after the Reference Date, is not for fair consideration, and would foreseeably and unreasonably jeopardize Allergan’s ability to make the payments under this Agreement that are due on or before the third Payment Date following the close of a sale or transfer transaction. The above restriction shall not apply if Allergan obtains the acquiror’s agreement that it will be either a guarantor of or successor to the percentage of Allergan’s remaining Payment Obligations under this Agreement equal to the percentage of Allergan’s consolidated assets being sold or transferred in such transaction. Percentages under this section shall be determined in accordance with the United States generally accepted accounting principles and as of the date of Allergan’s most recent publicly filed consolidated balance sheet prior to the date of entry into the sale or transfer agreement at issue.

This Section XVI.S.3 shall be enforceable solely by the Enforcement Committee, and any objection under this Section X.VI.S.3 not raised within twenty (20) calendar days from the date that Allergan transmits notice of the transaction to the Enforcement Committee is waived. Any dispute under this Section XVI.S.3 shall be a National Dispute as described in Section XIV.G and must be raised exclusively with the National Arbitration Panel as described therein within twenty (20) calendar days of the announcement, and the sole remedy shall be an order enjoining the transaction.

T. Modification, Amendment, Alteration. After the Reference Date, any modification, amendment, or alteration of this Agreement by the Parties shall be binding only if evidenced in writing signed by Allergan along with the signatures of at least thirty-seven (37) of those then-serving Attorneys General of the Settling States along with a representation from each Attorney General that either: (1) the advisory committee or similar entity established or recognized by that Settling State (either pursuant to subsection VIII.F.2, by a State-Subdivision Agreement, or by statute) voted in favor of the modification, amendment, or alteration of this Agreement including at least one Participating Subdivision-appointed member; or (2) in States without any advisory committee, that 50.1% of the Participating Subdivisions by population expressed approval of the modification, amendment, or alteration of this Agreement in writing. Provided, however, in the event the modification, amendment, or alteration relates to injunctive relief, interstate allocation between the Settling States, intrastate allocation in a particular Settling State, or fees or costs of Settling States and Participating Subdivisions, then every Settling

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State and each Participating Subdivision affected by that modification, amendment, or alteration must assent in writing. Provided further that, in the event the modification, amendment, or alteration relates to injunctive relief, then such amendment, modification, or alteration of injunctive relief against Allergan will not be effective unless and until any Consent Judgment is modified by a court of competent jurisdiction, except as otherwise provided by the Injunctive Terms.

U. Termination.

1. Unless otherwise agreed to by Allergan and the Settling State in question, this Agreement and all of its terms (except subsection XVI.O and any other nonadmissibility provisions, which shall continue in full force and effect) shall be canceled and terminated with respect to the Settling State, and the Agreement and all orders issued by the courts in the Settling State pursuant to the Agreement shall become null and void and of no effect if one or more of the following conditions applies:
a. A Consent Judgment approving this Agreement without modification of any of the Agreement’s terms has not been entered as to the Settling State by a court of competent jurisdiction on or before one hundred eighty (180) days after the Effective Date; or
b. This Agreement or the Consent Judgment as to that Settling State has been disapproved by a court of competent jurisdiction to which it was presented for approval and/or entry (or, in the event of an appeal from or review of a decision of such a court to approve this Agreement and the Consent Judgment, by the court hearing such appeal or conducting such review), and the time to appeal from such disapproval has expired, or, in the event of an appeal from such disapproval, the appeal has been dismissed or the disapproval has been affirmed by the court of last resort to which such appeal has been taken and such dismissal or disapproval has become no longer subject to further appeal (including, without limitation, review by the United States Supreme Court).

2. If this Agreement is terminated with respect to a Settling State and its Participating Subdivisions for whatever reason pursuant to subsection XVI.U.1, then:
a. An applicable statute of limitation or any similar time requirement (excluding any statute of repose) shall be tolled from the date the Settling State signed this Agreement until the later of the time permitted by applicable law or for one year from the date of such termination, with the effect that Allergan and the Settling State in question shall be in the same position with respect to the statute of limitation as they were at the time the Settling State filed its action; and
b. Allergan and the Settling State and its Participating Subdivisions in question shall jointly move the relevant court of competent jurisdiction for an order

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reinstating the actions and Claims dismissed pursuant to the terms of this Agreement governing dismissal, with the effect that Allergan and the Settling State and its Participating Subdivisions in question shall be in the same position with respect to those actions and Claims as they were at the time the action or Claim was stayed or dismissed.

3. Unless Allergan and the Enforcement Committee agree otherwise, this Agreement, with the exception of the Injunctive Relief Terms that have their own provisions on duration, shall terminate as to all Parties as of Annual Payment 6, provided that Allergan has performed its payment obligations under the Agreement as of that date. Notwithstanding any other provision in this Agreement, all releases under this Agreement will remain effective despite any termination under this paragraph.

V. Waiver. Allergan, for good and valuable consideration the receipt of which is acknowledged, hereby (a) waives, foregoes and relinquishes all rights to utilize and/or seek relief under any of the following laws of the State of Texas for the restructuring of its debts or liabilities related to Released Claims or Claims that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date, or this Agreement: Tex. Bus. Orgs. Code § 10.003 (Contents of Plan of Merger: More Than One Successor) or any other statute of Subchapter A of Chapter 10 of Tex. Bus. Orgs. Code to the extent such statute relates to multi-successor or divisive mergers (and/or any other similar laws or statutes in any other state or territory); Tex. Bus. Orgs. Code §§ 11.01–

11.414 (Winding Up and Termination of Domestic Entity); or Tex. Bus. & Com. Code §§

23.01–23.33 (Assignments for the Benefit of Creditors) (collectively, the “Texas Statutes”), and (b) agrees, warrants and represents that it will not file, request or petition for relief under the Texas Statutes related to its debts or liabilities related to Released Claims or Claims that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date, or this Agreement, in each case until such time as all of Allergan’s payment obligations incurred hereunder are satisfied in full. The foregoing waiver and relinquishment includes, without limitation, until such time as all of Allergan’s payment obligations hereunder are satisfied in full, Allergan’s rights to execute a divisional merger or equivalent transaction or restructuring related to its debts or liabilities related to Released Claims or Claims that would have been Released Claims if they had been brought by a Releasor against a Released Entity before the Effective Date, or this Agreement that in each case has the intent or foreseeable effect of (i) separating material assets from material liabilities and (ii) assigning or allocating all or a substantial portion of those liabilities to any subsidiary or affiliate that files for relief under chapter 11 of the Bankruptcy Code, or pursuant to which such subsidiary or affiliate that files for relief under chapter 11 of the Bankruptcy Code would be assuming or retaining all or a substantial portion of those liabilities.

W. Governing Law. Except (1) as otherwise provided in the Agreement or (2) as necessary, in the sole judgment of the National Arbitration Panel, to promote uniformity of interpretation for matters within the scope of the National Arbitration Panel’s authority, this Agreement shall be governed by and interpreted in accordance with the respective laws of the Settling State, without regard to the conflict of law rules of such Settling State, that is seeking to enforce the Agreement against Allergan or against which Allergan is seeking enforcement.

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Notwithstanding any other provision in this subsection on governing law, any disputes relating to the Settlement Fund Escrow shall be governed by and interpreted in accordance with the law of the state where the escrow agent has its primary place of business.

i

ALLERGAN PUBLIC GLOBAL OPIOID SETTLEMENT EXHIBITS
EXHIBIT A Alleged Harms..................................................................................................... A-1 EXHIBIT B Enforcement Committee Organizational Bylaws............................................. B-1 EXHIBIT C Litigating Subdivisions and Special Districts List ........................................... C-1 EXHIBIT D [Intentionally Omitted]....................................................................................... D-1 EXHIBIT E List of Opioid Remediation Uses ....................................................................... E-1 EXHIBIT F-1 List of States and Pre-Credit Overall Allocation Percentages......................F-1 EXHIBIT F-2 List of Eligible Settling States and Overall Allocation Percentages.............F-3 EXHIBIT G Subdivisions and Special Districts Eligible to Receive Direct Allocations from the Subdivision Fund and Subdivision Fund Allocation Percentages................................................................................................................................G-1 EXHIBIT H [Intentionally Omitted] ......................................................................................H-1 EXHIBIT I Subdivisions with a Population Greater than 10,000......................................... I-1 EXHIBIT J-1 AbbVie Entities.................................................................................................. J-1 EXHIBIT J-2 Allergan Entities................................................................................................ J-2 EXHIBIT J-3 Divested Entities................................................................................................ J-3 EXHIBIT K Subdivision and Special District Settlement Participation Form ..................K-1 EXHIBIT L Settlement Fund Administrator......................................................................... L-1 EXHIBIT M-1 Payment Schedule.......................................................................................... M-1 EXHIBIT M-2 Payment Schedule for Fee Funds, Cost Funds, and Additional Restitution................................................................................................................................. M-2 EXHIBIT N Additional Restitution Amount Allocation....................................................... N-1 EXHIBIT O Adoption of a State-Subdivision Agreement....................................................O-1 EXHIBIT P Injunctive Relief ...................................................................................................P-1 EXHIBIT Q [Intentionally Omitted] ......................................................................................Q-1