Emergency Procedures for the Cessna 400 Corvalis TT

compensatory, punitive, or statutory damages, absolute liability, strict liability, restitution, remediation, subrogation, contribution, indemnity, apportionment, disgorgement, reimbursement, 4 attorney fees, expert fees, consultant fees, fines, penalties, expenses, costs or any other legal, equitable, civil, administrative, or regulatory remedy whatsoever. P. "Claim-Over." 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. Q. “Compensatory Restitution Amount.” The aggregate amount paid or incurred by Walgreens hereunder for Opioid Remediation, which includes each Annual Remediation Payment and does not include amounts paid as attorneys’ fees and costs or identified pursuant to Section V.B.2 as being used to pay attorneys’ fees, investigation costs or litigation costs, which shall be up to the amount of the Adjusted State Remediation Payment. R. "Consent Judgment." A consent judgment in a form to be agreed by the Settling States and Walgreens prior to the Initial Participation Date that, among other things, (1) approves this Agreement and (2) provides for the release set forth in Section X.A, including the dismissal with prejudice of any Released Claims that the Settling State has brought against Released Entities. S. "Covered Conduct." Any actual or alleged act, failure to act, negligence, statement, error, omission, breach of any duty, conduct, event, transaction, agreement, misstatement, misleading statement or other activity of any kind whatsoever from the beginning of time through the Reference Date (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, misstatement, misleading statement or other activity) relating in any way to (1) compounding, counseling and documentation relating to any Product or class of Products (2) the discovery, development, manufacture, packaging, repackaging, marketing, promotion, advertising, labeling, 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 or advocacy relating to any Product or class of Products, including, but not limited to, any unbranded promotion, marketing, programs, or campaigns relating to any Product or class of Products; (3) the characteristics, properties, risks, or benefits of any Product; (4) the reporting, disclosure, non-reporting or nondisclosure to federal, state or other regulators of orders placed with any Released Entity; or (5) diversion control programs or suspicious order monitoring; T. “Deferred Payment Notice.” As defined in Section IV.K.4. U. “Designated State.” The State of New York. V. “Effective Date.” The date sixty (60) calendar days after the Reference Date. W. “Eligible States.” The states, commonwealths, and territories of the United States of America, excluding Florida. X. “Enforcement Committee.” A committee consisting of representatives of the Settling States and of the Participating Subdivisions. Exhibit B contains the organizational 5 bylaws of the Enforcement Committee. Notice pursuant to Section XIII.S shall be provided when there are changes in membership or contact information. Y. "Final Order." An order or judgment of a court of competent jurisdiction with respect to the applicable subject matter (1) which has not been reversed or superseded by a modified or amended order, is not currently stayed, and as to which any right to appeal or seek certiorari, review, reargument, stay, or rehearing has expired, and as to which no appeal or petition for certiorari, review, reargument, stay, or rehearing is pending, or (2) as to which an appeal has been taken or petition for certiorari, review, reargument, stay, or rehearing has been filed and (a) such appeal or petition for certiorari, review, reargument, stay, or rehearing has been resolved by the highest court to which the order or judgment was appealed or from which certiorari, review, reargument, stay, or rehearing was sought, or (b) the time to appeal further or seek certiorari, review, reargument, stay, or rehearing has expired and no such further appeal or petition for certiorari, review, reargument, stay, or rehearing is pending. Z. “Global Settlement Amount.” The Global Settlement Amount is $5,522,528,766which is comprised of the Adjusted State Remediation Payment, Private Attorneys Fees, State AG Fees and Costs, and Additional Remediation Amount AA. “Implementation Administrator.” The vendor agreed to by Walgreens and the Enforcement Committee, and retained by Walgreens for costs of up to $1,500,000, to provide notice pursuant to Section VII.A and to manage the initial joinder period for Subdivisions, including the issuance and receipt of Subdivision Participation Agreements. BB. "Incentive Payment A." The incentive payment described in Section IV.H.4. CC. “Incentive Payment A Catch-up Payment.” As defined in Section IV.H.4.f. DD. "Incentive Payment BC." The incentive payment described in Section IV.H.5. EE. "Incentive Payment D." The incentive payment described in Section IV.H.6. FF. "Initial Participating Subdivision." A Subdivision that meets the requirements set forth in Section VII.D. GG. "Initial Participation Date." The date ninety (90) calendar days after the Preliminary Agreement Date, unless it is extended by written agreement of Walgreens and the Enforcement Committee. HH. "Injunctive Relief Terms." The terms described in Section III and set forth in Exhibit P. II. "Later Litigating Subdivision." 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: (1) first files a lawsuit bringing a Released Claim against a Released Entity after the Trigger Date; or (2) adds a Released Claim against a Released Entity after the Trigger Date to a lawsuit brought before the Trigger Date that, prior to the Trigger Date, did not include any Released Claims against a Released Entity; or (3) (a) was a Litigating Subdivision whose 6 Released Claims against Released Entities were resolved by a legislative Bar or legislative Case- Specific Resolution as of the Trigger Date, (b) such legislative Bar or legislative Case-Specific Resolution is subject to a Revocation Event after the Trigger Date, and (c) the earlier of the date of completion of opening statements in a trial in an action brought by a Subdivision in that State that includes a Released Claim against a Released Entity or one hundred eighty (180) days from the Revocation Event passes without a Bar or Case-Specific Resolution being implemented as to that Litigating Subdivision or the Litigating Subdivision's Released Claims being dismissed; or (4) (a) was a Litigating Subdivision whose Released Claims against Released Entities were resolved by a judicial Bar or judicial Case-Specific Resolution as of the Trigger Date, (b) such judicial Bar or judicial Case-Specific Resolution is subject to a Revocation Event after the Trigger Date, and (c) such Litigating Subdivision takes any action in its lawsuit asserting a Released Claim against a Released Entity other than seeking a stay or dismissal. JJ. "Later Participating Subdivision." A Participating Subdivision that is not an Initial Participating Subdivision, but meets the requirements set forth in Section VILE. KK. "Litigating Subdivision." A Subdivision (or Subdivision official) that brought any Released Claim against any Released Entity prior to the Trigger Date; provided, however, that a Subdivision (or Subdivision official) that is a Prior Litigating Subdivision shall not be considered a Litigating Subdivision. Exhibit C is an agreed list of all 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 Reference Date. LL. “National Arbitration Panel.” The panel comprised as described in Section VI.F.2.b. MM. “National Disputes.” As defined in Section VI.F.2.a. NN. "Non-Litigating Subdivision." Any Subdivision that is neither a Litigating Subdivision nor a Later Litigating Subdivision. OO. “Non-Litigating Threshold Subdivisions.” Primary Subdivisions (a) with populations greater than 30,000 that have not sued Walgreens as of the Initial Subdivision Participation Date and (b) with populations between 10,000 and 30,000 that have not sued Walgreens but have sued McKesson, AmerisourceBergen, Cardinal or Janssen related to any allegations regarding the Products. PP. "Non-Participating Subdivision." Any Subdivision that is not a Participating Subdivision. QQ. "Non-Party Covered Conduct Claim." 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). RR. "Non-Party Settlement." A settlement by any Releasor that settles any Non-Party Covered Conduct Claim and includes a release of any Non-Released Entity. 7 SS. "Non-Released Entity." An entity that is not a Released Entity. TT. “Non-Settling State.” Any Eligible State that is not a Settling State. UU. "Opioid Remediation." Care, treatment, and other programs and expenditures (including reimbursement for past such programs or expenditures1 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, including on those injured as a result of, the opioid epidemic. Exhibit E provides a non-exhaustive list of expenditures that qualify as being paid for Opioid Remediation. Qualifying expenditures may include reasonable related administrative expenses in connection with the above. VV. “Opioid Tax.” Any tax, assessment, license fee, surcharge or any other fee (other than a fixed prospective excise tax or similar tax or fee that has no restriction on pass-through) imposed by a State on Walgreens on the sale, transfer or distribution of opioid products; provided, however, that none of the following as currently enacted shall be considered an Opioid Tax for purposes of this Agreement: 16 Del. Code Chapter 48B; fees assessed by the Minnesota Board of Pharmacy under Minnesota Statutes section 151.065; any penalty assessed under Minnesota’s Opiate Product Registration Fee law, Minnesota Statutes section 151.066; the MinnesotaCare Wholesale Drug Distributor and Use Tax, Minnesota Statutes section 292.52; the Excise Tax on sale of Opioids, Article 20-D of New York’s Tax Law; the Opioid Stewardship Act, Article 33, Title 2-A of New York’s Public Health Law; and Rhode Island’s Opioid Stewardship Act, R.I. Gen. Laws §§ 21-28.10, et seq.). WW. “Overall Allocation Percentage.” A Settling State’s percentage as set forth in Exhibit F-2. XX. "Participating Subdivision." Any Subdivision that meets the requirements for becoming a Participating Subdivision under Section VII.B and Section VII.C. Participating Subdivisions include both Initial Participating Subdivisions and Later Participating Subdivisions. YY. “Participation Percentage of Incentive BC Eligible Subdivision Population.” As defined in Section IV.H.5.e. ZZ. "Parties." Walgreens and the Settling States (each, a "Party"). AAA. "Payment Date." The date on which Walgreens makes the Annual Remediation Payment pursuant to Section IV.B. For the avoidance of doubt, the date on which the Annual Fee Payments (including without limitation State AG Fees and Costs and Additional Remediation Amounts) are made is December 31 for each Payment Year in which Annual Fee Payments are due pursuant to Exhibit M-3, which may be a different date than the Payment Date. BBB. "Payment Year." The Walgreens’ fiscal year during which the applicable Annual Remediation Payment and/or Annual Fees Payment is due pursuant to Exhibit M-2 and Exhibit M-3. Walgreens’ fiscal year is September 1-August 31. Payment Year 1 is September 1, 2022- 1 Reimbursement includes amounts paid to any governmental entities for past expenditures or programs 8 August 31, 2023, Payment Year 2 is September 1, 2023-August 31, 2024 and so forth. References to payment "for a Payment Year" mean the Annual Remediation Payment and/or Annual Fees Payment (including without limitation State AG Fees and Costs and Additional Remediation Amounts) due during that year. References to eligibility "for a Payment Year" mean eligibility in connection with the Annual Remediation Payment due during that year. CCC. “Post-Suspension Payment.” As defined in Section IV.K.2. DDD. “Primary Fire District.” A fire district that covers a population of 25,000, or 0.20% of an Eligible State’s population if an Eligible State’s population is greater than 18 million. If not easily calculable from state data sources and agreed to between the Eligible State and Walgreens, a fire district’s population 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. “Primary Fire Districts” shall mean fire districts as identified in connection with the implementation of the July 21, 2021 Janssen Settlement Agreement. EEE. “Preliminary Agreement Date.” The date on which Walgreens is to inform the Settling States of their determination whether the condition in Section II.B has been satisfied. The Preliminary Agreement Date shall be no more than ten (10) calendar days after the end of the notice period to States, unless it is extended by written agreement of the Walgreens and the Enforcement Committee. FFF. "Primary Subdivision." A Subdivision that is a General Purpose Government (including, but not limited to, a municipality, county, county subdivision, city, town, township, parish, village, borough, gore, or any other entities that provide municipal-type government) with population over 10,000. Attached as Exhibit I is an agreed list of the Primary Subdivisions in each Eligible State. GGG. "Prior Litigating Subdivision." A Subdivision (or Subdivision official) that brought any Released Claim against any Released Entity prior to the Trigger Date and all such Released Claims were separately settled or finally adjudicated prior to the Trigger Date; provided, however, that if the final adjudication was pursuant to a Bar, such Subdivision shall not be considered a Prior Litigating Subdivision. Notwithstanding the prior sentence, Walgreens and the Settling State of the relevant Subdivision may agree in writing that the Subdivision shall not be considered a Prior Litigating Subdivision. HHH. “Private Attorney Fees” are the amount to be paid by Walgreens for private attorneys’ litigation fees and costs on behalf of Participating Subdivisions. The Private Attorney Fees are 12.4% times the Base State Remediation Payment with the maximum amount being $638,600,000. For avoidance of doubt, Private Attorney Fees do not include State AG Fees and Costs or Additional Remediation Amount. III. "Product." Any chemical substance, whether used for medicinal or non-medicinal purposes, and whether natural, synthetic, or semi-synthetic, or any finished pharmaceutical product made from or with such substance, that is: (1) an opioid or opiate, as well as any product containing any such substance; or (2) benzodiazepine, carisoprodol, or gabapentin; or (3) a combination or "cocktail" of chemical substances prescribed, sold, bought, or dispensed to be used 9 together that includes opioids or opiates. "Product" shall include, but is not limited to, any substance consisting of or containing buprenorphine, codeine, fentanyl, hydrocodone, hydromorphone, meperidine, methadone, morphine, oxycodone, oxymorphone, tapentadol, tramadol, opium, heroin, carfentanil, diazepam, estazolam, quazepam, alprazolam, clonazepam, oxazepam, flurazepam, triozolam, temazepam, midazolam, carisoprodol, gabapentin, or any variant of these substances or any similar substance. Notwithstanding the foregoing, nothing in this section prohibits a Settling State from taking administrative or regulatory action related to benzodiazepine (including, but not limited to, diazepam, estazolam, quazepam, alprazolam, clonazepam, oxazepam, flurazepam, triozolam, temazepam, and midazolam), carisoprodol, or gabapentin that is wholly independent from the use of such drugs in combination with opioids, provided such action does not seek money (including abatement and/or remediation) for conduct prior to the Effective Date. JJJ. “Reduced Payment Termination Date.” As defined in Section IV.K.3. KKK. "Reference Date." The date on which Walgreens is to inform the Settling States of its determination whether the condition in Section VIII has been satisfied. The Reference Date shall be no later than thirty (30) calendar days after the Initial Participation Date, unless it is extended by written agreement of Walgreens and the Enforcement Committee. LLL. "Released Claims." 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 Walgreens, including claims arising from Walgreens’ acquisition of other firms or assets prior to the Reference Date, by a Settling State or Litigating Subdivision in any federal, state, or local action or proceeding (whether judicial, arbitral, or administrative) based on, arising out of, or 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, Subdivision, or Releasor (whether or not such State, Subdivision, or Releasor has brought such action or proceeding), including any subsidiaries thereof to the extent permissible by law. Released Claims include any claims of a Non-Released Entity held by a Released Entity by way of assignment. Released Claims also include all Claims asserted in any proceeding to be dismissed pursuant to this Agreement, whether or not such claims relate to Covered Conduct. The Parties intend that this term, "Released Claims," be interpreted broadly. This Agreement does not release Claims by private individuals. It is the intent of the Parties that Claims by private individuals be treated in accordance with applicable law. Released Claims is also used herein to describe claims brought by a Later Litigating Subdivision or other non-party Subdivision that would have been Released Claims if they had been brought by a Releasor against a Released Entity. MMM."Released Entities." With respect to Released Claims, Walgreens and (1) all past and present subsidiaries, divisions, predecessors, successors, and assigns (in each case, whether direct or indirect) of Walgreens; (2) all past and present subsidiaries and divisions (in each case, whether direct or indirect) of any entity described in subsection (1); (3) the respective past and present officers, directors, members, trustees, and employees of any of the foregoing (each for actions that occurred during and related to their work for, or employment with, any of Walgreens or the foregoing entities); (4) all past and present joint ventures (whether direct or indirect) of 10 Walgreens or its subsidiaries, including in any Walgreens or subsidiary's capacity as a participating member in such joint venture; (5) all direct or indirect parents and shareholders of Walgreens (solely in their capacity as parents or shareholders of Walgreens with respect to Covered Conduct); and (6) any insurer of Walgreens or any person or entity otherwise described in subsections (1)-(5) (solely in its role as insurer of such person or entity and subject to the last sentence of Section X.C). An illustrative list of Walgreens’ present joint ventures, subsidiaries and affiliates and predecessor entities is set forth in Exhibit J. Any person or entity described in subsections (3)-(6) shall be a Released Entity solely in the capacity described in such clause and shall not be a Released Entity with respect to its conduct in any other capacity. Any joint venture or past or present subsidiary of Walgreens is a Released Entity, including any joint venture between Walgreens and any distributor, provided, however, that any joint venture partner of Walgreens or any of Walgreens subsidiaries is not a Released Entity unless it falls within subsections (1)-(6) above. With respect to joint ventures (including predecessor entities), only entities listed on Exhibit J are Released Entities. With respect to wholly-owned subsidiaries (including predecessor entities), Exhibit J represents a good faith effort by Walgreens to list all such entities, but any and all wholly-owned subsidiaries (including predecessor entities) of Walgreens are Released Entities, whether or not they are listed on Exhibit J. For the avoidance of doubt, Exhibit J is illustrative, not exhaustive, and may not specifically identify or correctly name each and every Released Entity. Any entity acquired, or joint venture entered into, by Walgreens after the Reference Date is not a Released Entity. NNN. "Releasors." With respect to Released Claims, (1) each Settling State; (2) each Participating Subdivision; and (3) without limitation and to the maximum extent of the power of each Settling State’s Attorney General’s and/or Participating Subdivision to release Claims, (a) the Settling State’s and Participating Subdivision's departments, agencies, divisions, boards, commissions, Subdivisions, districts, instrumentalities of any kind and attorneys, including its Attorney General , and any person in his or her 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, and other Special Districts in a Settling State, 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 on behalf of or generally applicable to the general public with respect to a Settling State or Subdivision in a Settling State, whether or not any of them participate in this Agreement. The inclusion of a specific reference to a type of entity in this definition shall not be construed as meaning that the entity is not a Subdivision. Each Settling State’s Attorney General represents that he or she has or has obtained (or will obtain no later than the Initial Participation Date) the authority set forth in Section X.F. In addition to being a Releasor as provided herein, a Participating Subdivision shall also provide the Subdivision Settlement Participation Form referenced in Section VII providing for a release to the fullest extent of the Participating Subdivision's authority. OOO. "Remediation Accounts Fund.” The component of the Settlement Fund described in Section V.C. PPP. "Revocation Event." With respect to a Bar, Settlement Class Resolution, or Case- Specific Resolution, 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 11 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. QQQ. "Settlement Class Resolution." A class action resolution in a court of competent jurisdiction in a Settling State (that is not successfully removed to federal court) with respect to a class of Subdivisions in that State that (1) conforms with that Settling State’s statutes, case law, and rules of procedure regarding class actions; (2) is approved and entered as an order of a court of competent jurisdiction in that State and such order has become a Final Order; (3) is binding on all Non-Participating Subdivisions in that State (other than opt outs as permitted under the next sentence); (4) provides that all such Non-Participating Subdivisions may not bring any Released Claims against any Released Entities, whether on the ground of this Agreement (or the releases herein) or otherwise; and (5) does not impose any costs or obligations on Walgreens other than those provided for in this Agreement, or contain any provision inconsistent with any provision of this 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 one percent (1%) of the total population of that State 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 or for purposes unrelated to this Agreement. RRR. "Settlement Fund." The interest-bearing fund established pursuant to this Agreement into which the Annual Remediation Payments are made under Section IV. SSS. "Settlement Fund Administrator." The entity that annually determines the Annual Remediation Payment (including calculating suspension, offset or reduction and Incentive Payments pursuant to Section IV and any amounts subject to offset or reduction pursuant to Section XI and Section XII), administers the Settlement Fund, and distributes amounts into the Remediation Accounts Fund, State Fund, and Subdivision Fund pursuant to this Agreement. The duties of the Settlement Fund Administrator shall be governed by this Agreement. Prior to the Initial Participation Date, Walgreens and the Enforcement Committee shall agree to selection and removal processes for and the identity of the Settlement Fund Administrator, and a detailed description of the Settlement Fund Administrator's duties and responsibilities, including a detailed mechanism for paying the Settlement Fund Administrator's fees and costs, all of which shall be appended to the Agreement as Exhibit L. TTT. "Settlement Fund Escrow." The interest-bearing escrow fund established pursuant to this Agreement to hold disputed payments made under this Agreement, and to hold the first Annual Remediation Payment until the Effective Date. UUU. "Settlement Payment Schedule." The schedule attached to this Agreement as Exhibit M-1, Exhibit M-2, and Exhibit M-3. VVV. “Settling State.” An Eligible State that has entered into this Agreement and delivers executed releases in accordance with Section VIII.A. 12 WWW. “State.” The states, commonwealths, and territories of the United States of America, as well as the District of Columbia. The States are listed in Exhibit F-1. Additionally, the use of non-capitalized “state” to describe 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”). XXX. “State Allocation.” The State Remediation Payment multiplied by the percentage for each State listed in Exhibit F-2. For the avoidance of doubt, this amount shall be the same as the Base State Remediation Payment multiplied by the percentage for each Eligible State listed in Exhibit F-1, and it does not include the Additional Remediation Amount. YYY. “State AG Fees and Costs.” The amount to be paid by Walgreens to the States for their litigation fees and costs pursuant to Exhibit S and Exhibit T. The State AG Fees and Costs are 2% times the State Remediation Payment, minus the Additional Remediation Amount, with the maximum amount being $63,842,206. ZZZ. "State Fund." The component of the Settlement Fund described in Section V.C. AAAA. “State Global Allocation Percentage.” The allocation percentages for all States as set forth in Exhibit F-1, which represents allocations before the credit for Walgreens’ settlement with the State of Florida is applied. BBBB.“Statewide Payment Amount.” The amount from an Annual Remediation Payment to be paid to a Settling State, its separate types of funds (if applicable), and its Participating Subdivision listed on Exhibit G. CCCC.“State Remediation Payment.” The maximum amount owed by Walgreens to the States and Subdivisions, exclusive of the Private Attorney Fees, State AG Fees and Costs, Additional Remediation Amount, and is in the amount of $4,788,165,456, consisting of the Base State Remediation Payment and including a credit for Walgreens’ settlement with the State of Florida in the amount of 7.02591344086813% of the Base State Remediation Payment. An additional credit for Walgreens’ settlement with Suffolk and Nassau Counties in New York State in the amount of 15.31% of New York’s State Allocation will be applied to New York’s State Allocation pursuant to Section IV.L. For the avoidance of doubt, the credit for Walgreens’ settlement with Suffolk and Nassau Counties in New York State does not reduce the State Remediation Payment as defined herein, but shall nevertheless reduce the amount owed by Walgreens pursuant to this Agreement to New York State and its Subdivisions. DDDD. “State-Specific Agreement.” As defined in Section IV.J. EEEE. "State-Subdivision Agreement." 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 its Subdivisions. A State-Subdivision Agreement shall be effective if approved pursuant to the provisions of Exhibit O or if adopted by statute. Preexisting agreements addressing funds other 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 a State- 13 Subdivision Agreement if approved pursuant to the provisions of Exhibit O, or if such revision is adopted by statute. FFFF. "Statutory Trust." A trust fund established by state law to receive funds allocated to a Settling State's Remediation Accounts Fund and restrict any expenditures made using funds from the Settling State's Remediation Accounts Fund to Opioid Remediation, subject to reasonable administrative expenses. A State may give a Statutory Trust authority to allocate one (1) or more of the three (3) types of funds comprising such State's Settlement Fund, but this is not required. GGGG. "Subdivision." Any (1) General Purpose Government (including, but not limited to, a municipality, county, county subdivision, city, town, township, parish, village, borough, gore, or any other entities that provide municipal-type government), School District, or Special District within a State, and (2) any other subdivision, subdivision official (acting in an official capacity on behalf of the subdivision) or sub-entity of or located within a State (whether political, geographical or otherwise, whether functioning or non-functioning, regardless of population overlap, and including, but not limited to, Nonfunctioning Governmental Units and public institutions) that has filed a lawsuit that includes a Released Claim against a Released Entity in a direct, parens patriae, or any other capacity. "General Purpose Government," "School District," and "Special District" shall correspond to the "five basic types of local governments" recognized by the U.S. Census Bureau and match the 2017 list of Governmental Units.2 The three (3) General Purpose Governments are county, municipal, and township governments; the two (2) special purpose governments are School Districts and Special Districts.3 "Fire District," "Health District," "Hospital District," and "Library District" shall correspond to categories of Special Districts recognized by the U.S. Census Bureau.4 References to a State's Subdivisions or to a Subdivision "in," "of," or "within" a State include Subdivisions located within the State even if they are not formally or legally a sub-entity of the State; provided, however, that a "Health District" that includes any of the following words or phrases in its name shall not be considered a Subdivision: mosquito, pest, insect, spray, vector, animal, air quality, air pollution, clean air, coastal water, tuberculosis, and sanitary. Each of Lake and Trumbull Counties of Ohio shall not be considered “Subdivisions” for purposes of this Agreement. 2 https://www.census.govidataidatasets/2017/econ/gus/public-use-files.html. 3 E.g., U.S. Census Bureau, "Technical Documentation: 2017 Public Use Files for State and Local Government Organization" at 7 (noting that "the Census Bureau recognizes five basic types of local governments," that three of those are "general purpose governments" (county governments, municipal governments, and township governments), and that the other two are "school district and special district governments"), https://www2.census.gov/programs-surveysigus/datasets/2017/2017_gov_org_meth_tech_doc.pdf. 4 A list of 2017 Government Units provided by the Census Bureau identifies 38,542 Special Districts and categorizes them by "FUNCTION_NAME." "Govt_Units_2017_Final" spreadsheet, "Special District" sheet, included in "Independent Governments - list of governments with reference information," https://www.census.govidataidatasets/2017/econ/gus/public-use-files.html. As used herein, "Fire District" corresponds to Special District function name "24 — Local Fire Protection," "Health District" corresponds to Special District function name "32 — Health," "Hospital District" corresponds to Special District function name "40 —Hospitals," and "Library District" corresponds to Special District function name "52 — Libraries." See id. 14 HHHH. "Subdivision Allocation Percentage." The portion of a Settling State's Subdivision Fund set forth in Exhibit G that a Subdivision will receive pursuant to Section V if it becomes a Participating Subdivision. The aggregate Subdivision Allocation Percentage of all Subdivisions receiving a Subdivision Allocation Percentage in each State shall equal one hundred percent (100%). Immediately upon the effectiveness of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3 (or upon the effectiveness of an amendment to any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.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 V.D.3. The Subdivision Allocation Percentages contained in Exhibit G may not change once notice is distributed pursuant to Section VII.A, except upon the effectiveness of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3 (or upon the effectiveness of an amendment to any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3) that addresses allocation from the Subdivision Fund. For the avoidance of doubt, no Subdivision 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. IIII. "Subdivision Fund." The component of the Settlement Fund described in Section V.A. JJJJ. Subdivision Settlement Participation Form” The form attached as Exhibit K that Participating Subdivisions must execute and return to the Implementation Administrator or Settlement Fund Administrator, and which shall (1) make such Participating Subdivisions signatories to this Agreement, (2) include a full and complete release of any and of such Subdivision’s claims, and (3) require the prompt dismissal with prejudice of any Released Claims that have been filed by any such Participating Subdivision KKKK. "Threshold Motion." 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 or Participating Subdivision provided under this Agreement and, where appropriate under applicable law, any applicable limitations defense. LLLL. “Total Available Amount.” The sum of (1) the Adjusted State Remediation Payment, (2) State AG Fees and Costs payment and Additional Remediation Amount, as reduced for non-Settling States and (3) the Private Attorneys Fees, including any reduction to the Contingency Fee Fund. MMMM. "Trigger Date." In the case of a Primary Subdivision, the Reference Date. In the case of all other Subdivisions, the Preliminary Agreement Date. NNNN. “Walgreens.” Walgreen Co. 15 II. Participation by States and Condition to Preliminary Agreement A. Notice to States. On December 7 2022 this Agreement shall be distributed to all States. The States’ Attorneys General shall then have until December 30, 2022 to decide whether to become Settling States. States that determine to become Settling States shall so notify Walgreens and shall further commit to obtaining any necessary additional State releases prior to the Reference Date. This notice period may be extended by written agreement of Walgreens and the Enforcement Committee. B. Condition to Preliminary Agreement. Following the notice period set forth in Section II.A above, Walgreens shall determine whether, in its sole discretion, enough States have agreed to become Settling States to proceed with notice to Subdivisions as set forth in Section VII below. If Walgreens determines that this condition has been satisfied, and that notice to the Litigating Subdivisions should proceed, it will so notify the Settling States by providing notice to the Enforcement Committee on the Preliminary Agreement Date. If Walgreens determine that this condition has not been satisfied, and this Agreement will have no further effect and all releases and other commitments or obligations contained herein will be void. C. Later Joinder by States. After the Preliminary Agreement Date, a State may only become a Settling State with the consent of Walgreens and the Enforcement Committee. If a State becomes a Settling State more than sixty (60) calendar days after the Preliminary Agreement Date, but on or before June 30, 2023, the Subdivisions in that State that become Participating Subdivisions within ninety (90) calendar days of the State becoming a Settling State shall be considered Initial Participating Subdivisions. A State may not become a Settling State after June 30, 2023. D. Litigation Activity. Following the Preliminary Agreement Date, States that determine to become Settling States shall make reasonable efforts to cease litigation activity against Walgreens, including by jointly seeking stays or, where appropriate, severance of claim against Walgreens, where feasible, and otherwise to minimize such activity by means of agreed deadline extensions and agreed postponement of depositions, document productions, and motion practice if a motion to stay or sever is not feasible or is denied. III. Injunctive Relief A. Injunctive Relief. As part of the Consent Judgment, the Parties agree to the entry of the injunctive relief terms attached in Exhibit P. IV. Settlement Payments A. Settlement Fund. All payments under this Section IV 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 V. B. Annual Remediation Payments 16 1. Walgreens shall make fifteen (15) Annual Remediation Payments, each comprised of Base Payments and Incentive Payments as provided in this Section IV and as determined by the Settlement Fund Administrator as set forth in this Agreement, provided that the Annual Remediation Payment in Payment Year 1 shall consist solely of Base Payments. 2. The combination of the Annual Remediation Payment and the Annual Fee Payment in any given Payment Year shall not exceed one-fifteenth (1/15th) of the Total Available Amount (the “Annual Maximum”). Payments may be lower than one-fifteenth (1/15th) of the Total Available Amount due to credits and incentive eligibility. In the event that the full amount of the Annual Remediation Payment calculated by the Settlement Fund Administrator pursuant to Section IV.C exceeds the Annual Maximum, Settling States will be paid a prorated amount of payment available up to the Annual Maximum, and any unpaid amount will be due the following Payment Year and each succeeding Payment Year until the remediation is fully paid. The payment schedule for the Annual Remediation Payments is attached hereto as Exhibit M-2. The payment schedule for the Annual Fee Payments is attached hereto as Exhibit M-3. C. Settlement Fund Payment Process 1. To determine each Annual Remediation Payment for Payment Year 2 forward, the Settlement Fund Administrator shall use the data as of sixty (60) days prior to the Payment Date for each payment, unless another provision of the Agreement specifies a different date. 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 the Settling States and their Participating Subdivisions listed on Exhibit G consistent with the terms of this Agreement as quickly as practical. 2. The Settlement Fund Administrator shall determine the Annual Remediation 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 under Section IV.F, Section IV.G, and Section IV.H; b. applying any offsets, credits or reductions as specified under Section IV, Section XI, and Section XII; c. applying the annual cap on payments as specified under Section IV.B. d. applying any adjustment required as a result of significant financial constraint, as specified under Section IV.K e. determining the total amount owed by Walgreens to all Settling States and the Participating Subdivisions listed on Exhibit G; and 17 f. the Settlement Fund Administrator shall then allocate, after subtracting the portion of any Settlement Fund Administrator costs and fees owed out of funds from the Settlement Fund pursuant to Section V.C.5, the Annual Remediation Payment pursuant to Section V among the Settling States, among the separate types of funds for each Settling State (if applicable), and among the Participating Subdivisions listed on Exhibit G. 3. If, no later than fifty (50) days prior to the Payment Date, Walgreens and the Enforcement Committee inform the Settlement Fund Administrator that they agree on the amount of the Annual Remediation Payment and the Statewide Payment Amount for each Settling State, Walgreens shall pay the agreed-upon Annual Remediation Payment amount on the Payment Date and the Settlement Fund Administrator shall treat those amounts as the determination described in Section IV.C.2. If the Settlement Fund Administrator is not so informed, it shall give notice to Walgreens, the Settling States, and the Enforcement Committee of the amount of the Annual Remediation Payment, and the Statewide Payment Amount for each Settling State, following the determination described in Section IV.C.2, and the following timeline shall apply: a. Within twenty-one (21) calendar days of the notice provided by the Settlement Fund Administrator, Walgreens, any Settling State or the Enforcement Committee may dispute, in writing, the calculation of the Annual Remediation 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 Walgreens identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected. b. Within twenty-one (21) calendar 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 Walgreens 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 Walgreens shall pay the adjusted amount, collectively totaling that year's Annual Remediation 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 Walgreens 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 the notice of dispute, provided, however, that in no circumstances shall the preliminary amount to be paid be higher than the Annual Maximum as set forth in Section IV.B.2. 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 Annual Maximum. 18 d. The Settlement Fund Administrator shall place any disputed amount of the preliminary amount paid by Walgreens into the Settlement Fund Escrow and shall disburse any undisputed amount to each Settling State and its Participating Subdivisions listed on Exhibit G pursuant to Section IV.C.4. 4. If a Settling State informs the Settlement Fund Administrator that it and its Participating Subdivisions listed on Exhibit G have agreed on the amount of its Statewide Payment Amount, determined pursuant to Section IV.C.2 or Section IV.C.3, to be distributed to the Settling State, among its separate types of funds (if applicable), and among its Participating Subdivisions listed on Exhibit G, the Settlement Fund Administrator shall disburse the Statewide Payment Amount pursuant to the consensus distribution amounts provided by the Settling State as quickly as practical. For a Settling State 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 V, among the separate types of funds for the Settling State (if applicable), and among its Participating Subdivisions listed on Exhibit G using the following procedures: a. As soon as possible for each payment and following the determination described in Section IV.C.2 or Section IV.C.3, the Settlement Fund Administrator shall give notice to the relevant Settling States and their Participating Subdivisions listed on Exhibit G 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 Participating Subdivision listed on Exhibit G for each Settling State. b. Within twenty-one (21) days of the notice provided by the Settlement Fund Administrator, any Settling State or Participating Subdivision listed on Exhibit G may dispute, in writing, the calculation of the amount to be received by the relevant Settling State and/or its Participating Subdivision listed on Exhibit G. 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 Participating Subdivision 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 Participating Subdivision may submit a response, in writing, to the Settlement Fund Administrator, any affected Settling State and any affected Participating Subdivision 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. 19 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 Participating Subdivisions eligible for payment. 5. Disputes described in this subsection shall be resolved in accordance with the terms of Section VI.F. 6. The Settlement Fund Administrator may combine the disbursements of Annual Remediation Payments with disbursement of funds under other comparable opioid settlements. In determining when disbursements for each Annual Remediation Payment will be made, the Settlement Fund Administrator may take into account the timeline for the availability of disbursements under other comparable opioid settlements. 7. For the avoidance of doubt, a Subdivision not listed on Exhibit G shall not receive an allocation from the Subdivision Fund and no provision of this Agreement shall be interpreted to create such an entitlement. D. Procedure for Annual Remediation Payment in Payment Year 1. The process described in Section IV.C shall not apply to Payment Year 1. The procedure in lieu of Section IV.C for Payment Year 1 is as set forth below: 1. The Payment Date for Payment Year 1 is December 31, 2022 or five (5) business days after the Preliminary Agreement Date, whichever is later. Walgreens shall pay into the Settlement Fund Escrow the total amount of the Base Payment for the Eligible States that have agreed to become Settling States, pursuant to Section II.A, as of December 31, 2022 or the Preliminary Agreement Date, whichever is later. This amount shall be calculated by multiplying the aggregate Overall Allocation Percentage attributable to Eligible States that have agreed to become Settling States by the amount specified in Exhibit M-2 for Payment Year 1. Walgreens shall inform the Enforcement Committee of the Statewide Payment Amount for each Eligible State that has agreed to become a Settling State as of December 31, 2022 or the Preliminary Agreement Date, whichever is later. 2. In the event that, in accordance with the terms of Section VIII.A, Walgreens determines not to proceed with the Settlement, or the Settlement does not become effective for any other reason, the funds held in the Settlement Fund Escrow shall immediately revert to Walgreens. If the condition set forth in Section VIII.A is met, Walgreens shall pay into the Settlement Fund Escrow, no later than five (5) business days after the Reference Date, the difference between the existing escrowed amount and the total amount of the Base Payment for the Settling States as of the Initial Participation Date, which shall be calculated by multiplying those Settling States’ Overall Allocation Percentage by the amount specified in Exhibit M-2 for Payment Year 1. Walgreens shall inform the Enforcement Committee of the Statewide Payment Amount for each Settling State with money included in the payment. 20 3. The Annual Remediation Payment for Payment Year 1 placed in the Settlement Fund Escrow pursuant to Section IV.D.1 or Section IV.D.2 shall be transferred by the Settlement Fund Administrator on the Effective Date from the Settlement Fund Escrow to the Settlement Fund for distribution to each Settling State and to its Initial Participating Subdivisions listed on Exhibit G pursuant to Section IV.C.4 through Section IV.C.7; provided, however, that for any Settling State where the Consent Judgment has not been entered as of the Effective Date, the funds allocable to that Settling State and its Participating Subdivisions listed on Exhibit G shall not be disbursed until ten (10) calendar days after the entry of the Consent Judgment in that State. E. Payment Date for Payment Years 2 through 15. The Payment Date for Payment Year 2 is December 31, 2023. The Payment Date for Payment Year 3 is March 31, 2025, and the Payment Date for Payment Years 4 through 14 shall be each successive March 31. The Payment Date for Payment Year 15 is December 31, 2036. The Annual Remediation Payments for those Payment Years shall be made pursuant to the process set forth in Section IV.C. F. Offsets to Annual Remediation Payments to the Settlement Fund for Non-Settling States. An offset equal to $4,788,165,456 times the Overall Allocation Percentage assigned to each Non-Settling State in Exhibit F-2 shall be deducted from the total amount to be paid by Walgreens to the Settlement Fund. For the avoidance of doubt, the Adjusted State Remediation Payment is calculated in a way that reflects this offset. The Base Payments and Incentive Payments are also subject to suspension, offset, and reduction as provided in Section IV.K, Section XI and Section XII. G. Base Payments. 1. Subject to the offset and reduction provisions set forth in Section XI and Section XII, Walgreens shall make Base Payments into the Settlement Fund in an amount equal to forty-one percent (41%) of the Adjusted State Remediation Payment. The maximum total for Base Payments is $1,963,147,836. The Base Payments shall be due in installments consistent with Exhibit M-2 over the fifteen (15) Payment Years, subject to potential offsets for Non-Settling States as provided in Section IV.F. 2. The Base Payment for any Settling State in each Payment Year shall be the Base Payment for that Payment Year specified in Exhibit M-2 times the Settling State’s Overall Allocation Percentage specified in Exhibit F-2. H. Incentive Payments. 1. Subject to the offset and reduction provisions set forth in Section XI and Section XII, Walgreens shall make potential additional incentive payments totaling up to a maximum of fifty-nine percent (59%) of the Adjusted State Remediation Payment, with the Incentive Payment 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 $2,825,017,620. 21 2. A Settling State qualifies to receive Incentive Payments in addition to Base Payments if it meets the incentive eligibility requirements specified below. The maximum total Incentive Payment for any Settling State shall be no more than the maximum total for Incentive Payments listed in Section IV.H.1 times the Settling State’s Overall Allocation Percentage specified in Exhibit F-2. Incentive Payments are state-specific, with the actual amount depending on whether and the extent to which the criteria set forth below are met in such Settling State. 3. The incentive payments shall be divided among three (3) categories, referred to as Incentive Payments A, BC and D. Incentive Payments A and BC will be due in installments over the fourteen (14) Payment Years beginning with Payment Year 2, and Incentive Payment D will be due in installments over Payment Years 6 through 15, as shown on Exhibit M-2. The total amount of incentive payments in an Annual Remediation Payment shall be the sum of the incentive payments for which the 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. For the avoidance of doubt, eligibility for Incentive Payments A, BC, and D shall be determined on a Settling State- by-Settling State basis. 4. Incentive Payment A. a. Incentive Payment A is mutually exclusive with Incentive Payments BC and D; if a Settling State receives Incentive Payment A in an Annual Remediation Payment, such Settling State is not eligible for Incentive Payments BC or D in that Annual Remediation Payment. b. Incentive Payment A shall be equal to fifty-nine percent (59%) of the Adjusted State Remediation Payment, provided all Settling States satisfy the requirements of Incentive Payment A. Incentive Payment A will be due to a Settling State as part of the Annual Remediation Payment over fourteen (14) Payment Years, starting in Annual Remediation Payment 2, and shall equal a total potential maximum of $2,825,017,620 if all states are eligible. Each Settling State’s share of Incentive Payment A in a given year, provided that Settling State is eligible, shall equal the total maximum amount available for Incentive Payment A for that year as reflected in Exhibit M-2 times the Settling State’s Overall Allocation Percentage. c. Eligibility for Incentive Payment A is as follows: A Settling State is eligible for Incentive Payment A if, as of two (2) years of the Effective Date: (i) there is a Bar in that State in full force and effect, (ii) there is a Settlement Class Resolution in that State in full force and effect, (iii) the Released Claims of all of the following entities are released through the execution of Subdivision Settlement Participation Forms, or there is a Case-Specific Resolution against such entities: all Primary Subdivisions, Litigating Subdivisions, School Districts with a K-12 student enrollment of at least 25,000 or .10% of a State's population, whichever is greater, Hospital Districts that have at least one hundred twenty-five 22 (125) hospital beds in one or more hospitals rendering services in that district, and Primary Fire Districts; or (iv) a combination of the actions in clauses (i)-(iii) has achieved the same level of resolution of Claims by Subdivisions (e.g., a Bar against future litigation combined with full joinder by Litigating Subdivisions). For the avoidance of doubt, subsection (iv) cannot be satisfied unless all Litigating Subdivisions are Participating Subdivisions or there is a Case-Specific Resolution against any such Subdivisions that are not Participating Subdivisions. Walgreens and the Enforcement Committee shall meet and confer in order to agree on data sources for purposes of this Section prior to the Preliminary Agreement Date. d. A Settling State that is not eligible for Incentive Payment A as of two (2) years after the Effective Date shall not be eligible for Incentive Payment A for that Payment Year or any subsequent Payment Years. e. Walgreens shall indicate before the Initial Participation Date whether existing legislation in a Settling State is sufficient to qualify as a Bar. f. If a Settling State is not eligible for Incentive Payment A as of the Payment Date for Payment Year 2, and becomes eligible for Incentive Payment A as of Payment Date for Payment Year 3, it shall receive the payment that it would have received for Incentive Payment A for Payment Year 2 (the “Incentive Payment A Catch-up Payment”) beginning on the Payment Date for Payment Year 3. If a Settling State is not eligible for Incentive Payment A as of the Payment Date for Payment Year 3, and becomes eligible for Incentive Payment A as two (2) years after the Effective Date, it shall receive the payment that it would have received for Incentive Payment A for Payment Years 2 and 3 (also an “Incentive Payment A Catch-up Payment”) beginning on the Payment Date for Payment Year 4. The Incentive A Catch-up Payment shall be reduced by any amounts paid to the Settling State under Incentives Payments B or C prior to the Settling State’s eligibility for Incentive Payment A. The Incentive Payment A Catch-up Payment is subject to the Annual Maximum as set forth in Section IV.B.2. In the event that the full amount of Incentive Payment A Catch-up Payments is limited by the Annual Maximum, the process set forth in Section IV.B.2 shall apply. g. If Walgreens made a payment under Incentive Payment A solely on the basis of a Bar or Settlement Class Resolution in a Settling State and that Bar or Settlement Class Resolution is subsequently removed, revoked, rescinded, reversed, overruled, interpreted in a manner to limit the scope of the release, or otherwise deprived of force or effect in any material respect, that Settling State shall not be eligible for Incentive Payment A thereafter, unless the State requalifies for Incentive Payment A through any method pursuant to Section IV.H.4.b, in which case the Settling State shall be eligible for Incentive Payment A less any litigation fees and costs incurred by Walgreens in the interim, except that, if the re-imposition occurs after the completion of opening statements in a 23 trial involving a Released Claim, the Settling State shall not be eligible for Incentive Payment A (unless this exception is waived by Walgreens). 5. Incentive Payment BC. a. Incentive Payment BC shall be available to Settling States that do not qualify for Incentive Payment A. b. Incentive Payment BC shall be up to a maximum of fifty-six percent (56%) of the Settling State’s State Allocation. Incentive Payment A will be due to a Settling State as part of the Annual Remediation Payment over fourteen (14) Payment Years, starting in Annual Remediation Payment 2. Subject to Section IV.F, Incentive Payment BC shall equal a total potential maximum of $2,681,372,654 if all states are eligible. c. A Settling State may earn Incentive Payment BC in Annual Remediation Payments 2 through 15 and may receive, when combined with the Settling State’s Base Payment, a maximum of up to ninety-seven 97% of the Settling State’s State Allocation. The maximum Incentive Payment BC for any Settling State in a given Payment Year shall be the Incentive Payment BC for that Payment Year specified in Exhibit M-2 times the Settling State’s Overall Allocation Percentage specified in Exhibit F-2, provided such Settling State becomes eligible for Incentive Payment BC by sixty (60) days before the Payment Date for Payment Year 6. d. The amount of Incentive Payment BC for which a Settling State is eligible shall be determined based on the aggregate population of the Settling State’s Incentive BC Subdivisions that are Participating Subdivisions or have had their claims resolved through a Case-Specific Resolution, divided by the aggregate population of all the Settling State’s Incentive BC Subdivisions. The Settling State’s Incentive BC Subdivisions are (i) all Litigating Subdivisions (including School Districts and Special Districts) and (ii) all Non-Litigating Threshold Subdivisions (collectively, all Litigating Subdivisions and all Non- Litigating Threshold Subdivisions are “Incentive BC Subdivisions”). e. The percentage of the Settling State’s maximum Incentive Payment BC for the Payment Year provided by Section IV.H.5.c to which the Settling State is entitled shall be determined according to the table of Incentive BC payment levels below: 24 Participation Percentage of Incentive BC Eligible Subdivision Population5 Incentive Payment BC Percentage for the Relevant Payment Year Less than 85% 0% 85% or more but less than 86% 3.57% 86% or more but less than 87% 8.93% 87% or more but less than 88% 14.29% 88% or more but less than 89% 19.64% 89% or more but less than 90% 25% 90% or more but less than 91% 30.36% 91% or more but less than 92% 35.71% 92% or more but less than 93% 41.07% 93% or more but less than 94% 46.43% 94% or more but less than 95% 51.79% 95% or more but less than 96% 60.71% 96% or more but less than 97% 68.75% 97% or more but less than 98% 76.79% 98% or more but less than 99% 84.82% 99% or more but less than 100% 92.86% 100% 100% 5 The “Participation Percentage of Incentive BC Eligible Subdivision Population” shall be determined by the aggregate population of the Settling State’s Incentive BC Subdivisions that are Participating Subdivisions, or have had their claims resolved through a Case-Specific Resolution, divided by the aggregate population of the Settling State’s Incentive BC Subdivisions. In calculating the Settling State’s population that resides in Incentive BC Subdivisions, the population of the Settling State’s Incentive BC Subdivisions shall be the sum of the population of all Incentive BC Subdivisions in the Settling State, notwithstanding that persons may be included within the population of more than one Incentive BC Subdivision. An individual Subdivision shall not be included more than once in the numerator, and shall not be included more than once in the denominator, of the calculation regardless if it (or any of its officials) is named as multiple plaintiffs in the same lawsuit; provided, however, that for the avoidance of doubt, no Subdivision will be excluded from the numerator or denominator under this sentence unless a Subdivision otherwise counted in the denominator has the authority to release the Claims (consistent with Section XI) of the Subdivision to be excluded. 25 f. For Payment Years 2-5, the percentage of the available Incentive Payment BC amount for which a Settling State is eligible will be based on the Participation Percentage of Incentive BC Eligible Subdivision Population as of sixty (60) days before the Payment Date. For Payment Years 6-15, the percentage of the available Incentive Payment BC amount for which a Settling State is eligible will be based on the Participation Percentage of Incentive BC Eligible Subdivision Population as of sixty (60) days before the Payment Date for Payment Year 6. If Incentive BC Eligible Subdivisions that have become Participating Subdivisions, or achieved Case-Specific Resolution status, collectively represent less than eighty-five percent (85%) of a Settling State’s Incentive BC Eligible Subdivision population by sixty (60) days before the Payment Date for Payment Year 6, the Settling State shall not receive any Incentive Payment BC. g. If there are no Incentive BC Eligible Subdivisions in a Settling State, and that Settling State is otherwise eligible for Incentive Payment BC because it is not eligible for Incentive Payment A, that Settling State will receive its maximum Incentive Payment BC for that Annual Remediation Payment provided by Section IV.H.5.c. 6. Incentive Payment D. a. Incentive Payment D shall be available to Settling States that do not qualify for Incentive Payment A. b. Incentive Payment D shall be equal to up to a maximum of ten percent (10%) of the Adjusted State Remediation Payment, with the actual amount depending whether and the extent to which the criteria set forth below are met in each Settling State. The maximum total for Incentive Payment D is $478,816,550.6 c. Incentive Payment D shall be paid starting at Payment Year 6 and the amount of Incentive Payment D in Payment Years 6-15 will depend on (i) the Settling State’s eligibility as set out in Section IV.H.6.d and (ii) the Participation Percentage of Incentive BC Eligible Subdivision Population achieved by the Settling State as of sixty (60) days prior to the Payment Date for Payment Year 6. d. A Settling State is eligible for Incentive Payment D if no Later Litigating Subdivision (for purposes of Incentive Payment D, Later Litigating Subdivisions are limited to (i) a Primary Subdivision; (ii) a school district with a 6 The Incentive Payment BC table specified in Section IV.H.5.f and Incentive Payment D table specified in Section IV.H.6.e operate so that the combined amount of Incentive Payment BC and Incentive Payment D cannot exceed fifty-nine percent (59%) of the Adjusted State Remediation Payment over the term of the Agreement. Walgreens will have no obligation to pay more than $2,825,017,620 for the combined amounts of Incentive Payment BC and Incentive Payment D minus any offsets for Non-Settling States specified in Section IV.F. 26 K-12 student enrollment of at least 25,000 or 0.10% of the State’s population, whichever is greater; (iii) a health district or hospital district that has at least one hundred twenty-five (125) hospital beds in one or more hospitals rendering services in that district; and (iv) Primary Fire Districts) in that State has a lawsuit against a Released Entity survive more than six (6) months after denial in whole or in part of a Threshold Motion. e. A Settling State’s eligibility for Incentive Payment D shall be determined as of sixty (60) calendar days prior to the Payment Date (“Incentive Payment D Look-Back Date”). If a Later Litigating Subdivision’s lawsuit in that State survives more than six (6) months after denial in whole or in part a Threshold Motion after that date, that State shall not be eligible for Incentive Payment D for the Payment Year in which that occurs and any subsequent Payment Year. f. The Incentive Payment D for any Settling State eligible for Incentive Payment D in Payment Years 6-15 shall be equal to between three percent (3%) and ten percent (10%) of the of the State Remediation Payment times the Settling State’s Overall Allocation Percentage specified in Exhibit F-2. The applicable percentage shall be determined based on the Participation Percentage of Incentive BC Eligible Subdivision Population achieved by the Settling State as of sixty (60) days prior to the Payment Date for Payment Year 6 as shown in the table below: Participation Percentage of Incentive BC Eligible Subdivision Population as of sixty (60) days prior to the Payment Date for Payment Year 6 Each Eligible Settling State’s Applicable Incentive Payment D Percentage Participation of less than 95% 10% of State Allocation Participation of 95% but less than 96% 9% of State Allocation Participation of 96% but less than 97% 8% of State Allocation Participation of 97% but less than 98% 7% of State Allocation Participation of 98% but less than 99% 6% of State Allocation Participation of 99% but less than 100% 5% of State Allocation Participation of 100% 3% of State Allocation g. Incentive Payment D shall be paid in the installments of ten percent (10%) per year. In the event that the full amount of Incentive D is limited by the Annual Maximum, the process set forth in Section IV.B.2 shall apply. Prior to making the Annual Remediation Payment for Payment Years 6 through 15, the Settlement Fund Administrator shall determine a Settling State’s eligibility for Incentive Payment D as of the Incentive Payment D Look-Back Date for that Payment Year. Prior to the Incentive Payment D Look-Back Date for each Payment Year, Walgreens may provide the Settlement Fund Administrator and the Enforcement Committee with notice identifying any Settling State(s) it 27 believes do not qualify for Incentive Payment D and information supporting its belief. h. Notwithstanding Section IV.H.6.d and Section IV.H.6.e, a Settling State can become re-eligible for Incentive Payment D 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 be eligible for Incentive Payment D less any litigation fees and costs incurred by Walgreens in the interim, except that if the dismissal motion occurs after the completion of opening statements in such action, the Settling State shall not be eligible for Incentive Payment D. I. In no event shall any Settling State receive Base Payments and Incentive Payments totaling more than one hundred percent (100%) of its respective Overall Allocation Percentage specified in Exhibit F-2 times the State Remediation Payment. J. State Specific Agreements. Notwithstanding any other provision of this Agreement or any other agreement, in the event that: (1) Walgreens enters into an agreement with any Eligible State that resolves with finality such State’s Claims consistent with Section XI of this Agreement and such agreement has an effective date prior to the Effective Date of this Agreement (such agreement, a “State-Specific Agreement”) and (2) pursuant to the terms of the State-Specific Agreement, any payments, or any portion thereof, made by the Walgreens thereunder are made in lieu of any payments, or any portion thereof, to be made under this Agreement and Walgreens makes such a payment pursuant to the State-Specific Agreement, then Walgreens will reduce any payments allocable to such State (whether made to the Settlement Fund Escrow or the Settlement Fund) made pursuant to this Agreement in proportion to the Overall Allocation Percentage for such State. K. Significant Financial Constraint. 1. Walgreens may suspend its payments if, as of thirty (30) calendar days preceding an annual Payment Date, Walgreens’ credit rating from one or more of the three nationally recognized rating agencies is below BBB- or Baa3, except if within the prior three (3) months it repurchased any shares (other than those shares required to make the Company’s compensation programs non-dilutive), funded new acquisitions with a purchase price greater than $250 million, or paid a dividend. Walgreens shall not utilize this provision until after payment of the first two Annual Remediation Payments. 2. The suspension shall last until thirty (30) days after Walgreens achieves a BBB- or Baa3 or higher credit rating from all nationally recognized rating agencies that rate Walgreens, at which point Walgreens shall make a payment equal to the lowest of the remaining Total Available Amount or one-thirtieth (1/30th) of the Total Available Amount (the “Post- Suspension Payment”). 3. Annual Remediation Payments and Annual Fees Payments shall be made on the schedule prescribed in Exhibit M-2 and Exhibit M-3 beginning in the Payment Year following the Post-Suspension Payment (i.e., if the last payment made pre-suspension was the Annual 28 Remediation Payment 6, the Post-Suspension Payment would be made on schedule for Annual Remediation Payment 7), but shall remain capped at one-thirtieth (1/30th) of the Total Available Amount for two Payment Years until and unless Walgreens’ credit rating from all of the three nationally recognized rating agencies that rate Walgreens increases to BBB or Baa2 (the “Reduced Payment Termination Date”). 4. If Walgreens has reason to believe that it will not be able to the Annual Remediation Payment or Annual Fees Payment for a Payment Year, it shall provide at least ninety (90) calendar days’ prior written notice to the Settlement Fund Administrator and Enforcement Committee (a “Deferred Payment Notice”). Any Deferred Payment Notice shall specify and include: (a) the gross amount of the payments owed, (b) the amount that Walgreens believes it will be unable to pay, (c) the accounting and audited financial documents upon which Walgreens relied for making this determination, and (d) any other relevant information for the Enforcement Committee to consider. 5. Deferrals and payments made pursuant to Section IV.K.2-3 will apply proportionally across Base Payments and Incentive Payments. For the avoidance of doubt, this Section IV.K applies fully to Payment Years after the first two (2) Annual Remediation Payment Dates, including the Base Payments and all Incentive Payments due pursuant to this Agreement during the Payment Year at issue. 6. Walgreens shall pay any amounts deferred due to suspension or reduced Post- Suspension Payments, including applicable interest, or before the Payment Date for Payment Year 15. 7. If Walgreens defers some or all of the payments due in a Payment Year pursuant to this Section IV.K, it shall not repurchase any shares (other than those shares required to make the Company’s compensation programs non-dilutive), or fund new acquisitions with a purchase price greater than $250 million during the deferral period or until the deferred amount is fully repaid with interest. 8. Any payments deferred under this Section IV.K shall bear interest at a 7% per annum. 9. In the event that Walgreens suspends and/or defers Annual Payments pursuant to Section IV.K.1-2, Walgreens shall repay the suspended and/or deferred payments as follows: a. If Walgreens suspends payments for up to one year, it shall repay the suspended and/or deferred payments within three Payment Years after the Reduced Payment Termination Date. For each of those three Payment Years, Walgreens shall pay its Annual Remediation Payment and Annual Fee Payment, if applicable, plus the sum of (1) the amount of payments suspended pursuant to Section IV.K.1; (2) the amount of underpayments due to deferral pursuant to Section IV.K.2; and (3) interest pursuant to Section IV.K.8, divided by three or the remaining number of Payment Years, whichever is smaller. 29 b. If Walgreens suspends payments for longer than one year and up to three years, it shall repay the suspended and/or deferred payments within six Payment Years after the Reduced Payment Termination Date. For each of those six Payment Years, Walgreens shall pay its Annual Remediation Payment and Annual Fee Payment, if applicable, plus the sum of (1) the amount of payments suspended pursuant to Section IV.K.1; (2) the amount of underpayments due to deferral pursuant to Section IV.K.2; and (3) interest pursuant to Section IV.K.8, divided by six or the remaining number of Payment Years, whichever is smaller. c. If Walgreens suspends payments for longer than three years, it shall repay the suspended and/or deferred payments by no later than the Payment Date for Payment Year 15. For each of the remaining Payment Years, Walgreens shall pay its Annual Remediation Payment and Annual Fee Payment, if applicable, plus the sum of (1) the amount of payments suspended pursuant to Section IV.K.1; (2) the amount of underpayments due to deferral pursuant to Section IV.K.2; and (3) interest pursuant to Section IV.K.8, divided by the number of remaining Payment Years. L. New York Prior Settlement Credit. Walgreens shall not be required to pay into the Settlement Fund 15.31% of New York’s State Allocation as otherwise calculated pursuant to this Section IV as a credit for Walgreens’ settlement with Suffolk and Nassau Counties in New York State. For the avoidance of doubt, this credit shall solely reduce the amount New York State and its Subdivisions would otherwise have received under this Agreement, and it shall not affect the amount received by any other Settling State or their Subdivisions. V. Allocation and Use of Settlement Payments A. Components of Settlement Fund. The Settlement Fund shall be funded by the Annual Remediation Payments and comprised of a Remediation Accounts Fund, a State Fund, and a Subdivision Fund for each Settling State. The payments made under Section IV into the Settlement Fund shall be initially allocated among those three (3) sub-funds and distributed and used as provided below. Payments placed into the Settlement Fund do not revert back to Walgreens. B. Use of Settlement Payments. 1. It is the intent of the Parties that the payments disbursed from the Settlement Fund to Settling States and Participating Subdivisions be for Opioid Remediation, subject to exceptions that must be documented in accordance with Section V.B.2. In no event may less than ninety-five (95%) of Walgreens’ maximum amount of payments pursuant to Section IV as set forth on Exhibit M-2 over the entirety of all Payments Years (but not any single Payment Year) be spent on Opioid Remediation. 2. While disfavored by the Parties, a Settling State or a Participating Subdivision set forth on Exhibit G 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 a Participating Subdivision set forth on Exhibit G 30 uses any monies from the Settlement Fund for a purpose that does not qualify as Opioid Remediation, such Settling State or Participating Subdivision set forth on Exhibit G shall identify such amounts and report to the Settlement Fund Administrator and Walgreens 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 Section V.B.2 shall be available to the public. For the avoidance of doubt, (a) any amounts not identified under this Section V.B.2 as used to pay attorneys' fees, investigation costs, or litigation costs by December 15 each year shall be included in the Compensatory Restitution Amount for purposes of Section V.F and (b) Participating Subdivisions not listed on Exhibit G may only use monies from the Settlement Fund for purposes that qualify as Opioid Remediation. C. 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 their 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 Participating Subdivisions, 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. 1. Base Payments. The Settlement Fund Administrator will allocate Base Payments under Section IV.G among the Settling States pursuant to Section IV.G.2. Base payments for each Settling State will then be allocated fifteen percent (15%) to its State Fund, seventy percent (70%) to its Remediation Accounts Fund, and fifteen percent (15%) to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in Section V.D. 2. Incentive Payments. The Settlement Fund Administrator will treat Incentive Payments under Section IV.H on a State-specific basis. Incentive Payments for which a Settling State is eligible under Section IV.F will be allocated fifteen percent (15%) to its State Fund, seventy percent (70%) to its Remediation Accounts Fund, and fifteen percent (15%) to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in Section V.D. 3. Application of Adjustments. If a suspension, offset or reduction under Section XI or Section XII applies with respect to a Settling State, the suspension, offset or reduction shall be applied proportionally to all amounts that would otherwise be apportioned and distributed to the State Fund, the Remediation Accounts Fund, and the Subdivision Fund for that State. 4. Settlement Fund Administrator. Prior to the Initial Participation Date, Walgreens 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 then be appended hereto as Exhibit L. 5. Settlement Fund Administrator Costs. Any costs and fees associated with or arising out of the duties of the Settlement Fund Administrator as described in Exhibit L shall be 31 paid from the interest accrued in the Settlement Fund Escrow and the Settlement Fund; provided, however, that if such accrued interest is insufficient to pay the entirety of any such costs and fees, Walgreens shall pay fifty percent (50%) of the additional amount and fifty percent (50%) shall be paid out of the Settlement Fund. D. 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 Section V.D.1 and Section V.D.2, then the default provisions of Section V.D.4 apply. It is not necessary that a State- Subdivision Agreement or other means of allocating funds pursuant to Section V.D.1 and Section V.D.2 address all of the Settlement Fund sub-funds. For example, a Statutory Trust might only address disbursements from a Settling State’s Remediation Accounts Fund. 1. Distribution by State-Subdivision Agreement. If a Settling State has a State- Subdivision Agreement, amounts apportioned to that State's State Fund, Remediation Accounts Fund, and Subdivision Fund under Section V.C shall be reallocated and distributed as provided by that agreement. Any State Subdivision Agreement entered into after the Preliminary Agreement Date shall be applied only if it requires: (a) that all amounts be used for Opioid Remediation, except as allowed by Section V.B.2, and (b) that at least seventy percent (70%) of amounts be used solely for future Opioid Remediation.7 For a State-Subdivision Agreement to be applied to the relevant portion of an Annual Payment, notice must be provided to Walgreens and the Settlement Fund Administrator at least sixty (60) calendar 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, Remediation 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 Section V.B.28, and (2) at least seventy percent (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, Remediation Accounts Fund, and Subdivision Fund under Section V.C 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 described in Section V of any such unaddressed fund. For example, if an Allocation Statute or Statutory Trust that meets the requirements of this Section V.D.2 only addresses funds restricted to remediation, then the default provisions of 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 7 Future Opioid Remediation includes 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 32 that State would still apply, while the distribution of the applicable State's Remediation 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 Remediation Accounts Fund. A Participating Subdivision included on Exhibit G may choose to reallocate all or a portion of its allocation from the Subdivision Fund to the State's Remediation Accounts Fund or to another Participating Subdivision. The Settlement Fund Administrator is not required to honor a voluntary redistribution for which notice is provided to it less than sixty (60) calendar days prior to the applicable Payment Date. 4. Distribution in the Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust. If Section V.D.1 and Section V.D.2 do not apply, amounts apportioned to that State’s State Fund, Remediation Accounts Fund, and Subdivision Fund under Section V.C 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 Remediation Accounts Fund shall be distributed consistent with Section V.E. 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 State’s funding requests from the Remediation 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 Remediation 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 Remediation Accounts Fund to the Statutory Trust. c. Amounts apportioned to that State’s Subdivision Fund shall be distributed to Participating Subdivisions in that State included on Exhibit G per the Subdivision Allocation Percentage listed in Exhibit G. Section VII.I shall govern amounts that would otherwise be distributed to Non-Participating Subdivisions listed in Exhibit G. For the avoidance of doubt and notwithstanding any other provision in this Agreement, no Non-Participating Subdivision will receive any amount from the Settlement Fund, regardless of whether such Subdivision is included on Exhibit G. d. Special Districts shall not be allocated funds from the Subdivision Fund, except through a voluntary redistribution allowed by Section V.D.3 to Special Districts that are Participating Subdivisions. A Settling State may allocate funds from its State Fund or Remediation Accounts Fund for Special Districts that are Participating Subdivisions. 33 5. Restrictions on Distribution. No amounts may be distributed from the Subdivision Fund contrary to Section VII, i.e., no amounts may be distributed directly to Non-Participating Subdivisions or to Later Participating Subdivisions to the extent such a distribution would violate Section VII.E through Section VII.H. 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 Remediation 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 Section V.D.1 or by an Allocation Statute or a Statutory Trust described in Section V.D.2. E. Provisions Regarding the Remediation 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 Remediation Accounts Fund so long as it complies with the requirements of Section V.D.1 or Section V.D.2, as applicable, and all direct payments to Subdivisions comply with Section VII.E through Section VII.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 Remediation Accounts Fund will be used solely for future Opioid Remediation9 and the following shall apply with respect to a Settling State: a. Regional Remediation. (i) At least fifty percent (50%) of distributions for remediation from a State's Remediation Accounts Fund shall be annually allocated and tracked to the regional level. A Settling State may allow the Advisory Committee established pursuant to Section V.E.2.c to define its regions and assign regional allocations percentages. Otherwise, the State shall (A) define its initial regions, which shall consist of one (1) or more General Purpose 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; (B) assign initial regional allocation percentages to the regions based on the Subdivision Allocation Percentages in Exhibit G and an assumption that all Subdivisions included on Exhibit G will becom