Exhibit 10.3

 

STATE SETTLEMENT AGREEMENT AND RELEASE

 

I.  PARTIES

 

This Settlement Agreement and Release (“Agreement”) is entered into between the
State of                          (“State”), and Cephalon, Inc.  (“Cephalon”), a
Delaware corporation with its principal place of business in Frazer,
Pennsylvania, hereinafter collectively referred to as “the Parties”.

 

II.  PREAMBLE

 

As a preamble to this Agreement, the Parties agree to the following:

 

A.            At all relevant times, Cephalon distributed, marketed and sold
pharmaceutical products in the United States, including drugs sold under the
trade names of Actiq, Gabitril and Provigil.

 

B.            Cephalon has entered into a plea agreement with the United States
Attorney for the Eastern District of Pennsylvania and has agreed to plead
guilty, pursuant to Fed. R. Crim. P. 11, to a one count Information to be filed
in United States v. Cephalon, Inc. (the “Federal Criminal Action”) that will
allege that between January 2001 through October 1, 2001, Cephalon introduced
into interstate commerce and caused the introduction into interstate commerce of
drugs (Actiq, Gabitril, and Provigil) that were misbranded through off-label
promotion, a misdemeanor, in violation of 21 U.S. C. §§ 331(a), 333(a)(1) and
352(f)(1).

 

C.            Cephalon has entered into a separate settlement agreement (the
“Federal Settlement Agreement and Release”) with the United States (as that term
is defined in the Federal Settlement Agreement and Release), which will be
receiving settlement funds from

 

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Cephalon pursuant to Paragraph 1 below for the Covered Conduct described in
Paragraph D below.

 

D.            The State contends that it has certain civil and administrative
claims against Cephalon for engaging in the following alleged conduct (“the
Covered Conduct”):

 

(i)            Between January 1, 2001 and December 31, 2006 for Actiq and
Provigil and between January 1, 2001 and February 18, 2005 for Gabitril,
Cephalon knowingly and willfully promoted the sale and use of Actiq, Gabitril
and Provigil for certain uses which the Food and Drug Administration had not
approved (i.e. “unapproved uses”). The promotion of Actiq, Gabitril and Provigil
for these unapproved uses violated the Food Drug and Cosmetic Act 21 U.S.C. §
331(a), 21 U.S.C. § 352(f). In addition, certain of these unapproved uses were
not medically accepted indications for which the United States and State
Medicaid programs approved reimbursement. As a result of Cephalon’s conduct,
Cephalon knowingly caused false and/or fraudulent claims to be submitted to the
United States and the State Medicaid programs.

 

(ii)           Cephalon has entered into a plea agreement with the United States
Attorney for the Eastern District of Pennsylvania and has agreed to plead
guilty, pursuant to Fed. R. Crim. P. 11, to a one Count Information to be filed
in United States v. Cephalon, Inc. (the “Federal Criminal Action”) that will
allege that between January 2001 through October 1, 2001, Cephalon introduced
into interstate commerce and caused the introduction into interstate commerce of
drugs (Actiq, Gabitril, and Provigil) that were misbranded

 

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through off-label promotion, a misdemeanor, in violation of 21 U.S. C. §§
331(a), 333(a)(1) and 352(f)(1).

 

E.     Cephalon has cooperated fully and completely with the State throughout
the course of its investigation and continues to do so.

 

F.     This Agreement is made in compromise of disputed claims.  This Agreement
is neither an admission of facts or liability by Cephalon nor a concession by
the State that its claims are not well founded.  Neither this Settlement, its
execution, nor the performance of any obligation under it, including any
payment, nor the fact of the settlement, is intended to be or shall be
understood as an admission of liability or wrongdoing or other expression
reflecting upon the merits of the dispute by Cephalon.

 

G.    To avoid the delay, expense, inconvenience, and uncertainty of protracted
litigation of these claims, the Parties mutually desire to reach a full and
final settlement as set forth below.

 

III. TERMS AND CONDITIONS

 

NOW, THEREFORE, in reliance on the representations contained herein and in
consideration of the mutual promises, covenants, and obligations set forth below
in this Agreement, and for good and valuable consideration as stated herein, the
Parties agree as follows:

 

1.             Cephalon agrees to pay to the United States and the States that
will be receiving settlement funds pursuant to this paragraph (the “Medicaid
Participating States”) collectively the sum of three hundred seventy-five
million dollars ($375,000.000.00) plus interest in an amount

 

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of 4.0% per annum from January 1, 2008, and continuing until and including the
day before complete payment is made (the “Settlement Amount”).  Of this sum,
                                                                                    ($                            )
represents payment to Medicaid, which shall constitute a debt immediately due
and owing to the United States and the Medicaid Participating States on the
Effective Date of this Agreement subject to the terms of the Federal Settlement
Agreement and Release and this Agreement.  This debt is to be discharged by
payments to the United States and the Medicaid Participating States under the
following conditions:

 

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A.            CEPHALON  AND THE UNITED STATES SEPARATELY HAVE AGREED THAT THE
SUM OF                                                          
($                                ), PLUS INTEREST IN AN AMOUNT OF 4.0% PER
ANNUM FROM JANUARY 1, 2008, AND CONTINUING UNTIL AND INCLUDING THE DAY BEFORE
COMPLETE PAYMENT IS MADE REPRESENTS THE FEDERAL SHARE (THE “FEDERAL SETTLEMENT
AMOUNT”).  THE FEDERAL SETTLEMENT AMOUNT SHALL BE PAID PURSUANT TO THE TERMS OF
THE FEDERAL SETTLEMENT AGREEMENT AND RELEASE.

 

B.            CEPHALON AND THE MEDICAID PARTICIPATING STATES AGREE THAT THE SUM
OF                                                             
($                          ), PLUS INTEREST IN AN AMOUNT OF 4.0% PER ANNUM 
FROM JANUARY 1, 2008, UNTIL AND INCLUDING THE DAY BEFORE COMPLETE PAYMENT IS
MADE REPRESENTS THE STATES’ SHARE (THE “MEDICAID STATE SETTLEMENT AMOUNT”). 
  THIS MEDICAID STATE SETTLEMENT AMOUNT SHALL BE PAID INTO AN INTEREST BEARING
ACCOUNT NO LATER THAN THIRTY (30) BUSINESS DAYS AFTER THE FEDERAL SETTLEMENT
AGREEMENT AND RELEASE’S EFFECTIVE DATE PURSUANT TO WRITTEN PAYMENT INSTRUCTIONS
FROM THE NATIONAL ASSOCIATION OF MEDICAID FRAUD CONTROL UNITS’ NEGOTIATING TEAM
(“NAMFCU”) FOR THE MEDICAID PARTICIPATING STATES.

 

C.            The total portion of the Settlement Amount paid by Cephalon in
settlement for the Covered Conduct to the State is $                        ,
consisting of a portion paid to the State under this Agreement and another
portion paid to the Federal government as part of the Federal Settlement
Agreement and Release.  The individual portion of the Medicaid State Settlement
Amount allocable to the State under this Agreement is the sum of
$                    , plus applicable interest.  NAMFCU shall disburse to the
State the individual portion of the Medicaid State Settlement Amount allocable
to the State after the Effective Date of this Agreement.  If the State does not

 

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execute this Agreement within 180 days of the Effective Date of the Federal
Settlement Agreement and Release, the total portion of the Settlement Amount
paid by Cephalon in settlement for the Covered Conduct to the State plus the
interest accrued on that amount shall revert to Cephalon.

 

2.             Contingent upon the Medicaid Participating States receiving the
Medicaid State Settlement Amount, the Medicaid Participating States agree to
pay, as soon as feasible after receipt, the agreed upon amounts with Relators.

 

3.             Subject to the exceptions in Paragraph 4 below, and in
consideration of the obligations of Cephalon set forth in this Agreement,
conditioned upon Cephalon’s payment in full of the Settlement Amount, and
subject to Paragraph 13 below (concerning bankruptcy proceedings commenced
within 91 days of the Effective Date of this Agreement or any payment under this
Agreement), the State, on behalf of itself, and its officers, agents, agencies,
political subdivisions and departments, agrees to release Cephalon, its
predecessors, and its current and former parents, affiliates, divisions,
subsidiaries, successors and assigns, and their current and former directors,
officers, and employees (collectively, “Cephalon Released Entities”), from any
civil or administrative liability or monetary claim that the State or any of its
political subdivisions has or may have for any claims submitted or caused to be
submitted to the State Medicaid Program for the Covered Conduct.  The payment of
the Settlement Amount fully discharges the Cephalon Released Entities from any
obligations to pay Medicaid related restitution, damages, and/or any civil fine
or civil penalty to the State for the Covered Conduct.

 

4.             Notwithstanding any term of this Agreement, the State
specifically does not release any person or entity from any of the following
claims or liabilities:  (a) any criminal, civil, or administrative claims
arising under state revenue codes; (b) any criminal liability not

 

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specifically released by this Agreement; (c) any civil liability that Cephalon
has or may have under any state statute, regulation, or rule not covered by this
release; (d) any liability to the State (or any agencies thereof) for any
conduct other than the Covered Conduct; (e) any claims based upon obligations
created by this Agreement; (f) mandatory exclusion from the State’s Medicaid
program; (g) any express or implied warranty claims or other claims for
defective or deficient products and services provided by Cephalon; (h) any
claims for personal injury or property damage or for other consequential damages
arising from the Covered Conduct; (i) any claims based on a failure to deliver
items or services due; or (j) any civil or administrative claims relating to the
Covered Conduct against individuals, including officers and employees, who, as
of the Effective Date of this Agreement, received written notification that they
are the target of a criminal investigation, are criminally indicted or charged,
or are convicted, or who enter into a criminal plea agreement.  The State
represents that any mandatory exclusion provisions under its state law do not
apply in the facts and circumstances of this case.

 

5.             THIS AGREEMENT IS EXPRESSLY CONDITIONED UPON RESOLUTION OF THE
FEDERAL CRIMINAL ACTION.  IN CONSIDERATION OF THE ACCEPTANCE OF CEPHALON’S PLEA
OF GUILTY IN THE FEDERAL CRIMINAL ACTION, THE STATE, TO THE EXTENT THE ATTORNEY
GENERAL IS AUTHORIZED TO DO SO, AGREES THAT IT SHALL NOT FURTHER CRIMINALLY
INVESTIGATE, PROSECUTE, OR REFER FOR PROSECUTION OR INVESTIGATION TO ANY AGENCY,
THE CEPHALON RELEASED ENTITIES.

 

6.             IN CONSIDERATION OF THE OBLIGATIONS OF CEPHALON SET FORTH IN THIS
AGREEMENT, AND THE CIA THAT CEPHALON HAS ENTERED INTO WITH HHS-OIG IN CONNECTION
WITH THIS MATTER, AND CONDITIONED ON CEPHALON’S PAYMENT IN FULL OF THE
SETTLEMENT AMOUNT, EXCEPT AS RESERVED IN PARAGRAPH 4 ABOVE AND SUBJECT TO
PARAGRAPH 13 BELOW (CONCERNING BANKRUPTCY PROCEEDINGS COMMENCED WITHIN 91 DAYS
OF THE EFFECTIVE DATE OF THIS AGREEMENT OR ANY PAYMENT UNDER THIS

 

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AGREEMENT), THE STATE AGREES TO RELEASE AND REFRAIN FROM INSTITUTING, DIRECTING,
OR MAINTAINING ANY ADMINISTRATIVE CLAIM OR ANY ACTION SEEKING EXCLUSION FROM THE
STATE’S MEDICAID PROGRAM AGAINST CEPHALON, ITS PREDECESSORS, AND THEIR CURRENT
OR FORMER PARENTS, AFFILIATES, DIVISIONS, SUBSIDIARIES, SUCCESSORS, AND ASSIGNS
FOR THE COVERED CONDUCT.  THE MEDICAID FRAUD CONTROL UNIT FOR THE STATE FURTHER
AGREES TO REFRAIN FROM RECOMMENDING, CAUSING OR ATTEMPTING TO CAUSE ANY
ADMINISTRATIVE ACTION OR SANCTION, INCLUDING DEBARMENT, BY ANY OTHER GOVERNMENT
AGENCY OF THE STATE FOR THE COVERED CONDUCT.  NOTHING IN THIS AGREEMENT
PRECLUDES THE STATE FROM TAKING ACTION AGAINST CEPHALON IN THE EVENT THAT
CEPHALON IS EXCLUDED BY THE FEDERAL GOVERNMENT, OR FOR CONDUCT AND PRACTICES
OTHER THAN THE COVERED CONDUCT OR CONDUCT UNDERLYING THE CONVICTION IN THE
FEDERAL CRIMINAL ACTION.  THE STATE DOES NOT RELEASE CEPHALON FROM ANY CLAIMS OR
ACTIONS WHICH MAY BE ASSERTED BY PRIVATE PAYORS OR INSURERS, INCLUDING THOSE
THAT ARE PAID BY A STATE’S MEDICAID PROGRAM ON A CAPITATED BASIS.

 

7.             WITHIN FOURTEEN BUSINESS DAYS OF THE EFFECTIVE DATE OF THIS
AGREEMENT, THE STATE AGREES TO DISMISS WITH PREJUDICE ANY LAWSUIT SPECIFICALLY
AS TO THE CEPHALON RELEASED ENTITIES, INCLUDING ANY QUI TAM “WHISTLEBLOWER”
LAWSUITS, IN WHICH THE STATE HAS INTERVENED, IS A PARTY AND/OR HAS THE AUTHORITY
TO DISMISS, CURRENTLY PENDING AGAINST CEPHALON IN ANY COURT ASSERTING
ALLEGATIONS OR CLAIMS RELATING TO THE COVERED CONDUCT.  THIS AGREEMENT IS
CONTINGENT UPON DISMISSAL WITH PREJUDICE OF ALL SUCH QUI TAM “WHISTLEBLOWER”
LAWSUITS.  TO THE EXTENT ANY SUCH QUI TAM “WHISTLEBLOWER” LAWSUIT IS NOT
DISMISSED WITH PREJUDICE, THIS AGREEMENT SHALL BECOME NULL AND VOID AND THE
AMOUNT ALLOCABLE TO THE STATE UNDER THIS AGREEMENT, AS SET FORTH IN PARAGRAPH
III 1(C), SHALL BE RETURNED TO CEPHALON.

 

8.             THE CEPHALON RELEASED ENTITIES WAIVE AND SHALL NOT ASSERT ANY
DEFENSES THEY MAY HAVE TO CRIMINAL PROSECUTION OR ADMINISTRATIVE ACTION RELATING
TO THE COVERED CONDUCT, WHICH

 

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DEFENSES MAY BE BASED IN WHOLE OR IN PART ON A CONTENTION THAT, UNDER THE DOUBLE
JEOPARDY CLAUSE OF THE FIFTH AMENDMENT OF THE CONSTITUTION OR THE EXCESSIVE
FINES CLAUSE OF THE EIGHTH AMENDMENT OF THE CONSTITUTION, THIS AGREEMENT BARS A
REMEDY SOUGHT IN SUCH CRIMINAL PROSECUTION OR ADMINISTRATIVE ACTION.

 

9.             IN CONSIDERATION OF THE OBLIGATIONS OF THE STATE SET FORTH IN
THIS AGREEMENT, THE CEPHALON RELEASED ENTITIES WAIVE AND DISCHARGE THE STATE,
ITS AGENCIES, POLITICAL SUBDIVISIONS, EMPLOYEES, SERVANTS, AND AGENTS FROM ANY
CLAIMS (INCLUDING ATTORNEYS’ FEES, COSTS, AND EXPENSES OF EVERY KIND AND HOWEVER
DENOMINATED) WHICH THE CEPHALON RELEASED ENTITIES HAVE ASSERTED, COULD HAVE
ASSERTED, OR MAY ASSERT IN THE FUTURE AGAINST THE STATE, ITS AGENCIES, POLITICAL
SUBDIVISIONS, EMPLOYEES, SERVANTS, AND AGENTS, RELATED TO OR ARISING FROM THE
STATE’S INVESTIGATION AND PROSECUTION OF THE COVERED CONDUCT.

 

10.           THE SETTLEMENT AMOUNT THAT CEPHALON MUST PAY PURSUANT TO PARAGRAPH
1 ABOVE WILL NOT BE DECREASED AS A RESULT OF THE DENIAL OF CLAIMS FOR PAYMENT
NOW BEING WITHHELD FROM PAYMENT BY THE STATE’S MEDICAID PROGRAM, OR ANY OTHER
STATE PAYOR, RELATED TO THE COVERED CONDUCT; AND, IF APPLICABLE, CEPHALON AGREES
NOT TO RESUBMIT TO THE STATE’S MEDICAID PROGRAM OR ANY OTHER STATE PAYOR, ANY
PREVIOUSLY DENIED CLAIMS, WHICH DENIALS WERE BASED ON THE COVERED CONDUCT, AND
AGREES NOT TO APPEAL OR CAUSE THE APPEAL OF ANY SUCH DENIALS OF CLAIMS.

 

11.           CEPHALON WAIVES AND SHALL NOT SEEK PAYMENT FOR ANY OF THE HEALTH
CARE BILLINGS COVERED BY THIS AGREEMENT FROM ANY HEALTH CARE BENEFICIARIES OR
THEIR PARENTS, SPONSORS, LEGALLY RESPONSIBLE INDIVIDUALS, OR THIRD PARTY PAYORS
BASED UPON THE CLAIMS FOR PAYMENT COVERED BY THIS AGREEMENT.

 

12.           CEPHALON EXPRESSLY WARRANTS THAT IT HAS REVIEWED ITS FINANCIAL
CONDITION AND THAT IT IS CURRENTLY SOLVENT WITHIN THE MEANING OF 11 U.S.C. §§
547(B)(3) AND 548(A)(B)(II)(I), AND SHALL

 

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REMAIN SOLVENT FOLLOWING PAYMENT OF THE SETTLEMENT AMOUNT.  FURTHER, THE PARTIES
EXPRESSLY WARRANT THAT, IN EVALUATING WHETHER TO EXECUTE THIS AGREEMENT, THE
PARTIES (A) HAVE INTENDED THAT THE MUTUAL PROMISES, COVENANTS, AND OBLIGATIONS
SET FORTH HEREIN CONSTITUTE A CONTEMPORANEOUS EXCHANGE FOR NEW VALUE GIVEN TO
CEPHALON WITHIN THE MEANING OF 11 U.S.C. § 547(C)(1), AND (B) HAVE CONCLUDED
THAT THESE MUTUAL PROMISES, COVENANTS AND OBLIGATIONS DO, IN FACT, CONSTITUTE
SUCH A CONTEMPORANEOUS EXCHANGE.

 

13.           IN THE EVENT CEPHALON COMMENCES, OR ANOTHER PARTY COMMENCES,
WITHIN 91 DAYS OF THE EFFECTIVE DATE OF THIS AGREEMENT OR ANY PAYMENT MADE
HEREUNDER, ANY CASE, PROCEEDING, OR OTHER ACTION UNDER ANY LAW RELATING TO
BANKRUPTCY, INSOLVENCY, REORGANIZATION, OR RELIEF OF DEBTORS (A) SEEKING TO HAVE
ANY ORDER FOR RELIEF OF CEPHALON’S DEBTS, OR SEEKING TO ADJUDICATE CEPHALON AS
BANKRUPT OR INSOLVENT, OR (B) SEEKING APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN OR OTHER SIMILAR OFFICIAL FOR CEPHALON OR FOR ALL OR ANY SUBSTANTIAL
PART OF CEPHALON’S ASSETS, CEPHALON AGREES AS FOLLOWS:

 

A.            CEPHALON’S OBLIGATIONS UNDER THIS AGREEMENT MAY NOT BE AVOIDED
PURSUANT TO 11 U.S.C. §§ 547 OR 548, AND CEPHALON SHALL NOT ARGUE OR OTHERWISE
TAKE THE POSITION IN ANY SUCH CASE, PROCEEDING OR ACTION THAT: (I) CEPHALON’S
OBLIGATIONS UNDER THIS AGREEMENT MAY BE AVOIDED UNDER 11 U.S.C. §§ 547 OR 548;
(II) CEPHALON WAS INSOLVENT AT THE TIME THIS AGREEMENT WAS ENTERED INTO, OR
BECAME INSOLVENT AS A RESULT OF THE PAYMENT MADE TO THE STATE HEREUNDER; OR
(III) THE MUTUAL PROMISES, COVENANTS, AND OBLIGATIONS SET FORTH IN THIS
AGREEMENT DO NOT CONSTITUTE A CONTEMPORANEOUS EXCHANGE FOR NEW VALUE GIVEN TO
CEPHALON.

 

B.            IF CEPHALON’S OBLIGATIONS UNDER THIS AGREEMENT ARE AVOIDED FOR ANY
REASON, INCLUDING, BUT NOT LIMITED TO, THROUGH THE EXERCISE OF A TRUSTEE’S
AVOIDANCE POWERS UNDER THE BANKRUPTCY CODE, THE STATE, AT ITS SOLE OPTION, MAY
RESCIND THE RELEASES PROVIDED IN

 

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THIS AGREEMENT, AND BRING ANY CIVIL AND/OR ADMINISTRATIVE CLAIM, ACTION OR
PROCEEDING AGAINST CEPHALON FOR THE CLAIMS THAT WOULD OTHERWISE BE COVERED BY
THE RELEASES PROVIDED IN THIS AGREEMENT.  IF THE STATE CHOOSES TO DO SO,
CEPHALON AGREES THAT FOR PURPOSES ONLY OF ANY CLAIMS, ACTIONS OR PROCEEDINGS
REFERENCED IN THIS FIRST CLAUSE OF THIS PARAGRAPH, (I) ANY SUCH CLAIMS, ACTIONS,
OR PROCEEDINGS BROUGHT BY THE STATE (INCLUDING ANY PROCEEDINGS TO EXCLUDE
CEPHALON FROM PARTICIPATION IN THE STATE’S MEDICAID PROGRAM) ARE NOT SUBJECT TO
AN “AUTOMATIC STAY” PURSUANT TO 11 U.S.C. § 362(A) AS A RESULT OF THE ACTION,
CASE, OR PROCEEDING DESCRIBED IN THE FIRST CLAUSE OF THIS PARAGRAPH, AND THAT
CEPHALON SHALL NOT ARGUE OR OTHERWISE CONTEND THAT THE STATE’S CLAIMS, ACTIONS,
OR PROCEEDINGS ARE SUBJECT TO AN AUTOMATIC STAY; (II) CEPHALON SHALL NOT PLEAD,
ARGUE, OR OTHERWISE RAISE ANY DEFENSES UNDER THE THEORIES OF STATUTE OF
LIMITATIONS, LACHES, ESTOPPEL, OR SIMILAR THEORIES, TO ANY SUCH CIVIL OR
ADMINISTRATIVE CLAIMS, ACTIONS, OR PROCEEDINGS WHICH ARE BROUGHT BY THE STATE
WITHIN 90 CALENDAR DAYS OF WRITTEN NOTIFICATION TO CEPHALON THAT THE RELEASES
HEREIN HAVE BEEN RESCINDED PURSUANT TO THIS PARAGRAPH, EXCEPT TO THE EXTENT SUCH
DEFENSES WERE AVAILABLE BEFORE JUNE 24, 2005; AND (III) THE UNITED STATES AND
THE MEDICAID PARTICIPATING STATES HAVE A VALID CLAIM AGAINST CEPHALON IN THE
AMOUNT OF THREE HUNDRED AND SEVENTY FIVE MILLION DOLLARS ($375,000,000.00) PLUS
APPLICABLE MULTIPLIERS AND PENALTIES AND THEY MAY PURSUE THEIR CLAIMS, INTER
ALIA, IN THE CASE, ACTION, OR PROCEEDING REFERENCED IN THE FIRST CLAUSE OF THIS
PARAGRAPH, AS WELL AS IN ANY OTHER CASE, ACTION OR PROCEEDING; AND

 

C.            CEPHALON ACKNOWLEDGES THAT ITS AGREEMENTS IN THIS PARAGRAPH ARE
PROVIDED IN EXCHANGE FOR VALUABLE CONSIDERATION PROVIDED IN THIS AGREEMENT.

 

14.           The Parties each represent that this Agreement is freely and
voluntarily entered into without any degree of duress or compulsion whatsoever.

 

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15.           Except as expressly provided to the contrary in this Agreement,
each Party to this Agreement shall bear its own legal and other costs incurred
in connection with this matter, including the preparation and performance of
this Agreement.

 

16.           Except as otherwise stated in this Agreement, this Agreement is
intended to be for the benefit of the Parties only, and by this instrument the
Parties do not release any claims against any other person or entity.

 

17.           Nothing in this Agreement constitutes an agreement by the State
concerning the characterization of the amounts paid hereunder for purposes of
the State’s revenue code.

 

18.           In addition to all other payments and responsibilities under this
Agreement, Cephalon agrees to pay all reasonable travel costs and expenses of
the NAMFCU Negotiating Team.  Cephalon will pay this amount by separate check or
wire transfer made payable to the National Association of Medicaid Fraud Control
Units after  Medicaid Participating States execute their respective Agreement or
as otherwise agreed by the Parties.

 

19.           Cephalon covenants to cooperate fully, truthfully and in a
reasonably timely manner in the production of business records and in using
reasonable efforts to make employees available for interviews with Company
counsel present, if agreeable to the employee, with the State in any ongoing
investigation or investigation commenced within five years of the Effective Date
of this Agreement of individuals and entities not specifically released by this
Agreement relating to the Covered Conduct.  This provision does not require
Cephalon to:  (1) waive any applicable privilege or work product protection,
(2) create or produce records that had not already been prepared in the ordinary
course of business, or (3) further or encourage cooperation by any individual to
the extent inconsistent with the advice of that individual’s separate counsel.

 

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20.           This Agreement is governed by the laws of the State except that
disputes arising under the CIA shall be resolved exclusively under the dispute
resolution provisions of the CIA.

 

21.           The undersigned Cephalon signatories represent and warrant that
they are authorized as a result of appropriate corporate action to execute this
Agreement.  The undersigned State signatories represent that they are signing
this Agreement in their official capacities and that they are authorized to
execute this Agreement on behalf of the State through their respective agencies
and departments.

 

22.           The “Effective Date” of this Agreement shall be the date of
signature of the last signatory to this Agreement.  Facsimiles of signatures
shall constitute acceptable binding signatures for purposes of this Agreement.

 

23.           This Agreement shall be binding on all successors, transferees,
heirs, and assigns of the Parties.

 

24.           This Settlement Agreement constitutes the complete agreement
between the Parties and shall not be amended except by written consent of the
Parties.

 

25.           Each Party agrees to perform any further acts and to execute and
deliver any further documents reasonably necessary to carry out this Agreement.

 

26.           This Agreement may be executed in counterparts, each of which
shall constitute an original, and all of which shall constitute one and the same
Agreement.

 

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STATE

 

 

By:

 

 

Dated:

Name:

 

 

Title:

 

 

OFFICE OF THE ATTORNEY GENERAL

 

 

 

 

 

 

 

 

By:

 

 

Dated:

Name:

 

 

Title:

 

 

Medicaid Program:

 

 

 

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CEPHALON, INC.

 

 

By:

 

 

Dated:

GERALD J. PAPPERT, ESQ.

 

 

Executive Vice President and

 

 

General Counsel

 

 

Cephalon, Inc.

 

 

 

 

 

 

 

 

By:

 

 

Dated:

ERIC SITARCHUK, ESQ.

 

 

Morgan, Lewis & Bockius, LLP

 

 

 

 

 

J. SEDWICK SOLLERS, III, ESQ.

 

 

King & Spalding, LLP

 

 

 

 

 

MARK A. JENSEN, ESQ.

 

 

King & Spalding, LLP

 

 

 

 

 

 

 

 

Counsel to Cephalon, Inc.

 

 

 

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