EXHIBIT 10.3

 
SETTLEMENT AGREEMENT AND RELEASE
 
I.           PARTIES
 
This Settlement Agreement and Release (the “Settlement Agreement”) is entered
into by and among: the United States of America, acting through the United
States Department of Justice on behalf of the Office of Inspector General
(“OIG-HHS”) of the Department of Health and Human Services (“HHS”), the TRICARE
Management Activity (“TMA”), the Veterans’ Affairs Administration (“VA”), and
the United States Office of Personnel Management (“OPM”) (collectively, the
“United States”); Forest Laboratories, Inc., and Forest Pharmaceuticals, Inc.
(collectively, “Forest”); and Christopher Gobble, Joseph Piacentile, Constance
Conrad, and Jim Conrad (collectively, the “Relators”).  Collectively, all of the
above will be referred to as the “Parties.”
 
II.           PREAMBLE
 
As a preamble to this Settlement Agreement, the Parties agree to the following:
 
A. At all relevant times, Forest Laboratories, Inc., was a Delaware corporation
headquartered in New York, New York, and Forest Pharmaceuticals, Inc., a
Delaware corporation headquartered in St. Louis, Missouri, was a wholly owned
subsidiary of Forest Laboratories, Inc.
B. At all relevant times, Forest distributed, marketed, and sold pharmaceutical
products in the United States, including the drugs sold under the trade names
Celexa (generic name citalopram hydrobromide), Lexapro (generic name
escitalopram oxalate), and Levothroid (generic name levothyroxine sodium
tablets, USP).
C. The Relators listed herein have filed the following qui tam actions against
Forest (collectively the “Civil Actions”):
1. United States ex rel. Christopher R. Gobble, et al. v. Forest Laboratories,
Inc. & Forest Pharmaceuticals, Inc., Civil Action No. 03–10395–NMG (D. Mass.)
(the “Gobble qui tam action”);
2. United States ex rel. Joseph Piacentile, et al. v. Forest Laboratories, Inc.,
Civil Action No. 05–10201–NMG (D. Mass.) (the “Piacentile qui tam action”);
3. United States ex rel. Constance Conrad v. Forest Pharmaceuticals, Inc., et
al., Civil Action No. 02–11738–NG (D. Mass.) (the “Conrad qui tam action”); and
4. 
D. The United States intervened in the Gobble qui tam action and the Piacentile
qui tam action on November 14, 2008.  The District of Columbia and the states of
California, Delaware, Florida, Illinois, Massachusetts, Michigan, New York,
Oklahoma, Texas, Virginia, and Wisconsin filed notices of intervention in those
actions on February 13, 2009.  The United States filed its Complaint in
Intervention in those actions (the “United States Complaint in Intervention”) on
February 13,2009.
E. On such date as may be determined by the Court, Forest Pharmaceuticals, Inc.
(“FPI”) will enter a plea of guilty pursuant to Fed. R. Crim. P. 11(c)(1)(C) to
an Information, attached as Exhibit A to a plea agreement into which FPI is
entering simultaneously with the execution of this Settlement Agreement, to be
filed in United States of America v. Forest Pharmaceuticals, Inc., Criminal
Action No. [to be assigned] (D. Mass.) (the “Criminal Action”).
F. The United States alleges that Forest caused claims for payment for the drugs
Celexa, Lexapro, and Levothroid to be submitted to the Medicaid program, 42
U.S.C. §§ 1396–1396w–5, the TRICARE Program (formerly known as the Civilian
Health and Medical Program of the Uniformed Services), 10 U.S.C. §§ 1071–1110a,
and the Federal Employees Health Benefits Program (“FEHBP”), 5 U.S.C.
§§ 8901–8914, and that Forest caused the VA to purchase those drugs
(collectively “the Federal Health Care Programs”).
G. The United States contends that it and the Medicaid Participating States (as
defined below) have certain civil claims against Forest, as specified below, for
engaging in the following alleged conduct (hereinafter referred to as the
“Covered Conduct”):
1. During the period January 1998 through December 2005, Forest knowingly caused
false or fraudulent claims for Celexa and Lexapro to be submitted to the Federal
Health Care Programs by promoting the sale and use of Celexa and Lexapro to
physicians for pediatric uses (including by disseminating false and misleading
information about the safety and efficacy of Celexa and Lexapro in treating
pediatric patients), as set forth in the United States Complaint in
Intervention, when those uses were not approved by the Food and Drug
Administration (“FDA”), were not medically accepted indications (as defined by
42 U.S.C. § 1396r8(k)(6)), and were not covered by Federal Health Care Programs.
2. During the period January 1998 through December 2005, Forest knowingly caused
false or fraudulent claims for Celexa and Lexapro to be submitted to the Federal
Health Care Programs and caused the VA to purchase those drugs by offering and
paying illegal remuneration to physicians as set forth in the United States
Complaint in Intervention to induce the physicians to promote and to prescribe
Celexa and Lexapro, in violation of the Federal Anti-Kickback Statute, 42 U.S.C.
§ 1320a–7b(b)(2).
3. During the period August 2001 through December 2005, Forest knowingly caused
false or fraudulent claims to be submitted to the Federal Health Care Programs
and caused purchases by the VA through its distribution of a drug, Levothroid,
that did not qualify as a covered outpatient drug (as defined in 42 U.S.C.
§ 1396r–8(k)(2)).  In 1997, FDA determined that oral levothyroxine sodium
products, including Levothroid, were “new drugs.” FDA later announced that it
would exercise its discretion not to take enforcement action against a
manufacturer for distribution of an unapproved oral levothyroxine sodium product
if, among other things, the manufacturer phased down distribution of its
unapproved oral levothyroxine sodium product over a two-year period following
August 14, 2001.  Notwithstanding FDA’s announcement, Forest increased
distribution of its unapproved oral levothyroxine sodium product, Levothroid,
after August 14, 2001, and failed to advise CMS that unapproved Levothroid no
longer qualified as a covered outpatient drug under 42 U.S.C. § 1396r–8(k)(2).
H. The United States also contends that it has certain administrative claims
against Forest for engaging in the Covered Conduct.
I. Forest has entered into or will be entering into separate settlement
agreements, described in Paragraph III.1(b) below (hereinafter referred to as
the “Medicaid State Settlement Agreements”) with certain states and the District
of Columbia in settlement of the Covered Conduct.  States with which Forest
executes a Medicaid State Settlement Agreement in the form to which Forest and
the National Association of Medicaid Fraud Control Units (“NAMFCU”) Negotiating
Team have agreed, or in a form otherwise agreed to by Forest and an individual
state, shall be defined as “Medicaid Participating States.”
J. This Settlement Agreement is made in compromise of disputed claims.  This
Settlement Agreement is neither an admission of facts or liability by Forest,
nor a concession by the United States that its claims are not
well-founded.  Forest expressly denies the contentions and allegations of the
United States and Relators as set forth herein and in the Civil Actions and
denies that it engaged in any wrongful conduct, except as to such admissions
that FPI is required to make under the terms of the plea agreement into which
FPI is entering simultaneously with the execution of this Settlement
Agreement.  Neither this Settlement Agreement or its execution, nor the
performance of any obligation arising under it, including any payment, nor the
fact of settlement is intended to be, or shall be understood as, an admission of
liability or wrongdoing, or other expression reflecting on the merits of the
dispute by any party to this Settlement Agreement.
K. To avoid the delay, uncertainty, inconvenience, and expense of protracted
litigation of the above claims, the Parties reach a full and final settlement
pursuant to the Terms and Conditions below.
 
III.           TERMS AND CONDITIONS
 
NOW, THEREFORE, in reliance on the representations contained herein and in
consideration of the mutual promises, covenants, and obligations in this
Settlement Agreement, and for good and valuable consideration, receipt of which
is hereby acknowledged, the Parties agree as follows:
1. Subject to the terms and conditions set forth below, Forest agrees to pay to
the United States and the Medicaid Participating States, collectively, the total
amount of $149,158,057.66 in principal, plus interest as described herein
(“Settlement Amount”).  The Settlement Amount shall constitute a debt
immediately due and owing to the United States and the Medicaid Participating
States on the Effective Date of this Agreement.  This debt shall be discharged
by payments to the United States and the Medicaid Participating States as
follows:
a. Forest shall pay to the United States the principal sum of $88,833,560.18
plus interest accrued on that sum at a rate of 3.25% per annum, beginning June
1, 2009, and continuing through the day before full payment (“Federal Settlement
Amount”).  The Federal Settlement Amount shall be paid by electronic funds
transfer pursuant to written instructions from the United States.  Forest shall
make this electronic funds transfer no later than seven business days after the
Effective Date of this Settlement Agreement.
b. Forest shall deposit the principal sum of $60,324,497.48 plus interest
accrued on that sum at a rate of 3.25% per annum, beginning June 1, 2009, and
continuing through the day before such deposit (“State Settlement Amount”), into
one or more interest-bearing money market or bank accounts held in the name of
Forest but segregated from other Forest accounts (the “State Settlement
Accounts”), and shall administer funds from those accounts pursuant to terms and
conditions to be agreed upon by Forest and the NAMFCU Negotiating Team and as
set forth in the individual Medicaid State Settlement Agreements.  Forest shall
make this deposit on a date to be agreed with the NAMFCU Negotiating
Team.  Funds not released to Medicaid Participating States and remaining in the
State Settlement Accounts at the conclusion of the State settlement process
agreed upon by Forest and the NAMFCU Negotiating Team shall, together with any
accrued interest thereon, revert to Forest at the conclusion of the State
settlement process and shall thereupon be deducted from the amount referred to
herein as the Settlement Amount.
c. Contingent upon the United States receiving the Federal Settlement Amount
from Forest and as soon as feasible after receipt, the United States agrees to
pay the following Relators the following amounts plus their proportionate share
of interest accrued on the Federal Settlement Amount described in (a) above as
Relator’s Share of the proceeds pursuant to 31 U.S.C. § 3730(d):
 
(1)  
Christopher Gobble: $10,948,312;
 

(2)  
Joseph Piacentile (by agreement, Piacentile’s share shall be included in
Gobble’s Relator Share above); and
 

(3)  
Constance Conrad: $3,664,758.

 
All Relators in the Civil Actions listed in Preamble Paragraph C, above,
represent and agree that no other Relator payments shall be made, due, or owed
by the United States with respect to the matters covered by this Agreement.
2. Forest agrees to pay Relators’ attorneys’ fees and costs, as contemplated by
31 U.S.C. § 3730(d), in accordance with the terms set forth in separate
agreements being entered into simultaneously with the execution of this
Settlement Agreement with each of Relator Gobble, Relator Piacentile, and
Relators Constance Conrad and Jim Conrad.
3. Subject to the exceptions in Paragraph III.8, below, in consideration of the
obligations of Forest set forth in this Settlement Agreement, and conditioned
upon Forest’s full payment of the Settlement Amount in accordance with the terms
of Paragraph III.1, above, the United States (on behalf of itself, its officers,
agents, agencies, and departments) agrees to release Forest, its predecessors,
and its current and former divisions, parents, affiliates, subsidiaries,
successors and assigns, and their current and former directors, officers, and
employees from any civil or administrative monetary claim that the United States
has or may have for the Covered Conduct under the False Claims Act, 31 U.S.C.
§§ 3729–3733, the Civil Monetary Penalties Law, 42 U.S.C. § 1320a–7a, the
Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801–3812, any statutory
provision creating a cause of action for civil damages or civil penalties which
the Civil Division of the Department of Justice has actual and present authority
to assert and compromise pursuant to 28 C.F.R. Part O, Subpart I, 0.45(d), and
common law claims for fraud, disgorgement, payment by mistake, breach of
contract and unjust enrichment.
4. In consideration of the obligations of Forest set forth in this Settlement
Agreement, and conditioned upon Forest’s full payment of the Settlement Amount
in accordance with the terms of Paragraph III.1, above, Relators, for themselves
and for their heirs, successors, attorneys, agents, assigns, and any other
person or entity acting on their behalf or asserting their rights, agree to
dismiss with prejudice any currently pending claims against Forest in any
federal or state court or in any other forum, and fully and finally release,
waive and forever discharge Forest, its predecessors, and its current and former
divisions, parents, subsidiaries, affiliates, successors and assigns, and their
current and former directors, officers, and employees from any claims or
allegations that the United States has or may have under the False Claims Act,
31 U.S.C. §§ 3729–3733, for the Covered Conduct, and from all liability, claims,
allegations, demands, actions or causes of action whatsoever, known or unknown,
fixed or contingent, in law or in equity, in contract or in tort, under any
federal or state statute or regulation, or under common law or that they
otherwise would have standing to bring, including, without limitation, any claim
that the Relators asserted or could have asserted in the Civil Actions, and,
conditioned upon receipt of payment for attorneys’ fees and costs as
contemplated in Paragraph III.2, above, any claims they might assert for
expenses, attorneys’ fees, and costs under 31 U.S.C. § 3730(d) or any similar
federal or state statute; provided, however, that this Agreement does not
resolve Relator Gobble’s claims for retaliatory discharge and associated fees
and expenses pursuant to 31 U.S.C. § 3730(h), which are explicitly preserved in
the Stipulation of Dismissal described in Paragraph III.19 below, and Forest
reserves any claims or defenses that it may assert relating in any way to such
claims.
5. In consideration of the obligations of Forest set forth in this Settlement
Agreement and the Corporate Integrity Agreement (“CIA”) entered into between
OIG-HHS and Forest Laboratories, Inc., and conditioned upon Forest’s full
payment of the Settlement Amount in accordance with the terms of Paragraph
III.1, above, OIG-HHS agrees to release and refrain from instituting, directing,
or maintaining any administrative action seeking exclusion from Medicare,
Medicaid, and other Federal health care programs (as defined in 42 U.S.C.
§ 1320a–7b(f) against (a) Forest under 42 U.S.C. § 1320a–7a (Civil Monetary
Penalties Law) or 42 U.S.C. § 1320a–7(b)(7) (permissive exclusion for fraud,
kickbacks, and other prohibited activities) for the Covered Conduct, except as
reserved in Paragraph III.8 (concerning excluded claims), below, and as reserved
in this Paragraph; or (b) FPI under 42 U.S.C. § 1320a–7(b)(1) (permissive
exclusion for conviction relating to fraud) based on FPI’s agreement to plead
guilty to the charges in the Criminal Action referenced in Preamble Paragraph E,
except as reserved in Paragraph III.8 (concerning excluded claims), below, and
as reserved in this Paragraph.  OIG-HHS expressly reserves all rights to comply
with any statutory obligations to exclude Forest from Medicare, Medicaid, and
other Federal health care programs under 42 U.S.C. § 1320a–7(a) (mandatory
exclusion) based upon the Covered Conduct.  Nothing in this Paragraph precludes
OIG-HHS from taking action against entities or persons, or for conduct and
practices, for which claims have been reserved in Paragraph III.8, below.
6. In consideration of the obligations of Forest set forth in this Settlement
Agreement, and conditioned upon Forest’s full payment of the Settlement Amount
in accordance with the terms of Paragraph III.1, above, TMA agrees to release
and refrain from instituting, directing, or maintaining any administrative
action seeking exclusion from the TRICARE Program against Forest under 32 C.F.R.
§ 199.9 for the Covered Conduct, except as reserved in Paragraph III.8
(concerning excluded claims), below, and as reserved in this Paragraph.  TMA
expressly reserves authority to exclude Forest from the TRICARE Program under 32
C.F.R. §§ 199.9 (f)(1)(i)(A), (f)(1)(i)(B), and (f)(1)(iii), based upon the
Covered Conduct.  Nothing in this Paragraph precludes TMA from taking action
against entities or persons, or for conduct and practices, for which claims have
been reserved in Paragraph III.8, below.
7. In consideration of the obligations of Forest set forth in this Settlement
Agreement, and conditioned upon Forest’s full payment of the Settlement Amount
in accordance with the terms of Paragraph III.1, above, OPM agrees to release
and refrain from instituting, directing, or maintaining any administrative
action seeking exclusion against Forest under 5 U.S.C. § 8902a or 5 C.F.R. Part
970 for the Covered Conduct, except as reserved in Paragraph III.8 (concerning
excluded claims), below, and except if excluded by OIG-HHS pursuant to 42 U.S.C.
§ 1320a–7(a).  Nothing in this Paragraph precludes OPM from taking action
against entities or persons, or for conduct and practices, for which claims have
been reserved in Paragraph III.8, below.
8. Notwithstanding any term of this Settlement Agreement, the United States
specifically does not release hereby any person or entity (including Forest and
Relators) from any of the following claims or liabilities:
a. Any civil, criminal, or administrative liability arising under Title 26,
United States Code (Internal Revenue Code);
b. Any criminal liability;
c. Except as explicitly stated in this Settlement Agreement, any administrative
liability, including mandatory exclusion from Federal Health Care Programs;
d. Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct;
e. Any liability based upon such obligations as are created by this Settlement
Agreement;
f. Any liability for express or implied warranty claims or other claims for
defective or deficient products or services, including quality of goods and
services;
g. Any liability for failure to deliver goods or services due; and
h. Any liability for personal injury or property damage or for other
consequential damages arising from the Covered Conduct.
9. Relators and their heirs, successors, attorneys, agents, and assigns agree
not to object to this Settlement Agreement and agree and confirm that this
Settlement Agreement is fair, adequate, and reasonable under all the
circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B), and expressly waive the
opportunity for a hearing on any objections to this Settlement Agreement
pursuant to 31 U.S.C. § 3730(c)(2)(B).  Conditioned upon receipt of his or her
Relator’s Share, each Relator, for himself/herself individually, and for his/her
heirs, successors, agents, and assigns, fully and finally releases, waives, and
forever discharges the United States, its officers, agents, and employees, from
any claims arising from or relating to 31 U.S.C. § 3730, from any claims arising
from the filing of the Civil Actions, and from any other claims for a share of
the Settlement Amount, and in full settlement of any claims Relators may have
under this Settlement Agreement.  Relator Gobble’s claims for damages, costs,
and attorney’s fees from Forest pursuant to 31 U.S.C. § 3730(h) are not waived
or released and shall survive the execution of this Settlement Agreement.  This
Settlement Agreement does not resolve or in any manner affect any claims the
United States has or may have against the Relators arising under Title 26,
United States Code (Internal Revenue Code), or any claims arising under this
Settlement Agreement.
10. Forest waives and shall not assert any defenses Forest may have to any
criminal prosecution or administrative action relating to the Covered Conduct
that may be based in whole or in part on a contention that, under the Double
Jeopardy Clause in the Fifth Amendment of the Constitution, or under the
Excessive Fines Clause in the Eighth Amendment of the Constitution, this
Settlement Agreement bars a remedy sought in such criminal or administrative
action.  Nothing in this Paragraph or any other provision of this Settlement
Agreement constitutes an agreement by the United States concerning the
characterization of the Settlement Amount for purposes of the Internal Revenue
laws, Title 26 of the United States Code.
11. Forest fully and finally releases the United States, its agencies,
employees, servants, and agents from any claims (including attorneys’ fees,
costs, and expenses of every kind and however denominated) that Forest has
asserted, could have asserted, or may assert in the future against the United
States, its agencies, employees, servants, and agents, related to the Covered
Conduct and the United States’ investigation and prosecution of civil claims
arising out of or in connection with the Covered Conduct.
12. Forest fully and finally releases the Relators from any claims (including
for attorney’s fees, costs, and expenses of every kind and however denominated)
that Forest has asserted, could have asserted, or may assert in the future
against the Relators, related to the Covered Conduct or the Relators’
investigation and prosecution thereof, but expressly reserves any claims or
defenses Forest may assert relating in any way to the claims set forth in the
Gobble qui tam action that are not dismissed pursuant to the Stipulations of
Dismissal described in Paragraph III.19 below.
13. The Settlement Amount shall not be decreased as a result of the denial of
claims for payment now being withheld from payment by any Medicare carrier or
intermediary, any TRICARE, FEHBP, or VA carrier, or any state payer, related to
the Covered Conduct; and Forest shall not resubmit to any Medicare carrier or
intermediary, any TRICARE, FEHBP, or VA carrier, or any state payer any
previously denied claims related to the Covered Conduct, and shall not appeal
any such denials of claims.
14. Forest agrees to the following:
a. Unallowable Costs Defined:  that all costs (as defined in the Federal
Acquisition Regulation, 48 C.F.R. § 31.205–47, in Titles XVIII and XIX of the
Social Security Act, 42 U.S.C. §§ 1395–1395iii and 1396–1396w–1, and in the
regulations and official program directives promulgated thereunder) incurred by
or on behalf of Forest, its present or former officers, directors, employees,
shareholders, and agents in connection with the following shall be “Unallowable
Costs” on government contracts and under the Medicare Program, Medicaid Program,
TRICARE Program, FEHBP, and VA health care program:
(1) the matters covered by this Settlement Agreement;
(2) the United States’ audit(s) and civil investigation(s) of the matters
covered by this Settlement Agreement;
(3) Forest’s investigation, defense, and corrective actions undertaken in
response to the United States’ audit(s) and civil investigation(s) in connection
with the matters covered by this Settlement Agreement (including attorneys’
fees);
(4) the negotiation and performance of this Settlement Agreement;
(5) the payment Forest makes to the United States pursuant to this Settlement
Agreement and any payments that Forest may make to Relators, including costs and
attorney’s fees; and
(6) the negotiation of, and obligations undertaken pursuant to the CIA to:
 
(i)  
retain an independent review organization to perform annual reviews as described
in Section III.D of the CIA; and
 

(ii)  
prepare and submit reports to the OIG-HHS.

 
However, nothing in this paragraph III.14.a.(6) that may apply to the
obligations undertaken pursuant to the CIA affects the status of costs that are
not allowable based on any other authority applicable to Forest.  (All costs
described or set forth in this Paragraph III.14.a. are hereinafter “Unallowable
Costs.”)
b. Future Treatment of Unallowable Costs:  These Unallowable Costs shall be
separately determined and accounted for by Forest, and Forest shall not charge
such Unallowable Costs directly or indirectly to any contracts with the United
States or any State Medicaid program, or seek payment for such Unallowable Costs
through any cost report, cost statement, information statement, or payment
request submitted by Forest or any of its subsidiaries or affiliates to the
Medicare, Medicaid, TRICARE, FEHBP, or VA Programs.
c. Treatment of Unallowable Costs Previously Submitted for Payment:  Forest
further agrees that, within 90 days of the Effective Date of this Settlement
Agreement, it shall identify to applicable Medicare and TRICARE fiscal
intermediaries, carriers, and/or contractors, and Medicaid, FEHBP, and VA fiscal
agents, any Unallowable Costs (as defined in this Paragraph) included in
payments previously sought from the United States, or any State Medicaid
program, including, but not limited to, payments sought in any cost reports,
cost statements, information reports, or payment requests already submitted by
Forest or any of its subsidiaries or affiliates, and shall request, and agree,
that such cost reports, cost statements, information reports, or payment
requests, even if already settled, be adjusted to account for the effect of the
inclusion of the Unallowable Costs.  Forest agrees that the United States, at a
minimum, shall be entitled to recoup from Forest any overpayment plus applicable
interest and penalties as a result of the inclusion of such Unallowable Costs on
previously submitted cost reports, information reports, cost statements, or
requests for payment.
Any payments due after any such adjustments have been made shall be paid to the
United States pursuant to the direction of the Department of Justice and/or the
affected agencies.  The United States reserves its rights to disagree with any
calculations submitted by Forest or any of its subsidiaries or affiliates on the
effect of inclusion of Unallowable Costs (as defined in this Paragraph) on
Forest or any of its subsidiaries’ or affiliates’ cost reports, cost statements,
or information reports.
d. Nothing in this Settlement Agreement shall constitute a waiver of the rights
of the United States to audit, examine, or re-examine Forest’s books and records
to determine that no Unallowable Costs have been claimed in accordance with the
provisions of this Paragraph.
15. Forest agrees to cooperate fully and truthfully with the United States’
investigation relating to the Covered Conduct of individuals and entities not
released in this Settlement Agreement.  Upon reasonable notice, Forest shall
encourage, and agrees not to impair, the cooperation of its directors, officers,
and employees, and shall use its best efforts to make available, and encourage
the cooperation of former directors, officers, and employees for interviews and
testimony, consistent with the rights and privileges of such individuals.
16. This Settlement Agreement is intended to be for the benefit of the Parties
only.  Other than as set forth in this Settlement Agreement, the Parties do not
release any claims against any other person or entity.
17. Forest agrees that it waives and shall not seek payment for any of the
health care billings covered by this Settlement Agreement from any health care
beneficiaries or their parents, sponsors, legally responsible individuals, or
third party payors based upon the claims defined as Covered Conduct.
18. Forest warrants that it has reviewed its financial situation and that it
currently is solvent within the meaning of 11 U.S.C. §§ 547(b)(3) and
548(a)(1)(B)(ii)(I), and shall remain solvent following payment of the
Settlement Amount.  Further, the Parties warrant that, in evaluating whether to
execute this Settlement Agreement, they (a) have intended that the mutual
promises, covenants, and obligations set forth herein constitute a
contemporaneous exchange for new value given to Forest, within the meaning of 11
U.S.C. § 547(c)(1); and (b) conclude that these mutual promises, covenants, and
obligations do, in fact, constitute such a contemporaneous exchange.  Further,
the Parties warrant that the mutual promises, covenants, and obligations set
forth herein are intended to and do, in fact, represent a reasonably equivalent
exchange of value that is not intended to hinder, delay, or defraud any entity
to which Forest was or became indebted to on or after the date of this transfer,
within the meaning of 11 U.S.C. § 548(a)(1).
19. Upon receipt of the payments described in Paragraph III.1, above, the United
States will file a Notice of Intervention in the Conrad qui tam action wherein
the United States will intervene as to claims asserted against Forest concerning
the Covered Conduct, and the Parties will file Stipulations of Dismissal, in the
form attached hereto as Attachments 1 and 2, (a) with prejudice as to the United
States’ claims as to the Covered Conduct as to Forest in each of the Gobble qui
tam action, the Piacentile qui tam action, and the Conrad qui tam action, and
with prejudice as to the United States’ Complaint in Intervention in its
entirety, (b) without prejudice as to the United States as to all other claims
in each of the Gobble qui tam action, the Piacentile qui tam action, and the
Conrad qui tam action, and (c) with prejudice as to the Relators’ claims in each
of the Gobble qui tam action, the Piacentile qui tam action, and the Conrad qui
tam action (provided, however, that Gobble’s retaliatory termination claims
pursuant to 31 U.S.C. § 3730(h) shall be preserved).  If the Court enters Orders
of Dismissal that differ from the proposed Orders of Dismissal attached hereto
as Attachments 1 and 2, the Parties agree to take all reasonable and necessary
steps to seek modifications of the entered Orders to conform with the attached
Orders of Dismissal.
20. As soon as practicable after the Effective Date of this Settlement
Agreement, Relators Constance Conrad and Jim Conrad agree to take all necessary
actions to secure the dismissal with prejudice of all claims asserted against
Forest, its predecessors, and/or its current and former divisions, parents,
subsidiaries, affiliates, successors and assigns and/or their current and former
directors, officers, and employees in the Civil Actions listed in Paragraph
II.C.4, above.
21. Except as expressly provided to the contrary in this Settlement Agreement,
each Party shall bear its own legal and other costs incurred in connection with
this matter, including the preparation and performance of this Settlement
Agreement.
22. Forest represents that this Settlement Agreement is freely and voluntarily
entered into without any degree of duress or compulsion whatsoever.
23. Relators represent that this Settlement Agreement is freely and voluntarily
entered into without any degree of duress or compulsion whatsoever.
24. This Settlement Agreement is governed by the laws of the United States.  The
Parties agree that the exclusive jurisdiction and venue for any dispute arising
between and among the Parties under this Settlement Agreement is the United
States District Court for the District of Massachusetts, except that disputes
arising under the CIA shall be resolved exclusively under the dispute resolution
provisions in the CIA.
25. For purposes of construction, this Settlement Agreement shall be deemed to
have been drafted by all Parties to this Settlement Agreement and shall not,
therefore, be construed against any Party for that reason in any subsequent
dispute.
26. This Settlement Agreement constitutes the complete agreement between the
Parties with respect to the Covered Conduct.  This Settlement Agreement may not
be amended except by written consent of the Parties.
27. The individuals signing this Settlement Agreement on behalf of Forest
represent and warrant that they are authorized by Forest to execute this
Settlement Agreement.  The individuals signing this Settlement Agreement on
behalf of Relators represent and warrant that they are authorized by Relators to
execute this Settlement Agreement.  The United States signatories represent that
they are signing this Settlement Agreement in their official capacities and that
they are authorized to execute this Settlement Agreement.
28. This Settlement Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same Settlement
Agreement.  Facsimiles of signatures and/or electronic signatures in portable
document format (.pdf) shall constitute acceptable, binding signatures for
purposes of this Settlement Agreement.
29. This Settlement Agreement is binding on Forest’s successors, transferees,
heirs, and assigns.
30. This Settlement Agreement is binding on Relators’ successors, transferees,
heirs, and assigns.
31. All parties consent to the disclosure of this Settlement Agreement, and
information about this Settlement Agreement, to the public on or after the
Effective Date.
32. As used in this Settlement Agreement, the “Effective Date” shall mean the
date of the signature of the last signatory to the Settlement Agreement.

 
 

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THE UNITED STATES OF AMERICA
 
DATED: 9/15/2010                                 
BY:   /s/ Sanjay M.
Bhambani                                                              
 
JAMIE ANN YAVELBERG
SANJAY M. BHAMBHANI
EVA U. GUNASEKERA
Attorneys
Commercial Litigation Branch
Civil Division
United States Department of Justice
 
DATED: 9/15/10                                    
BY:   /s/ Gregg
Shapiro                                                               
 
GREGG D. SHAPIRO
Assistant United States Attorney
United States Attorney’s Office
District of Massachusetts
 
DATED: 9/15/10                                    
BY:   /s/ Gregory E.
Demske                                                              
 
GREGORY E. DEMSKE
Assistant Inspector General for Legal Affairs
Office of Counsel to the Inspector General
Office of Inspector General
United States Department of Health and Human Services

 
 

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DATED: 14 Sep 2010                                          
BY:   /s/ Laurel C.
Gillespie                                                             
 
LAUREL C. GILLESPIE
Deputy General Counsel
TRICARE Management Activity
United States Department of Defense
 
DATED: 9/14/10                                      
BY:   /s/ Shirley R.
Patterson                                                              
 
 
 
 
DATED: 9/15/10         
SHIRLEY R. PATTERSON
Acting Deputy Associate Director Insurance Operations
United States Office of Personnel Management
 
/s/ David Cope
J. DAVID COPE   
Assistant Inspector General for Legal Affairs
United States Office of Personnel Management

 
 

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FOREST LABORATORIES, INC. & FOREST PHARMACEUTICALS, INC. – DEFENDANTS
 
DATED: 9/14/2010                                 
BY:   /s/ Herschel S.
Weinstein                                                              
 
HERSCHEL S. WEINSTEIN
Vice President – General Counsel
Forest Laboratories, Inc.
909 Third Avenue
New York, NY  10022
 
DATED: 9/14/2010                                  
BY:   /s/ Christopher K.
Tahbaz                                                              
 
MARY JO WHITE
CHRISTOPHER K. TAHBAZ
ANDREW J. CERESNEY
KRISTIN D. KIEHN
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY  10022
 

 
 

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CHRISTOPHER R. GOBBLE – RELATOR
 
DATED: 9/14/10                                 
BY:   /s/ Marlan B. Wilbanks /
SED                                                              
 
MARLAN B. WILBANKS
Wilbanks & Bridges LLP
3414 Peachtree Rd., NE, Suite 1075
Atlanta, GA  30326
 
DATED: 9/14/10                                 
BY:   /s/ Philip S. Marstiller /
SED                                                               
 
PHILIP S. MARSTILLER
Philip S. Marstiller, P.C.
16 Second Street
Richmond, VA  23219
 
DATED: 9/14/10                                 
BY:   /s/ Suzanne E.
Durrell                                                             
 
SUZANNE E. DURRELL
Durrell Law Office
180 Williams Ave.
Milton, MA  02186

DR. JOSEPH PIACENTILE – RELATOR
 
DATED: 9/14/10    
BY:   /s/ David
Stone                                                              
 
DAVID S. STONE
Stone & Magnanini, LLP
150 John F. Kennedy Parkway, 4th Floor
Short Hills, NJ  07078

 

 

 
 

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CONSTANCE CONRAD AND JIM CONRAD – RELATORS
 
DATED: 9/14/10                                 
BY:   /s/ Kenneth J.
Nolan                                                             
 
KENNETH J. NOLAN
MARCELLA AUERBACH
Nolan & Auerbach, P.A.
435 North Andrews Avenue
Suite 401
Ft. Lauderdale, FL  33301
 
DATED: 9/14/10                                  
BY:   /s/ John
Roddy                                                             
 
JOHN RODDY
Roddy, Klein & Ryan
727 Atlantic Ave., 2nd Floor
Boston, MA  02111