Exhibit 10.1

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is entered into among the United States
of America, acting through the United States Department of Justice and the
United States Attorney’s Office for the Northern District of Georgia and on
behalf of the Office of Inspector General of the Department of Health and Human
Services (“OIG-HHS”), the TRICARE Management Activity (“TMA”), the United States
Office of Personnel Management (“OPM”), the United States Department of Veterans
Affairs (“VA”), and Office of Workers’ Compensation Programs of the United
States Department of Labor (“DOL-OWCP”) (collectively “the United States”);
Dr. Amy M. Lang, Charles J. Rushin, Cher Beilfuss, Kathleen O’Connor-Masse, and
Albert Edward Hallivis (collectively, “Relators”); Allergan, Inc. and Allergan
USA, Inc. (referred to individually and collectively as “Allergan”), through
their authorized representatives. Collectively, all of the above will be
referred to as “the Parties.”

PREAMBLE

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

A.         Allergan, Inc. and Allergan USA, Inc. are Delaware corporations
headquartered in Irvine, California. At all relevant times herein, Allergan
developed, manufactured, distributed, marketed, and sold pharmaceutical products
in the United States, including a drug sold under the trade name of Botox®
Therapeutic (“Botox®”), which is billed to federal health care programs under
HCPCS code J0585.

B.         Relators have filed the following qui tam actions against Allergan
captioned as follows (collectively the “Civil Actions”):

 

  (i) United States ex rel. Amy M. Lang and Charles J. Rushin v. Allergan, Inc.,
Civ. No. 1:07-cv-1288-WSD (N.D. Ga.) (hereinafter “Civil Action I”);

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  (ii) United States ex rel. Cher Beilfuss and Kathleen O’Connor-Masse v.
Allergan, Inc., Civ. No. 1:08-cv-1883-WSD (N.D. Ga.) (hereinafter “Civil Action
II”); and

 

  (iii) United States ex rel. Albert Edward Hallivis v. Allergan, Inc. a/k/a
Allergan USA, Inc., Civ. No. 1:09-cv-3434-WSD (N.D. Ga.) (hereinafter “Civil
Action III”).

The United States intervened in Civil Action I and Civil Action II on April 2,
2010.

C.         On such date as may be determined by the Court, Allergan, Inc. will
enter into a plea of guilty pursuant to Fed. R. Crim. P. 11(c)(1)(C) (the “Plea
Agreement”) to an information to be filed in United States v. Allergan, Inc.,
Criminal Action No. [to be assigned] (Northern District of Georgia) (the
“Criminal Action”) that will allege a violation of Title 21, United States Code,
Sections 331(a) and 333(a)(1), a misdemeanor, namely, the introduction into
interstate commerce of a misbranded drug, Botox® , in violation of the Food,
Drug and Cosmetic Act.

D.         Allergan has filed a declaratory judgment action pending in the
United States District Court for the District of Columbia, captioned Allergan,
Inc. v. United States, et al., 1:09-cv-01879 (D.D.C.) (hereinafter, the “D.C.
Litigation”). The D.C. Litigation is currently stayed at the joint request of
Allergan and the United States.

E.         Allergan has entered or will be entering into separate settlement
agreements, described in Paragraph 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 Allergan
executes a Medicaid State Settlement Agreement in the form to which Allergan and
the National Association of Medicaid Fraud Control Units (“NAMFCU”) Negotiating
Team have agreed, or in a form otherwise agreed to by Allergan and an individual
State, shall be defined as “Medicaid Participating States.”

 

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F.         The United States alleges that Allergan caused claims for payment for
Botox® to be submitted to the Medicare Program (“Medicare”), Title XVIII of the
Social Security Act, 42 U.S.C. §§ 1395-1395hhh. The United States further
alleges that Allergan caused claims for payment for Botox® to be submitted to
the Medicaid Program (“Medicaid”), Title XIX of the Social Security Act, 42
U.S.C. §§ 1396-1396v. The United States further alleges that Allergan caused
claims for payment of Botox® to be submitted to the TRICARE program, 10 U.S.C.
§§ 1071-1109; the Federal Employees Health Benefits Program (“FEHBP”), 5 U.S.C.
§§ 8901-8914; the following DOL-OWCP programs: the Federal Employees’
Compensation Act (“FECA”), 5 U.S.C. § 8101 et seq.; the Energy Employees
Occupational Illness Compensation Program Act (“EEOICPA”), 42 U.S.C. § 7384 et
seq.; and the Black Lung Benefits Act (“BLBA”), 30 U.S.C. § 901 et seq.; and
caused purchases of Botox® by the VA, 38 U.S.C. §§ 1701-1743 (collectively, the
“Other Federal Health Care Programs”).

G.         The United States contends that it and the Medicaid Participating
States have certain civil claims, as specified in Paragraph 2, below, against
Allergan for engaging in the following conduct during the period January 1, 2001
through December 31, 2008 (hereinafter referred to as the “Covered Conduct”):

 

  (i) Allergan promoted the sale and use of Botox® for uses that were not
approved by the Food and Drug Administration as safe and effective (including
but not limited to headache, pain, spasticity, and overactive bladder)
(“unapproved uses”) and promoting the drug for unapproved uses renders the drug
misbranded in violation of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §
331, et seq. Some of these unapproved uses were not medically accepted
indications for which the United States and state Medicaid programs provided
coverage for Botox®;

 

  (ii) Allergan made and/or disseminated unsubstantiated and/or misleading
representations or statements that Botox® was safe and effective for some of
these unapproved uses;

 

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  (iii) Allergan instructed health care professionals to miscode claims for the
treatment of headache and pain using inapplicable diagnosis codes (including but
not limited to codes for spasm of muscle (ICD-9-CM 728.5), other facial nerve
disorders (ICD-9-CM 351.8), spasmodic torticollis (ICD-9-CM 333.83), and
torticollis unspecified (ICD-9-CM 723.5)) to ensure payment by Medicare,
Medicaid and the Other Federal Health Care Programs; and

 

  (iv) Allergan offered and paid illegal remuneration to health care
professionals that was intended to induce them to promote and/or prescribe
Botox®.

As a result of the foregoing conduct, the Government alleges that Allergan
caused false or fraudulent claims for Botox® to be submitted to, or caused
purchases by, Medicare, Medicaid and the Other Federal Health Care Programs.

With respect only to claims for Botox® submitted to Medicaid, Medicare and the
Other Federal Health Care Programs with diagnosis codes for overactive bladder
and neurogenic bladder conditions (ICD-9-CM 788.30, 788.31, 788.32, 788.33,
788.34, and 599.82), the Covered Conduct extends from January 1, 2001 through
December 31, 2009.

Notwithstanding Preamble Paragraph G(iii), the Covered Conduct does not include
conduct relating to claims for Botox® submitted to Medicaid, Medicare and the
Other Federal Health Care Programs with the diagnosis codes ICD-9-CM 333.81
(blepharospasm) and ICD-9- CM 705.21, 705.22, and 780.8 (hyperhidrosis).

H.         The United States also contends that it has certain administrative
claims against Allergan, as set forth in Paragraphs 4 through 7, below, for
engaging in the Covered Conduct.

I.         This Agreement is made in compromise of disputed claims. This
Agreement is not an admission of facts or liability by Allergan. With the
exception of such admissions that are made in connection with any guilty plea by
Allergan in connection with the Criminal Action, Allergan expressly denies the
allegations of the United States and the Relators as set forth herein

 

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and in the Civil Actions and denies that it engaged in any wrongful conduct in
connection with the Covered Conduct. This Agreement is not a concession by the
United States that its claims are not well founded. Neither this Agreement, its
execution, nor the performance of any obligation under it, including any
payment, nor the fact of any 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 Allergan.

J.        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.

 

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TERMS AND CONDITIONS

NOW, THEREFORE, in reliance on the representations contained herein and in
consideration of the mutual promises, covenants, and obligations in this
Agreement, and for good and valuable consideration, receipt of which is hereby
acknowledged, the Parties agree as follows:

1.        Allergan agrees to pay to the United States and the Medicaid
Participating States, collectively, the sum of Two Hundred and Twenty Five
Million Dollars ($225,000,000), plus accrued interest at the rate of 3.5% per
annum from January 25, 2010, and continuing until and including the day of
payment (the “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, under the
following terms and conditions:

(a)        Allergan shall pay to the United States the sum of $210,150,000 plus
accrued interest as set forth above (“Federal Settlement Amount”). The Federal
Settlement Amount shall be paid by electronic funds transfer pursuant to written
instructions from the United States no later than seven (7) business days after
(i) this Agreement is fully executed by the Parties and delivered to Allergan’s
attorneys; or (ii) the Court accepts a Fed. R. Crim. P. 11(c)(1)(C) guilty plea
as described in Preamble Paragraph C in connection with the Criminal Action and
imposes the agreed upon sentence, whichever occurs later.

(b)        Allergan shall deposit the sum of $14,850,000, plus accrued interest
as set forth above (“Medicaid State Settlement Amount”) into one or more
interest-bearing money market or bank accounts (the “State Settlement Accounts”)
that are held in the name of Allergan but segregated from other Allergan
accounts, and shall pay the Medicaid Participating States

 

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from the State Settlement Accounts pursuant to written instructions from the
NAMFCU Negotiating Team and under the terms and conditions of the Medicaid State
Settlement Agreements that Allergan will enter into with the Medicaid
Participating States.

(c)        Contingent upon the United States receiving the Federal Settlement
Amount from Allergan, the United States agrees to pay, as soon as feasible upon
receipt, Amy M. Lang and Charles J. Rushin $37,827,000, plus a proportionate
share of the actual accrued interest paid to the United States by Allergan, as
set forth in Paragraph 1.a., above, (“Relators’ Share”) as Relators’ share of
the proceeds pursuant to 31 U.S.C. § 3730(d). No other relator payments shall be
made by the United States with respect to the matters covered by this Agreement.
All Relators represent that they will abide by the terms of any written and
executed separate agreements that they may have entered into with one or more of
the other Relators concerning the allocation of the Relators’ Share among
themselves.

(d)        If Allergan’s agreed-upon guilty plea pursuant to Fed. R. Crim. P.
11(c)(1)(C) in the Criminal Action described in Preamble Paragraph C is not
accepted by the Court or the Court does not impose the agreed-upon sentence for
whatever reason, this Agreement shall be null and void at the option of either
the United States or Allergan. If either the United States or Allergan exercises
this option, which option shall be exercised by notifying all Parties, through
counsel, in writing within five (5) business days of the Court’s decision, the
Parties will not object and this Agreement will be rescinded. If this Agreement
is rescinded, Allergan will not plead, argue or otherwise raise any defenses
under the theories of statute of limitations, laches, estoppel or similar
theories, to any civil or administrative claims, actions or proceedings arising
from the Covered Conduct that are brought by the United States within 90

 

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calendar days of rescission, except to the extent such defenses were available
on the day on which the qui tam complaints listed in Preamble Paragraph B,
above, were filed.

(e)        If the stay of the D.C. Litigation described in Preamble Paragraph D
is lifted before Allergan dismisses with prejudice the D.C. Litigation pursuant
to Paragraph 19, below, this Agreement shall be null and void at the option of
either the United States or Allergan. If either the United States or Allergan
exercises this option, which option shall be exercised by notifying all Parties,
through counsel, in writing within five (5) business days of the Court’s
decision to lift the stay, the Parties will not object and this Agreement will
be rescinded. If this Agreement is rescinded, Allergan will not plead, argue or
otherwise raise any defenses under the theories of statute of limitations,
laches, estoppel or similar theories, to any civil or administrative claims,
actions or proceedings arising from the Covered Conduct that are brought by the
United States within 90 calendar days of rescission, except to the extent such
defenses were available on the day on which the qui tam complaints listed in
Preamble Paragraph B, above, were filed.

2.        Subject to the exceptions in Paragraph 8 (concerning excluded claims),
below, in consideration of the obligations of Allergan set forth in this
Agreement, and conditioned upon Allergan’s full payment of the Settlement
Amount, the United States (on behalf of itself, its officers, agents, agencies,
and departments) agrees to release Allergan, 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 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 for which the Civil

 

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Division of the Department of Justice has actual and present authority to assert
and compromise pursuant to 28 C.F.R. Part 0, Subpart I, Section 0.45(d); or the
common law theories of payment by mistake, fraud, disgorgement, unjust
enrichment, and, if applicable, breach of contract.

3.        Subject to the exceptions in Paragraph 8 (concerning excluded claims),
below, in consideration of the obligations of Allergan in this Agreement,
conditioned upon Allergan’s full payment of the Settlement Amount, Relators, for
themselves and for their heirs, successors, attorneys, agents, and assigns,
agree to release Allergan, 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 liability to
Relators arising from any claim the United States has, may have, or could have
asserted relating to the Covered Conduct, and from all liability, claims,
demands, actions or causes of action whatsoever existing as of the Effective
Date of this Agreement, whether 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 that they or their heirs, successors, attorneys, agents and
assigns otherwise would have standing to bring, including any liability arising
from the filing of the Civil Actions, except for: (1) claims for attorneys’
fees, expenses and costs pursuant to 31 U.S.C. § 3730(d); (2) claims for a
Relator’s Share under the Medicaid State Settlement Agreements; and (3) any
employment discrimination claims Albert Edward Hallivis may have against
Allergan.

4.        In consideration of the obligations of Allergan in this Agreement and
the Corporate Integrity Agreement (CIA) entered into between OIG-HHS and
Allergan, Inc., and conditioned upon Allergan’s full payment of the Settlement
Amount, 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. §

 

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1320a-7b(f)) against Allergan 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, or against
Allergan, Inc. under 42 U.S.C. § 1320a-7(b)(1) based on Allergan, Inc.’s
agreement to plead guilty to the charge in the Allergan Criminal Action
referenced above in Preamble Paragraph C, except as reserved in Paragraph 8
(concerning excluded claims), below, and as reserved in this Paragraph. The
OIG-HHS expressly reserves all rights to comply with any statutory obligations
to exclude Allergan 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 the OIG-HHS from taking
action against entities or persons, or for conduct and practices, for which
claims have been reserved in Paragraph 8, below.

5.        In consideration of the obligations of Allergan in this Agreement, and
conditioned upon Allergan’s full payment of the Settlement Amount, TMA agrees to
release and refrain from instituting, directing, or maintaining any
administrative action seeking exclusion or suspension from the TRICARE Program
against Allergan, its predecessors, and its current and former divisions,
parents, affiliates, subsidiaries, successors and assigns, and their current and
former directors, officers, and employees under 32 C.F.R. § 199.9 for the
Covered Conduct, except as reserved in Paragraph 8 (concerning excluded claims),
below, and as reserved in this Paragraph. TMA expressly reserves authority to
exclude Allergan 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 or the TRICARE Program from taking action against
entities or persons, or for conduct and practices, for which claims have been
reserved in Paragraph 8, below.

 

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6.        In consideration of the obligations of Allergan in this Agreement, and
conditioned upon Allergan’s full payment of the Settlement Amount, OPM agrees to
release and refrain from instituting, directing, or maintaining any
administrative action against Allergan, its predecessors, and its current and
former divisions, parents, affiliates, subsidiaries, successors and assigns, and
their current and former directors, officers, and employees under 5 U.S.C. §
8902a or 5 C.F.R. Part 919 for the Covered Conduct, except as reserved in
Paragraph 8 (concerning excluded claims), below, and except if excluded by the
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 8, below.

7.        In consideration of the obligations of Allergan in this Agreement, and
conditioned upon Allergan’s full payment of the Settlement Amount, DOL-OWCP
agrees to release and refrain from instituting, directing, or maintaining any
administrative action seeking exclusion and debarment from the FECA, EEOICPA and
BLBA programs against Allergan, its predecessors, and its current and former
divisions, parents, affiliates, subsidiaries, successors and assigns, and their
current and former directors, officers, and employees under 20 C.F.R. §§ 10.815,
30.715 and 702.431 for the Covered Conduct, except as reserved in Paragraph 8
(concerning excluded claims), below and except if excluded by the OIG-HHS
pursuant to 42 U.S.C. § 1320a-7(a). Nothing in this Paragraph precludes the OWCP
of the DOL from taking action against entities or persons, or for conduct and
practices, for which claims have been reserved in Paragraph 8, below.

8.        Notwithstanding any term of this Agreement, the following claims of
the United States are specifically reserved and excluded from the scope and
terms of the Agreement as to any entity or person (including Allergan and the
Relators):

 

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(a)        Any civil, criminal, or administrative liability arising under Title
26, U.S. Code (Internal Revenue Code);

(b)        Any criminal liability;

(c)        Except as explicitly stated in this 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
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 personal injury or property damage or for other
consequential damages arising from the Covered Conduct;

(h)        Any liability for failure to deliver goods or services due; and

(i)        Any liability of individuals (including current or former directors,
officers, employees, or agents of Allergan) who receive 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.

9.      Relators and their heirs, successors, attorneys, agents, and assigns
agree not to object to this Agreement and agree and confirm that this 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
objection to this Agreement pursuant to 31 U.S.C. § 3730(c)(2)(B). Conditioned
upon the United States’ payment of the Relators’ Share, as

 

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set forth in Paragraph 1.c., above, Relators for themselves individually, and
for their heirs, successors, agents, and assigns, fully and finally release,
waive, and forever discharge the United States, and 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 or payment of any sort from the
United States relating to the Agreement or the filing of the Civil Actions; and
in full settlement of any claims Relators may have under this Agreement. This
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, U.S. Code (Internal
Revenue Code), or any claims arising under this Agreement.

10.    Conditioned upon the United States’ payment of the Relators’ Share, as
set forth in Paragraph 1.c., above, the Relators, for themselves, and for their
respective heirs, successors, attorneys, agents, and assigns:

(a)        hereby fully and finally release and forever discharge Allergan, its
predecessors, and its current and former divisions, parents, affiliates,
subsidiaries, successors, and assigns, and their current and former officers,
directors, trustees, agents, servants, employees, representatives, attorneys,
consultants, executors, and administrators (collectively, “Allergan Releasees”)
from any and all claims for relief, actions, rights, causes of action, suits,
debts, obligations, liabilities, demands, losses, damages (including treble
damages and any civil penalties), punitive damages, costs, and expenses of any
kind, character, or nature whatsoever, known or unknown, fixed or contingent, in
law or in equity, in contract or in tort, or under any federal or state statute
or regulation or otherwise that Relators or their heirs, successors, attorneys,
agents or assigns would have standing to bring, and which Relators or their
heirs, successors, attorneys, agents, or assigns may now have or claim to have
against the Allergan

 

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Releasees, arising in any way out of or connected in any way with the facts,
claims, and circumstances alleged in, arising under, or arising from the filing
of the Civil Actions, or from any other past activities and actions of the
Allergan Releasees, except for: (1) claims for attorneys’ fees, expenses and
costs pursuant to 31 U.S.C. § 3730(d); (2) claims for a Relators’ Share under
the Medicaid State Settlement Agreements; and (3) any employment discrimination
claims that Albert Edward Hallivis may have against Allergan; and

(b)        agree not to disseminate any documents or communications in their
possession or control, or information from such documents or communications,
that can be readily identified as having been created in whole or in part by, or
at the direction of, Allergan. In this regard, Relators and their counsel will
make a good faith effort to identify all such materials. The obligations in this
subparagraph do not apply: (1) to documents or information in the public record
or domain; (2) to the extent that compliance with the obligation would conflict
with a statute or regulation; (3) if disclosure is required by a subpoena or
court order; or (4) in the case of employee Albert Edward Hallivis, to the
degree he is authorized by Allergan to utilize business records as necessary
within the scope of his current employment.

11.    Allergan waives and shall not assert any defenses Allergan 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
Agreement bars a remedy sought in such criminal prosecution or administrative
action. Nothing in this paragraph or any other provision of this 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.

 

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12.    Allergan 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 Allergan 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 or arising from the United States’ investigation and prosecution of the
Civil Actions and the Criminal Action.

13.    Conditioned upon Relators’ compliance with their obligations under this
Agreement, Allergan, for itself, its predecessors, and its current and former
divisions, parents, affiliates, subsidiaries, successors, and assigns, and their
current and former officers, directors, trustees, agents, servants, employees,
representatives, attorneys, consultants, executors, and administrators, when
acting on behalf of Allergan or any of its affiliated companies, fully and
finally releases and forever discharges Relators and their heirs, successors,
attorneys, agents, and assigns (collectively, “Relator Releasees”) from any and
all claims for relief, actions, rights, causes of action, suits, debts,
obligations, liabilities, demands, losses, damages (including treble damages and
any civil penalties), punitive damages, costs, and expenses of any kind,
character, or nature whatsoever, known or unknown, fixed or contingent, in law
or in equity, in contract or in tort, or under any federal or state statute or
regulation or otherwise that Allergan, its predecessors, or its current and
former divisions, parents, affiliates, subsidiaries, successors, or assigns may
now have or claim to have against the Relator Releasees, arising in any way out
of or connected in any way with the facts, claims, and circumstances alleged in,
arising under, or arising from the Civil Actions, or from any other past
activities and actions of the Relator Releasees, except to the extent related
to: (1) claims Relators may have under 31 U.S.C. § 3730(d); (2) claims for a
Relators’ Share under the Medicaid State Settlement Agreements; or (3)

 

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any employment discrimination claim that Albert Edward Hallivis may have against
Allergan, or rights Allergan may have arising out of any violation by him of the
terms and conditions of his employment. Allergan attests that, upon inquiry of
its Legal Department, it is not presently aware of any claims its officers,
directors, employees, or agents may have against Relator Releasees.

14.    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 or any other state or Federal payer, related to the Covered
Conduct; and Allergan agrees not to resubmit to any Medicare carrier or
intermediary or any other state or Federal payer any previously denied claims
related to the Covered Conduct, and agrees not to appeal any such denials of
claims.

15.    Allergan 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; and in Titles XVIII and XIX of
the Social Security Act, 42 U.S.C. §§ 1395-1395hhh and 1396-1396v; and the
regulations and official program directives promulgated thereunder) incurred by
or on behalf of Allergan, 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, and FEHBP:

 

  (i) the matters covered by this Agreement and any related plea agreement;

 

  (ii) the United States’ audit(s) and civil and criminal investigation(s) of
the matters covered by this Agreement;

 

  (iii)

Allergan’s investigation, defense, and corrective actions undertaken in response
to the United States’ audit(s) and civil and criminal

 

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investigation(s) in connection with the matters covered by this Agreement
(including attorneys’ fees);

 

  (iv) the negotiation and performance of this Agreement, the Plea Agreement,
and the Medicaid State Settlement Agreements;

 

  (v) the payments Allergan makes to the United States pursuant to this
Agreement, the Plea Agreement, or the Medicaid State Settlement Agreements, and
any payments that Allergan may make to Relators (including costs and attorneys’
fees); and

 

  (vi) the negotiation of, and obligations undertaken pursuant to the CIA to:

 

  (a) retain an independent review organization to perform annual reviews as
described in Section III of the CIA; and

 

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

However, nothing in this Paragraph 15.a.vi. 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 Allergan. (All costs
described or set forth in this Paragraph 15.a. are hereafter “Unallowable
Costs.”)

(b)        Future Treatment of Unallowable Costs: These Unallowable Costs shall
be separately determined and accounted for by Allergan, and Allergan 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 Allergan or any of its subsidiaries
or affiliates to the Medicare, Medicaid, TRICARE, or FEHBP Programs.

(c)        Treatment of Unallowable Costs Previously Submitted for Payment:
Allergan

 

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further agrees that within 90 days of the Effective Date of this Agreement it
shall identify to applicable Medicare and TRICARE fiscal intermediaries,
carriers, and/or contractors, and Medicaid and FEHBP 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 Allergan 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. Allergan agrees that the United States, at a minimum, shall
be entitled to recoup from Allergan 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 the 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 Allergan or any of its subsidiaries or affiliates on
the effect of inclusion of Unallowable Costs (as defined in this Paragraph) on
Allergan or any of its subsidiaries or affiliates’ cost reports, cost
statements, or information reports.

(d)        Nothing in this Agreement shall constitute a waiver of the rights of
the United States to audit, examine, or re-examine Allergan’s books and records
to determine that no Unallowable Costs have been claimed in accordance with the
provisions of this Paragraph.

16.        This Agreement is intended to be for the benefit of the Parties only.
The Parties do not release any claims against any other person or entity, except
as explicitly stated in this

 

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Agreement, including in Paragraph 17 (waiver for beneficiaries paragraph),
below.

17.        Allergan agrees that it 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 defined as Covered Conduct.

18.        Allergan 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 to the United
States of the Settlement Amount. Further, the Parties warrant that, in
evaluating whether to execute this Agreement, they (a) have intended that the
mutual promises, covenants, and obligations set forth herein constitute a
contemporaneous exchange for new value given to Allergan, 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 Allergan 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.        Within seven (7) days of making the payments described in Paragraph
1, above, Allergan shall file a stipulation of dismissal with prejudice in the
D.C. Litigation.

20.        Upon the Effective Date of this Agreement, the United States shall
file in Civil Action III a Notice of Intervention as to the Covered Conduct.
Upon receipt of the payments described in Paragraph 1, above, and entry of an
order dismissing the D.C. Litigation with prejudice, the United States and
Relators shall file a Joint Stipulation of Dismissal in each of the

 

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Civil Actions as follows:

(a)        each stipulation of dismissal shall be with prejudice as to the
United States’ and Relators’ claims as to Allergan as to the Covered Conduct in
each Civil Action pursuant to and consistent with the terms and conditions of
this Agreement;

(b)        each stipulation of dismissal shall be without prejudice to the
United States and with prejudice as to Relators as to all other claims; and

(c)        provided, however, that the following claims against Allergan shall
not be dismissed until they are settled, adjudicated, or otherwise resolved, and
the Court is so informed: (a) Relators’ claims for reasonable attorneys’ fees,
expenses, and costs pursuant to 31 U.S.C. § 3730(d); (b) Relators’ claims for a
Relators’ Share under the Medicaid State Settlement Agreements; and (c) any
employment discrimination claims that Albert Edward Hallivis may have against
Allergan.

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

22.        Allergan represents that this Agreement is freely and voluntarily
entered into without any degree of duress or compulsion whatsoever.

23.        Relators represent that this Agreement is freely and voluntarily
entered into without any degree of duress or compulsion whatsoever.

24.        This 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 Agreement is the United States District
Court for the Northern District of Georgia, except that disputes arising under
the CIA shall be resolved exclusively under the dispute

 

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resolution provisions in the CIA.

25.        For purposes of construction, this Agreement shall be deemed to have
been drafted by all Parties to this Agreement and shall not, therefore, be
construed against any Party for that reason in any subsequent dispute.

26.        This Agreement constitutes the complete agreement between the
Parties. This Agreement may not be amended except by written consent of the
Parties.

27.        The individuals signing this Agreement on behalf of Allergan
represent and warrant that they are authorized by Allergan to execute this
Agreement. The individuals signing this Agreement on behalf of Relators
represent and warrant that they are authorized by Relators to execute this
Agreement. The United States signatories represent that they are signing this
Agreement in their official capacities and that they are authorized to execute
this Agreement.

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

29.        This Agreement is binding on Allergan’s successors, transferees,
heirs, attorneys, agents, and assigns.

30.        This Agreement is binding on Relators’ successors, transferees,
heirs, attorneys, agents, and assigns.

31.        All parties consent to the United States’ disclosure of this
Agreement, and information about this Agreement, to the public.

32.        This Agreement is effective on the date of signature of the last
signatory to the Agreement (Effective Date of this Agreement). Facsimiles of
signatures shall constitute acceptable, binding signatures for purposes of this
Agreement.

 

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THE UNITED STATES OF AMERICA

 

DATED:  

    8/31/10

    BY:  

    /s/ Sally Quillian Yates

             SALLY QUILLIAN YATES           United States Attorney          
United States Attorney’s Office           Northern District of Georgia   DATED:
 

    8/31/10

    BY:  

    /s/ Amy Berne

             AMY BERNE           Chief, Civil Division           United States
Attorney’s Office           Northern District of Georgia   DATED:  

    8/31/10

    BY:  

    /s/ Sally B. Molloy

             SALLY B. MOLLOY           Assistant U.S. Attorney           United
States Attorney’s Office           Northern District of Georgia   DATED:  

    8/31/2010

    BY:  

    /s/ Christopher J. Huber

             CHRISTOPHER J. HUBER           Assistant U.S. Attorney          
United States Attorney’s Office           Northern District of Georgia   DATED:
 

    8/31/10

    BY:  

    /s/ Edward C. Crooke

             EDWARD C. CROOKE           Trial Attorney           Commercial
Litigation Branch           Civil Division           United States Department of
Justice  

 

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DATED:  

    8/20/10

    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   DATED:  

    18 Aug 2010

    BY:  

    /s/ Laurel C. Gillespie

            LAUREL C. GILLESPIE           Deputy General Counsel          
TRICARE Management Activity           United States Department of Defense  
DATED:  

    8/18/10

    BY:  

    /s/ Shirley R. Patterson

            SHIRLEY R. PATTERSON           Acting Deputy Associate Director
Insurance Operations           United States Office of Personnel Management  
DATED:  

    8/19/2010

    BY:  

    /s/ J. David Cope

            J. DAVID COPE           Assistant Inspector General for Legal
Affairs           United States Office of Personnel Management   DATED:  

    8/18/2010

    BY:  

    /s/ Cecily A. Rayburn

           

CECILY A. RAYBURN

          Acting Deputy Director           Office of Workers’ Compensation
Programs           United States Department of Labor  

 

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ALLERGAN

 

DATED:

 

    8/30/10

  BY:  

    /s/ Samuel J. Gesten

        SAMUEL J. GESTEN, ESQ.       Executive Vice President and General
Counsel       Allergan, Inc.       Vice President and Assistant Secretary      
Allergan USA, Inc.

DATED:

 

    8/31/10

  BY:  

    /s/ Stephen S. Cowen

        STEPHEN S. COWEN, ESQ.         King & Spalding, LLP  

DATED:

 

    8/31/10

  BY:  

    /s/ Matthew H. Baughman

        MATTHEW H. BAUGHMAN, ESQ.       King & Spalding, LLP

DATED:

 

    8/31/10

  BY:  

    /s/ John T. Bentivoglio

        JOHN T. BENTIVOGLIO, ESQ.       Skadden, Arps, Slate, Meagher & Flom,
LLP

 

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RELATOR AMY M. LANG, M.D.

 

DATED:  

    8/18/2010

  BY:  

    /s/ Amy M. Lang, M.D.

        AMY M. LANG, M.D.   DATED:  

    08/18/10

  BY:  

    /s/ John E. Floyd

        JOHN E. FLOYD, ESQ.         Bondurant, Mixson, & Elmore, LLP   DATED:  

    08/18/10

  BY:  

    /s/ Ben E. Fox

        BEN E. FOX, ESQ.         Bondurant, Mixson, & Elmore, LLP   DATED:  

    8/18/2010

  BY:  

    /s/ Lance D. Lourie

        LANCE D. LOURIE, ESQ.         Watkins, Lourie, Roll & Chance, P.C.  

 

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RELATOR CHARLES J. RUSHIN

 

DATED:  

    8/18/2010

  BY:  

    /s/ Charles J. Rushin

        CHARLES J. RUSHIN   DATED:  

    08/18/2010

  BY:  

    /s/ John E. Floyd

        JOHN E. FLOYD, ESQ.         Bondurant, Mixson, & Elmore, LLP   DATED:  

    08/18/10

  BY:  

    /s/ Ben E. Fox

        BEN E. FOX, ESQ.         Bondurant, Mixson, & Elmore, LLP   DATED:  

    8/18/10

  BY:  

    /s/ Lance D. Lourie

        LANCE D. LOURIE, ESQ.         Watkins, Lourie, Roll & Chance, P.C.  

 

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RELATOR CHER BEILFUSS

 

DATED:

 

    Aug 22, 2010

  BY:  

    /s/ Cher Beilfuss

        CHER BEILFUSS  

DATED:

 

    8/23/10

  BY:  

    /s/ Marcella Auerbach

        MARCELLA AUERBACH, ESQ.         Nolan & Auerbach, P.A.  

DATED:

 

    8/23/10

  BY:  

    /s/ Ken Nolan

        KEN NOLAN, ESQ.         Nolan & Auerbach, P.A.  

 

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RELATOR KATHLEEN O’CONNOR-MASSE

 

DATED:  

    8/18/10

  BY:  

    /s/ Kathleen O’Connor-Masse

        KATHLEEN O’CONNOR-MASSE   DATED:  

    8/23/10

  BY:  

    /s/ Marcella Auerbach

        MARCELLA AUERBACH, ESQ.         Nolan & Auerbach, P.A.   DATED:  

    8/23/10

  BY:  

    /s/ Ken Nolan

        KEN NOLAN, ESQ.         Nolan & Auerbach, P.A.  

 

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RELATOR ALBERT EDWARD HALLIVIS

 

DATED:  

    8/18/10

  BY:  

    /s/ Albert Edward Hallivis

        ALBERT EDWARD HALLIVIS   DATED:  

    8/18/10

  BY:  

    /s/ Jay P. Holland

        JAY P. HOLLAND, ESQ.         Joseph, Greenwald & Laake, P.A.   DATED:  

    8/18/10

  BY:  

    /s/ Brian J. Markowitz

        BRIAN J. MARKOWITZ, ESQ.         Joseph, Greenwald & Laake, P.A.  

 

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