IN THE UNITED STATES DISTRICT COURT
                    FOR THE EASTERN DISTRICT OF PENNSYLVANIA

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                                                      )
IN RE DIET DRUGS                                      )
(PHENTERMINE/FENFLURAMINE/                            )
DEXFENFLURAMINE) PRODUCTS                             )
LIABILITY LITIGATION                                  )     MDL NO. 1203
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THIS DOCUMENT RELATES TO:                             )
ALL ACTIONS                                           )
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SHEILA BROWN, et al. v. AMERICAN HOME PRODUCTS        )CIVIL ACTION NO. 99-20593
CORPORATION                                           )
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                             NATIONWIDE CLASS ACTION
                            SETTLEMENT AGREEMENT WITH
                       AMERICAN HOME PRODUCTS CORPORATION

                                  (AS AMENDED)









Dated:         November  18, 1999

Amended:       November 24, 1999
               January 10, 2000
               March 24, 2000
               July 20, 2000



<PAGE>






                                TABLE OF CONTENTS


PREAMBLE....................................................................1


I.    DEFINITIONS...........................................................2


II.   SCOPE OF THE SETTLEMENT CLASS.........................................15


III.  AHP'S PAYMENT OBLIGATIONS.............................................18

       A.      ESTABLISHMENT OF SETTLEMENT TRUST............................18

       B.      FUND A.......................................................19

       C.      FUND B.......................................................20

       D.     OTHER PROVISIONS..............................................23

       E.      SECURITY ARRANGEMENTS........................................24


IV.   CLASS MEMBER RIGHTS AND BENEFITS......................................29

       A.    SCREENING/REFUND/MEDICAL SERVICES/CASH/RESEARCH  BENEFITS
                     PAYABLE  FROM FUND A...................................29

              1.  BENEFITS FOR CLASS MEMBERS WHO INGESTED PONDIMIN(R)AND/OR
                     REDUX(TM)FOR 61 OR MORE DAYS...........................29

                   a.  SCREENING PROGRAM ...................................29
                   b.  COST OF TRANSTHORACIC ECHOCARDIOGRAM.................29
                   c.  ADDITIONAL MEDICAL SERVICES OR CASH..................29
                   d.  REFUND...............................................30

               2.  BENEFITS FOR CLASS MEMBERS WHO INGESTED  PONDIMIN(R)AND/OR
                     REDUX(TM)FOR  60 DAYS OR LESS..........................30

                   a.  REFUND...............................................30
                   b.  SCREENING PROGRAM....................................30
                   c.  ADDITIONAL MEDICAL SERVICES OR CASH..................31

               3. BENEFITS FOR ALL CLASS MEMBERS............................31

                   a.  MEDICAL RESEARCH AND EDUCATION FUND..................31
                   b.  MEDICAL/LEGAL REGISTRY...............................32
                   c.  ECHOCARDIOGRAM IN THE CASE OF FINANCIAL HARDSHIP.....32

                   d.  REIMBURSEMENT FOR CERTAIN PRIVATELY-OBTAINED
                                    ECHOCARDIOGRAMS.........................32

              4.  TERMS OF MEDICAL SCREENING PROGRAM AND PROVISION OF
                  ADDITIONAL MEDICAL SERVICES...............................33

              5.  SOURCE OF FUND A BENEFITS.................................33

       B.    COMPENSATION BENEFITS PAYABLE FROM FUND B......................33

              1.   ELIGIBLE CLASS MEMBERS...................................33
              2.  BENEFITS AVAILABLE........................................35

       C.     PAYMENT PROVISIONS............................................50

       D.     OPT-OUT RIGHTS................................................51

              1.   DERIVATIVE CLAIMANTS.....................................51

              2.   INITIAL OPT-OUT..........................................51

                  a.   ELIGIBILITY..........................................51
                  b.   METHOD OF EXERCISE...................................52
                  c.   EFFECT OF EXERCISE...................................52
                  d.   REVOCATION OF EXERCISE...............................52

              3.   INTERMEDIATE OPT-OUT.....................................52

                  a.   ELIGIBILITY..........................................52
                  b.   METHOD OF EXERCISE...................................53
                  c.   EFFECT OF EXERCISE...................................53

              4.   BACK-END OPT-OUT.........................................55

                  a.   ELIGIBILITY..........................................55
                  b.   METHOD OF EXERCISE...................................55
                  c.   EFFECT OF EXERCISE...................................56


V.    ACCELERATED IMPLEMENTATION OPTION.....................................58


VI.   CLAIMS ADMINISTRATION.................................................64

       A.    THE INTERIM ESCROW AGENT, INTERIM CLAIMS ADMINISTRATOR(S),
                     CLAIMS ADMINISTRATOR(S) AND TRUSTEES...................64

       B.     NOTICE........................................................78

       C.     CLAIMS ADMINISTRATION AND CRITERIA FOR BENEFITS DETERMINATIONS.81

              1.   ECHOCARDIOGRAM CRITERIA..................................81
              2.   CLAIMS INFORMATION.......................................83
              3.   GENERAL CLAIMS PROCESSING PROCEDURES AND THE REGISTRY....88
              4.   ADMINISTRATION OF MATRIX COMPENSATION BENEFIT CLAIMS.....97

       D.    PROCEDURE FOR RECOGNITION OF CREDITS...........................106

       E.    AUDITS OF CLAIMS BY TRUSTEES AND/OR CLAIMS ADMINISTRATOR(S)....110

       F.    AHP-INITIATED AUDITS OF CLAIMS.................................114


VII.  AHP RIGHTS AND BENEFITS...............................................118

       A.   CREDITS.........................................................118

       B.   EFFECT ON CLAIMS................................................120

       C.   PROTECTION OF AHP FROM CLAIMS BY NON-SETTLING DEFENDANTS........122

       D.   PROTECTION OF AHP FROM POSSIBLE SUBROGATION CLAIMS..............129

       E.   WALKAWAY RIGHTS.................................................129

       F.   LIMITATION ON FINANCIAL OBLIGATIONS.............................130


VIII.    SETTLEMENT IMPLEMENTATION..........................................131

       A.   GENERAL.........................................................131

       B.   JURISDICTION....................................................131

       C.   APPROVAL PROCESS AND NOTICE PROVISIONS..........................132

       D.   CONDITIONS......................................................133

       E.   ATTORNEYS' FEES.................................................135

       F.   OTHER PROVISIONS................................................139


<PAGE>


                     14



                                TABLE OF EXHIBITS

1.       Trust Agreement

2.       Fund A Legal Fee Escrow Account Agreement

3.       Security Fund and Escrow Agreement

4.       Articles of Incorporation and Bylaws of Medical
         Research and Education Fund

5.       Summary Notice to Pharmacists

6.       ORANGE FORM  (Initial Opt-Out Notice Form)

7.       ORANGE FORM #2 (Intermediate Opt-Out Notice Form)

8.       ORANGE FORM #3 (Back-End Opt-Out Notice Form)

9.       PINK FORM (for Election of the Accelerated Implementation
         Option) [as amended by Second Amendment]

10.      Interim Escrow Agreement

11.      Proposed Preliminary Approval Order

12.      A Class Member's Guide to Settlement Benefits
         [as amended by Second Amendment]

13.      Official Court Notice [as amended by Second Amendment]

14.      Matrix Compensation Benefits Guide for Physicians, Attorneys
         and Class Members

15.      Publication Notice [as amended by Second Amendment]

16.      Plan of Media Notice [as amended by First Amendment and
         Second Amendment]

17.      Script of Television Notice

18.      Summary Notice to Physicians [as amended by First Amendment]

19.      WHITE FORM (for reimbursement of Echocardiogram expenses
         incurred independent of the Screening Program) [as amended by
         Second Amendment]

20.      GRAY FORM (for qualifications of Board-Certified Cardiologist
         and Echocardiogram results)

21.      BLUE FORM (for registration of Settlement Benefits)
         [as amended by Second Amendment]

22.      GREEN FORM (for Matrix Compensation Benefits)

23.      BROWN FORM (for compassionate and humanitarian and true financial
         hardship Echocardiograms) [as amended by Second Amendment]

24.      Notice of Appeal of Determination of Trustees and/or Claims
         Administrator(s)

25.      RED FORM (Credits for Initial and Back-End Opt-Out) [as amended
         by Fourth Amendment]

26.      [Exhibit deleted by Fourth Amendment]

27.      Class Representative's Release and Covenant Not to Sue
         [as amended by Fourth Amendment]




<PAGE>



                  NATIONWIDE CLASS ACTION SETTLEMENT AGREEMENT
                          WITH AMERICAN HOME PRODUCTS
                                  CORPORATION

                                    PREAMBLE

     American   Home   Products   Corporation   ("AHP")   and  the   undersigned
representatives of the purported class and subclasses defined herein (the "Class
Representatives") (together, the "Parties") hereby agree to propose a nationwide
Class  Action  Settlement  which would  resolve,  on the terms set forth in this
Settlement Agreement,  "Settled Claims" against AHP and other "Released Parties"
arising  from  the  marketing,  sale,  distribution  and use of the  diet  drugs
Pondimin(R)and  Redux(TM),  pending in various courts, including but not limited
to claims  which have been made in the actions  that have been  transferred  for
coordinated or consolidated  pretrial  proceedings to the United States District
Court for the Eastern  District of  Pennsylvania  under Docket No. MDL 1203 (the
"Federal  District Court"),  in Vadino et al. v. AHP (Docket No.  MID-L-425-98),
and in the numerous other State Courts around the United States.  The Parties to
this Agreement are aware of the following  certified or conditionally  certified
nationwide or statewide classes involving Pondimin(R)and  Redux(TM)as of October
7, 1999:  United States District Court for the Eastern District of Pennsylvania,
Jeffers v. American Home Products Corp., C.A. No.  98-CV-20626 (E.D. Pa.) (In re
Diet  Drug  Products  Liability   Litigation,   MDL  1203)  (nationwide  medical
monitoring  class);  West  Virginia  (Burch  et al.  v. AHP,  Civil  Action  No.
97-C-204(1-11))  (statewide  personal  injury  and  medical  monitoring  class);
Illinois  (Rhyne  v.  AHP,  98  CH  4099)   (statewide   refund  and  monitoring
reimbursement class); New Jersey (Vadino et al. v. AHP, Docket No. MID-L-425-98)
(statewide  Unfair and  Deceptive  Acts and  Practices  and  medical  monitoring
class); New York (New York Diet Drug Litigation, Index No. 700000/98) (statewide
medical  monitoring  class);  Pennsylvania  (Pennsylvania  Diet Drug Litigation,
Master Docket No. 9709-3162 C.C.P. Phila.) (statewide medical monitoring class);
Texas  (Earthman v. AHP, No.  97-10-03970  CV, Dist.  Ct.  Montgomery Co. Texas)
(statewide   medical  monitoring  class);  and  Washington  (St.  John  v.  AHP,
97-2-06368-4) (statewide medical monitoring class).

     This  Settlement  Agreement  shall not be construed as evidence of or as an
admission by AHP of any liability or wrongdoing whatsoever or as an admission by
the Class  Representatives  or members of the Settlement Class as defined herein
("Class Members") of any lack of merit in their claims.

         Accordingly, AHP and the Class Representatives hereby agree, subject to
Final Judicial  Approval  (except as to the  Accelerated  Implementation  Option
("AIO")  described  in  Section  V  below),  compliance  with  applicable  legal
requirements, and other conditions, all as set forth below, that Fund A and Fund
B shall be established, from which the benefits described herein will be paid to
the Class Members of the proposed Settlement Class and Subclasses,  and that the
Settled Claims against AHP and other Released Parties,  as defined herein,  will
be settled, compromised and released, in accordance with the following terms.

I.       DEFINITIONS

         For  purposes  of  this   Settlement   Agreement  the  following  terms
(designated by initial capitalization  throughout this Agreement) shall have the
meanings set forth in this Section.  Terms used in the singular  shall be deemed
to include the plural and vice versa.

     1.   "Adjusted  Maximum  Available  Fund B Amount"  shall  mean the  amount
          determined  by adding the balance in Fund A which was  transferred  to
          Fund B pursuant  to the terms of Section  III.A.4.  of the  Settlement
          Agreement  to the Maximum  Available  Fund B Amount as defined in this
          section. If there has been no such transfer, then the Adjusted Maximum
          Available Fund B Amount shall be equal to the Maximum Available Fund B
          Amount.  The "Maximum  Available  Fund B Amount" shall mean the amount
          determined by adding $2,550,000,000 and the Fund B Accretions,  and by
          then  subtracting  from the  resulting  sum:  (i) the  Fund B  Initial
          Payment under Section III.C.2; (ii) all amounts paid or transferred to
          the  Trustees  to pay Fund B  benefits  pursuant  to Fund B  Quarterly
          Notices under Section  III.C.3 and pursuant to Requests for Fund B AIO
          Payments under Section V.F; and (iii) Credits to which AHP is entitled
          under  Section   VII.A   (Opt-Out   Credits)  and  Section   VII.C.1.g
          (Cross-Claim  Credits),  provided  that Initial  Opt-Out  Credits,  as
          defined in Section  VII.A.2,  shall be applied to reduce the  Adjusted
          Maximum  Available  Fund B Amount only when and as provided in Section
          VII.A.  "Fund B Accretions" are determined as follows:  Beginning with
          the earlier of the Final  Judicial  Approval Date or the date on which
          it is determined  that Final  Judicial  Approval will not be obtained,
          the  Trustees  shall  calculate a quarterly  accretion  to the Maximum
          Available  Fund B Amount  which  will be one and  one-half  percent (1
          1/2%) of the  Maximum  Available  Fund B Amount  determined  as of the
          close of each AIO  Fiscal  Quarter  or Fiscal  Quarter,  whichever  is
          applicable.  Such accretions  shall be added to the Maximum  Available
          Fund B Amount as of the first day of the quarter following the quarter
          for which such accretion is calculated.

     2    "Administrative   Reserve"   has  the  meaning   provided  in  Section
          III.C.3.b.

     3.   [This section intentionally left blank.]

     4.   "AHP" means  American Home Products  Corporation,  its  successors and
          assigns.

     5.   "AHP Released  Parties" shall mean the Released  Parties  described in
          Sections I.48.a and I.48.b herein.

     6.   "AIO  Fiscal  Year"  shall  mean the  partial  calendar  year and each
          calendar  year after the date on which it is finally  determined  that
          Final  Judicial  Approval  will  not be  obtained  or  the  Settlement
          Agreement is otherwise  terminated,  as follows.  The first AIO Fiscal
          Year shall be the partial calendar year beginning on the date on which
          it is determined that Final Judicial  Approval will not be obtained or
          the  Settlement  Agreement  is  otherwise  terminated.  The second AIO
          Fiscal Year shall be the calendar  year  beginning on the first day of
          the year  following the year in which Final  Judicial  Approval is not
          obtained or the Settlement Agreement is otherwise  terminated,  and so
          forth.  "AIO Fiscal Quarter" shall mean the partial  calendar  quarter
          and each  calendar  quarter  after  the  date on  which it is  finally
          determined  that Final  Judicial  Approval will not be obtained or the
          Settlement  Agreement is otherwise  terminated,  as follows. The first
          AIO Fiscal Quarter shall be the partial calendar quarter  beginning on
          the date on which it is determined  that Final Judicial  Approval will
          not be obtained or the Settlement  Agreement is otherwise  terminated.
          The second AIO Fiscal Quarter shall be the calendar quarter  beginning
          on the first day of the  calendar  quarter  following  the  quarter in
          which  Final  Judicial  Approval  is not  obtained  or the  Settlement
          Agreement is otherwise terminated, and so forth.

     7.   "AIO  Start  Date"  shall  mean  the  date on which  the  Trial  Court
          determines by oral or written  decision  whether or not to approve the
          Settlement  or  the  date  on  which  AHP  terminates  the  Settlement
          Agreement, whichever is earlier.

     8.   "Business Day" shall mean any day other than  Saturday,  Sunday or New
          Year's  Day,  Birthday  of  Martin  Luther  King,  Jr.,   Washington's
          Birthday,  Memorial Day,  Independence  Day, Labor Day,  Columbus Day,
          Veterans  Day,  Thanksgiving  Day,  Christmas  Day,  and any other day
          appointed as a holiday by the  President or the Congress of the United
          States.

     9.   "Claim for  Benefits"  or "Claim for  Settlement  Benefits" or "Claim"
          refers to the  submission of a form in which a Class Member elects the
          Accelerated  Implementation  Option (or "AIO"), or the submission of a
          form in which a Class Member seeks to register for any of the benefits
          available to Class Members pursuant to this Settlement  Agreement,  or
          the  submission  of a form  through  which a Class Member seeks Matrix
          Compensation  Benefits pursuant to the matrices,  along with all other
          materials including correspondence, documents and video tapes or disks
          of  Echocardiograms  submitted with such forms or in support of such a
          Claim.

     10.  "Class Counsel" shall mean those  attorneys  executing this Settlement
          Agreement  on  behalf  of the  Class  Representatives,  or such  other
          attorneys  as  shall  be  approved  by the  Court  as  counsel  to the
          Settlement Class.

     11.  "Claims  Administrator"  shall  mean  any  person  or  persons  to  be
          appointed  by the  Trustees,  subject to  approval  of the  Court,  to
          administer Claims for Benefits pursuant to the Settlement Agreement.

     12.  "Class Counsel  Representative(s)"  shall mean one or more  individual
          members of the Class  Counsel who are selected by the Class Counsel to
          represent the Class Counsel with respect to those matters specified in
          this Settlement Agreement.

     13.  "Class  Representatives"  shall mean Sheila Brown, Sharon Gaddie, Jose
          Gaddie, Vivian Naugle, Quentin Layer, Joan S. Layer, Joby Jackson-Reid
          and Harvey E. Reid,  or such  other or  different  persons as shall be
          designated  by the  Court  as the  representatives  of the  Settlement
          Class, in the action  captioned  Sheila Brown, et al. v. American Home
          Products Corporation, Civil Action No. 99-20593, pending in the United
          States District Court for the Eastern District of Pennsylvania.

     14.  "Common Benefit  Attorneys" shall mean those attorneys who contributed
          to the creation of the  Settlement  Trust  through work devoted to the
          "common  benefit"  of  Class  Members,   including  any  attorney  who
          reasonably  believes that he or she actually  conferred  benefits upon
          the Class Members as a whole through state court  litigation,  subject
          to determination by the Court.

     15.  "Court" and/or "Trial Court" and/or "Federal District Court" means the
          United States District Court for the Eastern  District of Pennsylvania
          presiding over MDL Docket No. 1203.

     16.  "Credit" has the meaning provided in Section VII.A.

     17.  "Cross-Claim Credit" has the meaning provided in Section VII.C.1.g.

     18.  "Date 1" is the date which is 210 days after Final Judicial  Approval,
          by which (1) Class Members in  Subclasses  1(a) and 1(b) must register
          to receive refund and/or  Screening  Program benefits from Fund A, and
          (2) Class Members in Subclasses 2(a) and 2(b) must register to receive
          refund benefits from Fund A.

     19.  "Date 2" is the date which is 120 days after the end of the  Screening
          Period.

     20.  "Diet Drug(s)" shall mean  Fenfluramine  marketed under the brand name
          Pondimin(R)  and/or  Dexfenfluramine  marketed  under the  brand  name
          Redux(TM).

     21.  "Endocardial  Fibrosis" is defined as a condition (a) diagnosed by (1)
          endomyocardial   biopsy  that   demonstrates   fibrosis   and  cardiac
          catheterization  that demonstrates  restrictive  cardiomyopathy or (2)
          autopsy that demonstrates  endocardial  fibrosis and (b) other causes,
          including  dilated  cardiomyopathy,  myocardial  infarction,  amyloid,
          Loeffler's   endocarditis,   endomyocardial  fibrosis  as  defined  in
          Braunwald1  (involving one or both  ventricles,  located in the inflow
          tracts of the  ventricles,  commonly  involving the chordae  tendinae,
          with partial obliteration of either ventricle commonly present), focal
          fibrosis  secondary to valvular  regurgitation  (e.g., "jet lesions"),
          focal fibrosis secondary to catheter instrumentation, and hypertrophic
          cardiomyopathy with septal fibrosis, have been excluded.

     22.  "FDA Positive" is defined as follows:

          a.   With respect to a diagnosis based on an Echocardiogram  conducted
               between the commencement of Diet Drug use and September 30, 1999,
               FDA   Positive   is  a  condition   in  which  the   Cardiologist
               interpreting  the  Echocardiogram,  in  the  ordinary  course  of
               medical  treatment,  has issued a written  report  which  clearly
               states that the individual has mild or greater  regurgitation  of
               the aortic valve and/or moderate or greater  regurgitation of the
               mitral valve;  provided  however,  that this definition  shall be
               applicable  only to  qualification  of a Diet Drug  Recipient for
               Fund A  benefits.  In order to qualify  for  Matrix  Compensation
               Benefits,  a Diet Drug Recipient must present evidence that he or
               she  had an  Echocardiogram  prior  to the  end of the  Screening
               Period that meets the requirements of Section I.22.b below.

          b.   With respect to a diagnosis based on an Echocardiogram  conducted
               after  September  30,  1999,  FDA  Positive is defined as mild or
               greater  regurgitation  of the aortic  valve of the heart  and/or
               moderate  or greater  regurgitation  of the  mitral  valve of the
               heart as these  levels are defined in Singh2  (1999) and measured
               by an  echocardiographic  examination  performed and evaluated by
               qualified medical personnel following the protocol as outlined in
               Feigenbaum3 (1994) or Weyman4 (1994).

               The  degrees of regurgitation are determined as follows:

               -    Aortic  Valve -- Mild or greater  regurgitation,  defined as
                    regurgitant jet diameter in the  parasternal  long-axis view
                    (or  in  the  apical  long-axis  view,  if  the  parasternal
                    long-axis view is unavailable), equal to or greater than 10%
                    of the outflow tract diameter (JH/LVOTH).

               -    Mitral Valve -- Moderate or greater  regurgitation,  defined
                    as  regurgitant  jet  area in any  apical  view  equal to or
                    greater than 20% of the left atrial area (RJA/LAA).

     23.  "Final  Judicial  Approval"  refers to the approval of the  Settlement
          Agreement as a whole by the Federal  District  Court and such approval
          becoming  final by the  exhaustion  of all  appeals,  if any,  without
          substantial   modification  of  the  order  or  orders  granting  such
          approval.  Final  Judicial  Approval  shall be deemed not to have been
          obtained  in the event that Trial Court  Approval  is denied,  and the
          period for appealing  such denial has expired  without any such appeal
          having been taken.

     24.  "Final  Judicial  Approval  Date"  shall mean the date on which  Final
          Judicial Approval occurs.

     25.  "Fiscal  Year" shall mean the partial  calendar year and each calendar
          year after the Final  Judicial  Approval  Date as  follows.  The first
          Fiscal Year shall be the partial  calendar year beginning on the Final
          Judicial  Approval  Date. The second Fiscal Year shall be the calendar
          year  beginning  on the  first day of the year  following  the year in
          which the Final Judicial Approval Date occurs,  and so forth.  "Fiscal
          Quarter"  shall mean the partial  calendar  quarter and each  calendar
          quarter after the Final Judicial  Approval Date as follows.  The first
          Fiscal Quarter shall be the partial calendar quarter  beginning on the
          Final  Judicial  Approval Date. The second Fiscal Quarter shall be the
          calendar  quarter  beginning on the first day of the calendar  quarter
          following  the  quarter  in which the  Final  Judicial  Approval  Date
          occurs, and so forth.

     26.  "Full Credit" has the meaning provided in Section VII.A.4.

     27.  "Fund A Amounts" has the meaning provided in Section III.B.1.

     28.  "Fund A Escrow Account" has the meaning provided in Section III.B.3.

     29.  "Fund B Amounts" has the meaning provided in Section III.C.1.

     30.  "Fund B Deposit Amount" has the meaning provided in Section III.C.3.

     31.  "Fund B Quarterly Notice" has the meaning provided in Section III.C.3.

     32.  "Initial  Opt-Out  Period" shall mean the period to be  established by
          the Court during which Class Members may exercise the Initial  Opt-Out
          right described in Section IV.D.2.

     33.  "Interim Claims  Administrator(s)" shall mean the two persons mutually
          agreed upon by AHP and Class Counsel  subject to approval by the Court
          pursuant to Section VI.A.2 to exercise all of the functions  which are
          to be exercised by the Claims  Administrator and/or the Trustees prior
          to approval of the Trustees.

     34.  "Interim Escrow Agent" shall mean the person or entity mutually agreed
          upon by AHP  and  Class  Counsel  subject  to  approval  by the  Court
          pursuant  to  Section  VI.A.1 to  receive,  hold and  disburse  Fund A
          Amounts  and Fund B  Amounts  until  Court  approval  of the  Trustees
          pursuant to Section VI.A.3 herein.

     35.  [This section intentionally left blank.]

     36.  "Judgment" has the meaning provided in Section VII.A.4.

     37.  "Matrix-Level  Condition" shall mean a physiological  condition with a
          level of severity  meeting any of the  criteria  specified  in Section
          IV.B.2.c.

     38.  "Mild Mitral  Regurgitation" refers to mild mitral valve regurgitation
          as  that  level  is  defined  in  Singh5  (1999)  and  measured  by an
          echocardiographic  examination  performed  and  evaluated by qualified
          medical  personnel  following the protocol as outlined in  Feigenbaum6
          (1994) or Weyman7 (1994).  That degree of  regurgitation is determined
          as follows: (1) either the RJA/LAA ratio is more than 5% or the mitral
          regurgitant  jet height is greater  than 1 cm from the valve  orifice,
          and (2) the RJA/LAA ratio is less than 20%.

     39.  "Mitral  Valve   Prolapse"   refers  to  a  condition  where  (a)  the
          echocardiogram  video tape or disk includes the parasternal  long axis
          view and (b) that  echocardiographic view shows displacement of one or
          both mitral leaflets >2mm above the  atrial-ventricular  border during
          systole, and >5mm leaflet thickening during diastole, as determined by
          a Board-Certified Cardiologist.8

     40.  "Non-AHP  Released  Parties" shall mean those  Released  Parties other
          than the AHP Released Parties.

     41.  "Nonpayment Hearing" has the meaning provided in Section III.E.6.a.

     42.  "Plaintiffs'  Counsel"  shall  mean the Class  Counsel  and the Common
          Benefits Attorneys.

     43.  [This section intentionally left blank.]

     44.  "Preliminary   Approval"  shall  mean  the  Federal  District  Court's
          conditional  certification  of the  Settlement  Class and  preliminary
          approval  of this  Settlement  Agreement  pursuant  to Fed. R. Civ. P.
          23(a), 23(b)(2), 23(b)(3), 23(c)(1) and 23(e) and entry of an order or
          orders providing for issuance of notice to the Settlement Class.

     45.  "Preliminary  Approval Date" shall mean the date on which  Preliminary
          Approval occurs.

     46.  "Primary Pulmonary  Hypertension" ("PPH") is defined as either or both
          of the following:

          a.   For a diagnosis based on examinations and clinical findings prior
               to death:

               (1)  (a)   Mean    pulmonary    artery    pressure   by   cardiac
                    catheterization of > 25 mm Hg at rest or > 30 - - mm Hg with
                    exercise with a normal  pulmonary artery wedge pressure < 15
                    mm Hg9; or -

                    (b)  A peak systolic pulmonary artery pressure of > 60 mm Hg
                         at rest measured by Doppler - echocardiogram  utilizing
                         standard procedures; or

                    (c)  Administration  of  Flolan  to the  patient  based on a
                         diagnosis of PPH with cardiac  catheterization not done
                         due to increased risk in the face of severe right heart
                         dysfunction; and

               (2)  Medical  records  which   demonstrate   that  the  following
                    conditions have been excluded by the following results10:

                    (a)  Echocardiogram demonstrating no primary cardiac disease
                         including, but not limited to, shunts, valvular disease
                         (other   than    tricuspid   or   pulmonary    valvular
                         insufficiency as a result of PPH or trivial, clinically
                         insignificant left-sided valvular  regurgitation),  and
                         congenital  heart  disease  (other than patent  foramen
                         ovale); and

                    (b)  Left  ventricular  dysfunction  defined  as  LVEF < 40%
                         defined    by   MUGA,    Echocardiogram    or   cardiac
                         catheterization; and

                    (c)  Pulmonary  function tests  demonstrating the absence of
                         obstructive lung disease  (FEV1/FVC > 50% of predicted)
                         and the absence of greater than mild  restrictive  lung
                         disease  (total  lung  capacity > 60% of  predicted  at
                         rest); and

                    (d)  Perfusion lung scan ruling out pulmonary embolism; and

                    (e)  If, but only if, the lung scan is indeterminate or high
                         probability, a pulmonary angiogram or a high resolution
                         angio computed tomography scan demonstrating absence of
                         thromboembolic disease; and

               (3)  Conditions  known  to cause  pulmonary  hypertension11,12,13
                    including  connective  tissue  disease  known to be causally
                    related  to  pulmonary  hypertension,   toxin  induced  lung
                    disease   known  to  be   causally   related  to   pulmonary
                    hypertension,  portal hypertension,  significant obstructive
                    sleep  apnea,  interstitial  fibrosis  (such  as  silicosis,
                    asbestosis,  and  granulomatous  disease) defined as greater
                    than mild patchy  interstitial  lung  disease,  and familial
                    causes,   have   been   ruled   out  by  a   Board-Certified
                    Cardiologist or  Board-Certified  Pulmonologist as the cause
                    of the person's pulmonary hypertension.

                                                                       -OR-

          b.   For a diagnosis made after the individual's death:

               (1)  Autopsy  demonstrating  histopathologic  changes in the lung
                    consistent  with  primary  pulmonary   hypertension  and  no
                    evidence of congenital  heart  disease  (other than a patent
                    foramen ovale) with left-to-right shunt, such as ventricular
                    septal   defect   as   documented   by   a   Board-Certified
                    Pathologist; and

               (2)  Medical records which show no evidence of alternative causes
                    as described above for living persons.

          This  definition of PPH ("the PPH  Definition") is intended solely for
          the purpose of  describing  claims  excluded  from the  definition  of
          Settled Claims and for purposes of Section  VII.B.4 and 5, below.  The
          Parties agree that the PPH Definition includes but is broader than the
          rare  and  serious  medical  condition  suffered  by  the  individuals
          described in L. Abenhaim, et al.,  Appetite-Suppressant  Drugs and the
          Risk  of  Primary  Pulmonary   Hypertension,   International   Primary
          Pulmonary  Hypertension  Study Group,  335(9),  New England Journal of
          Medicine,  609-16  (1996) (the "IPPHS  study").  The  subjects in that
          study exhibited significantly elevated pulmonary artery pressures with
          an average systolic  pulmonary artery pressure of 88 mm Hg and average
          mean pulmonary  artery  pressure of 57 mm Hg.  Two-thirds of the IPPHS
          patients  demonstrated NYHA Class III or IV symptoms.  While the IPPHS
          subjects would fall within the PPH  Definition,  the  definition  also
          includes persons with a milder, less serious medical condition.

     47.  "Qualified  Physician" shall mean a Board-Certified  or Board-Eligible
          Cardiologist.

     48.  "Released Parties" shall mean:

          a.   AHP and  each of its  subsidiaries,  affiliates,  and  divisions,
               including,   but  not  limited  to,   Wyeth-Ayerst   Laboratories
               Division,    Wyeth-Ayerst    Laboratories    Co.,    Wyeth-Ayerst
               Pharmaceuticals  Inc., and American Cyanamid  Corporation,  along
               with  each of  their  respective  current  and  former  officers,
               directors, employees, attorneys, agents, and insurers;

          b.   Any and all predecessors,  successors, and/or shareholders of AHP
               and  each  of  its  subsidiaries,   affiliates,   and  divisions;
               provided,  however,  that  any such  person  or  entity  shall be
               considered  a Released  Party only to the extent that such person
               or entity is sued in its  capacity as a  predecessor,  successor,
               and/or  shareholder of AHP or its subsidiaries,  affiliates,  and
               divisions;

          c.   Any and all suppliers of materials, components, and services used
               in the manufacture of Pondimin(R) and/or Redux(TM), including the
               labeling and packaging thereof,  along with each such person's or
               entity's   predecessors,   successors,   parents,   subsidiaries,
               affiliates,  and divisions,  and each of their respective current
               and  former   shareholders,   officers,   directors,   employees,
               attorneys,  agents,  and  insurers;  provided,  however,  that no
               person or entity described in this subsection shall be a Released
               Party with  respect to any claims  based upon his, her or its own
               independent negligence or culpable conduct;

          d.   All  distributors  of  Pondimin(R)and/or   Redux(TM),   including
               wholesale  distributors,   private  label  distributors,   retail
               distributors,   hospitals  and  clinics,   and  their  respective
               predecessors,  successors, parents, subsidiaries, affiliates, and
               divisions,  and their respective current and former shareholders,
               officers, directors,  employees, attorneys, agents, and insurers;
               provided  that:  (1) such persons and entities  described in this
               section  shall be a Released  Party only as to claims as to which
               such  persons  would  have a  statutory  or  common-law  right of
               indemnity  against AHP; (2) no person or entity described in this
               section shall be a Released Party to the extent that any claim is
               based upon his, her or its own independent negligence or culpable
               conduct,   including,    without   limitation,    negligence   or
               professional malpractice asserted against hospitals, clinics, and
               diet  centers;  and (3) no  person or  entity  described  in this
               section   shall  be  a  Released   Party  with   respect  to  the
               manufacture,   sale,   or   distribution   of   any   Phentermine
               hydrochloride or Phentermine resin pharmaceutical product.

          e.   All physicians who prescribed, and all pharmacists and pharmacies
               who dispensed,  Pondimin(R)  and/or  Redux(TM) to the extent that
               liability  against such physicians,  pharmacists or pharmacies is
               based on:

               (1)  the   prescription   or  dispensing   of   Pondimin(R)and/or
                    Redux(TM)in a manner  consistent with the product  labeling;
                    and/or

               (2)  the prescription or dispensing of Pondimin(R)for  any period
                    longer than a "few weeks"; and/or

               (3)  the   prescription   or  dispensing   of   Pondimin(R)and/or
                    Redux(TM)for concomitant use with Phentermine  hydrochloride
                    or Phentermine resin; and/or

               (4)  a claim that the physician's or pharmacist's liability stems
                    solely from having prescribed or dispensed Pondimin(R)and/or
                    Redux(TM); and/or

               (5)  a claim that the physician's or pharmacist's liability stems
                    solely from the prescription or dispensing of a defective or
                    unreasonably dangerous product.

               Physicians,  pharmacists and pharmacies are not Released  Parties
               with respect to any claims based on their independent  negligence
               or culpable  conduct,  not consisting of the conduct described in
               paragraphs (1)-(5) of this Subsection I.48.e.

               Notwithstanding    the   foregoing,    manufacturers,    sellers,
               wholesalers,  or distributors of any Phentermine hydrochloride or
               Phentermine resin pharmaceutical product are not Released Parties
               with respect to the  manufacture,  sale, or  distribution  of any
               Phentermine  hydrochloride  or Phentermine  resin  pharmaceutical
               product,  and  Les  Laboratoires  Servier  S.A.  and  all  of its
               affiliates  and  subsidiaries,   including,  without  limitation,
               Servier S.A.S., Oril, Orsem,  Servier Amerique,  Science Union et
               Cie,  Institut de  Recherches  Internationales  Servier,  Servier
               Research  (collectively  hereinafter  "Servier") and  Interneuron
               Pharmaceuticals,   Inc.   (hereinafter   "Interneuron")  are  not
               Released Parties.

     49.  "Screening  Period"  refers to the  12-month  period  (or such  longer
          period that shall be permitted by the Court for good cause shown,  but
          in any case not to exceed 18 months)  during which  benefits  shall be
          available under the Screening Program.

     50.  "Screening Program" refers to the program for providing  Transthoracic
          Echocardiograms and associated  interpretive physician visit benefits,
          as set forth in Sections IV.A.1.a and IV.A.2.b.

     51.  "Security Fund" has the meaning provided for in Section III.E.2.

     52.  "Security  Fund Escrow  Account"  has the meaning  provided in Section
          III.E.8.

     53.  "Settled  Claims"  shall mean any and all claims,  including  assigned
          claims, whether known or unknown,  asserted or unasserted,  regardless
          of the legal  theory,  existing now or arising in the future by any or
          all members of the Settlement  Class arising out of or relating to the
          purchase, use, manufacture, sale, dispensing, distribution, promotion,
          marketing,   clinical   investigation,    administration,   regulatory
          approval,  prescription,  ingestion, and labeling of Pondimin(R)and/or
          Redux(TM),   alone  or  in  combination   with  any  other  substance,
          including,  without  limitation,  any other drug, dietary  supplement,
          herb, or botanical. These "Settled Claims" include, without limitation
          and by way of example,  all claims for damages or remedies of whatever
          kind or character, known or unknown, that are now recognized by law or
          that  may  be  created  or   recognized  in  the  future  by  statute,
          regulation, judicial decision, or in any other manner, for:

          a.   personal  injury and/or bodily  injury,  damage,  death,  fear of
               disease  or  injury,   mental  or  physical  pain  or  suffering,
               emotional or mental harm, or loss of enjoyment of life;

          b.   compensatory damages,  punitive,  exemplary,  statutory and other
               multiple damages or penalties of any kind;

          c.   loss of wages, income,  earnings,  and earning capacity,  medical
               expenses, doctor, hospital, nursing, and drug bills;

          d.   loss of support, services, consortium,  companionship, society or
               affection, or damage to familial relations, by spouses,  parents,
               children,  other relatives or "significant  others" of Settlement
               Class Members;

          e.   consumer fraud,  refunds,  unfair business  practices,  deceptive
               trade   practices,   Unfair  and  Deceptive  Acts  and  Practices
               ("UDAP"), and other similar claims whether arising under statute,
               regulation, or judicial decision;

          f.   wrongful  death and survival  actions;

          g.   medical  screening and  monitoring,  injunctive  and  declaratory
               relief;

          h.   economic or business  losses or  disgorgement  of profits arising
               out of personal injury; and

          i.   prejudgment or post-judgment interest.

          Notwithstanding  the  foregoing,  Settled Claims do not include claims
          based on PPH, including claims for compensatory,  punitive,  exemplary
          or multiple damages based on PPH; provided,  however,  that if a Class
          Member receives  settlement benefits from Fund B, he/she may not bring
          a lawsuit  based  upon a claim for PPH,  unless  the Class  Member was
          diagnosed with PPH before the Class Member had left-sided  heart valve
          abnormalities  (other than those  which  produce  trivial,  clinically
          insignificant  left-sided  regurgitation) or Endocardial  Fibrosis. In
          addition, notwithstanding the foregoing, Settled Claims do not include
          claims  arising from the  exposure of unborn  children,  in utero,  to
          Pondimin(R)  or  ReduxTM,  and persons  alleging  exposure in utero to
          Pondimin(R)  or ReduxTM shall not be considered  Diet Drug  Recipients
          eligible for benefits under this Agreement.

     54.  "Transthoracic   Echocardiogram"   means  a   non-invasive,   standard
          Echocardiogram  which  includes an M-Mode and 2D  Echocardiogram,  and
          Doppler  and color  Doppler  evaluations  of all four  chambers of the
          heart and all four heart valves.

     55.  "Trial  Court  Approval"  shall mean the  granting,  by order,  of the
          approval of the Settlement Agreement by the Federal District Court.

     56.  "Trial Court Approval Date" shall mean the date upon which Trial Court
          Approval occurs.

     57.  "Trust"  or  "Settlement  Trust"  shall  mean a trust  established  to
          receive  funds  to be  paid  by AHP as  provided  in  this  Settlement
          Agreement  pursuant  to a Trust  Agreement  substantially  in the form
          appended hereto as Exhibit "1."

     58.  "Trustees"  shall  mean  those  individuals  approved  by the Court as
          Trustees of the  Settlement  Trust in accordance  with Section  VI.A.3
          herein.

<PAGE>


II.  SCOPE OF THE SETTLEMENT CLASS


     A.   The Parties shall seek  certification by the Federal District Court of
          a nationwide  class solely for  Settlement  purposes (the  "Settlement
          Class") in the case  entitled  Sheila  Brown,  et al. v. American Home
          Products Corporation, Civil Action No. 99-20593, pending in the United
          States District Court for the Eastern District of Pennsylvania.

     B.   The Settlement Class will consist of:

               All persons in the United States, its possessions and territories
               who   ingested   Pondimin(R)   and/or   Redux(TM)   ("Diet   Drug
               Recipients"),  or their  estates,  administrators  or other legal
               representatives,    heirs   or   beneficiaries   ("Representative
               Claimants"), and any other persons asserting the right to sue AHP
               or any Released Party  independently or derivatively by reason of
               their personal relationship with a Diet Drug Recipient, including
               without limitation, spouses, parents, children, dependents, other
               relatives or "significant others" ("Derivative  Claimants").  The
               Settlement  Class does not include any  individuals  whose claims
               against AHP and/or the AHP Released Parties, arising from the use
               of Diet Drugs, have been resolved by judgment on the merits or by
               release   (other  than   releases   provided   pursuant  to  this
               Settlement).

     C.   There will be five subclasses as follows:

          1.(a)"Subclass  1(a)" shall consist of all Diet Drug Recipients in the
               Settlement  Class (1) who ingested  Pondimin(R)  and/or Redux(TM)
               for 60 days or less,  and (2) who have  not been  diagnosed  by a
               Qualified   Physician  as  FDA  Positive  by  an   Echocardiogram
               performed between the commencement of Diet Drug use and September
               30, 1999, and all Representative and Derivative  Claimants in the
               Settlement  Class  whose  claims are based on their  personal  or
               legal  relationship  with a Diet Drug  Recipient (1) who ingested
               Pondimin(R) and/or Redux(TM) for 60 days or less, and (2) who has
               not been diagnosed by a Qualified Physician as FDA Positive by an
               Echocardiogram  performed  between the  commencement of Diet Drug
               use and September 30, 1999.

          1.(b)"Subclass  1(b)" shall consist of all Diet Drug Recipients in the
               Settlement  Class (1) who ingested  Pondimin(R)  and/or Redux(TM)
               for 61 or more  days,  and (2) who have not been  diagnosed  by a
               Qualified   Physician  as  FDA  Positive  by  an   Echocardiogram
               performed between the commencement of Diet Drug use and September
               30, 1999, and all Representative and Derivative  Claimants in the
               Settlement  Class  whose  claims are based on a personal or legal
               relationship   with  a  Diet  Drug  Recipient  (1)  who  ingested
               Pondimin(R) and/or Redux(TM) for 61 or more days, and (2) who has
               not been diagnosed by a Qualified Physician as FDA Positive by an
               Echocardiogram  performed  between the  commencement of Diet Drug
               use and September 30, 1999.

          2.(a)"Subclass  2(a)" shall consist of all Diet Drug Recipients in the
               Settlement  Class (1) who ingested  Pondimin(R)  and/or Redux(TM)
               for 60  days  or  less,  and (2) who  have  been  diagnosed  by a
               Qualified  Physician as FDA Positive by an  Echocardiogram  which
               was  performed  between  the  commencement  of Diet  Drug use and
               September  30,  1999,  and  all   Representative  and  Derivative
               Claimants  in the  Settlement  Class whose  claims are based on a
               personal or legal relationship with a Diet Drug Recipient (1) who
               ingested  Pondimin(R)  and/or  Redux(TM) for 60 days or less, and
               (2)  who has  been  diagnosed  by a  Qualified  Physician  as FDA
               Positive by an  Echocardiogram  which was  performed  between the
               commencement of Diet Drug use and September 30, 1999.

          2.(b)"Subclass  2(b)" shall consist of all Diet Drug Recipients in the
               Settlement  Class (1) who ingested  Pondimin(R)  and/or Redux(TM)
               for 61 or more  days,  and  (2)  who  have  been  diagnosed  by a
               Qualified  Physician as FDA Positive by an  Echocardiogram  which
               was  performed  between  the  commencement  of Diet  Drug use and
               September  30,  1999,  and  all   Representative  and  Derivative
               Claimants  in the  Settlement  Class whose  claims are based on a
               personal or legal relationship with a Diet Drug Recipient (1) who
               ingested  Pondimin(R)  and/or  Redux(TM) for 61 or more days, and
               (2)  who has  been  diagnosed  by a  Qualified  Physician  as FDA
               Positive by an  Echocardiogram  which was  performed  between the
               commencement of Diet Drug use and September 30, 1999.

          3.   "Subclass  3"  (which  may  include   persons  also  included  in
               Subclasses  1(a)  and  1(b))  shall  consist  of  all  Diet  Drug
               Recipients in the  Settlement  Class who have been diagnosed by a
               Qualified  Physician  as having Mild Mitral  Regurgitation  by an
               Echocardiogram  performed  between the  commencement of Diet Drug
               use and the end of the  Screening  Period,  but who have not been
               diagnosed  by  a  Qualified  Physician  as  FDA  Positive  by  an
               Echocardiogram  performed  between the  commencement of Diet Drug
               use and the end of the Screening Period,  and all  Representative
               and Derivative Claimants in the Settlement Class whose claims are
               based  on a  personal  or  legal  relationship  with a Diet  Drug
               Recipient  who has been  diagnosed  by a Qualified  Physician  as
               having Mild Mitral  Regurgitation by an Echocardiogram  performed
               between  the  commencement  of Diet  Drug  use and the end of the
               Screening  Period,  but who has not been diagnosed by a Qualified
               Physician as FDA Positive by an Echocardiogram  performed between
               the  commencement  of Diet Drug use and the end of the  Screening
               Period.

<PAGE>



III.     AHP'S PAYMENT OBLIGATIONS

         A.    ESTABLISHMENT OF SETTLEMENT TRUST

               1.   A Settlement  Trust shall be established to receive the Fund
                    A  Amounts  and Fund B  Amounts  to be paid by AHP under the
                    terms of this Settlement  Agreement pursuant to the terms of
                    a Trust Agreement  substantially in the form appended to the
                    Settlement Agreement as Exhibit "1."

               2.   The Parties agree that, as provided in the Trust  Agreement,
                    the  Trustees of the  Settlement  Trust will be nominated by
                    the  Parties  and that each  nomination  will be  subject to
                    agreement  of the  Parties  and  subject to  approval by the
                    Court  consistent  with the  provisions  stated  in  Section
                    VI.A.3 herein and the Trust Agreement  substantially  in the
                    form appended to the Settlement Agreement as Exhibit "1".

               3.   The Settlement Trust will begin as a reversionary  trust and
                    will become  non-reversionary  upon Final Judicial Approval.
                    If  Final  Judicial  Approval  is  not  obtained,  or if the
                    Settlement  Agreement is terminated  in accordance  with its
                    terms for any other  reason,  all amounts  remaining  in the
                    Settlement  Trust after  payment of any charges and expenses
                    which  the  Settlement  Agreement  expressly  authorized  or
                    required to be incurred and expended  prior to the reversion
                    date,  including  any amounts  expended to assist in seeking
                    Final Judicial Approval, shall be returned to AHP, except as
                    provided in Section V hereof relating to the  administration
                    of claims of Class Members who have accepted the Accelerated
                    Implementation Option.

               4.   AHP  shall  have no  right  to any of the  funds  previously
                    deposited,  nor to any of the funds  subsequently  deposited
                    into the Settlement  Trust, as of the date the Trust becomes
                    non-reversionary.  AHP shall have no  further  claim to such
                    funds for any purpose.

               5.   Subject  to the  conditions  set  forth  in this  Settlement
                    Agreement,  AHP shall be obligated  to make  payments as set
                    forth in  Sections  III.B  ("Fund  A") and III.C  ("Fund B")
                    below to the Settlement  Trust.  Such payments shall be made
                    by wire transfer.  If any date of payment provided herein is
                    not a Business Day, such payment shall be due and payable on
                    the first Business Day following such date.


         B.    FUND A

               1.   AHP shall make payments into Fund A as follows (such amounts
                    collectively referred to herein as the "Fund A Amounts"):

                    a.   $50 million five  Business  Days after the  Preliminary
                         Approval Date.

                    b.   $383 million five  Business  Days after the Trial Court
                         Approval Date.

                    c.   $383  million 180 days after the  preceding  payment of
                         $383 million.

                    d.   $184  million  five   Business  Days  after  the  Final
                         Judicial Approval Date.

               2.   The monies  held by Fund A shall be  available  and shall be
                    used to pay all benefits payable from Fund A,  out-of-pocket
                    and  pre-  settlement  litigation  expenses  of  Plaintiffs'
                    Counsel approved by the Court for  reimbursement in relation
                    to Fund A, and all proper administrative expenses associated
                    with the administration of the Settlement and the Settlement
                    Trust insofar as they relate to Fund A.

               3.   In addition to the  foregoing,  within  five  Business  Days
                    after the Final  Judicial  Approval Date, AHP shall pay $200
                    million into an escrow account under the  supervision of the
                    Court (the "Fund A Escrow Account"). The funds in the Fund A
                    Escrow  Account  shall  be  used  to  pay   compensation  to
                    Plaintiffs'  Counsel.  In addition,  the funds in the Fund A
                    Escrow Account may be used to make  incentive  awards to the
                    Class  Representatives  in the  following  State and Federal
                    Court  class  actions  involving  Pondimin(R)and  Redux(TM):
                    United  States  District  Court for the Eastern  District of
                    Pennsylvania,  Brown v. American Home Products  Corp.,  C.A.
                    No. 99-20593;  Jeffers v. American Home Products Corp., C.A.
                    No.  98-CV-20626  (E.D.  Pa.)  (In  re  Diet  Drug  Products
                    Liability  Litigation,  MDL 1203); New Jersey (Vadino et al.
                    v. AHP,  Docket No.  MID-L-425-98);  New York (New York Diet
                    Drug   Litigation,   Index  No.   700000/98);   Pennsylvania
                    (Pennsylvania  Diet  Drug  Litigation,   Master  Docket  No.
                    9709-3162  C.C.P.  Phila.);  Washington  (St.  John v.  AHP,
                    97-2-06368-4); Illinois (Rhyne v. American Home Products, 98
                    CH 4099);  and Texas  (Earthman v. AHP, No.  97-10-03970 CV,
                    Dist.  Ct.  Montgomery  Co.  Texas).  The  payment  of  said
                    compensation, relating to Fund A, to Plaintiffs' Counsel and
                    the certified State and Federal Court Class  Representatives
                    shall be in such  manner  and in such  amounts as the Court,
                    with advice and counsel of the State Court Judicial Advisory
                    Committee, may determine is appropriate,  as contemplated by
                    Sections  VIII.B.3 and  VIII.E.1.a  hereof and pursuant to a
                    Fund A Escrow Account  Agreement  substantially  in the form
                    attached  hereto as Exhibit  "2." AHP shall take no position
                    on the amount of such fees to be awarded as attorneys'  fees
                    or incentive  awards or the  allocation  thereof.  All Class
                    Members  shall have  standing  to object to or  support  the
                    award of  attorneys'  fees and  incentive  awards  for Class
                    Representatives  from the Fund A Escrow Account.  Any amount
                    in the Fund A Escrow Account not awarded in attorneys'  fees
                    shall be returned to AHP by order of the Court.

               4.   When the Trustees  decide that Fund A's  purposes  have been
                    met,  the  remaining  balance,  if any,  in Fund A shall  be
                    transferred to Fund B.

               5.   Any  transfer  from  Fund A to Fund B will  not  reduce  the
                    maximum obligation of AHP to make payments to Fund B.

         C.    FUND B

               1.   Fund B  Amounts.  Fund B shall  consist  of (i)  the  Fund B
                    Initial  Payment  under  Section  III.C.2;  (ii)  all Fund B
                    Deposit  Amounts paid  pursuant to Fund B Quarterly  Notices
                    under Section III.C.3;  (iii) all Fund B AIO Deposit Amounts
                    paid  pursuant to  Requests  for Fund B AIO  Payments  under
                    Section V.F;  and (iv) all interest and other income  earned
                    by the Trust on such amounts.

               2.   Fund B Initial  Payment.  No later than five  Business  Days
                    after  the  Preliminary  Approval  Date,  AHP  shall pay $25
                    million into Fund B.

               3.   Additional Fund B Deposits.  Beginning on the Final Judicial
                    Approval  Date,  the  Trustees  may  request in writing on a
                    quarterly  basis  (each  a  "Fund B  Quarterly  Notice")  an
                    additional  amount (such amount being referred to as a "Fund
                    B Deposit Amount"):

                    a.   to pay claims  received  which qualify for payment from
                         Fund B  pursuant  to Section  IV.B.,  awards of counsel
                         fees  and  costs   under   Section   VIII.E.1.b.,   and
                         authorized  administrative expenses which have not been
                         paid due to an  insufficient  cash  balance  in Fund B,
                         and/or

                    b.   to  maintain  a  $50  million  reserve  in  Fund  B for
                         administrative expenses (the "Administrative Reserve").

                           AHP shall pay each Fund B Deposit Amount so requested
                           no later  than 15 days  after  the date on which  AHP
                           receives from the Trustees a Fund B Quarterly  Notice
                           requesting  such  Fund B  Deposit  Amount;  provided,
                           however,  that AHP's obligation to pay Fund B Deposit
                           Amounts shall at all times be limited to the Adjusted
                           Maximum Available Fund B Amount.

               4.   Termination of AHP's Fund B Payment Obligations.

                    a.   AHP's  obligation  to  make  payments  to  Fund B shall
                         terminate  upon the  earlier  of: (i) the date of AHP's
                         payment  into Fund B of the  amount  that  reduces  the
                         Adjusted  Maximum  Available  Fund B Amount to zero; or
                         (ii) the date of AHP's  payment  to Fund B of the Final
                         Projected Amount under Section  III.C.4.b.  below. Such
                         payment  shall be referred to in this  Agreement as the
                         "Final Payment."

                    b.   The  Final  Projected  Amount  shall be  determined  as
                         follows:

                    (i)  As of  the  end  of  the  sixteenth  Fiscal  Year,  the
                         Trustees shall cause an actuarial  determination  to be
                         made, based on the experience of the Settlement  Trust,
                         as to the amount of  additional  funds,  if any,  which
                         will be required to fund  payments to Class Members who
                         have  qualified  or who are  likely to  qualify  in the
                         future for benefits from Fund B in accordance  with the
                         provisions of Section IV.B and Section IV.C, determined
                         without  regard to any  limitation on the obligation of
                         AHP to make Fund B payments under this  Agreement,  and
                         to  fund  the  payment  of  associated   administrative
                         expenses.   The   Trustees   shall   also   take   into
                         consideration   the  then  cash   balance   in  Fund  B
                         (including the Administrative  Reserve),  its projected
                         future investment and other income,  and an estimate of
                         required future administrative expenses.

                    (ii) No later  than 30 days  after  the  date on  which  the
                         Trustees  are  required  to  make  the  estimate  under
                         Section  III.C.4.a.(i),  the Trustees  shall  provide a
                         written report  ("Final  Projected  Amount  Report") to
                         Class  Counsel and to AHP setting  forth the  Trustees'
                         projection of the amount of additional  funds,  if any,
                         which will be necessary to meet the obligations of Fund
                         B as  described  in  Section  III.C.4.a.(i).  The Final
                         Projected  Amount Report shall  contain all  supporting
                         information necessary to allow Class Counsel and AHP to
                         evaluate  the  accuracy  and   reasonableness   of  the
                         estimate.  Such supporting  information  shall include,
                         without  limitation,   the  Trustees'  methodology  for
                         making the estimate and any assumptions  used in making
                         the  estimate.  AHP and/or Class Counsel shall have the
                         right  to  obtain  from  the  Trustees  any  additional
                         information  reasonably  requested by them  relating to
                         the estimate  contained in the Final  Projected  Amount
                         Report.

                    (iii)Within 30 days  after  the date of the Final  Projected
                         Amount Report,  Class Counsel and/or AHP may appeal the
                         Trustees' estimate to the Court, which shall modify the
                         Trustees'  estimate  to the extent  appropriate  upon a
                         judicial finding that the Trustees' estimate was either
                         unreasonable or lacking in substantial support. If such
                         an  appeal  is not  taken or if such an appeal is taken
                         and the Court  determines  not to modify the  Trustees'
                         estimate,  then the Trustees' estimate, as set forth in
                         the Final  Projected  Amount  Report,  will  become the
                         "Final   Projected   Amount"   for   purposes  of  this
                         Agreement.  If such an appeal of the Trustees' estimate
                         is taken and the Court modifies the estimated amount in
                         connection  with  such an  appeal,  then the  estimated
                         amount  determined  by the Court will become the "Final
                         Projected  Amount" for purposes of this Agreement.  The
                         Parties waive any right to appeal any  determination of
                         the Court with respect to the Final Projected Amount.

                    (iv) If the Adjusted  Maximum  Available Fund B Amount as of
                         the  date  on  which  the  Final  Projected  Amount  is
                         determined  exceeds the Final  Projected  Amount,  then
                         within  five  business  days  after  the  date  of  the
                         determination   of  the  Final   Projected   Amount  in
                         accordance with this Agreement, AHP shall pay the Final
                         Projected  Amount  into Fund B and such  payment  shall
                         constitute the Final Payment under this  Agreement.  If
                         the Final Projected Amount exceeds the Adjusted Maximum
                         Available  Fund B Amount  as of the  date on which  the
                         Final Projected Amount is determined,  then within five
                         business  days after the date of the  determination  of
                         the  Final  Projected  Amount in  accordance  with this
                         Agreement, AHP shall pay the Adjusted Maximum Available
                         Fund B  Amount  into  Fund  B and  such  payment  shall
                         constitute the Final Payment under this  Agreement.  In
                         no event  shall  AHP's  payment  into Fund B exceed the
                         Adjusted Maximum Available Fund B Amount.

                    c.   The monies held by Fund B shall be available  and shall
                         be used to pay all  benefits  payable  from Fund B, all
                         attorneys'  fees and  common  benefit  fees  and  costs
                         awarded  by the  Court  in  relation  to Fund B and all
                         proper  administrative  expenses  associated  with  the
                         administration  of the  Settlement  and the  Settlement
                         Trust  insofar  as they  relate  to Fund B, and for the
                         purposes described in Section III.C.4.d.

                    d.   The Trustees shall use any residual funds  remaining in
                         Fund B after the satisfaction of all Fund B obligations
                         to Class  Members to either pay for or create a reserve
                         for payment of all  administrative  expenses which have
                         been or will be incurred to wind up the  administration
                         of  the  Trust  on  behalf  of  the  Settlement  Class,
                         including   adequate   provision  for   maintaining  or
                         disposing of the database  created  pursuant to Section
                         VI.C.3.c,  and shall transfer any funds remaining after
                         satisfaction  of the foregoing to the Medical  Research
                         and Education Fund created under Section IV.A.3.a.

         D.   OTHER PROVISIONS

               1.   The  Settlement  Trust  shall be  structured  and managed to
                    qualify as a Qualified Settlement Fund under Section 468B of
                    the Internal  Revenue Code and related  regulations and will
                    contain  customary  provisions  for  such  trusts  including
                    obligations of the Settlement  Trust to make tax filings and
                    to  provide  to AHP  information  to  permit  AHP to  report
                    deductions properly for tax purposes.

               2.   The  Parties  agree  that  all of  the  amounts  being  paid
                    pursuant to the terms of this  Settlement  are being paid as
                    damages (other than punitive  damages) on account of alleged
                    physical  personal  injuries or alleged physical sickness of
                    the members of the Settlement  Class as described in Section
                    104(a)(2) of the Internal  Revenue Code of 1986,  as amended
                    (the "Code").  The Parties further agree that the claims set
                    forth in the  definition  of Settled  Claims in Section I.53
                    have their origin in such alleged physical personal injuries
                    or physical sickness.

               3.   Except  as  provided  in  Section V herein  relating  to the
                    Accelerated   Implementation   Option,  AHP  shall  have  no
                    financial  obligations under this Settlement Agreement other
                    than as  explicitly  set forth in this  Section  III  (AHP's
                    Payment  Obligations).  AHP shall have no responsibility for
                    the management of the  Settlement  Trust or any liability to
                    any Class Member  arising from the handling of claims by the
                    Trustees.

         E.    SECURITY ARRANGEMENTS

               1.   During  the  period  beginning  on the  first  Business  Day
                    following  the Trial Court  Approval  Date and ending on the
                    fifth  Business Day  following the Final  Judicial  Approval
                    Date, AHP shall maintain  credit  facilities in an aggregate
                    principal  amount of One  Billion  Dollars  ($1,000,000,000)
                    exclusively  as  security  for its  obligations  under  this
                    Settlement  Agreement over the sum of (1) the greater of (a)
                    the aggregate  minimum principal amount of credit facilities
                    that  would be  required  by  Moody's  Investors  Service to
                    satisfy  back-up   liquidity  on  AHP's   commercial   paper
                    obligations or (b) the aggregate minimum principal amount of
                    credit  facilities  that  would be  required  by  Standard &
                    Poor's  Rating  Services as  sufficient  to satisfy  back-up
                    liquidity on AHP's  commercial paper  obligations,  plus (2)
                    the amount of any uses (other than the  payments  under this
                    Settlement  Agreement) for which such credit facilities have
                    been  committed,  plus (3)  outstanding  drawings under such
                    credit facilities.

               2.   Fifteen days after the Final Judicial  Approval Date, or the
                    first Business Day thereafter if such fifteenth day is not a
                    Business Day, AHP shall establish and thereafter  maintain a
                    fund (the "Security Fund") consisting of cash and high-grade
                    marketable commercial securities (which shall consist of the
                    "Permitted  Investments,"  defined  herein)  selected by AHP
                    having  a  principal  value  equal to $370  million.  If the
                    credit rating for AHP as reported by both Moody's  Investors
                    Service  and  Standard  & Poor's  Rating  Services  is below
                    investment  grade at any time during which the Security Fund
                    must be maintained  hereunder,  AHP shall deposit additional
                    cash and  Permitted  Investments  selected  by AHP having an
                    aggregate principal value of an additional $180 million. For
                    purposes  of  this  Section  III.E,   the  term   "Permitted
                    Investments"  shall mean any of the  following:  (a) readily
                    marketable  direct  obligations  of the United States or any
                    agency   or    instrumentality    thereof   or   obligations
                    unconditionally  guaranteed  by the full faith and credit of
                    the United States,  maturing within 365 days of purchase (in
                    the  case  of  all  such   obligations   other  than  direct
                    obligations of the United States Treasury); (b) certificates
                    of  deposit  or time  deposits  maturing  within 365 days of
                    purchase  with any  commercial  bank  that (1) has  deposits
                    insured by the Federal Deposit Insurance Corporation, (2) is
                    organized  under the laws of the United  States or any state
                    thereof, (3) has a minimum long-term rating of "A-3" (or the
                    then  equivalent)  by  Moody's   Investors   Service  and  a
                    long-term  rating  of  "A-"  (or  the  then  equivalent)  by
                    Standard  & Poor's  Rating  Services,  and (4) has  combined
                    capital and surplus of at least $10 billion;  (c) commercial
                    paper issued by any corporation  organized under the laws of
                    any state of the United States and rated at least  "Prime-1"
                    short-term  (or  the  then   equivalent   grade)  and  "A-1"
                    long-term  (or the then  equivalent  grade)  by  Standard  &
                    Poor's Rating Services,  in each case with a maturity of not
                    more than 180 days from the date of acquisition  thereof; or
                    (d) investments,  classified as current assets of AHP or any
                    of its  subsidiaries  under  generally  accepted  accounting
                    principles,  in money market investment  programs registered
                    under the Investment Company Act of 1940, as amended,  which
                    are  administered  by financial  institutions  that have the
                    highest  rating  obtainable  from either  Moody's  Investors
                    Service  or  Standard  &  Poor's  Rating  Services,  and the
                    portfolios of which are limited solely to investments of the
                    character,  quality and  maturity  described in clauses (a),
                    (b) or (c) of this definition.

               3.   The Security Fund shall be terminated  upon AHP's making the
                    Final Payment provided for in Section III.C.4.a.

               4.   AHP shall be entitled to withdraw from the Security Fund all
                    income earned  thereby.  However,  in the event that, and so
                    long as, the credit  rating of AHP  reported by both Moody's
                    Investors  Service and Standard & Poor's Rating  Services is
                    below investment grade at any time during which the Security
                    Fund must be maintained,  AHP shall no longer be entitled to
                    withdraw from the Security  Fund the income earned  thereby,
                    except that AHP shall thereafter be entitled to withdraw, at
                    each tax payment  date,  such amount  thereof as shall equal
                    all  federal,  state and  local  taxes  payable  by AHP with
                    respect to or on account of the whole amount of the Security
                    Fund.  AHP  shall  be  responsible  for the  payment  of all
                    federal, state and local taxes payable with respect to or on
                    account of the Security Fund.

               5.   AHP  shall  grant  to  the  Trustees  a  perfected  security
                    interest  in the  Security  Fund  as  collateral  for  AHP's
                    obligations under the Settlement  Agreement  pursuant to the
                    terms of a Security  Fund and Escrow  Agreement  in the form
                    appended  hereto as Exhibit  "3"  hereto.  The assets in the
                    Security Fund shall at all times be owned by AHP, subject to
                    the rights of the Trust as a secured creditor.

               6.   For  purposes  of this  Settlement  Agreement,  an  "Uncured
                    Failure to Make Payment" is an event in which:

                    a.   AHP fails to make a payment to Fund B which was due and
                         not timely  paid,  and such failure to make payment was
                         due  to  either  a  financial  inability  to  pay  or a
                         deliberate  unwillingness  to pay, such  determinations
                         having  been  made  by  order  of the  Court  after  an
                         evidentiary hearing (a "Nonpayment Hearing"); and

                    b.   AHP fails to make that payment within thirty days after
                         such  order  becomes  final  after  exhaustion  of  all
                         appeals,  if any,  or AHP  fails to make  that  payment
                         thirty  days after a Trial  Court  order  declaring  an
                         Uncured Failure to Make Payment and is unable to obtain
                         a stay of that order pending an appeal from such order.

               7.   At least thirty days prior to any  Nonpayment  Hearing,  AHP
                    and Class  Counsel  shall have the right to receive from the
                    Trustees  such   information  as  they  reasonably   request
                    relating to the  Trustees'  claim that such  payment was due
                    and owing,  as to which  issue the  Trustees  shall have the
                    burden of proof.

               8.   In  the  event  of  an  Uncured  Failure  to  Make  Payment,
                    securities  and/or  cash  in  the  Security  Fund  having  a
                    principal  value equal to the entire  amount of the Security
                    Fund shall be  transferred  to the escrow agent of an escrow
                    account to be maintained  under the supervision of the Court
                    (the "Security Fund Escrow Account"),  without impairing the
                    security  interest of the Trust. The portion of the Security
                    Fund  Escrow   Account,   if  any,  needed  to  satisfy  the
                    obligations of AHP under the Settlement  Agreement  shall be
                    paid to the  Trust  pursuant  to  order  of the  Court or on
                    agreement of the Parties.  Any unused amount of the Security
                    Fund Escrow Account shall be returned to AHP at the time the
                    Final  Payment  is made or  deemed to have  been  made.  Any
                    income  earned on the account  shall  remain the property of
                    the account, and all federal,  state and local taxes payable
                    with respect to the Security  Fund Escrow  Account  shall be
                    paid  out  of  the  account.   Additional   conditions   and
                    procedures for the establishment, operation and distribution
                    of the Security Fund Escrow Account are set forth in Exhibit
                    "3," which is to be executed  substantially  in that form by
                    the escrow agent.

               9.   In the event of the following occurrences:

                    a.   The occurrence of more than one Uncured Failure to Make
                         Payment within a two-year period; and

                    b.   The  depletion of the amount of the assets which AHP is
                         required to have on deposit in the Security  Fund or in
                         the Security  Fund Escrow  Account  described  above by
                         more than fifty percent of the then-required  amount of
                         assets; and

                    c.   A  determination  by  the  Court  after  notice  and an
                         opportunity to be heard by all interested  parties that
                         the  remaining  assets in the  Security  Fund or in the
                         Security  Fund  Escrow  Account  are not  likely  to be
                         sufficient to pay the remaining  Fund B obligations  to
                         Class Members as of that point in time;

                           all Diet Drug  Recipients  who (i) are diagnosed by a
                           Qualified Physician as FDA Positive or as having Mild
                           Mitral  Regurgitation by an Echocardiogram  performed
                           between the commencement of Diet Drug use and the end
                           of the Screening  Period and who have  registered for
                           settlement  benefits by Date 2, or (ii) are diagnosed
                           as having Endocardial Fibrosis by September 30, 2005,
                           and have  registered  for Fund B benefits  by January
                           31,   2006,    together    with   their    associated
                           Representative and/or Derivative Claimants, will have
                           a right to opt out of the  Settlement  and pursue all
                           of their Settled  Claims (except for those claims set
                           forth in subparagraphs (e) and (g) of Section I.53 of
                           this  Agreement),  against AHP and the other Released
                           Parties,  including  claims for punitive and multiple
                           damages   (hereinafter   the  "Financial   Insecurity
                           Opt-Out Right"), provided such Class Members have not
                           received Matrix-Level V benefits set forth in Section
                           IV.B.2.

               10.  Within  thirty  (30)  days of the  date of the  entry of any
                    Order  determining that the remaining assets in the Security
                    Fund or in the Security  Fund Escrow  Account are not likely
                    to be sufficient to pay the remaining Fund B obligations, as
                    referred to in Sections III.E.6.a and III.E.9.c,  above, the
                    Trustees  and/or  Claims   Administrator(s)   shall  provide
                    written   notice  to  all  affected  Class  Members  of  the
                    circumstances   giving  rise  to  the  Financial  Insecurity
                    Opt-Out Right by first class mail,  postage prepaid.  Within
                    one-hundred  and twenty  (120) days of the  transmission  of
                    that notice, each Class Member who is eligible to exercise a
                    Financial Insecurity Opt-Out Right may send a written notice
                    advising the Trustees and/or Claims  Administrator(s) of the
                    Class Member's election to exercise the Financial Insecurity
                    Opt-Out Right on a form  prescribed  by the Trustees  and/or
                    Claims  Administrator(s).  In the event of such an  opt-out,
                    the Class  Member may pursue any and all claims  (except for
                    those  claims  set  forth  in  subparagraphs  (e) and (g) of
                    Section  I.53 of this  Agreement)  against  AHP in the legal
                    system,  and none of the  Released  Parties  may  assert any
                    defense to such claims  based on any statute of  limitations
                    or  repose,  the  doctrine  of  laches,  any  other  defense
                    predicated  on the failure to timely  pursue the claim,  any
                    defense based on "splitting" a cause of action,  any defense
                    based  on any  release  signed  pursuant  to the  Settlement
                    Agreement,  and/or any other  defense based on the existence
                    of the Settlement  Agreement,  except to the extent provided
                    in Section  III.E.9 of this  Agreement.  In any legal action
                    commenced  by a Class  Member  exercising a right of opt-out
                    under these circumstances, the Class Member shall reduce the
                    amount of his or her recovery by the amount of any cash that
                    the Class  Member  has  received  from AHP  and/or the Trust
                    under  any  terms  of  the  Settlement.  There  shall  be no
                    deduction, offset, or reduction for any Medical Screening or
                    Medical Services received by a Class Member.

               11.  Nothing  contained in this Section of the Agreement shall be
                    construed to be a waiver of or a limitation  on rights which
                    the Class Members,  Class  Representatives or Trustees would
                    otherwise have under the law in the event of a breach of the
                    Settlement Agreement.

               12.  Immediately  upon  termination  of the  Security  Fund under
                    Section III.E.3 above, any remaining balance in the Security
                    Fund, including any income earned thereon, shall be released
                    to AHP.

<PAGE>

IV.  CLASS MEMBER RIGHTS AND BENEFITS

     A.   SCREENING/REFUND/MEDICAL  SERVICES/CASH/RESEARCH BENEFITS PAYABLE FROM
          FUND A

          1.   BENEFITS  FOR  CLASS  MEMBERS  WHO  INGESTED  PONDIMIN(R)  AND/OR
               REDUX(TM) FOR 61 OR MORE DAYS

               a.   SCREENING  PROGRAM:  Diet Drug  Recipients  in Subclass 1(b)
                    will be eligible for one Transthoracic Echocardiogram and an
                    associated  interpretive  physician  visit.  Eligible  Class
                    Members  must  register  for this  benefit  by Date 1.  This
                    Screening  Program shall be conducted for a 12-month  period
                    after Final Judicial  Approval.  This period may be extended
                    for up to an additional 6 months by the Court for good cause
                    shown.

               b.   COST OF TRANSTHORACIC  ECHOCARDIOGRAM:  Diet Drug Recipients
                    in   Subclass   1(b)  who  do  not  elect  the   Accelerated
                    Implementation  Option described in Section V below and who,
                    independent   of   the   Screening   Program,    obtain   an
                    Echocardiogram  after the end of the Initial  Opt-Out Period
                    but before the Final  Judicial  Approval  Date,  may recover
                    from Fund A the  lesser of (i) the  Trust's  direct  cost of
                    providing for a Transthoracic  Echocardiogram and associated
                    interpretive physician visit under the Screening Program and
                    (ii) the  actual  amount  paid by the Class  Member  for the
                    Echocardiogram and associated  interpretive physician visit,
                    net of amounts paid or reimbursed by an insurance carrier or
                    other  third-party  payor,  but only in the  event  that the
                    Settlement receives Final Judicial Approval.  Eligible Class
                    Members  must  submit a claim  for this  benefit  by Date 2.
                    Class  Members   receiving  such  a  payment  may  not  also
                    participate in the Screening  Program benefits  described in
                    Section IV.A.1.a.

               C.   ADDITIONAL   MEDICAL   SERVICES  OR  CASH:   All  Diet  Drug
                    Recipients in Subclass  2(b) and those Diet Drug  Recipients
                    in  Subclass  1(b) who have been  diagnosed  by a  Qualified
                    Physician  as FDA  Positive by an  Echocardiogram  performed
                    between the commencement of Diet Drug use and the end of the
                    Screening Period,  will be entitled to receive, at the Class
                    Member's election, either (i) valve-related medical services
                    up to $10,000 in value to be provided by the Trust;  or (ii)
                    $6,000  in cash.  Such  cash  payments  and  funds  for such
                    medical  services  will  come from  Fund A.  Eligible  Class
                    Members  must   register  for  this  benefit  and  make  the
                    affirmative election as to whether they wish to receive cash
                    or services by Date 2.

               d.   REFUND: Diet Drug Recipients in Subclasses 1(b) and 2(b), or
                    their associated  Representative Claimants, will be eligible
                    for a refund in the fixed amount of $30 per month of use for
                    Pondimin(R) and $60 per month of use for Redux(TM),  subject
                    to a maximum of $500 per Class  Member;  provided,  however,
                    that such  benefits  will be made  available  to  members of
                    Subclasses  1(b) and 2(b) only if, and to the  extent  that,
                    Fund A  possesses  sufficient  assets  to pay such  benefits
                    after  paying or creating a reserve for payment of all other
                    authorized  expenses  and benefits to be provided by Fund A.
                    Eligible  Class  Members  must  register for this benefit by
                    Date 1.

          2.   BENEFITS  FOR  CLASS  MEMBERS  WHO  INGESTED  PONDIMIN(R)  AND/OR
               REDUX(TM) FOR 60 DAYS OR LESS:

               a.   REFUND:  Diet Drug Recipients in Subclasses 1(a) and 2(a) or
                    their associated  Representative  Claimants will be eligible
                    for a refund in the fixed amount of $30 per month of use for
                    Pondimin(R) and $60 per month of use for Redux(TM). Eligible
                    Class Members must register for this refund  benefit by Date
                    1.

               b.   SCREENING PROGRAM:

                    (1)  In general,  members of Subclass  1(a) are not entitled
                         to screening benefits.

                    (2)  LIMITED REIMBURSEMENT FOR SCREENING  EXAMINATIONS.  If,
                         however,  during  the  Screening  Period,  a Diet  Drug
                         Recipient  in  Subclass   1(a),   independent   of  the
                         Screening  Program,  obtains an  Echocardiogram  and is
                         diagnosed  by a  Qualified  Physician  as FDA  Positive
                         based on that  Echocardiogram,  he/she may recover from
                         Fund A the lesser of (i) the  direct  cost to the Trust
                         of  providing  a  Transthoracic  Echocardiogram  and an
                         associated   interpretive  physician  visit  under  the
                         Screening  Program,  and (ii) the actual amount paid by
                         the Class Member for the  Echocardiogram and associated
                         interpretive  physician  visit,  net of amounts paid or
                         reimbursed by an insurance carrier or other third-party
                         payor,  but  only  in the  event  that  the  Settlement
                         receives Final  Judicial  Approval.  Eligible  Subclass
                         1(a) members must register for this benefit by Date 2.

                    (3)  COMPASSIONATE  AND HUMANITARIAN  PROGRAM.  In addition,
                         the Trustees may, in their  discretion  in  appropriate
                         cases  for  compassionate  and  humanitarian   reasons,
                         provide a Transthoracic  Echocardiogram  and associated
                         interpretive   physician  visit  during  the  Screening
                         Period for members of  Subclass  1(a) who are Diet Drug
                         Recipients,  where the Trustees determine that (a) such
                         persons are in need of such  services and are otherwise
                         unable to  obtain  them;  or (b) where  there are other
                         compelling  reasons to provide  such  services  to such
                         persons.  Total  disbursements  for such services shall
                         not exceed $20 million.  Eligible Subclass 1(a) members
                         must apply for such benefits by Date 1.

               c.   ADDITIONAL MEDICAL SERVICES OR CASH. All members of Subclass
                    2(a) who are Diet Drug  Recipients  as well as those members
                    of Subclass 1(a) who are Diet Drug  Recipients  and who have
                    been  diagnosed by a Qualified  Physician as FDA Positive by
                    an Echocardiogram performed between the commencement of Diet
                    Drug  use  and  the  end of the  Screening  Period,  will be
                    entitled to receive, at the Class Member's election,  either
                    (i) valve-related  medical services up to $5,000 in value to
                    be provided  by the Trust or (ii) $3,000 in cash.  Such cash
                    payments and funds for such medical  services will come from
                    Fund A.  Eligible  Class  Members  must  register  for  this
                    benefit and make the affirmative election as to whether they
                    wish to receive cash or services by Date 2

     3.   BENEFITS FOR ALL CLASS MEMBERS

          a.   MEDICAL  RESEARCH AND EDUCATION  FUND. An amount in Fund A not to
               exceed $25 million may be used to finance  medical  research  and
               education  related to heart  disease.  The Medical  Research  and
               Education  Fund  will  be  funded  by the  transfer  of up to $25
               million  from Fund A to an  organization  formed for that purpose
               and described in Subsection (c)(3) of Section 501 of the Internal
               Revenue  Code  pursuant to Articles of  Incorporation  and Bylaws
               substantially  in the form  appended  hereto as Exhibit  "4." The
               management of the Medical  Research and Education Fund will be by
               an  independent  Board of  Directors.  The Parties agree that the
               Directors  of the Medical  Research  and  Education  Fund will be
               nominated by the Parties and that each nominee will be subject to
               agreement of the Parties and subject to Court approval

          b.   MEDICAL/LEGAL  REGISTRY.  The  Trustees  shall apply a portion of
               Fund A to  establish,  operate and maintain a "Registry" to track
               the medical  condition  of Class  Members,  both for  purposes of
               processing  claims for benefits under the terms of the Settlement
               and for  purposes of medical  research and  education.  The funds
               expended to create,  maintain and operate this Registry  shall be
               considered administrative expenses of Fund A and shall not reduce
               the $25 million  which is  available  for medical  education  and
               research.

          c.   ECHOCARDIOGRAM  IN THE CASE OF FINANCIAL  HARDSHIP.  In addition,
               the Trustees may, in their discretion,  for members of Subclasses
               1(a) and  1(b),  in cases of true  financial  hardship  provide a
               Transthoracic    Echocardiogram   and   associated   interpretive
               physician  visit to such  persons  after Trial Court  Approval of
               this Settlement.  Total disbursements for such services shall not
               exceed $10 million.

          d.   REIMBURSEMENT  FOR  CERTAIN  PRIVATELY-OBTAINED  ECHOCARDIOGRAMS.
               Diet Drug  Recipients or their  Representative  Claimants will be
               eligible for  reimbursement  of the cost of  Echocardiograms  and
               associated  interpretive  visits not otherwise  reimbursed  under
               this Agreement  where such  procedures  were performed  after the
               commencement  of Diet  Drug  use;  provided,  however,  that such
               reimbursement  benefits  will be  made  available  to  Diet  Drug
               Recipients or their Representative  claimants only if, and to the
               extent  that,  Fund A  possesses  sufficient  assets  to pay such
               benefits  after  paying or  creating a reserve for payment of all
               other authorized  expenses and benefits to be provided by Fund A,
               except for the refund benefits  described in Section  IV.A.1.d of
               the  Settlement  Agreement,  which refund  benefits  described in
               Section  IV.A.1.d  shall be paid only after  paying or creating a
               reserve for the payment of the reimbursement benefit described in
               this Section IV.A.3.d. The reimbursement to be provided hereunder
               shall  be the  lesser  of (i) the  direct  cost to the  Trust  of
               providing   a   Transthoracic   Echocardiogram   and   associated
               interpretive  visit  under  the  Screening  Program  and (ii) the
               actual amount paid by the Class Member for the Echocardiogram and
               associated  interpretive visit, net of amounts paid or reimbursed
               by an insurance carrier or other third-party payor. Class Members
               seeking such reimbursement must apply for it by Date 1.

     4.   TERMS OF MEDICAL SCREENING PROGRAM AND PROVISION OF ADDITIONAL MEDICAL
          SERVICES.

          a.   In order to supply  Transthoracic  Echocardiograms and associated
               interpretive  physician  visits  pursuant to  Sections  IV.A.1.a,
               IV.A.1.b, IV.A.2.b.2,  IV.A.2.b.3 and IV.A.3.c of this Settlement
               Agreement,  and  the  additional  medical  services  which  Class
               Members  are  entitled  to receive in  accordance  with  Sections
               IV.A.1.c and IV.A.2.c of this Settlement Agreement,  the Trustees
               and/or Claims  Administrator(s)  may enter into a contract with a
               network of providers of health services.

          b.   The  "additional  medical  services" which eligible Class Members
               are entitled to receive under  Sections  IV.A.1.c and IV.A.2.c of
               this Settlement Agreement shall be determined by the Trustees and
               may include the following services,  when performed,  supervised,
               or prescribed by a physician  specializing in internal  medicine,
               cardiology, or cardiothoracic surgery:

               (1)  Comprehensive physical examinations;

               (2)  Chest x-rays;

               (3)  Electrocardiograms;

               (4)  Standard laboratory testing;

               (5)  Medically-appropriate Echocardiograms;

               (6)  Medically-supervised nutritional counseling; and/or

               (7)  Any  new,   accepted   technology  or  modalities   for  the
                    management of valvular heart disease.

          5.   SOURCE OF FUND A BENEFITS.  The  benefits  referred to in Section
               IV.A.1  through and including  Section  IV.A.4 shall be paid only
               out of Fund A.

B.   COMPENSATION BENEFITS PAYABLE FROM FUND B

          1.   ELIGIBLE CLASS  MEMBERS.  The following  Class Members,  and only
               such  Class  Members,  shall  be  entitled  to  the  compensation
               benefits from Fund B ("Matrix Compensation Benefits"):

               a.   Diet Drug  Recipients who have been diagnosed by a Qualified
                    Physician   as  FDA   Positive  or  as  having  Mild  Mitral
                    Regurgitation  by an  Echocardiogram  performed  between the
                    commencement  of Diet Drug use and the end of the  Screening
                    Period  and  who  have  registered  for  further  settlement
                    benefits by Date 2;

               b.   The  Representative  Claimants of Diet Drug  Recipients  who
                    have been diagnosed by a Qualified Physician as FDA Positive
                    or as having Mild Mitral  Regurgitation by an Echocardiogram
                    performed  between the commencement of Diet Drug use and the
                    end of the  Screening  Period,  where  either  the Diet Drug
                    Recipient  or the  Representative  Claimant(s)  for the Diet
                    Drug  Recipient  has   registered  for  further   settlement
                    benefits by Date 2;

               c.   The  Derivative  Claimants of Diet Drug  Recipients who have
                    been  diagnosed by a Qualified  Physician as FDA Positive or
                    as having Mild  Mitral  Regurgitation  by an  Echocardiogram
                    performed  between the commencement of Diet Drug use and the
                    end of the Screening Period,  where the Derivative Claimants
                    have registered for further  settlement  benefits by Date 2,
                    to the extent that such  persons  have a legally  recognized
                    claim  for loss of  services,  consortium,  support,  or the
                    like,  arising  from  injury  to the  associated  Diet  Drug
                    Recipient;

               d.   Diet Drug  Recipients who have been diagnosed by a Qualified
                    Physician as having  Endocardial  Fibrosis by September  30,
                    2005 and have  registered for Fund B benefits by January 31,
                    2006;

               e.   The  Representative  Claimants of Diet Drug  Recipients  who
                    have  been  diagnosed  by a  Qualified  Physician  as having
                    Endocardial Fibrosis by September 30, 2005, where either the
                    Diet Drug Recipient or the Representative Claimant(s) of the
                    Diet Drug  Recipient has  registered  for Fund B benefits by
                    January 31, 2006;

               f.   The  Derivative  Claimants of Diet Drug  Recipients who have
                    been   diagnosed   by  a  Qualified   Physician   as  having
                    Endocardial  Fibrosis  by  September  30,  2005,  where  the
                    Derivative  Claimants have registered for Fund B benefits by
                    January 31,  2006,  to the extent that such  persons  have a
                    legally  recognized claim for loss of services,  consortium,
                    support,  or the like, arising from injury to the associated
                    Diet Drug Recipient.

     2.   BENEFITS AVAILABLE

          a.   For purposes of providing Matrix  Compensation  Benefits to those
               Class Members  eligible to receive such  payments,  the following
               four payment  matrices  (hereinafter  the "Matrices" or "Matrix")
               are established:

<TABLE>

Matrix A-1
                             Age at diagnosis/event
<CAPTION>

Severity  =or< 24    25-29       30-34        35-39         40-44        45-49        50-54        55-59

<S>       <C>        <C>         <C>          <C>           <C>          <C>          <C>          <C>
I         $123,750   $117,563    $111,685     $106,100      $100,795     $95,755      $90,967      $86,419

II        $643,500   $611,325    $580,759     $551,721      $524,135     $497,928     $473,032     $449,381

III       $940,500   $893,475    $848,801     $806,361      $766,043     $727,741     $691,354     $656,786

IV        $1,336,50  $1,269,675  $1,206,191   $1,145,881    $1,088,587   $1,034,158   $982,450     $933,327

V         $1,485,00  $1,410,750  $1,340,213   $1,273,202    $1,209,542   $1,149,065   $1,091,612   $1,037,031
</TABLE>

<TABLE>

Matrix A-1 (continued)
<CAPTION>

Severity  60-64        65-69        70 - 79

<S>       <C>          <C>          <C>
I         $82,098      $73,888      $36,944

II        $426,912     $384,221     $192,111

III       $623,947     $561,552     $280,776

IV        $886,661     $797,995     $398,998

V         $985,180     $886,662     $443,331

</TABLE>

Matrix A-2
<TABLE>
                             Age at diagnosis/event
<CAPTION>

Severity  =or< 24  25-29      30-34      35-39     40-44     45-49      50-54     55-59      60-64     65-69     70 - 79

<S>       <C>      <C>        <C>        <C>       <C>       <C>        <C>       <C>        <C>       <C>       <C>
I         $1,250   $1,187     $1,128     $1,072    $1,018    $967       $919      $873       $829      $739      $500

II        $6,500   $6,175     $5,866     $5,573    $5,294    $5,030     $4,778    $4,539     $4,312    $3,842    $1,921

III       $9,500   $9,025     $8,574     $8,145    $7,738    $7,351     $6,983    $6,634     $6,302    $5,616    $2,808

IV        $13,500  $12,825    $12,184    $11,575   $10,996   $10,446    $9,924    $9,428     $8,956    $7,980    $3,990

V         $15,000  $14,250    $13,537    $12,861   $12,218   $11,607    $11,026   $10,475    $9,951    $8,867    $4,433
</TABLE>

Matrix B-1
<TABLE>

                             Age at diagnosis/event
<CAPTION>

Severity  =or< 24   25-29      30-34      35-39     40-44     45-49      50-54     55-59      60-64     65-69     70 - 79

<S>       <C>       <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>       <C>       <C>
I         $24,750   $23,513   $22,337    $21,221   $20,159    $19,152   $18,194    $17,284   $16,420   $14,778   $7,389

II        $128,700  $122,265  $116,152   $110,344  $104,827   $99,586   $94,606    $89,876   $85,383   $76,844   $38,422

III       $188,100  $178,695  $169,760   $161,272  $153,208   $145,548  $138,270   $131,357  $124,790  $112,310  $56,155

IV        $267,300  $253,935  $241,238   $229,176  $217,717   $206,831  $196,489   $186,665  $177,332  $159,599  $79,800

V         $297,000  $282,150  $268,043   $254,641  $241,908   $229,813  $218,322   $207,406  $197,036  $177,332  $88,666
</TABLE>

Matrix B-2
<TABLE>

                             Age at diagnosis/event
<CAPTION>
Severity  =or< 24   25-29      30-34      35-39     40-44     45-49      50-54     55-59      60-64     65-69     70 - 79

<S>       <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>       <C>       <C>       <C>
I         $500      $500       $500      $500       $500      $500       $500      $500      $500      $500      $500

II        $1,300    $1,235     $1,173    $1,115     $1,059    $1,006     $956      $908      $862      $768      $500

III       $1,900    $1,805     $1,715    $1,629     $1,548    $1,470     $1,397    $1,327    $1,260    $1,123    $562

IV        $2,700    $2,565     $2,437    $2,315     $2,199    $2,089     $1,985    $1,885    $1,791    $1,596    $798

V         $3,000    $2,850     $2,707    $2,572     $2,444    $2,321     $2,205    $2,095    $1,990    $1,773    $886
</TABLE>

          b.   Each Matrix  describes the amount which an eligible  Class Member
               is  entitled  to recover  based on (1) the level of severity of a
               Diet Drug Recipient's disease pursuant to Section IV.B.2.c below,
               and (2)  the age at  which  the  Diet  Drug  Recipient  is  first
               diagnosed as suffering from that level of disease severity.

          c.   The levels of disease  severity  in a Diet Drug  Recipient  which
               qualify eligible Class Members for payment on the Matrices are as
               follows:

               (1)  MATRIX LEVEL I is severe left sided  valvular  heart disease
                    without  complicating  factors, and is defined as one of the
                    following:

                    (a)  Severe aortic  regurgitation (AR) > 49% jet height/left
                         ventricular  outflow tract height  (JH/LVOTH)14  and/or
                         severe mitral  regurgitation (MR) > 40% regurgitant jet
                         area/left   atrial   area   (RJA/LAA)15   16   and   no
                         complicating factors as defined below;

                    (b)  FDA Positive  valvular  regurgitation14  with bacterial
                         endocarditis    contracted   after    commencement   of
                         Pondimin(R) and/or Redux(TM) use.

               (2)  MATRIX LEVEL II is left sided  valvular  heart  disease with
                    complicating factors, and is defined as:

                    (a)  Moderate AR (25% - 49%  JH/LVOTH)18 or Severe AR (> 49%
                         JH/LVOTH)19 with one or more of the following:

                    i)   Pulmonary   hypertension  secondary  to  severe  aortic
                         regurgitation  with a peak  systolic  pulmonary  artery
                         pressure > 40 mm Hg measured by cardiac catheterization
                         or with a peak systolic  pulmonary artery pressure > 45
                         mm Hg15 measured by Doppler Echocardiography,  at rest,
                         utilizing  standard  procedures16,17  assuming  a right
                         atrial pressure of 10 mm Hg;

                    ii)  Abnormal left ventricular  end-systolic  dimension > 50
                         mm18 by M-mode or 2-D Echocardiography or abnormal left
                         ventricular   end-diastolic  dimension  >  70  mm19  as
                         measured by M-mode or 2-D Echocardiography;

                    iii) Ejection fraction of < 50%20; and/or

                    (b)  Moderate MR (20% - 40%  RJA/LAA)21  or Severe MR (> 40%
                         RJA/LAA)22 with one or more of the following:

                    i)   Pulmonary  hypertension  secondary  to  valvular  heart
                         disease with peak systolic  pulmonary artery pressure >
                         40 mm Hg measured by cardiac  catheterization or with a
                         peak systolic  pulmonary  artery  pressure > 45 mm Hg23
                         measured   by   Doppler   Echocardiography,   at  rest,
                         utilizing   the   procedures   described   in   Section
                         IV.B.2.c.(2)(a)(i) above;

                    ii)  Abnormal left atrial supero-inferior systolic dimension
                         > 5.3 cm24 (apical four chamber  view) or abnormal left
                         atrial  antero-posterior  systolic  dimension  > 4.0 cm
                         (parasternal  long axis view)  measured by 2-D directed
                         M-mode or 2-D echocardiography with normal sinus rhythm
                         using sites of measurement  recommended by the American
                         Society of Echocardiography;25

                    iii) Abnormal left ventricular  end-systolic  dimension > 45
                         mm26 by M-mode or - 2-D Echocardiogram;

                    iv)  Ejection fraction of < 60%27; -

                    v)   Arrhythmias,      defined     as     chronic     atrial
                         fibrillation/flutter that cannot be converted to normal
                         sinus rhythm, or atrial fibrillation/flutter  requiring
                         ongoing  medical  therapy,  any of which are associated
                         with  left  atrial  enlargement;  as  defined  above in
                         Section IV.B.2.c.(2)(b)(ii).

               (3)  MATRIX  LEVEL  III is  left  sided  valvular  heart  disease
                    requiring  surgery or conditions of equal  severity,  and is
                    defined as:

                    (a)  Surgery to repair or replace the aortic  and/or  mitral
                         valve(s)   following  the  use  of  Pondimin(R)  and/or
                         Redux(TM); or

                    (b)  Severe  regurgitation and the presence of ACC/AHA Class
                         I  indications  for  surgery to repair or  replace  the
                         aortic28 and/or mitral29  valve(s) and a statement from
                         the attending Board-Certified Cardiothoracic Surgeon or
                         Board-Certified   Cardiologist   supported  by  medical
                         records  regarding  the  recommendations  made  to  the
                         patient  concerning  valvular surgery,  with the reason
                         why the surgery is not being performed; or

                    (c)  Qualification  for  payment  at Matrix  Level  I(b) (as
                         described in Section  IV.B.2.c.(1)(b)  above) or Matrix
                         Level II and, in  addition,  a stroke due to  bacterial
                         endocarditis contracted after use of Pondimin(R) and/or
                         Redux(TM)  or  as  a  consequence   of  chronic  atrial
                         fibrillation with left atrial enlargement as defined in
                         Section   IV.B.2.c.(2)(b)(ii)   which   results   in  a
                         permanent  condition  which  meets the  criteria of AHA
                         Stroke Outcome  Classification30  Functional  Level II,
                         determined six months after the event.

               (4)  MATRIX LEVEL IV is defined as follows:

                    (a)  Qualification  for  payment  at Matrix  Level  I(b) (as
                         described in Section  IV.B.2.c.(1)(b) above), II or III
                         and,   in   addition,   a  stroke   due  to   Bacterial
                         Endocarditis contracted after use of Pondimin(R) and/or
                         Redux(TM)  or  as  a  consequence   of  chronic  atrial
                         fibrillation with left atrial enlargement as defined in
                         Section   IV.B.2.c.(2)(b)(ii)   which   results   in  a
                         permanent  condition  which  meets the  criteria of AHA
                         Stroke Outcome  Classification31  Functional Level III,
                         determined six months after the event; or

                    (b)  Qualification  for payment at Matrix  Level I.b, II, or
                         III and,  in  addition,  a  peripheral  embolus  due to
                         Bacterial   Endocarditis   contracted   after   use  of
                         Pondimin(R)  and/or  Redux(TM) or as a  consequence  of
                         atrial  fibrillation  with left atrial  enlargement  as
                         defined in Section IV.B.2.c.(2)(b)(ii) which results in
                         severe permanent  impairment to the kidneys,  abdominal
                         organs,   or   extremities,   where  severe   permanent
                         impairment means:

                    i)   for the kidneys, chronic severe renal failure requiring
                         hemodialysis   or   continuous   abdominal   peritoneal
                         dialysis for more than six months;

                    ii)  for the abdominal organs,  impairment  requiring intra-
                         abdominal surgery;

                    iii) for the extremities, impairment requiring amputation of
                         a major limb; or

                    (c)  The individual has the following:

                    i)   Qualification for payment at Matrix Level III; and

                    ii)  New York Heart Association  Functional Class I or Class
                         II   symptoms   as    documented   by   the   attending
                         Board-Certified      Cardiothoracic      Surgeon     or
                         Board-Certified Cardiologist; and

                    iii) Valvular    repair   and    replacement    surgery   or
                         ineligibility  for  surgery  due to medical  reasons as
                         documented   by   the   attending    Board-   Certified
                         Cardiothoracic Surgeon or Board-Certified Cardiologist;
                         and

                    iv)  Significant damage to the heart muscle, defined as: (a)
                         a left ventricular  ejection fraction < 30% with aortic
                         regurgitation or a left ventricular ejection fraction <
                         35% with mitral  regurgitation in patients who have not
                         had   surgery   and  meet  the   criteria   of  Section
                         IV.B.2.c.(3)(b)   above  or  (b)  a  left   ventricular
                         ejection  fraction  < 40%  six  months  after  valvular
                         repair or replacement  surgery in patients who have had
                         such surgery; or

                    (d)  The individual  has had valvular  repair or replacement
                         surgery   and  has   one  or  more  of  the   following
                         complications which occur either during surgery, within
                         30 days after surgery, or during the same hospital stay
                         as the surgery:

                    i)   Renal failure, defined as chronic, severe renal failure
                         requiring regular  hemodialysis or continuous abdominal
                         peritoneal   dialysis   for  greater  than  six  months
                         following   aortic  and/or  mitral  valve   replacement
                         surgery;

                    ii)  Peripheral   embolus  following  surgery  resulting  in
                         severe permanent  impairment to the kidneys,  abdominal
                         organs, or extremities;

                    iii) Quadriplegia  or  paraplegia  resulting  from  cervical
                         spine injury during valvular heart surgery; or

                    (e)  A stroke  caused by aortic  and/or mitral valve surgery
                         and the stroke has produced a permanent condition which
                         meets  the   criteria   of  the  AHA   Stroke   Outcome
                         Classification32 Functional Levels II or III determined
                         six months after the event;

                    (f)  The individual  has had valvular  repair or replacement
                         surgery and suffers from post  operative  endocarditis,
                         mediastinitis  or sternal  osteomyelitis,  any of which
                         requires reopening the median sternotomy for treatment,
                         or a post-operative serious infection defined as HIV or
                         Hepatitis C within six months of surgery as a result of
                         blood  transfusion  associated  with  the  heart  valve
                         surgery.

                    (g)  The individual  has had valvular  repair or replacement
                         surgery  and  requires  a second  surgery  through  the
                         sternum within 18 months of the initial  surgery due to
                         prosthetic    valve    malfunction,    poor   fit,   or
                         complications   reasonably   related  to  the   initial
                         surgery.

               (5)  MATRIX LEVEL V is defined as:

                    (a)  Endocardial    Fibrosis    (1)    diagnosed    by   (a)
                         endomyocardial  biopsy that  demonstrates  fibrosis and
                         cardiac  catheterization that demonstrates  restrictive
                         cardiomyopathy   or  (b)  autopsy   that   demonstrates
                         endocardial  fibrosis and (2) other  causes,  including
                         dilated cardiomyopathy, myocardial infarction, amyloid,
                         Loeffler's  endocarditis,  endomyocardial  fibrosis  as
                         defined in Braunwald (involving one or both ventricles,
                         located  in  the  inflow  tracts  of  the   ventricles,
                         commonly  involving the chordae tendinea,  with partial
                         obliteration of either ventricle  commonly  present)33,
                         focal  fibrosis  secondary  to  valvular  regurgitation
                         (e.g.,  "jet  lesions"),  focal  fibrosis  secondary to
                         catheter     instrumentation,      and     hypertrophic
                         cardiomyopathy   with   septal   fibrosis,   have  been
                         excluded; or

                    (b)  Left  sided   valvular   heart   disease   with  severe
                         complications,   defined  as  Matrix  Levels  I(b)  (as
                         described in Section  IV.B.2.c.(1)(b) above), III or IV
                         above with one or more of the following:

                    i)   A severe  stroke  caused by aortic  and/or mitral valve
                         surgery  or due to  bacterial  endocarditis  contracted
                         after  use  of  Pondimin(R)  and/or  Redux(TM)  or as a
                         consequence  of chronic atrial  fibrillation  with left
                         atrial    enlargement    as    defined    in    Section
                         IV.B.2.c.(2)(b)(ii)  and the severe stroke has resulted
                         in a permanent  condition  which meets the  criteria of
                         AHA Stroke Outcome  Classification34  Functional Levels
                         IV or V, determined six months after the event;

                    ii)  The individual has the following:

                    a)   Qualification  for payment at Matrix  Levels III or IV;
                         and

                    b)   New York  Heart  Association  Functional  Class  III or
                         Class  IV  symptoms  as  documented  by  the  attending
                         Board-Certified      Cardiothoracic      Surgeon     or
                         Board-Certified Cardiologist; and

                    c)   Valvular repair or replacement surgery or ineligibility
                         for surgery due to medical reasons as documented by the
                         attending  Board-Certified  Cardiothoracic  Surgeon  or
                         Board-Certified Cardiologist; and

                    d)   Significant damage to the heart muscle, defined as: (i)
                         a left ventricular  ejection fraction < 30% with aortic
                         regurgitation or a left ventricular ejection fraction <
                         35% with mitral regurgitation, in patients who have not
                         had   surgery   and  meet  the   criteria   in  Section
                         IV.B.2.c.(3)(b)   above  or  (ii)  a  left  ventricular
                         ejection  fraction  < 40%  six  months  after  valvular
                         repair or replacement  surgery in patients who have had
                         such surgery; or

                    iii) Heart transplant;

                    iv)  Irreversible  pulmonary  hypertension (PH) secondary to
                         valvular   heart  disease   defined  as   peak-systolic
                         pulmonary  artery  pressure  > 50 mm Hg35  (by  cardiac
                         catheterization)    at   rest   following   repair   or
                         replacement   surgery  of  the  aortic   and/or  mitral
                         valve(s);

                    v)   Persistent    non-cognitive   state36   caused   by   a
                         complication  of valvular heart disease (e.g.,  cardiac
                         arrest)   or   valvular    repair/replacement   surgery
                         supported   by   a   statement   from   the   attending
                         Board-Certified      Cardiothoracic      Surgeon     or
                         Board-Certified  Cardiologist,   supported  by  medical
                         records; or

                    (c)  Death  resulting  from a  condition  caused by valvular
                         heart  disease or valvular  repair/replacement  surgery
                         which occurred  post-Pondimin(R)  and/or  Redux(TM) use
                         supported   by   a   statement   from   the   attending
                         Board-Certified      Cardiothoracic      Surgeon     or
                         Board-Certified  Cardiologist,   supported  by  medical
                         records; or

                    (d)  The  individual  otherwise  qualifies  for  payment  at
                         Matrix   Level  II,  III,   or  IV  and  suffers   from
                         ventricular   fibrillation  or  sustained   ventricular
                         tachycardia which results in hemodynamic compromise.

          d.   The  circumstances  which determine  whether Matrix A-1 or Matrix
               B-1 is applicable to a claim for Matrix compensation benefits are
               as follows:

               (1)  FOR  MATRIX  A-1:   Diet  Drug   Recipients   who   ingested
                    Pondimin(R)  and/or  Redux(TM) for 61 or more days, who were
                    diagnosed  by a Qualified  Physician  as FDA  Positive by an
                    Echocardiogram  performed  between the  commencement of Diet
                    Drug  use  and  the  end  of  the  Screening  Period,  whose
                    conditions  are eligible for Matrix  payments but who do not
                    have any  condition or  circumstance  which makes Matrix B-1
                    applicable,  or  their  Representative  Claimants,  shall be
                    entitled to receive Matrix Compensation  Benefits determined
                    by application  of Matrix A-1,  provided that such Diet Drug
                    Recipients or  Representative  Claimants have registered (or
                    are deemed to have  registered)  for settlement  benefits by
                    Date 2.

               (2)  FOR MATRIX B-1:  Diet Drug  Recipients  who are eligible for
                    Matrix Compensation  Benefits and to whom one or more of the
                    following   conditions   apply,   or  their   Representative
                    Claimants,   will  receive  Matrix   Compensation   Benefits
                    determined by application of Matrix B-1,  provided that such
                    Diet  Drug  Recipients  or  Representative   Claimants  have
                    registered (or are deemed to have registered) for settlement
                    benefits by Date 2:

                    (a)  For claims as to the mitral valve, Diet Drug Recipients
                         who were  diagnosed by a Qualified  Physician as having
                         Mild   Mitral   Regurgitation   by  an   Echocardiogram
                         performed between the commencement of Diet Drug use and
                         the  end of the  Screening  Period  (regardless  of the
                         duration of ingestion of Pondimin(R) and/or Redux(TM));
                         or

                    (b)  Diet Drug  Recipients who ingested  Pondimin(R)  and/or
                         Redux(TM) for 60 days or less,  who were diagnosed by a
                         Qualified    Physician    as   FDA   Positive   by   an
                         Echocardiogram  performed  between the  commencement of
                         Diet Drug use and the end of the Screening Period; or

                    (c)  Diet Drug  Recipients who ingested  Pondimin(R)  and/or
                         Redux(TM) for 61 or more days,  who were diagnosed by a
                         Qualified    Physician    as   FDA   Positive   by   an
                         Echocardiogram  performed  between the  commencement of
                         Diet Drug use and the end of the Screening Period, with
                         any of the following conditions:

                    i)   With respect to an aortic valve claim:

                    a)   The following  congenital  aortic valve  abnormalities:
                         unicuspid,   bicuspid  or  quadricuspid  aortic  valve,
                         ventricular   septal  defect   associated  with  aortic
                         regurgitation;

                    b)   Aortic  dissection  involving  the aortic  root  and/or
                         aortic valve;

                    c)   Aortic sclerosis in people who are > 60 years old as of
                         the - time they are first diagnosed as FDA Positive;

                    d)   Aortic root dilatation > 5.0 cm;

                    e)   Aortic  stenosis with an aortic valve area < 1.0 square
                         centimeter by the Continuity Equation.

                    ii)  With respect to a mitral valve claim:

                    a)   The following  congenital  mitral valve  abnormalities:
                         parachute  valve,  cleft of the mitral valve associated
                         with atrial septal defect;

                    b)   Mitral Valve Prolapse;

                    c)   Chordae  tendineae rupture or papillary muscle rupture;
                         or acute  myocardial  infarction  associated with acute
                         mitral regurgitation;

                    d)   Mitral annular calcification;

                    e)   M-Mode and 2-D echocardiographic  evidence of rheumatic
                         mitral valves  (doming of the anterior  leaflet  and/or
                         anterior   motion  of  the  posterior   leaflet  and/or
                         commissural  fusion),  except  where a  Board-Certified
                         Pathologist   has  examined  mitral  valve  tissue  and
                         determined  that  there was no  evidence  of  rheumatic
                         valve disease.

                    iii) With  respect to claims for the  aortic  and/or  mitral
                         valve(s):

                    a)   Heart   valve   surgery   prior  to   Pondimin(R)and/or
                         Redux(TM)use on the valve that is the basis of claim;

                    b)   Bacterial   endocarditis  prior  to   Pondimin(R)and/or
                         Redux(TM)use;

                    c)   FDA    Positive     regurgitation     (confirmed     by
                         Echocardiogram) prior to Pondimin(R)and/or Redux(TM)use
                         for the valve that is the basis of claim;

                    d)   A  diagnosis  of  Systemic  Lupus  Erythematosus  or  a
                         diagnosis  of  Rheumatoid   Arthritis37   and  valvular
                         abnormalities   of  a  type   associated   with   those
                         conditions;38

                    e)   Carcinoid tumor of a type associated with aortic and/or
                         mitral valve lesions;

                    f)   History of daily use of methysergide or ergotamines for
                         a continuous period of longer than 120 days.

          e.   Matrix A-2 and Matrix B-2 describe the amount of  compensation to
               which  Derivative   Claimants  are  entitled  if  the  Diet  Drug
               Recipient  with  whom  they  are  associated  has a  Matrix-Level
               Condition,  to the extent that  applicable  state law  recognizes
               that  they  have a claim  for  loss of  consortium,  services  or
               support.   Derivative   Claimants  will  be  paid  based  on  the
               Matrix-Level  Condition  and age of  diagnosis  of the Diet  Drug
               Recipient whose alleged injury forms the basis of their claim for
               loss of consortium,  services,  or support under applicable state
               law.  Matrix  A-2 will  apply if the Diet Drug  Recipient,  whose
               alleged  injury  forms  the  basis  of  the  claim  for  loss  of
               consortium,  services,  or support  under  applicable  state law,
               meets the criteria for payment under Matrix A-1.  Matrix B-2 will
               apply if the Diet Drug Recipient,  whose alleged injury forms the
               basis of the claim for loss of consortium,  services,  or support
               under  applicable  state law,  meets the  criteria for payment on
               Matrix B-1.

          f.   If a Diet Drug  Recipient  qualifies  for Matrix  payments due to
               more than one condition,  the Diet Drug  Recipient  and/or his or
               her associated  Representative and Derivative  Claimants who have
               registered (or who are deemed to have  registered) for settlement
               benefits by Date 2 shall be  entitled to receive  only the higher
               of such payments, but not both such payments.

          g.   Matrices  A-1 and B-1 set forth the maximum  aggregate  amount to
               which  the  Diet  Drug  Recipient  or his  or her  Representative
               Claimants are collectively entitled to receive from Fund B. Where
               there is more than one  Representative  Claimant  associated with
               any  particular  Diet Drug  Recipient  eligible  for such  Matrix
               Compensation     Benefits,    the    Trustees    and/or    Claims
               Administrator(s)  shall  allocate  this  amount  among all of the
               Representative  Claimants who have made a claim for such benefits
               according to applicable  law.  Matrices A-2 and B-2 set forth the
               maximum  aggregate  amount  to  which  all  Derivative  Claimants
               associated   with  any   particular   Diet  Drug   Recipient  are
               collectively entitled to receive from Fund B. Where there is more
               than one Derivative  Claimant associated with any particular Diet
               Drug Recipient  eligible for such Matrix  Compensation  Benefits,
               the Trustees  and/or Claims  Administrator(s)  shall allocate the
               Matrix amount, pro rata among all of the Derivative Claimants who
               have  made  a  claim  for  such  benefits,  to  the  extent  that
               applicable  state law recognizes  that they have a claim for loss
               of consortium, services or support.

          h.   Diet Drug  Recipients  who have  been  diagnosed  by a  Qualified
               Physician  as FDA  Positive  (but not also as having  Mild Mitral
               Regurgitation)  by  an   Echocardiogram   performed  between  the
               commencement of Diet Drug use and the end of the Screening Period
               and have registered for settlement  benefits by Date 2, and their
               associated  Representative  and  Derivative  Claimants  who  have
               registered (or who are deemed to have  registered) for settlement
               benefits by Date 2, shall be  eligible  for Matrix  payments  for
               Matrix-Level  Conditions  resulting  from the valve or valves for
               which  there  was  an  FDA  Positive  diagnosis  by  a  Qualified
               Physician  by the end of the  Screening  Period,  subject  to the
               above  provision  that if  he/she  qualifies  for  more  than one
               benefit,  he/she shall be entitled to the higher benefit, but not
               both.

          i.   Diet Drug  Recipients  who have  been  diagnosed  by a  Qualified
               Physician  as having Mild Mitral  Regurgitation  (but not also as
               FDA  Positive)  by  an   Echocardiogram   performed  between  the
               commencement of Diet Drug use and the end of the Screening Period
               and have registered for settlement  benefits by Date 2, and their
               associated  Representative  and  Derivative  Claimants  who  have
               registered (or who are deemed to have  registered) for settlement
               benefits by Date 2, shall be eligible  for Matrix  payments  only
               for  claims  based upon the  mitral  valve,  subject to the above
               provision  that if he/she  qualifies  for more than one  benefit,
               he/she shall be entitled to the higher benefit, but not both.

          j.   Diet Drug  Recipients  who have  been  diagnosed  by a  Qualified
               Physician  both as FDA  Positive  (due to mild or greater  aortic
               regurgitation)  and as having  Mild  Mitral  Regurgitation  by an
               Echocardiogram  performed  between the  commencement of Diet Drug
               use and the end of the Screening  Period and who have  registered
               for  settlement   benefits  by  Date  2,  and  their   associated
               Representative  and Derivative  Claimants who have registered (or
               who are deemed to have  registered)  for  settlement  benefits by
               Date 2, shall be eligible for Matrix  payments  based upon either
               the aortic or the mitral valve.

          k.   Diet Drug  Recipients  who have  been  diagnosed  by a  Qualified
               Physician as having  Endocardial  Fibrosis by September 30, 2005,
               and  have  registered  for  Matrix   Compensation   Benefits  for
               Endocardial  Fibrosis by January 31, 2006,  and their  associated
               Representative  and Derivative  Claimants who have registered (or
               who are deemed to have registered) for these settlement  benefits
               by  January  31,  2006,  shall  be  entitled  to the  Endocardial
               Fibrosis   benefits  as  set  forth  in  Sections   IV.B.2.a  and
               IV.B.2.c.(5)(a),  regardless  of  whether  or not the  Diet  Drug
               Recipient had valvular regurgitation.

               l.   A  Representative  Claimant is deemed to have registered for
                    settlement benefits either when the Representative  Claimant
                    registers  for  benefits or, if  applicable,  as of the date
                    when the Diet Drug  Recipient to which the claim relates has
                    registered for settlement benefits.

         C.       PAYMENT PROVISIONS

                    1.   The  Matrix  payment   amounts  set  forth  in  Section
                         IV.B.2.a  above will be  increased  by two percent (2%)
                         per year, compounded annually, beginning one year after
                         the Final Judicial Approval Date. In the event that the
                         Settlement does not receive Final Judicial  Approval or
                         is terminated  by AHP in accordance  with its terms for
                         any  other  reason,  then  for  purposes  of  providing
                         benefits to each Class  Member who has entered  into an
                         Individual   Agreement   pursuant  to  the  Accelerated
                         Implementation  Option  (described in Section V below),
                         the Matrix payment amounts shall be increased by 2% per
                         year, compounded annually, beginning in the second "AIO
                         Fiscal   Year"  (as  defined  in  Section  I.6  and  as
                         discussed in Section V.H.3 hereof).

                    2.   A "Matrix  Payment  Cut-Off  Date" is  established  for
                         purposes of this Settlement. The Matrix Payment Cut-Off
                         Date  shall be a date  which is 14 years from the Final
                         Judicial Approval Date or December 31, 2015,  whichever
                         is earlier. Those Class Members who fail to qualify for
                         payment on the Matrices by the Matrix  Payment  Cut-Off
                         Date  shall  have no  further  right to claim  benefits
                         under  Fund B or to  exercise a  Back-End  Opt-Out  (as
                         described in Section  IV.D.4 below).  However,  where a
                         Diet Drug  Recipient  does  qualify  for payment on the
                         Matrices by the Matrix  Payment  Cut-Off Date, the Diet
                         Drug Recipient and/or the associated Representative and
                         Derivative  Claimants  may  continue to receive  higher
                         amounts of Matrix Compensation Benefits, if any, if the
                         condition of the Diet Drug  Recipient  which  qualified
                         such  person  for  such  payment  progresses  to a more
                         severe condition after the Matrix Payment Cut-Off Date.

                    3.   Once a Diet Drug  Recipient has reached a  Matrix-Level
                         Condition  before the Matrix Payment  Cut-Off Date, the
                         Diet Drug Recipient and any  associated  Representative
                         and/or  Derivative  Claimants  can  step  up to  higher
                         Matrix-Level   Conditions   and   will  be   paid   the
                         incremental  dollar amount, if any, by which the Matrix
                         payment for the higher  Matrix-Level  Condition exceeds
                         the Matrix payment previously received. Notwithstanding
                         the  foregoing,  Class  Members who seek  benefits  for
                         Endocardial  Fibrosis  must  qualify for payment on the
                         Matrices for that  condition by September  30, 2005 and
                         register (or be deemed to have  registered)  for Matrix
                         Compensation   Benefits  for  Endocardial  Fibrosis  by
                         January 31, 2006.

                  4.       Prior to the  payment of Fund B benefits to any Class
                           Member,  the Trustees and/or Claims  Administrator(s)
                           shall  deduct  the  amount  provided  for in  Section
                           VIII.E.1.b for the payment of attorneys' fees.

          D.   OPT-OUT RIGHTS

               1.   DERIVATIVE  CLAIMANTS.  As to all  opt-outs,  where there is
                    both a Diet Drug Recipient or a Representative  Claimant and
                    one or more Derivative Claimants,  the Diet Drug Recipient's
                    or the  Representative  Claimant's  exercise  or  failure to
                    exercise an opt-out right shall be binding on the associated
                    Derivative Claimant(s).

               2.   INITIAL OPT-OUT

                    a.   ELIGIBILITY: All Class Members are eligible to exercise
                         an Initial Opt-Out right.

                    b.   METHOD OF EXERCISE:  Each Class  Member  wishing to opt
                         out from this  Settlement  must sign and submit  timely
                         written notice to the Claims  Administrator(s),  with a
                         copy to AHP,  clearly  manifesting  the Class  Member's
                         intent  to  opt  out  of  the  Settlement.  The  Claims
                         Administrator(s) shall then submit all Opt-Out forms to
                         the Court. The Court shall be the official  registry of
                         Opt-Outs.  This  written  notice  shall  be in the form
                         appended  hereto as Exhibit  "6" or in a  substantially
                         identical  written   manifestation  of  intent.  To  be
                         effective,  this  written  notice  must be  signed  and
                         submitted  by the  expiration  of the  Initial  Opt-Out
                         Period.  The  Parties  will  recommend  that the  Court
                         approve an Initial  Opt-Out Period of 120 days from the
                         date on which class notice commences.

                    c.   EFFECT OF  EXERCISE:  Any Class  Member  who timely and
                         properly   exercises  an  Initial   Opt-Out  right  may
                         initiate,  continue  with,  or otherwise  prosecute any
                         legal  claim  against  AHP  and  the  Released  Parties
                         without any  limitation,  impediment or defense arising
                         from the terms of the Settlement  Agreement and subject
                         to all  defenses  and rights which AHP and the Released
                         Parties  would  otherwise  have in the  absence  of the
                         Settlement  Agreement.  AHP agrees that it will not use
                         the Settlement  Agreement or any proceedings  connected
                         therewith to cause delay to any Class Member who timely
                         and properly  exercises  his/her  Initial Opt-Out right
                         and initiates,  continues with, or otherwise prosecutes
                         a  claim  against  AHP.  Lawsuits  initiated  by  Class
                         Members  who timely and  properly  exercise  an Initial
                         Opt-Out  shall be subject to the  provisions of Section
                         VIII.F.3.

                    d.   REVOCATION OF EXERCISE:  Any Class Member may revoke an
                         election  to  exercise a right of Initial  Opt-Out  and
                         thereby   receive  the  benefits  of  the   Settlement,
                         provided  that  the  revocation  takes  place  with the
                         written consent of AHP, which shall not be unreasonably
                         withheld.

          3.   INTERMEDIATE OPT-OUT

               a.   ELIGIBILITY:  All Diet Drug Recipients (other than those who
                    have entered into AIO Individual  Agreements pursuant to the
                    Accelerated  Implementation  Option)  who are not members of
                    Subclasses 2(a), 2(b) or 3, and who have been diagnosed by a
                    Qualified  Physician  as FDA  Positive by an  Echocardiogram
                    performed  between the commencement of Diet Drug use and the
                    end  of  the   Screening   Period,   and  their   associated
                    Representative and/or Derivative Claimants,  are eligible to
                    exercise a right to Intermediate Opt-Out

               b.   METHOD OF EXERCISE:  Each Class Member who wants to exercise
                    a right of  Intermediate  Opt-Out must do so by  completing,
                    signing, and timely submitting a written notice of the Class
                    Member's  intent  to do so in the form  appended  hereto  as
                    Exhibit  "7." This  written  notice must be submitted to the
                    Court, the Trustees and/or Claims  Administrator(s),  and to
                    AHP,  no later than Date 2. In that form,  the Class  Member
                    must clearly  express  his/her desire to exercise a right of
                    Intermediate Opt-Out,  certify that he/she is eligible to do
                    so,  and  expressly  acknowledge  an  understanding  of  the
                    Settlement  rights and benefits that will be relinquished by
                    the  exercise of the  Intermediate  Opt-Out  right.  A Class
                    Member may not exercise an Intermediate  Opt-Out right after
                    receiving either $6,000 in cash or any portion of $10,000 in
                    medical  services  in the case of members of  Subclass  1(b)
                    (pursuant to Section IV.A.1.c  above),  or $3,000 in cash or
                    any  portion  of $5,000 in medical  services  in the case of
                    members of  Subclass  1(a)  (pursuant  to  Section  IV.A.2.c
                    above).  If a member of Subclass  1(a) or 1(b) is  diagnosed
                    with a Matrix-Level Condition and exercises an opt-out right
                    after the end of the  Initial  Opt-Out  Period,  the opt-out
                    shall be deemed a Back-End Opt-Out.

               c.   EFFECT OF EXERCISE:  The Intermediate  Opt-Out is subject to
                    the  following  provisions.  A Class  Member  who timely and
                    properly exercises an Intermediate  Opt-Out right may pursue
                    all of his or her Settled  Claims  (except for those  claims
                    set forth in  subparagraphs  (e) and (g) of  Section  I.53),
                    against the AHP Released Parties and/or the Non-AHP Released
                    Parties,  but may only assert a claim  against AHP  Released
                    Parties  and/or the Non-AHP  Released  Parties  based on the
                    heart valve of the relevant  Diet Drug  Recipient  which was
                    diagnosed  by a Qualified  Physician  as FDA  Positive by an
                    Echocardiogram  performed  between the  commencement of Diet
                    Drug use and the end of the  Screening  Program.  If, at any
                    time after a Class Member exercises an Intermediate  Opt-Out
                    right,  the Class  Member  initiates  a lawsuit  seeking  to
                    pursue a Settled  Claim  against  AHP or any other  Released
                    Party, the Released Party shall have the right to challenge,
                    in such  lawsuit  only,  whether  the opt-out was timely and
                    proper,  including  whether the Class Member was eligible to
                    exercise such an opt-out  right.  With respect to each Class
                    Member who timely and properly  exercises  the  Intermediate
                    Opt-Out right and who initiates a lawsuit against any of the
                    Released  Parties within one year from the date on which the
                    Intermediate  Opt-Out right is  exercised,  the AHP Released
                    Parties shall not assert any defense based on any statute of
                    limitations  or repose,  the  doctrine of laches,  any other
                    defense  predicated  on the  failure  to timely  pursue  the
                    claim,  any defense based on  "splitting" a cause of action,
                    any  defense  based on any  release  signed  pursuant to the
                    Settlement Agreement,  and/or any other defense based on the
                    existence of the Settlement Agreement,  except to the extent
                    provided   herein.   A  Class  Member  timely  and  properly
                    exercising  an  Intermediate  Opt-Out  right  may  not  seek
                    punitive, exemplary, or any multiple damages against the AHP
                    Released Parties or the Non-AHP Released Parties;  provided,
                    however, as consideration for being a Non-AHP Released Party
                    and for  receiving  the benefit of this waiver of  punitive,
                    exemplary,  and multiple damages, the Non-AHP Released Party
                    must agree in writing not to assert any defense based on any
                    statute of limitations or repose, the doctrine of laches, or
                    any other defense predicated on the failure to timely pursue
                    the  claim,  any  defense  based on  "splitting"  a cause of
                    action,  any defense based on any release signed pursuant to
                    the Settlement Agreement,  and/or any other defense based on
                    the  existence of the  Settlement  Agreement,  except to the
                    extent  provided  herein;  and provided  further that if the
                    Non-AHP Released Party so agrees,  then the Class Member may
                    not  recover  more  than the total  amount  of  compensatory
                    damages  he or  she is  entitled  to  from  all  persons  or
                    entities in connection  with any claimed injury arising from
                    his/her use of Diet Drugs,  except where such  limitation is
                    inconsistent  with applicable law. A Class Member timely and
                    properly  exercising an  Intermediate  Opt-Out right may not
                    use any  previous  verdicts  or  judgments  against  the AHP
                    Released  Parties,  or factual  findings  necessary  to such
                    verdicts or judgments,  for purposes of establishing  claims
                    or facts in order to obtain a verdict  or  judgment  against
                    the  AHP  Released   Parties  under  the  doctrines  of  res
                    judicata, collateral estoppel or other doctrines of claim or
                    issue preclusion. Nor may a Class Member timely and properly
                    exercising an  Intermediate  Opt-Out right seek to introduce
                    into  evidence  against the AHP  Released  Parties,  for any
                    purpose,  such a  verdict,  judgment,  or  factual  finding.
                    Lawsuits  initiated by Class Members who timely and properly
                    exercise  an  Intermediate  Opt-Out  shall be subject to the
                    provisions of Section VIII.F.3.



          4.   BACK-END OPT-OUT

               a.   ELIGIBILITY:

                    (1)  As  to   Matrix-Level   claims   based  upon   valvular
                         regurgitation,  all Diet Drug  Recipients  (other  than
                         those who have entered into AIO  Individual  Agreements
                         pursuant to the Accelerated  Implementation Option) who
                         have been  diagnosed  by a Qualified  Physician  as FDA
                         Positive or as having Mild Mitral  Regurgitation  by an
                         Echocardiogram  performed  between the  commencement of
                         Diet Drug use and the end of the Screening Period,  and
                         who reach a Matrix-Level  Condition after September 30,
                         1999, but before the Matrix  Payment  Cut-Off Date, and
                         their  associated   Representative   and/or  Derivative
                         Claimants,  may  exercise  a  Back-End  Opt-Out  right,
                         provided  that the Class  Member has  registered  or is
                         deemed to have  registered for  settlement  benefits by
                         Date 2. Class  Members who knew prior to September  30,
                         1999, that they had injury to one or more of their left
                         side heart valves and a condition  which would  entitle
                         them to payments  on the  Matrices  may not  exercise a
                         Back-End Opt-Out.

                    (2)  As  to  Matrix-Level   claims  based  upon  Endocardial
                         Fibrosis,   all  Diet  Drug  Recipients  who  have  not
                         received the diagnosis of  Endocardial  Fibrosis from a
                         Qualified Physician by September 30, 1999, and who have
                         subsequently been diagnosed by a Qualified Physician as
                         having Endocardial  Fibrosis by September 30, 2005, and
                         their  associated   Representative   and/or  Derivative
                         Claimants, may exercise a Back-End Opt-Out.

                    (3)  Class   Members  who  are  not   eligible   for  Matrix
                         Compensation  Benefits  may not  exercise  the Back-End
                         Opt-Out right provided by this Settlement.

          b.   METHOD OF  EXERCISE:  Each Class  Member who wishes to exercise a
               right of Back-End Opt-Out must complete,  sign, and timely submit
               written  notice of the Class  Member's  intention to do so in the
               form appended  hereto as Exhibit "8." This written notice must be
               submitted   to   the   Court,    the   Trustees   and/or   Claims
               Administrator(s),  and to AHP,  within 120 days after the date on
               which the Class  Member  first  knows or should have known in the
               exercise of  reasonable  diligence  that the  relevant  Diet Drug
               Recipient  developed  a  Matrix-Level  Condition  or by  Date  2,
               whichever is later. In that notice, the Class Member must clearly
               express his or her decision to exercise a Back-End Opt-Out right,
               certify that he or she is eligible to do so, and  acknowledge  an
               understanding of the Settlement  rights and benefits that will be
               relinquished  by the  exercise of the Back-End  Opt-Out.  A Class
               Member may not exercise a Back-End  Opt-Out right after  claiming
               any Matrix Compensation Benefits.

          c.   EFFECT OF  EXERCISE:  The  Back-End  Opt-Out  is  subject  to the
               following  provisions.  A Class  Member who  timely and  properly
               exercises a Back-End Opt-Out may pursue all of his or her Settled
               Claims  (except for those claims set forth in  subparagraphs  (e)
               and (g) of Section I.53), against the AHP Released Parties and/or
               the Non-AHP Released Parties, but may only assert a claim against
               the AHP Released  Parties and/or the Non-AHP  Released Parties as
               follows:  (i)  if  such  person  has  opted  out by  reason  of a
               Matrix-Level Condition of one or more heart valves diagnosed by a
               Qualified Physician as FDA Positive or Mild Mitral  Regurgitation
               by an  Echocardiogram  performed between the commencement of Diet
               Drug use and the end of the  Screening  Period,  such lawsuit may
               only  assert a claim  based on that  heart  valve or  valves  and
               condition;  and (ii) if such  person  has  opted out by reason of
               Endocardial Fibrosis,  such lawsuit may only assert a claim based
               on  Endocardial  Fibrosis.  If, at any time after a Class  Member
               exercises a Back-End  Opt-Out right, the Class Member initiates a
               lawsuit  seeking  to pursue a Settled  Claim  against  AHP or any
               other Released Party,  the Released Party shall have the right to
               challenge,  in such lawsuit only,  whether the opt-out was timely
               and proper,  including  whether the Class  Member was eligible to
               exercise such an opt-out right. With respect to each Class Member
               who timely and properly  exercises the Back-End Opt-Out right and
               who  initiates  a lawsuit  against  any of the  Released  Parties
               within one year from the date on which the Back-End Opt-Out right
               is  exercised,  the AHP  Released  Parties  shall not  assert any
               defense  based on any  statute  of  limitations  or  repose,  the
               doctrine of laches,  any other defense  predicated on the failure
               to timely pursue the claim,  any defense  based on  "splitting" a
               cause of action, any defense based on any release signed pursuant
               to the  Settlement  Agreement,  and/or any other defense based on
               the existence of the Settlement  Agreement,  except to the extent
               provided herein. A Class Member timely and properly  exercising a
               Back-End  Opt-Out  may  not  seek  punitive,  exemplary,  or  any
               multiple  damages against the AHP Released Parties or the Non-AHP
               Released Parties; provided, however, as consideration for being a
               Non-AHP  Released  Party and for  receiving  the  benefit of this
               waiver of punitive,  exemplary, and multiple damages, the Non-AHP
               Released  Party must agree not to assert any defense based on any
               statute of limitations or repose,  the doctrine of laches, or any
               other  defense  predicated  on the  failure to timely  pursue the
               claim,  any defense based on  "splitting" a cause of action,  any
               defense based on any release  signed  pursuant to the  Settlement
               Agreement, and/or any other defense based on the existence of the
               Settlement  Agreement,  except to the extent provided herein; and
               provided  further that if the Non-AHP  Released  Party so agrees,
               then the Class  Member may not recover more than the total amount
               of compensatory damages he or she is entitled to from all persons
               or entities in connection  with any claimed  injury  arising from
               his/her  use of Diet  Drugs,  except  where  such  limitation  is
               inconsistent  with  applicable  law.  A Class  Member  timely and
               properly  exercising a Back-End  Opt-Out may not use any previous
               verdicts  or  judgments  against  the AHP  Released  Parties,  or
               factual  findings  necessary to such verdicts or  judgments,  for
               purposes  of  establishing  claims  or facts in order to obtain a
               verdict or judgment  against the AHP Released  Parties  under the
               doctrines of res judicata, collateral estoppel or other doctrines
               of claim or issue  preclusion.  Nor may a Class Member timely and
               properly  exercising a Back-End  Opt-Out  right seek to introduce
               into evidence against the AHP Released Parties,  for any purpose,
               such a verdict,  judgment, or factual finding. Lawsuits initiated
               by Class  Members  who  timely and  properly  exercise a Back-End
               Opt-Out shall be subject to the provisions of Section VIII.F.3.


V.   ACCELERATED IMPLEMENTATION OPTION

     A.   All Class Members shall be offered the option of obtaining  settlement
          benefits prior to the Final Judicial  Approval Date (the  "Accelerated
          Implementation  Option" or "AIO")  subject to the  conditions  defined
          below.

     B.   Any Class  Member  may elect the AIO at any time from the  Preliminary
          Approval  Date until the Final  Judicial  Approval Date or, unless AHP
          elects to extend  the offer date  thereafter,  the date on which it is
          determined  that  the  Settlement  Agreement  will not  receive  Final
          Judicial  Approval.  Persons  electing  the AIO will  begin  receiving
          benefits  thereunder  at such time as the Trial Court makes an oral or
          written ruling on the approval or non-approval of the Settlement or at
          such time as AHP exercises its "walkaway  rights"  pursuant to Section
          VII.E hereof. A Derivative  Claimant may not elect the AIO if the Diet
          Drug   Recipient   with  whom  he  or  she  is   associated   (or  the
          Representative  Claimant of the Diet Drug  Recipient)  has not elected
          the AIO.

     C.   In order to elect the AIO, a Class  Member must  complete and sign the
          "PINK FORM" appended to this  Settlement  Agreement as Exhibit "9" and
          submit it to the Trustees and/or Claims  Administrator(s).  Any person
          properly  executing the "PINK FORM" and  delivering it to the Trustees
          and/or  Claims  Administrator(s)  during  the  period  in which AHP is
          offering the AIO,  including any extension of the AIO offer, will have
          entered into an  individual  agreement  with AHP,  separate  from this
          Settlement  Agreement,  under which the parties thereto shall have all
          the same  rights,  benefits  and  obligations  to one  another  as the
          rights,  benefits and obligations accorded to Class Members and to AHP
          under the  Settlement  Agreement,  except  as  provided  below.  Class
          Members will have all the rights, benefits and obligations provided in
          Section IV.A, IV.B, and IV.C, except for Section IV.A.1.b herein.  AHP
          will have all the rights, benefits and obligations provided in Section
          VII., except  subsection E. thereof.  Such executed and delivered PINK
          FORMS shall be referred to as "Individual Agreements."

     D.   Such  Individual  Agreements  shall be  effective  prior to the  Final
          Judicial Approval Date and, even if AHP exercises its "walkaway right"
          under Section VII.E, the Individual  Agreements  entered into prior to
          the date of such exercise shall nevertheless be binding and effective.
          If AHP does not  exercise  its  "walkaway  right," and the  Settlement
          Agreement  with the  Settlement  Class does not receive Final Judicial
          Approval  or is  terminated  for any  other  reason,  such  Individual
          Agreements shall nevertheless continue to be effective and binding.

     E.   No person  exercising  an Initial  Opt-Out  right will be  eligible to
          enter into an Individual  Agreement,  unless such Initial  Opt-Out has
          been revoked with AHP's consent  pursuant to Section  IV.D.2.d hereof.
          Persons  signing  Individual  Agreements  will,  by entering into such
          Individual   Agreements,   knowingly  and   affirmatively   waive  all
          Intermediate and Back-End Opt-Out rights otherwise provided for by the
          Settlement  Agreement  regardless  of  whether  or not the  Settlement
          Agreement  receives  Final  Judicial  Approval.   Notwithstanding  the
          preceding sentence, Class Members who enter into Individual Agreements
          pursuant to the Accelerated  Implementation Option will be eligible to
          exercise the Financial  Insecurity  Opt-Out Right described in Section
          III.E.9 above.  In addition,  such persons will agree not to object to
          approval of the  Settlement  by the Court and will agree not to appeal
          from  Trial  Court  Approval.  The  Individual  Agreements  shall also
          provide for a  Screening  Period to commence on or about the AIO Start
          Date and to conclude 12 months after the date on which the  Settlement
          Agreement  obtains Final Judicial  Approval or the date on which it is
          determined  that  the  Settlement  Agreement  will not  receive  Final
          Judicial  Approval  or  is  otherwise   terminated.   Persons  signing
          Individual Agreements pursuant to the AIO shall also agree to be bound
          by the provisions contained in Sections VII.C.1 through VII.C.4 herein
          with  respect to the  protection  of AHP from  claims by  Non-Settling
          Defendants,  notwithstanding  the absence of any order  enjoining  and
          barring all Non-Settling Defendants from commencing or prosecuting any
          claim against AHP or any other Released Party for contribution  and/or
          non-contractual  indemnity  as set  forth  in  Section  VII.C.1.a  and
          Section VII.C.2 herein.

     F.   After  Trial Court  Approval  or in the event Trial Court  Approval is
          denied and an appeal from that denial is taken in a timely manner, but
          prior to the Final Judicial  Approval  Date, the following  provisions
          shall apply:

          1.   Fund A benefits for individuals accepting the AIO will be payable
               only out of Fund A of the Settlement  Trust and AHP's  obligation
               to make  payments to Fund A for this and any other  purpose shall
               be unchanged from that set forth in Section III.B. hereof;

          2.   Fund B benefits for eligible  individuals  accepting the AIO will
               be payable only out of Fund B of the Settlement Trust.  Beginning
               on the AIO Start Date,  the  Trustees may request in writing on a
               monthly basis (each a "Request for Fund B AIO  Payment")  payment
               of an amount  (such  amount  being  referred  to as a "Fund B AIO
               Deposit")   to  pay  claims  for  Fund  B  benefits  by  eligible
               individuals  who have  accepted  the AIO which have not been paid
               due to an  insufficient  cash  balance  in  Fund B and to pay the
               reasonable costs of administration associated with providing such
               benefits.  AHP  shall  pay  the  Fund  B AIO  Deposit  amount  so
               requested  no later  than 15 days  after  the  date on which  AHP
               receives  from the  Trustees  a  Request  for Fund B AIO  Payment
               requesting such Fund B AIO Deposit;  provided however, that AHP's
               obligation  to pay Fund B Deposits  shall at all times be limited
               to the Adjusted Maximum  Available Fund B Amount.  The payment of
               attorneys'  fees by AHP in the  circumstances  described  by this
               paragraph  shall  be  in  accordance  with  Sections   VIII.E.2.,
               VIII.E.3. and VIII.E.4.

     G.   In the event of Final  Judicial  Approval,  all benefits due under the
          AIO shall be paid from Fund A or Fund B, as applicable,  and AHP shall
          continue to have  obligations as set forth in Sections III.B and III.C
          hereof to make  payments  to Fund A and Fund B, but AHP shall  have no
          further  obligation to make any Fund B AIO Deposits to Fund B pursuant
          to  Section  V.F  above  for the  payment  of such AIO  benefits.  All
          Individual  Agreements  shall be  administered  after  Final  Judicial
          Approval in all respects as if they were part of the Settlement, other
          than as set forth in Section V.E hereof;  provided,  however, that all
          persons who have entered into Individual Agreements shall be deemed to
          have registered for all benefits under the Settlement Agreement.  Such
          persons  will  be  subject  to  the  requirements  for  submission  of
          documentation  and other  evidence to establish  their  entitlement to
          settlement  benefits,  including  but not limited to submission of the
          "GREEN FORM" in order to claim Matrix Compensation Benefits.

     H.   If  Final  Judicial  Approval  is not  obtained  or if the  Settlement
          Agreement  is  terminated  by  AHP  for  any  reason,   the  following
          provisions shall apply with respect to the Individual Agreements which
          have been entered into pursuant to the AIO:

          1.   The Settlement Trust shall not automatically terminate, but shall
               remain in effect to administer the Individual Agreements, subject
               to Sections V.H.2, V.H.3, V.H.4 and V.H.5 hereof.

          2.   Notwithstanding  the  provisions of Section V.H.1 hereof,  within
               five  Business  Days  after  the  date on  which  Final  Judicial
               Approval  is  not  obtained  or  the  date  on  which  Settlement
               Agreement is terminated for any other reason,  the Trustees shall
               transfer to AHP all amounts in the Settlement Trust after payment
               of any  charges  and  expenses  which  the  Settlement  Agreement
               expressly  authorized  or required to be  incurred  and  expended
               prior  thereto,  including  any  amounts  expended  to  assist in
               seeking  Final  Judicial  Approval,  except  that the Trust shall
               retain the sum of $50 million and any additional amount which the
               Trustees  reasonably  determine  to be required to provide Fund A
               and  Fund B  benefits  to  individuals  who  have  qualified  for
               benefits  pursuant  to  Individual  Agreements  but  have not yet
               received them. Thereafter,  and subject to any changes negotiated
               or determined by arbitration pursuant to Sections V.H.4 and V.H.5
               hereof, AHP shall make payments to the Trust on a quarterly basis
               of amounts  required  by the Trust to  provide  Fund A and Fund B
               benefits to  individuals  who have  qualified  for such  benefits
               pursuant to Individual  Agreements but have not yet received them
               and  to  maintain  a $50  million  Administrative  Reserve.  Such
               quarterly  payments  shall be based upon an AIO Fiscal Year.  For
               this purpose,  AHP agrees to pay into the  Settlement  Trust such
               amount as the Trustees may request in writing on such a quarterly
               basis, no later than 15 days after the date on which the Trustees
               provide  AHP with such a  quarterly  request,  subject to Section
               V.H.3 below.

          3.   AHP's   obligations  to  make  payments  pursuant  to  Individual
               Agreements,  including  but not  limited to payments to the Trust
               pursuant to Section  V.F and  pursuant  to Section  V.H.2  above,
               shall be subject in the aggregate to the same maximum limitations
               on its  obligations  as would have been  applicable to its Fund A
               and Fund B obligations to the Settlement Trust had the Settlement
               received  Final  Judicial  Approval,  subject  to  the  following
               modifications:

               a.   The payment  amounts  specified in Section  III.B.1.  hereof
                    shall be deemed  to be AHP's  maximum  aggregate  obligation
                    pursuant  to  all  Individual   Agreements  to  pay  for  or
                    otherwise provide benefits or other amounts which would have
                    been payable from Fund A had Final  Judicial  Approval  been
                    obtained and for the cost of administration thereof.

               b.   In calculating the Adjusted Maximum  Available Fund B Amount
                    (i) the AIO Fiscal  Year shall be used in lieu of the Fiscal
                    Year;  and (ii) no  deduction  shall be made for any Credits
                    pursuant  to  Section  VII.A  or  any  Cross-Claim   Credits
                    pursuant to Section VII.C hereof.

          4.   During  the  60-day  period  following  the  termination  of  the
               Settlement  Agreement,  AHP and the Class Counsel shall engage in
               good faith negotiations with respect to a mechanism to administer
               the  Individual  Agreements  in a manner  designed to assure that
               individuals electing the AIO have the same rights and benefits as
               the rights and  benefits  accorded  to Class  Members  under this
               Agreement  (except as provided in Section V.E hereof);  to reduce
               the cost of administering the Individual  Agreements to an amount
               which is reasonable in relation to the number of such  agreements
               which have been entered into;  and to assure that AHP obtains the
               most favorable tax treatment available under those circumstances,
               and to assure that AHP receives all  information  requested by it
               to permit it to take  appropriate  tax  deductions  and otherwise
               calculate its taxes.  Such  negotiations  shall address,  without
               limitation, the following matters:

               a.   whether a  different  mechanism  other  than the  Settlement
                    Trust should be established for administering the Individual
                    Agreements;   whether  such  an  alternative   mechanism  is
                    necessary to reduce the cost of administering the Individual
                    Agreements  to an amount which is  reasonable in relation to
                    the number of such agreements  which have been entered into;
                    or whether  the  Settlement  Trust  shall be retained as the
                    mechanism for administering the Individual  Agreements,  but
                    with  changes  in its  structure  or level of  expenditures;
                    provided  however that the Settlement  Trust shall remain in
                    effect,  as modified in accordance  with Sections  V.H.2 and
                    V.H.3 above,  unless and until such  changes or  alternative
                    mechanisms are agreed upon pursuant to this Section V.H.4 or
                    are determined pursuant to Section H.5;

               b.   whether  and  to  what  extent  an  alternative   means  for
                    resolving  disputes in the  administration of the Individual
                    Agreements,  including  but not  limited to  disputes  as to
                    whether or not AHP has failed to make any required  payment,
                    should be used in lieu of the resolution of such disputes by
                    the Court;

               c.   whether  and to what  extent  changes  should be made to the
                    Security Fund structure and terms  (including a reduction in
                    the amount of collateral  and the treatment of the Financial
                    Insecurity  Opt-Out  Right)  in light of the  number of such
                    agreements which shall have been entered into and to reflect
                    the different circumstances then in effect;

               d.   in the event that the  Settlement  Trust is retained for the
                    purpose of  administering  the  Individual  Agreements,  the
                    amount by which the Administrative  Reserve is to be reduced
                    to reflect the reasonable  administrative needs of the Trust
                    for the purpose of administering the Individual  Agreements,
                    which shall be  reasonable in relation to the number of such
                    agreements which have been entered into.

          5.   In the event  that  Class  Counsel  and AHP are not able to reach
               agreement  as to any or all of the matters  described  in Section
               V.H.4, such matters shall be resolved by binding arbitration by a
               panel of three arbitrators, one of whom shall be selected by AHP,
               one of whom shall be selected  by Class  Counsel and the third of
               whom shall be  selected  by the first two such  arbitrators.  The
               cost of such arbitration shall be paid by the Settlement Trust as
               an  administrative  expense.  Such arbitration shall be conducted
               under the rules of the American Arbitration Association and shall
               be  concluded in no more than 60 days after the end of the 60-day
               period  referred  to  in  Section  V.H.4  above,   including  the
               rendering of a decision by the arbitrators.

     I.   If AHP exercises its "walkaway right" under Section VII.E hereof,  the
          Individual  Agreements  previously  entered into shall nevertheless be
          binding  and  effective  on AHP and the  other  parties  thereto.  The
          exercise  of  the  "walkaway   right"  by  AHP  will  not  affect  its
          obligations  to those Class Members who have accepted the AIO prior to
          AHP's exercise of its "walkaway right" or during any subsequent period
          in which AHP  continues  to offer the AIO,  nor those  Class  Members'
          obligations to AHP thereunder.

     J.   The Parties  shall ask the Court to supervise  the award of attorneys'
          fees relating to the  Individual  Agreements,  as set forth in Section
          VIII.E hereof,  whether or not the Settlement  receives Final Judicial
          Approval.

VI.      CLAIMS ADMINISTRATION

     A.   THE INTERIM  ESCROW AGENT,  INTERIM  CLAIMS  ADMINISTRATOR(S),  CLAIMS
          ADMINISTRATOR(S) AND TRUSTEES.

     1.   In  connection  with their  request  for  Preliminary  Approval of the
          Settlement, AHP and the Class Counsel Representative(s) shall mutually
          select an  Interim  Escrow  Agent,  such  selection  being  subject to
          approval  by the  Court.  Until  such time as the Court  approves  the
          appointment  of Trustees,  the Interim  Escrow Agent shall have all of
          the rights and  responsibilities  of the Trustees under the Settlement
          Agreement  with  regard to the receipt and  investment  of  Settlement
          Funds and any  payments  which AHP is required to make to the Trustees
          shall be paid to the Interim Escrow Agent.

     2.   In  connection  with their  request  for  Preliminary  Approval of the
          Settlement,  AHP and the Class Counsel Representative(s) shall request
          that the Court  approve  the  appointment  of two (2)  Interim  Claims
          Administrators. The Interim Claims Administrators will be nominated by
          the Parties,  and each  nomination will be subject to agreement of the
          Parties and subject to approval by the Federal District Court.

     3.   The Trustees shall consist of seven (7) independent  individuals,  all
          of whom shall be  jointly  nominated  by the  Parties  and  subject to
          agreement of AHP and the Class Counsel Representative(s).  Four (4) of
          the  nominees  shall be subject to the approval by the Judges who will
          participate in the State Court Judicial Advisory Committee referred to
          in Sections  VIII.B.3-6 of this  Agreement.  These four Trustees shall
          serve for a period  ending  December  31, 2004.  The initial  Trustees
          shall  be those  persons  named on the  signature  pages of the  Trust
          Agreement,  and the Trustees who shall serve until  December 31, 2004,
          shall  be  designated  as such on the  signature  pages  of the  Trust
          Agreement.  Beginning on January 1, 2005,  the Trust will be comprised
          of three (3) Trustees until the termination of the Trust.  All nominee
          Trustees  shall be subject to the approval of and  appointment  by the
          Federal  District Court.  AHP and the Class Counsel  Representative(s)
          shall use their best  efforts  to assure  that such  Trustees  will be
          appointed within 60 days of this Settlement Agreement.  If any nominee
          is not approved,  the Parties shall jointly  nominate another nominee,
          who  will  be  subject  to  agreement  of AHP and  the  Class  Counsel
          Representative(s).  If any  vacancy  occurs  among the  Trustees,  the
          successor  Trustee,  if any,  shall be  selected  in  accordance  with
          Article 3.06 of the Trust Agreement, subject to approval of the Court.

     4.   The Interim Escrow Agent,  Interim Claims  Administrator(s),  Trustees
          and Claims Administrator(s), shall have the following qualifications:

          a.   The  Interim   Claims   Administrator(s),   Trustees  and  Claims
               Administrator(s) shall have relevant medical,  financial,  legal,
               or administrative experience.

          b.   The following individuals and/or entities,  may not be nominated,
               approved,  or  serve as the  Interim  Escrow  Agent or any  other
               escrow    agent    appointed     hereunder,     Interim    Claims
               Administrator(s), Claims Administrator(s), or Trustees:

               i.   Past or present officers, directors, agents, or employees of
                    AHP,  Interneuron  or  Servier,  or  any  successor  or  any
                    affiliates thereof.

               ii.  Past or present officers, directors, agents, or employees of
                    any manufacturer,  seller, wholesaler, or distributor of any
                    Phentermine     hydrochloride    or    Phentermine     resin
                    pharmaceutical product.

               iii. Attorneys or other persons who represent or have represented
                    or been retained to represent  Interneuron,  Servier, or any
                    of the Parties to this Agreement,  including but not limited
                    to, AHP, any Diet Drug Recipients,  Representative Claimants
                    or Derivative Claimants.

               iv.  Diet  Drug   Recipients,   Class   Members,   Representative
                    Claimants, or Derivative Claimants.

               v.   Persons  or  entities  related  to or  affiliated  with  any
                    attorneys  or   representatives  of  Diet  Drug  Recipients,
                    Representative Claimants, or Derivative Claimants.

               vi.  Persons who own any securities of AHP, Interneuron, Servier,
                    or any successor  corporations or any affiliates thereof, or
                    who have any other financial  interest in AHP,  Interneuron,
                    Servier or, any  successor  corporations  or any  affiliates
                    thereof.

               vii. Persons who own any securities of any manufacturer,  seller,
                    wholesaler or distributor of any  Phentermine  hydrochloride
                    or Phentermine resin pharmaceutical product.

               Notwithstanding  the  foregoing,  upon  written  request and full
               disclosure   of  any  and  all   disqualifications   under   this
               subsection,  said  disclosed  disqualifications  may be waived in
               writing  by the  Parties  to this  Agreement,  subject  to  Court
               approval.

     5.   The rights and duties of the Interim  Escrow  Agent shall be set forth
          in an escrow  agreement  substantially  in the form appended hereto as
          Exhibit "10."

     6.   Until  the   effective   date  of  the  Trust,   the  Interim   Claims
          Administrators  shall jointly  exercise all of the functions which are
          to be exercised by the Claims  Administrator(s)  and/or Trustees under
          the terms of this Settlement  Agreement,  except those functions which
          will be exercised by the Interim  Escrow  Agent.  Each Interim  Claims
          Administrator  that was or is a party,  or is  threatened to be made a
          party,  to any  threatened,  pending,  or  completed  action,  suit or
          proceeding of any kind, whether civil,  administrative or arbitrative,
          by reason of such Interim Claims Administrator being or having been an
          Interim  Claims  Administrator,  shall  be  indemnified  by the  Trust
          against  expenses,  costs and fees of  attorneys,  judgments,  awards,
          costs,  amounts  paid in  settlement,  and  liabilities  of all  kinds
          incurred by such Interim Claims  Administrator  in connection  with or
          resulting from such action,  suit, or proceeding if he or she acted in
          good  faith  and  in  a  manner  such  Interim  Claims   Administrator
          reasonably  believed to be in or not opposed to the best  interests of
          the Trust  and/or  the  Interim  Escrow  established  pursuant  to the
          Interim  Escrow  Agreement  contemplated  in this  Section  VI.A.  Any
          indemnification  under this  Section  VI.A.6 shall be made only upon a
          determination by the Court that indemnification of such Interim Claims
          Administrator  is proper in the  circumstances.  Reasonable  expenses,
          costs,  and fees of  attorneys  incurred by or on behalf of an Interim
          Claims  Administrator  in  connection  with any such action,  suit, or
          proceeding,  whether civil, administrative or arbitrative, may be paid
          by the Trust in advance of the final disposition  thereof upon receipt
          of an undertaking by or on behalf of such Interim Claims Administrator
          to repay such amount  unless it shall be  determined  ultimately  that
          such  Interim   Claims   Administrator   or  former   Interim   Claims
          Administrator  is  entitled  to be  indemnified  by the Trust.  If any
          disbursements  are  required to be made for  indemnification  purposes
          pursuant to this  Section  VI.A.6 prior to the  effective  date of the
          Trust,  and are ordered to be paid by the Court,  the  Interim  Escrow
          Agent shall have the authority to make  disbursements from the Interim
          Escrow  for such  purposes.  Each  Interim  Claims  Administrator  may
          purchase  and  maintain  reasonable  amounts  and  types of  insurance
          against  liability  asserted against or incurred by such individual in
          that  capacity or arising from his or her status as an Interim  Claims
          Administrator.  Each Interim Claims  Administrator  shall have a prior
          lien upon the Trust  and the  Interim  Escrow  Account  to secure  the
          payment of any amounts  payable to such Interim  Claims  Administrator
          pursuant to this Section  VI.A.6.  The Interim  Claims  Administrators
          shall not be required to post any bond or other form of surety  unless
          otherwise ordered by the Court.

     7.   In addition to the duties,  obligations  and  procedures  described in
          this Settlement Agreement,  the Interim Claim(s)  Administrator(s) (if
          required),  Claims Administrator(s) and Trustees shall hire personnel,
          including personnel qualified to provide expert medical advice.

     8.   Until the effective date of the Trust:

          a.   Disbursements for purposes of paying claims or providing benefits
               under  the  Settlement  Agreement  shall  be made by the  Interim
               Escrow  Agent  subject to the  direction  of the  Interim  Claims
               Administrators; and

          b.   Disbursements  for purposes of claims  administration,  including
               the cost of providing  notice to the Settlement  Class,  shall be
               made by the Interim  Escrow Agent subject to the joint  direction
               of AHP and Class Counsel.  All  disbursements  will be subject to
               review and approval by the Court.

     9.   As promptly as possible,  after the effective  date of the Trust,  for
          purposes of administering the Settlement Trust:

          a.   Control  over  Fund A and  Fund B  shall  be  transferred  by the
               Interim Escrow Agent to the Trustees and upon such transfer,  the
               Interim Escrow Agent shall cease to have any  responsibility  for
               the future receipt,  preservation,  maintenance,  investment, and
               disbursement of the Settlement funds;

          b.   The Trustees shall have  responsibility for each matter entrusted
               to the "Trustees and/or Claims  Administrator(s)" under the terms
               of  the   Settlement   Agreement.   Until  such  time  as  Claims
               Administrator(s)   are   appointed  and  approved  by  the  Court
               according to Section  VI.A.9.c  below,  the Trustees may delegate
               any portion of their responsibility for claims  administration to
               the Interim Claims Administrator(s);

          c.   The Trustees  shall have  responsibility  for  appointing  Claims
               Administrator(s)  within  120  days  of the  date  on  which  the
               Trustees are appointed by the Court,  and the  appointment of the
               Claims  Administrator(s)  shall be  subject  to  approval  of the
               Court.  At  the  time  of  such  approval,   the  Interim  Claims
               Administrator(s) shall have no further duties or responsibilities
               under the Settlement.

     10.  The Trustees  (and the Interim  Claims  Administrator(s))  and Interim
          Escrow  Agent  prior to the  effective  date of the Trust  shall  make
          reports to the Court, AHP, and Class Counsel as follows:

          a.   Annual Reporting Obligations

               (1)  On an annual (calendar year) basis, the Trustees shall cause
                    an audit to be  performed by a Certified  Public  Accountant
                    upon the calendar year  financial  statements of each of the
                    following  (each  financial   statement  being  prepared  in
                    accordance with generally  accepted  accounting  principles)
                    and shall  issue a report  stating  the  result of each such
                    audit:

                    (a)  the   Settlement   Trust  and  each  Fund   established
                         thereunder;

                    (b)  the Security Fund; and

                    (c)  each   escrow   account   then  in   effect   hereunder
                         (including, as to the Security Fund Escrow Account, the
                         amounts  transferred  from the  Security  Fund  upon an
                         Uncured Failure to Make Payment).

               (2)  On an annual basis based on the calendar  year, the Trustees
                    shall provide AHP with  information  sufficient to allow AHP
                    to calculate  in a timely  fashion its  estimated  taxes and
                    taxes in connection  with payments made by AHP to the Trust,
                    including without limitation the actual payments made by the
                    Trust.

               (3)  The Trustees  shall provide  annual  reports for each Fiscal
                    Year  to be sent to AHP  and to  Class  Counsel,  reporting,
                    among other appropriate items, the following:

                    (i)  the total  amount paid out of each of Fund A and Fund B
                         for each category of benefit  payable by each such Fund
                         for  that  Fiscal  Year  and   cumulatively   from  the
                         Preliminary Approval Date;

                    (ii) the  amounts   incurred  by  the  Settlement  Trust  in
                         administrative  expenses and for any other  purpose for
                         that Fiscal Year and cumulatively  from the Preliminary
                         Approval  Date,  and how such  disbursements  have been
                         allocated between Fund A and Fund B;

                    (iii)the amount of cash and other liquid  assets held by the
                         Settlement Trust at the end of that Fiscal Year;

                    (iv) the Trustees' calculation of the Fund B amounts paid by
                         AHP during that Fiscal Year;

                    (v)  the  Trustees'  calculation  of  the  Adjusted  Maximum
                         Available  Fund B  Amount  as of the end of the  Fiscal
                         Year and appropriate accretions thereto for that Fiscal
                         Year;

                    (vi) the   Trustees'   calculation   of  the   Credits   and
                         Cross-Claim Credits to which AHP became entitled during
                         that Fiscal Year; and

                    (vii)the Trustees'  calculation of the  accumulated  Initial
                         Opt-Out  Credits  which have become final as of the end
                         of that  Fiscal  Year,  but  which  have  not yet  been
                         applied to reduce the Adjusted Maximum Available Fund B
                         Amount.

               (4)  On an annual  (calendar  year) basis for each year beginning
                    one (1) year after Final  Judicial  Approval,  the  Trustees
                    shall  issue a report  stating  the  value of Fund B Payment
                    Matrices  payments,  which are to be  increased  2% per year
                    compounded annually.

               (5)  On an annual (calendar year) basis, the Trustees shall cause
                    an audit to be  performed by a health care  consulting  firm
                    nominated  and agreed to by the Parties and  approved by the
                    Court(s) to conduct an audit  regarding  the  processing  of
                    claims and a report based on that audit shall be prepared by
                    the health care consulting firm conducting the audit stating
                    the results of the audit. The purpose of this audit shall be
                    to ensure  that the claims  administration  process is being
                    administered in a manner which reasonably ensures that Class
                    Members who claim benefits are actually  entitled to receive
                    them and that payments are not made to Class Members who are
                    not entitled to receive them.

          b.   Quarterly Reporting Obligations

               (1)  The  Trustees  shall cause to be prepared at the end of each
                    of the  first  three  quarters  of  each  calendar  year,  a
                    quarterly   accounting    containing   unaudited   financial
                    statements  of the  Trust  as of the  end of  such  quarter,
                    including without limitation,  a balance sheet of the Trust,
                    a statement  of receipts and  disbursements,  a statement of
                    profit  and  loss  prepared  on  an  accrual  basis,  and  a
                    supplementary  schedule of investments  and assets,  listing
                    both  principal  and income  reported on,  subject to normal
                    year-end  adjustments,  as to  fairness of  presentation  in
                    accordance   with  generally   accepted   trust   accounting
                    principles  consistently  applied,  by the Trustees or by an
                    accountant or financial officer or agent regularly  employed
                    the Trust.

               (2)  On a calendar  quarter basis, the Trustees shall provide AHP
                    with  information  sufficient to allow AHP to calculate in a
                    timely  fashion its estimated  taxes and taxes in connection
                    with  payments made by AHP to the Trust,  including  without
                    limitation the actual payments made by the Trust.

               (3)  On a Fiscal Year quarterly basis, the Trustees shall provide
                    AHP and the Class Counsel with a report with respect to each
                    of the items required to be reported  annually under Section
                    VI.A.10.a(3) hereof.

               (4)  The Trustees shall report, on a quarterly  (calendar) basis,
                    the following:

                    (a)  Opt-Outs.

                    i)   The number and identities of Class Members  revoking an
                         Initial Opt-Out;

                    ii)  The number and  identities of Class Members  exercising
                         an Intermediate Opt-Out; and

                    iii) The number and identities of Class Members exercising a
                         Back-End Opt-Out.

                    (b)  Accelerated Implementation Option.

                    i)   The number and identities of Class Members electing the
                         Accelerated Implementation Option;

                    ii)  The number and identities of Initial  Opt-Outs who have
                         revoked such  opt-out and have elected the  Accelerated
                         Implementation Option;

                    iii) All  amounts  paid to provide  Fund A benefits to Class
                         Members electing the Accelerated Implementation Option;
                         and

                    iv)  All payments from Fund B to Class Members  electing the
                         Accelerated Implemented Option.

                    (c)  General Registration.

                    i)   The total number of Class  Members who have  registered
                         for settlement benefits;

                    ii)  The number of Subclass 1(a) members who have registered
                         for  benefits of any kind,  and have not  exercised  an
                         opt-out right; and

                    iii) The number of Subclass 1(b) members who have registered
                         for  benefits of any kind,  and have not  exercised  an
                         opt-out right;

                    iv)  The number of Subclass 2(a) members who have registered
                         for  benefits of any kind,  and have not  exercised  an
                         opt-out right;

                    v)   The number of Subclass 2(b) members who have registered
                         for  benefits of any kind,  and have not  exercised  an
                         opt-out right; and

                    vi)  The number of Subclass 3 members,  who have  registered
                         for  benefits of any kind,  and have not  exercised  an
                         opt-out right.

                    (d)  Refund Benefits.

                    i)   The number of Class  Members  who have  registered  for
                         refund benefits for use of Pondimin(R)and/or Redux(TM);

                    ii)  The number of  Subclass  1(a)  members  who have timely
                         registered for a refund for use of  Pondimin(R)  and/or
                         Redux(TM);  the number of these  Subclass  1(a) members
                         who  qualify  for  refund;  and  the  number  of  these
                         Subclass 1(a) members who do not qualify for refund;

                    iii) The number of Subclass 2(a) members who have registered
                         for a refund for use of Pondimin(R)  and/or  Redux(TM);
                         the number of these  Subclass  2(a) members who qualify
                         for  refund;  and the  number  of these  Subclass  2(a)
                         members who do not qualify for refund; and

                    iv)  Amounts paid from Fund A for refund benefits.

                    (e)  Screening Program Benefits.

                    i)   The number of Class  Members who register for Screening
                         Program benefits;

                    ii)  The number of Subclass  1(a)  members who qualify for a
                         Transthoracic     Echocardiogram     and    association
                         interpretative physician visit for compassionate and/or
                         humanitarian reasons;

                    iii) The  amounts   paid  from  Fund  A  for   Transthoracic
                         Echocardiograms and associated interpretative physician
                         visits for compassionate and/or humanitarian reasons;

                    iv)  The number of Subclass 1(b) members who have registered
                         for  Screening  Program  benefits;  the number of these
                         Subclass 1(b) members who qualify for Screening Program
                         benefits; and the number of these Subclass 1(b) members
                         who do not qualify for Screening Program benefits; and

                    v)   The  number  of  Subclass  1(b)  members  who  actually
                         participate in the Screening Program.

                    (f)  Independent  Echocardiogram And Associated Interpretive
                         Physician Visit.

                    i)   The number of Subclass  1(a) members who have  obtained
                         an independent  FDA Positive  Echocardiogram,  and have
                         registered  pursuant to Section  IV.A.2.b.(2) to obtain
                         the lesser of (i) the Trust's  direct cost of providing
                         such an Echocardiogram  and an associated  interpretive
                         physician visit under the Screening  Program,  and (ii)
                         the  actual  amount  paid by the Class  Member  for the
                         Echocardiogam  and  associated  interpretive  physician
                         visit,  less amounts paid or reimbursed by an insurance
                         carrier or other  third-party  payor;  and the  amounts
                         paid from Fund A therefor.

                    ii)  The number of Diet Drug  Recipients  or  Representative
                         Claimants who have applied pursuant to Section IV.A.3.d
                         to obtain the lesser of (i) the Trust's  direct cost of
                         providing  such  an  Echocardiogram  and an  associated
                         interpretive   physician   visit  under  the  Screening
                         Program,  and (ii) the actual  amount paid by the Class
                         Member   for   the    Echocardiogram   and   associated
                         interpretive  physician  visit,  less  amounts  paid or
                         reimbursed by an insurance carrier or other third-party
                         payor; and the amounts paid from Fund A therefor.

                    iii) The number of Subclass 1(b) members who have registered
                         pursuant  to Section  IV.A.1.b  to obtain the lesser of
                         (i)  the  Trust's  direct  cost  of  providing  such an
                         Echocardiogram and an associated interpretive physician
                         visit under the Screening Program,  and (ii) the actual
                         amount paid by the Class Member for the  Echocardiogram
                         and  associated   interpretive  physician  visit,  less
                         amounts paid or reimbursed  by an insurance  carrier or
                         other third-party payor; and the amounts paid from Fund
                         A therefor.

                    (g)  Valve-Related  Medical  Services or $6,000 In Cash From
                         Fund A.

                    The  number  of  Subclass  1(b)  and 2(b)  members  who have
                    registered  and have  obtained an FDA Positive  diagnosis by
                    the end of the Screening  Period and have elected to receive
                    either (i)  valve-related  medical services up to $10,000 in
                    value to be  provided  by the Trust;  or (ii) $6,000 in cash
                    from Fund A; the number  electing  each; and the amount paid
                    in cash from Fund A for such.

               (h)  Valve-Related  Medical  Services or $3,000 In Cash From Fund
                    A.

                    The  number  of  Subclass  1(a)  and 2(a)  members  who have
                    registered  and have  obtained an FDA Positive  diagnosis by
                    the end of the Screening  Period and have elected to receive
                    either  (i)  valve-related  medical  service up to $5,000 in
                    value to be  provided  by the Trust;  or (ii) $3,000 in cash
                    from Fund A; the number  electing each; and the amounts paid
                    in cash from Fund A for such.

               (i)  Credits To AHP Pursuant To Judgment Or Settlement Of Claims.

                    All credits to AHP against its Fund B  obligations  stemming
                    from payments by AHP, pursuant to judgment or settlement, of
                    the  claims  of  Initial,   Intermediate   and/or   Back-End
                    Opt-Outs.

               (j)  Subrogation Claims.

                    i)   All  subrogation  claims  asserted  against  the Trust;
                         identification  of  subrogation   claims  approved  for
                         payment;   identification  of  subrogation  claims  not
                         approved for payment;  and amounts to be paid from Fund
                         B in resolution of such.

                    ii)  All  subrogation  claims  asserted  against  AHP and/or
                         Released Parties.

               (k)  Accelerated Implementation Option (AIO); Attorneys' Fees And
                    Costs.

                    All amounts  deposited for  individual  attorneys'  fees and
                    costs  pursuant  to the  authorized  deduction  from  Fund B
                    benefits   paid  to   claimants   accepting   the  AIO;  the
                    applications  for payment of individual  attorneys' fees and
                    costs from such;  and the payments for  attorneys'  fees and
                    costs being made from such monies.

               (l)  Matrix Level Claims.

                    i)   The  number of Matrix  Level I  claims;  the  number of
                         Matrix Level I claims approved;  the number of Matrix I
                         claims  rejected;  and the  total  amount  of  Matrix I
                         claims paid;

                    ii)  The  number of Matrix  Level II  claims;  the number of
                         Matrix Level II claims  approved;  the number of Matrix
                         II claims  rejected;  and the total amount of Matrix II
                         claims paid;

                    iii) The number of Matrix  Level III  claims;  the number of
                         Matrix Level III claims approved;  the number of Matrix
                         III claims rejected; and the total amount of Matrix III
                         claims paid;

                    iv)  The  number of Matrix  Level IV  claims;  the number of
                         Matrix Level IV claims  approved;  the number of Matrix
                         IV claims  rejected;  and the total amount of Matrix IV
                         claims paid; and

                    v)   the  number of Matrix  Level V  claims;  the  number of
                         Matrix Level V claims approved;  the number of Matrix V
                         claims  rejected;  and the  total  amount  of  Matrix V
                         claims paid.

                    (m)  Assignment Of Indemnity Rights.

                    The indemnity  rights of AHP against Class Members  assigned
                    by AHP to the  Trustees  for  which  AHP  receives  a credit
                    against  its  Fund  B  obligations,   including  the  amount
                    thereof.

                    c.   Periodic Reporting Obligations.

                    (1)  The  Trustees  and/or  Claims   Administrator(s)  shall
                         report  within five (5) Business  Days all AHP payments
                         into the  Settlement  Trust,  including but not limited
                         to:

                    (a)  All AHP payments deposited into Fund A;

                    (b)  All AHP payments deposited into Fund B; and

                    (c)  All requests for  additional  cash deposits into Fund B
                         and payments deposited in accordance with each request.

                    (2)  The  Trustees  and/or  Claims   Administrator(s)  shall
                         report within five (5) Business Days an Uncured Failure
                         To Make Payment by AHP.

                    (3)  At the conclusion of the Initial  Opt-Out  Period,  the
                         Trustees  and/or Claims  Administrator(s)  shall report
                         within  fifteen  (15)  Business  Days  the  number  and
                         identities  of  Class  Members  exercising  an  Initial
                         Opt-Out.

               11.  The Trustees  shall have the duty to administer  and resolve
                    all Claims  according to the terms of this Agreement,  while
                    minimizing  the  costs  of   administration   of  the  Trust
                    associated  with the processing and resolution of Claims and
                    the operations of the Trust.

         B.       NOTICE.

               1.   Within  ten (10) days of the  execution  of this  Settlement
                    Agreement, the parties shall apply to the Court for an Order
                    in the form appended hereto as Exhibit "11":

                    a.   Granting Preliminary Approval of the Settlement;

                    b.   Approving   the    appointment    of   Interim   Claims
                         Administrator(s)  and an Interim  Escrow Agent pursuant
                         to Section VI.A.2 and Section VI. A.1;

                    c.   Approving  a  written  notification  to the  Settlement
                         Class which  shall  contain A Class  Member's  Guide to
                         Settlement  Benefits  (Exhibit "12"), an Official Court
                         Notice   Package   (Exhibit   "13"),   and   a   Matrix
                         Compensation  Benefits Guide for Physicians,  Attorneys
                         and Class Member (Exhibit "14");

                    d.   Approving   a   summary   publication   notice  to  the
                         Settlement Class in the form appended hereto as Exhibit
                         "15";

                    e.   Approving the  establishment  of and  maintenance  of a
                         "1-800"   telephone   number  and  website  to  receive
                         requests from Class Members for written notice;

                    f.   Directing  written  notice to all those  Class  Members
                         whose  names  and  addresses  are  known  or  presently
                         knowable to the Parties as a result of:

                    (1)  The  filing of legal  claims by Class  Members  against
                         AHP;

                    (2)  The  creation  and  maintenance  of a database of Class
                         Members who registered to receive benefits  pursuant to
                         a proposed  limited fund Class Action  Settlement  with
                         Interneuron  Pharmaceuticals,  Inc.  in Sharyn  Wish v.
                         Interneuron  Pharmaceuticals,  Inc.,  Civil  Action No.
                         98-CV-20594 (E.D. Pa.);

                    (3)  The establishment and operation of the "1-800-386-2070"
                         telephone   number   and    www.settlementdietdrugs.com
                         website  incident to the  publication of the Memorandum
                         of  Understanding  which was executed among the Parties
                         on October 7, 1999;

                    (4)  Any database within the possession, custody, or control
                         of AHP which  reflects the names and addresses of Class
                         Members;

                    (5)  Any  database  which  is  readily  obtainable  from any
                         pharmacy  chain which  reflects the names and addresses
                         of Class Members;

                    g.   Directing  that the  person or entity who will mail the
                         individual  notices  shall have access to the names and
                         addresses of  individuals  who requested the mailing of
                         individual    notices    to    them    by    contacting
                         "1-800-386-2070"    and    www.settlementdietdrugs.com;

                    h    Directing that all names and addresses of Class Members
                         collected for the purpose of providing  notice shall be
                         kept strictly  confidential  and shall not be disclosed
                         to any  person or used for any  purpose  other than for
                         issuance of notice to Class Members upon prior order of
                         the Court;

                    i.   Authorizing  Publication  Notice  in the form  appended
                         hereto as Exhibit "15" in  accordance  with the Plan of
                         Media Notice appended hereto as Exhibit "16";

                    j.   Authorizing  television  notice in accordance  with the
                         Script of Television  Notice appended hereto as Exhibit
                         "17," and in  accordance  with the Plan of Media Notice
                         appended hereto as Exhibit "16";

                    k.   Authorizing  the  distribution  of  Summary  Notice  to
                         Physicians in the form appended hereto as Exhibit "18,"
                         to physicians for display to their patients; and

                    l.   Authorizing  the  distribution  of  Summary  Notice  to
                         Pharmacists in the form appended hereto as Exhibit "5,"
                         to pharmacists for display to their customers.

          2.   The   Claims   Administrator(s)   and/or   the   Interim   Claims
               Administrator(s) shall maintain a list of the names and addresses
               of  each  person  to  whom  written  notice  was  transmitted  in
               accordance  with any order  entered by the Court  pursuant to the
               preceding  paragraph of this  Settlement  Agreement  (hereinafter
               "the  Notice  List").  These  names and  addresses  shall be kept
               strictly  confidential  and  shall  be used  only by  appropriate
               persons for administrative purposes of the Trust, except on prior
               order of the Court.

          3.   Within  forty-five (45) days after Final Judicial  Approval,  the
               Trustees and/or Claims  Administrator(s) shall transmit a written
               notice to all individuals whose names and addresses are contained
               in the Notice List advising all recipients of the notice that the
               Settlement  has received Final  Judicial  Approval,  advising all
               Class  Members  of the day on which  Date 1 falls,  advising  the
               recipients of the notice that Class  Members in  Subclasses  1(a)
               and 1(b) must Register to receive Refund and/or Screening Program
               benefits  from  Fund  A by  Date  1 and  that  Class  Members  in
               Subclasses 2(a) and 2(b) must register to receive Refund Benefits
               from Fund A by Date 1,  advising all  recipients of the notice of
               the period of time in which  Date 2 may fall,  and  advising  all
               recipients  of the  notice  that if they wish to  receive  Matrix
               Compensation  Benefits in the future they must be  registered  as
               having  Mild Mitral  Regurgitation  or an FDA  Positive  level of
               valvular  regurgitation by Date 2. This notice shall also contain
               information  concerning  the rights of certain  Class  Members to
               exercise Intermediate and Back-End Opt-Outs. It shall contain the
               BLUE FORM, GREEN FORM and Intermediate and Back-End Opt-Out forms
               as  described   below,   which  will  allow  Class   Members  the
               opportunity  to  register  for  settlement  benefits  or exercise
               Intermediate  or Back-End  Opt-Out rights.  In addition,  it will
               advise  members of Subclass 1(a) of their right to obtain payment
               of the net cost of any FDA Positive Echocardiogram which they may
               have had  during the  Screening  Period  but  independent  of the
               Screening  Program  pursuant  to  the  terms  and  conditions  of
               Sections  IV.A.2.b(2)  and shall  provide  Class Members with the
               WHITE FORM  appended  hereto as  Exhibit  "19" in order to make a
               claim for such benefits.  It will also advise members of Subclass
               1(b) of  their  right  to  obtain  payment  of the net  cost of a
               Transthoracic   Echocardiogram   obtained   independent   of  the
               Screening  Program performed after the end of the Initial Opt-Out
               Period but before the Final Judicial  Approval Date,  pursuant to
               the terms and  conditions  of Section  IV.A.1.b and shall provide
               Class Members with the WHITE FORM appended hereto as Exhibit "19"
               in order to make a claim for such  benefits.  It will also advise
               Diet Drug  Recipients  who had an  Echocardiogram  and associated
               interpretive  visit after the  commencement  of Diet Drug use, or
               their   Representative   Claimants,   of  their   right  to  seek
               reimbursement  of  the  net  cost  of  the   Echocardiogram   and
               associated  interpretive  visit,  pursuant  to and subject to the
               limitations of, the terms and conditions of Section IV.A.3.d, and
               shall  provide  Class Members with the WHITE FORM appended to the
               Settlement Agreement as Exhibit "19" in order to make a claim for
               such  benefits.  The Parties  shall prepare this class notice for
               Court  approval.  The  notice  shall  reflect  the fact  that the
               Settlement Agreement has been approved, that there are no further
               rights to object to the  Settlement,  and that there is no longer
               any Initial Opt-Out right in effect.

          4.   Three (3)  months  prior to Date 2, the  Trustees  and/or  Claims
               Administrator(s)   shall   transmit  a  written   notice  to  all
               individuals whose names and addresses are contained in the Notice
               List  advising all  recipients  of the notice of the day on which
               Date 2 falls and advising all  recipients of the notice,  that if
               they wish to receive Matrix  Compensation  Benefits in the future
               they must be registered as having Mild Mitral Regurgitation or an
               FDA  Positive  level of  valvular  regurgitation  by Date 2. This
               notice shall also contain  information  concerning  the rights of
               certain  Class  Members to  exercise  Intermediate  and  Back-End
               Opt-Outs.  It shall  contain  the BLUE  FORM,  the GREEN FORM and
               Intermediate  and Back-End  Opt-Out  forms,  as described  below,
               which will allow Class  Members the  opportunity  to register for
               settlement benefits or exercise  Intermediate or Back-End Opt-Out
               rights.  In addition,  it will advise members of Subclass 1(a) of
               their right to obtain payment of the net cost of any FDA Positive
               Echocardiogram  which  they  may have had  during  the  Screening
               Period but independent of the Screening  Program  pursuant to the
               terms and  conditions  of Section  IV.A.2.b(2)  and shall provide
               Class Members with the WHITE FORM appended hereto as Exhibit "19"
               in order to make a claim for such  benefits.  It will also advise
               members  of  Subclass  1(b) of their  right to  obtain a  limited
               refund  of  the  net  cost  of any  Transthoracic  Echocardiogram
               obtained  independent  of the Screening  Program after the end of
               the Initial Opt-Out Period but before the Final Judicial Approval
               Date,  pursuant to the terms and  conditions of Section  IV.A.1.b
               and shall  provide  Class  Members  with the WHITE FORM  appended
               hereto  as  Exhibit  "19"  in  order  to make a  claim  for  such
               benefits.  The Parties  shall prepare this class notice for court
               approval.  The notice shall reflect the fact that the  Settlement
               has been approved,  that there are no further rights to object to
               the  Settlement,  and that there is no longer any Initial Opt-Out
               right in effect,  and that the time to register for the Screening
               Program has been completed.

     C.   CLAIMS ADMINISTRATION AND CRITERIA FOR BENEFITS DETERMINATIONS.

          1.   ECHOCARDIOGRAM CRITERIA.

               a.   Where  a Diet  Drug  Recipient  has  had  an  Echocardiogram
                    between the  commencement of Diet Drug use and September 30,
                    1999, the results of that Echocardiogram as contained in the
                    written report issued by a Qualified Physician shall be used
                    by the  Trustees/Claims  Administrator(s)  to determine  the
                    level of mitral and/or  aortic  valvular  regurgitation  for
                    that   Diet   Drug   Recipient   as  of  the   date  of  the
                    Echocardiogram    for    purposes   of   Fund   A   benefits
                    determinations  under the Settlement  Agreement,  except (i)
                    where the  report  of the  Echocardiogram  does not  clearly
                    state the level of  valvular  regurgitation  for the  mitral
                    and/or  aortic  valves or (ii)  where in an audit  conducted
                    pursuant  to  Section  VI.E,  it  is  determined   that  the
                    conclusions  of the written  report are not supported by the
                    videotape or disk of the Echocardiogram or a Board-Certified
                    Cardiothoracic Surgeon.

                    Such an  Echocardiogram  shall not be used to qualify a Diet
                    Drug Recipient for Matrix Compensation Benefits unless, upon
                    re-reading,  it is  determined  (i) that prior to the end of
                    the  Screening  Period,  the  Diet  Drug  Recipient  met the
                    definition  for "FDA  Positive" set forth in Section  I.22.b
                    and (ii) the  Echocardiogram  met the  criteria set forth in
                    Section VI.C.1.b below.  Such a determination may be made by
                    the Trustees and/or Claims  Administrator(s) upon submission
                    of a GRAY FORM  (appended  hereto as Exhibit "20") which has
                    been completed by a Board-Certified Cardiologist.

               b.   Each  Echocardiogram  performed  after  September  30, 1999,
                    which is used to determine  whether the  condition of a Diet
                    Drug Recipient qualifies a Class Member for Fund A or Fund B
                    (Matrix) settlement benefits, shall be one which was:

                    (1)  conducted in accordance with the standards and criteria
                         as outlined in Feigenbaum (1994)39 or Weyman (1994);40

                    (2)  evaluated  following  the  grading  system of  valvular
                         regurgitation defined in Singh (1999);41

                    (3)  conducted by a Diagnostic  Cardiac  Sonographer  who is
                         able to  produce  and  evaluate  ultrasound  images and
                         related  data  used by  physicians  to render a medical
                         diagnosis; and

                    (4)  conducted  under  the  supervision  of,  and  read  and
                         interpreted  by,  a  Board-Certified   Cardiologist  or
                         Board-Certified  Cardiothoracic  Surgeon  with  level 2
                         training  in   echocardiography  as  specified  in  the
                         Recommendations    of   the    American    Society   of
                         Echocardiography  Committee  on  Physician  Training in
                         Echocardiography.42

          c.   A Diet Drug  Recipient who  demonstrates  to the Trustees  and/or
               Claims  Administrator(s)  that  he or she  had an  Echocardiogram
               conducted between September 30, 1999 and the date of commencement
               of Class Notice which a Qualified  Physician  reported as showing
               that  he or she  had  FDA  Positive  regurgitation  shall  not be
               disqualified   from   receiving   settlement   benefits   if  the
               Echocardiogram  does not meet all of the  requirements of Section
               VI.C.1.b above.

          d.   A claimant who  qualifies  for a particular  Matrix  payment,  by
               virtue  of a  properly  interpreted  Echocardiogram  showing  the
               required levels of  regurgitation  and/or  complicating  factors,
               after exposure to fenfluramine and/or dexfenfluramine,  shall not
               be  disqualified  from receiving that Matrix payment in the event
               that a subsequent  Echocardiogram  shows that the required levels
               of  regurgitation  and/or  complicating  factors  are  no  longer
               present.

     2.   CLAIMS  INFORMATION.

          a.   Each Claim for Benefits under the Settlement  Agreement  shall be
               made on one of two forms  signed and  submitted  to the  Trustees
               and/or Claims Administrator(s), as follows:

               (1)  The "PINK FORM"  appended  to the  Settlement  Agreement  as
                    Exhibit "9" shall be used by Class Members who want to elect
                    the AIO; and

               (2)  The "BLUE FORM"  appended  to the  Settlement  Agreement  as
                    Exhibit  "21" shall be used by all other  Class  Members who
                    wish to make a claim for the  benefits  available  under the
                    Settlement Agreement.

          b.   Submission  of a PINK FORM or BLUE  FORM that has not been  fully
               completed  shall be sufficient to "register" the Class Member for
               benefits, provided, however, that the missing information must be
               submitted  in order for the Class  Member to receive any benefits
               under this Settlement Agreement.

          c.   In  addition,  each  person  who wants to make a claim for Matrix
               Compensation  Benefits  under  Section  IV.B  of  the  Settlement
               Agreement or pursuant to the AIO must  complete and submit to the
               Trustees and/or Claims Administrator(s) the "GREEN FORM" which is
               appended to this Settlement Agreement as Exhibit "22."

          d.   In order to complete the submission of a Claim and to qualify for
               any benefits  under the Settlement  Agreement,  each Class Member
               must  submit  documentary  proof to the  Trustees  and/or  Claims
               Administrator(s)  of the  period of time for which the Diet Drugs
               Pondimin(R) and/or Redux(TM) were prescribed and dispensed to the
               Diet Drug  Recipient who is the subject of the Claim.  This proof
               must include one of the following:

               (1)  If the diet drug was  dispensed by a pharmacy,  the identity
                    of each pharmacy that  dispensed Diet Drugs to the Diet Drug
                    Recipient,   including  its  name,  address,  and  telephone
                    number, and a copy of the prescription  dispensing record(s)
                    from each  pharmacy,  which  should  include the  medication
                    name,  quantity,  frequency,  dosage  and  number of refills
                    prescribed,    prescribing    physician's   name,   assigned
                    prescription number,  original fill date and each subsequent
                    refill date; or,

               (2)  If the diet drug was  dispensed  directly by a physician  or
                    weight  loss   clinic,   or  the   pharmacy   record(s)   is
                    unobtainable,  the identity of each  prescribing  physician,
                    including the prescribing  physician's  name,  address,  and
                    telephone  number  and  a  copy  of  the  medical  record(s)
                    prescribing  or  dispensing  the diet  drug(s).  The medical
                    record(s) must include  records which identify the Diet Drug
                    Recipient,  the Diet Drug name, the date(s) prescribed,  the
                    dosage, and duration the drug was prescribed or dispensed;

               (3)  If  the   pharmacy   records   and   medical   records   are
                    unobtainable, an affidavit under penalty of perjury from the
                    prescribing physician or dispensing pharmacy identifying the
                    Diet Drug  Recipient,  the drug(s)  prescribed or dispensed,
                    the  date(s),  quantity,  frequency,  dosage  and  number of
                    prescriptions or refills of the Diet Drug(s).

          e.   In order to complete  the  submission  of a Claim and qualify for
               Fund A benefits  under the  Settlement  Agreement,  where a Class
               Member relies on a result of an  Echocardiogram to establish that
               a Diet Drug Recipient had FDA Positive levels of regurgitation by
               the end of the  Screening  Period and where  that  Echocardiogram
               took  place  between  the  commencement  of  Diet  Drug  use  and
               September  30,  1999,  the Class Member must provide the Trustees
               and/or Claims  Administrator(s)  with a copy of the report of the
               results of the  Echocardiogram  and the  videotape or disk of the
               Echocardiogram.  In order to complete the  submission  of a Claim
               and qualify for Matrix Compensation Benefits under the Settlement
               Agreement,  where  a  Class  Member  relies  on a  result  of  an
               Echocardiogram  to establish  that a Diet Drug  Recipient had FDA
               Positive levels of regurgitation or Mild Mitral  Regurgitation by
               the end of the  Screening  Period and where  that  Echocardiogram
               took  place  between  the  commencement  of  Diet  Drug  use  and
               September  30,  1999,  the Class Member must provide the Trustees
               and/or Claims  Administrator(s)  with a copy of the report of the
               results of the  Echocardiogram  and the  videotape or disk of the
               Echocardiogram and a certification from a Qualified  Physician on
               the GRAY FORM which is appended to the  Settlement  Agreement  as
               Exhibit  "20" or a  certification  regarding  the  results of the
               Echocardiogram  on  the  GREEN  FORM  which  is  appended  to the
               Settlement  Agreement as Exhibit "22.".  If the Class Member does
               not have custody of such videotape or disk, the Class Member must
               submit an executed  authorization  which will allow the  Trustees
               and/or Claims  Administrator(s)  to obtain a videotape or disk of
               the Echocardiogram from the physician or health care provider who
               has  custody  of  such  videotape  or  disk  as  a  condition  to
               considering  the  Class  Member's  Claims  for  Benefits.  If the
               videotape  or disk is no longer in  existence,  the Class  Member
               must supply an affidavit under penalty of perjury from the person
               who last had custody of the  videotape  or disk  stating that the
               videotape or disk is no longer in existence  and  describing  the
               circumstances under which it came to be misplaced or destroyed.

          f.   In order to complete  the  submission  of a Claim and qualify for
               benefits  under the  Settlement  Agreement,  where a Class Member
               relies on the results of an  Echocardiogram  to establish  that a
               Diet Drug  Recipient  had FDA  Positive  regurgitation  levels of
               regurgitation  or  Mild  Mitral  Regurgitation  by the end of the
               Screening Period and where that  Echocardiogram  took place after
               September  30,  1999,  and where that  Echocardiogram  took place
               outside of the  Screening  Program,  the Class Member must report
               the results of the  Echocardiogram  to the Trustees and/or Claims
               Administrator(s)   in  the  form  of  a   certification   from  a
               Board-Certified  Cardiologist  on the GRAY FORM which is appended
               to the Settlement  Agreement as Exhibit "20," or a  certification
               regarding  the  results of the  Echocardiogram  on the GREEN FORM
               which is appended to the  Settlement  Agreement as Exhibit  "22,"
               and provide the Trustees  and/or Claims  Administrator(s)  with a
               copy of the  videotape or disk which  reflects the results of the
               Echocardiogram. If the Class Member does not have custody of such
               videotape  or disk,  the Class  Member  must  submit an  executed
               authorization   which  will  allow  the  Trustees  and/or  Claims
               Administrator(s)   to   obtain  a   videotape   or  disk  of  the
               Echocardiogram from the physician or health care provider who has
               custody of such  videotape or disk as a condition to  considering
               the Class Member's  Claim for Benefits.  If the videotape or disk
               is no  longer  in  existence,  the Class  Member  must  supply an
               affidavit  under  penalty of perjury from the person who last had
               custody of the  videotape or disk  stating that the  videotape or
               disk is no longer in existence and describing  the  circumstances
               under which it came to be misplaced or destroyed.

          g.   Each    Cardiologist    who   is   responsible   for   performing
               Echocardiograms  pursuant to the Screening Program  provisions of
               the  Settlement  Agreement  shall  report  the  results  of those
               Echocardiograms to the Trustees and/or Claims Administrator(s) on
               the "GRAY FORM" which is appended to the Settlement  Agreement as
               Exhibit "20" and shall supply a copy of the  videotape or disk of
               the results of the Echocardiogram to the Claims  Administrator(s)
               and/or Trustees. If a Class Member submits to the Trustees and/or
               Claims  Administrators a GREEN FORM with the Doctor's  Evaluation
               Form in Part II of such Form (or the  equivalent  section  of the
               GREEN FORM in any  subsequent  printing of such  forms)  properly
               completed  and  signed  by  a  Board-Certified   Cardiologist  or
               Cardiothoracic  Surgeon,  that Class  Member and  Board-Certified
               Cardiologist or Cardiothoracic Surgeon are not required to submit
               a GRAY FORM to report on the same  Echocardiogram  referenced  in
               such GREEN FORM. If, however, a Cardiologist  submits a GRAY FORM
               reporting on an  Echocardiogram  performed on a Class Member,  in
               order to seek Matrix  Compensation  Benefits,  such Class  Member
               must  submit  a  complete  GREEN  FORM,  including  the  Doctor's
               Evaluation  Form in Part II (or its  equivalent in any subsequent
               printings) completed and signed by a Board-Certified Cardiologist
               or Cardiothoracic Surgeon.

          h.   In order to complete  the  submission  of a claim and qualify for
               benefits  under the Settlement  Agreement,  each Class Member who
               submits a claim as a  Representative  Claimant  must  supply  the
               Trustees and/or Claims  Administrator(s)  with written proof that
               such  person  has  legal  authority  to act  in a  representative
               capacity.

          i.   In order to complete  submission of a Claim for  reimbursement of
               the actual  amount paid for an  Echocardiogram  by a Class Member
               pursuant to Sections IV.A.1.b, IV.A.2.b.(2), or IV.A.3.d above, a
               Class Member must submit the following documents:

               (1)  A copy of the report of the Echocardiogram;

               (2)  A copy of the bill or invoice reflecting the charges for the
                    Echocardiogram; and

               (3)  A copy of the cancelled check or other documentary  evidence
                    of the  amount  actually  paid by the Class  Member  for the
                    Echocardiogram.

          j.   In order to complete the  submission of a Claim by a Class Member
               who has ingested Pondimin(R) and/or Redux(TM) for 60 days or less
               to receive an Echocardiogram and interpretive physician visit for
               compassionate and humanitarian reasons pursuant to the provisions
               of Section IV.A.2.b(3),  the Class Member must submit documentary
               proof  supporting  the Claim  that  there are  compassionate  and
               humanitarian  reasons  which would  justify the  Trustees  and/or
               Claims  Administrator(s)  to exercise their discretion to provide
               the Diet  Drug  Recipient  with the  benefit  of a  Transthoracic
               Echocardiogram and associated interpretive physician visit.

          k.   In order to  complete  the  submission  of a claim and qualify to
               receive an Echocardiogram after Trial Court Approval but prior to
               Final Judicial  Approval by reason of "true  financial  hardship"
               pursuant to Section IV.A.3.c of the Settlement Agreement,  a Diet
               Drug   Recipient   must  provide  the  Trustees   and/or   Claims
               Administrator(s)   with  documentary   proof  of  the  Diet  Drug
               Recipient's financial situation including a copy of the Diet Drug
               Recipient's  most  recent  federal  income  tax  return  or other
               documentary  proof of the Diet Drug Recipient's  income where the
               Diet Drug Recipient submits a sworn declaration, under oath, that
               he or she has not filed such tax returns.

     3.   GENERAL CLAIMS PROCESSING PROCEDURES AND THE REGISTRY.

          a.   Within thirty (30) days of the date on which the Trustees  and/or
               Claims Administrator(s) receive a Claim for Benefits from a Class
               Member, the Claims Administrator(s) shall:

               (1)  assign a unique identifying number to the Claim;

               (2)  review the Claim  which has been  submitted,  together  with
                    supporting documentation, and determine whether the Claim is
                    complete or requires a submission of additional  information
                    to make it complete;

               (3)  confirm that any required physician  certification submitted
                    in support of a claim for Matrix  Compensation  Benefits was
                    submitted by a physician  who actually is a  Board-Certified
                    Cardiologist,     Cardiothoracic    Surgeon,    Pathologist,
                    Neurologist or Neurosurgeon; and

               (4)  inform  the  Class  Member,   in  writing,   of  the  unique
                    identifying  number assigned to the Class Member's Claim and
                    the  information  which the Class  Member must submit to the
                    Trustees  and/or Claims  Administrator(s),  if any, in order
                    for the claim to be completed and ready for processing.

                    During the first full twelve (12) calendar months  following
                    the   AIO   Start   Date,   the   Trustees   and/or   Claims
                    Administrator(s)  shall take these actions within sixty (60)
                    days of the date on which they  receive a Claim for Benefits
                    from a Class  Member,  rather  than  the  thirty-day  period
                    stated above.

          b.   With respect to each Claim submitted by a Class Member as part of
               the claims  administration  process,  the Trustees  and/or Claims
               Administrator(s)  shall  afford each Class  Member at least three
               (3)  separate  opportunities  to supply  any  missing  or omitted
               information  and  documentation  which are necessary to support a
               Claim for Benefits under the Settlement Agreement.

          c.   All information submitted by Class Members to the Trustees and/or
               Claims  Administrator(s)  shall  be  recorded  in a  computerized
               database suitable for use with standard medical research software
               such as SAS and for all purposes of claims  administration.  This
               database,  throughout the duration of its use, shall be kept in a
               form  that can be  accessed  and read,  which  may in the  future
               involve, as evolving technology warrants, placing the information
               in a more modern database.

          d.   The database created pursuant to the preceding paragraph shall be
               maintained  as a  "Registry"  for purposes of  administering  the
               Settlement  and for purposes of medical  education  and research.
               After taking appropriate steps to maintain the confidentiality of
               Class Members, the Trustees and/or Claims  Administrator(s) shall
               make the database, or any portion thereof, available to qualified
               scientists,  physicians,  and other  researchers  subject  to the
               following conditions:

               (1)  First,  the Trustees  and/or Claims  Administrator(s)  shall
                    make  the  deidentified43  database  available  only to such
                    persons who:

                    (a)  provide the  Trustees  and/or  Claims  Administrator(s)
                         with written proof of their  training,  qualifications,
                         and   experience  to  conduct   medical  or  scientific
                         research;

                    (b)  provide a research  protocol setting forth the purposes
                         for which  they seek  access to the  Registry/database,
                         their  research  methodology,   source  of  funding,  a
                         description  of how the proposed  research will benefit
                         the Settlement Class and any other information that may
                         be   requested   by   the   Trustees    and/or   Claims
                         Administrator(s);

                    (c)  undertake,  in writing,  to use the  information  which
                         they  receive  from the  Registry/database  solely  for
                         medical,  scientific,  and educational purposes and not
                         to disclose  confidential  information  concerning  any
                         Class   Member   in  the   event   that   they   should
                         inadvertently come into possession of such confidential
                         information through their access to the database;

                    (d)  undertake,  in writing, to provide,  upon completion of
                         the    research,    the    Trustees    and/or    Claims
                         Administrator(s),  the Court,  AHP,  and Class  Counsel
                         with a copy of any published or  unpublished  abstract,
                         article, or report which is based, in whole or in part,
                         on the information contained in the Registry/ database;
                         and

                    (e)  undertake,  in  writing,  not to testify at any time on
                         behalf of any party in any lawsuit  relating to the use
                         of Pondimin(R)and/or Redux(TM).

               (2)  Second,  the Trustees and/or Claims  Administrator(s)  shall
                    make the  deidentified  database,  or any  portion  thereof,
                    available to  qualified  scientists,  physicians,  and other
                    researchers    only   when,    considering   the   training,
                    qualifications  and  experience  of  such  persons  and  the
                    purposes    for   which    they    seek    access   to   the
                    Registry/database,     the    Trustees     and/or     Claims
                    Administrator(s)  form a reasoned opinion that disclosure of
                    database information to any given scientist,  physician,  or
                    other researcher will be beneficial to the Settlement Class.

          e.   Copies of all videotapes and disks of  Echocardiograms  submitted
               by or on behalf of Diet Drug  Recipients  to the Trustees  and/or
               Claims Administrator(s) shall be preserved and maintained. Copies
               of these  videotapes  and disks shall be  available  to qualified
               scientists,  physicians,  and other  researchers  subject  to the
               conditions  stated in Section  VI.C.3.d above, and subject to the
               following additional conditions:

               (1)  In making copies of  videotapes  and disks to be provided to
                    qualified  scientists,  physicians and other researchers for
                    purposes of medical and  scientific  research,  the Trustees
                    and/or Claims  Administrator(s) shall redact all information
                    identifying  the Diet Drug  Recipient who was the subject of
                    the Echocardiogram; and

               (2)  The Trustees  and/or Claims  Administrator(s)  shall require
                    that the scientists,  physicians,  and/or other  researchers
                    requesting a copy of the videotapes pay all costs reasonably
                    incurred by the Trustees and/or Claims  Administrator(s)  in
                    making  copies of the  videotapes  and in redacting  patient
                    identifying  information  from the videotapes as a condition
                    to receiving copies thereof.

          f.   In  making   arrangements   for  the  disclosure  of  information
               contained in the Medical  Registry/database,  the Trustees and/or
               Claims   Administrator(s)  shall  assure  that  an  alpha-numeric
               designation is used for each claimant and that the name, address,
               telephone  number,  social security number,  e-mail address,  and
               other  personal  identifying  information  pertaining to the Diet
               Drug Recipient and/or Class Member is not disclosed.

          g.   PROCESSING  CLAIMS FOR  SCREENING  PROGRAM  BENEFITS FOR SUBCLASS
               1(B) MEMBERS:

               (1)  Within  forty-five  (45)  days  of the  date  on  which  the
                    Trustees and/or Claims Administrator(s)  receive a completed
                    Claim which adequately  documents that a Diet Drug Recipient
                    is a member of Subclass  1(b),  the Trustees  and/or  Claims
                    Administrator(s)  shall certify that the Diet Drug Recipient
                    is  eligible   for  a   Transthoracic   Echocardiogram   and
                    associated  interpretive  physician  visit in the  Screening
                    Program pursuant to Section IV.A.1.a. or Section IV.A.3.c of
                    this Settlement Agreement and shall furnish to the Diet Drug
                    Recipient the appropriate  documentation  and information to
                    receive such  benefits and will  provide  those  benefits in
                    accordance with the timetable set forth in Section VI.C.3.m,
                    below.

               (2)  Within  forty-five  (45)  days  of the  date  on  which  the
                    Trustees and/or Claims Administrator(s)  receive a completed
                    Claim which adequately  documents that a Diet Drug Recipient
                    is a member of Subclass 1(b) and which  requests  payment of
                    the  net  cost  of an  Echocardiogram  pursuant  to  Section
                    IV.A.1.b, the Trustees and/or Claims  Administrator(s) shall
                    determine  whether  the Diet Drug  Recipient  is entitled to
                    such  payment,  and if so, the amount of such  payment.  The
                    Trustees and/or Claims  Administrator(s)  shall provide such
                    payments  in  accordance  with the  timetable  set  forth in
                    Section  VI.C.3.m,  below.  If the  Trustees  and/or  Claims
                    Administrator(s) deny such a claim, they shall send the Diet
                    Drug Recipient written notification of that decision and the
                    reasons therefor within this forty-five (45) day period.


          h.   PROCESSING  CLAIMS FOR  SCREENING  PROGRAM  BENEFITS FOR SUBCLASS
               1(A) MEMBERS:

               (1)  Within  forty-five  (45)  days  of the  date  on  which  the
                    Trustees and/or Claims Administrator(s)  receive a completed
                    Claim which adequately  documents that a Diet Drug Recipient
                    is a member of Subclass  1(a) and  requests a  Transthoracic
                    Echocardiogram and associated  interpretive  physician visit
                    pursuant  to Section  IV.A.2.b  or Section  IV.A.3.c  of the
                    Settlement    Agreement,    the   Trustees   and/or   Claims
                    Administrator(s) shall promptly transmit to each such person
                    the BROWN FORM,  appended  to the  Settlement  Agreement  as
                    Exhibit  "23." The BROWN  FORM  explains  the  circumstances
                    under  which  such  Diet  Drug   Recipients  may  receive  a
                    Transthoracic  Echocardiogram  and  associated  interpretive
                    physician  visit and allows  them to make a request for that
                    benefit by  completing,  signing  and  submitting  the form,
                    together  with  supporting  documentation,  to the  Trustees
                    and/or Claims Administrator(s).  Within forty-five (45) days
                    after  receiving a completed BROWN FORM, the Trustees and/or
                    Claims   Administrator(s)   shall   make   a   determination
                    concerning  whether the Diet Drug  Recipient  will receive a
                    Transthoracic  Echocardiogram  and  associated  interpretive
                    physician  visit and will either reject the request for such
                    benefits  or shall  furnish to the Diet Drug  Recipient  the
                    appropriate  documentation  and  information to receive such
                    benefits and will provide those benefits in accordance  with
                    the timetable set forth in Section VI.C.3.m, below.

               (2)  Within  forty-five  (45)  days  of the  date  on  which  the
                    Trustees and/or Claims Administrator(s)  receive a completed
                    Claim which adequately  documents that a Diet Drug Recipient
                    is a member of Subclass 1(a) and which  requests  payment of
                    the  net  cost  of an  Echocardiogram  pursuant  to  Section
                    IV.A.2.b.(2).,  the Trustees and/or Claims  Administrator(s)
                    shall determine  whether the Diet Drug Recipient is entitled
                    to such payment,  and if so, the amount of such payment. The
                    Trustees and/or Claims  Administrator(s)  shall provide such
                    payments  in  accordance  with the  timetable  set  forth in
                    Section  VI.C.3.m,  below.  If the Trustee(s)  and/or Claims
                    Administrator(s) deny such a claim, they shall send the Diet
                    Drug Recipient written notification of that decision and the
                    reasons therefor within this forty-five (45) day period.

          i.   PROCESSING  CLAIMS FOR  ADDITIONAL  MEDICAL  SERVICES OR CASH FOR
               SUBCLASS 1(B) AND 2(B) MEMBERS:

               Within  forty-five  (45) days of the date on which  the  Trustees
               and/or Claims  Administrator(s)  receive a completed  Claim which
               adequately  documents  that a Diet Drug  Recipient is a member of
               Subclass  2(b),  or is a member of Subclass  1(b) and obtained an
               FDA Positive diagnosis by a Qualified Physician after Pondimin(R)
               and/or Redux(TM) use but by the end of the Screening Period,  the
               Trustees and/or Claims Administrator(s) shall, in accordance with
               the Diet Drug  Recipient's  election,  certify that the Diet Drug
               Recipient  is  entitled  to either  $6,000 in cash or  $10,000 in
               valve-related  medical  services and shall either make payment to
               the Diet Drug Recipient or furnish to the Diet Drug Recipient the
               appropriate   documentation   and  information  to  receive  such
               valve-related   services  and  will  provide  those  benefits  in
               accordance  with the  timetable  set forth in  Section  VI.C.3.m,
               below.

          j.   PROCESSING  CLAIMS FOR  ADDITIONAL  MEDICAL  SERVICES OR CASH FOR
               SUBCLASS 1(A) AND 2(A) MEMBERS:

               Within  forty-five  (45) days of the date on which  the  Trustees
               and/or Claims  Administrator(s)  receive a completed  Claim which
               adequately  documents  that a Diet Drug  Recipient is a member of
               Subclass  2(a),  or is a member of Subclass  1(a) and obtained an
               FDA Positive diagnosis by a Qualified Physician after Pondimin(R)
               and/or Redux(TM) use but by the end of the Screening Period,  the
               Trustees and/or Claims  Administrator(s) shall in accordance with
               the Diet Drug  Recipient's  election  certify  that the Diet Drug
               Recipient   is   entitled   to   $3,000  in  cash  or  $5,000  in
               valve-related  medical  services and shall either make payment to
               the Diet Drug Recipient or furnish to the Diet Drug Recipient the
               appropriate   documentation   and  information  to  receive  such
               valve-related   services  and  will  provide  those  benefits  in
               accordance  with the  timetable  set forth in  Section  VI.C.3.m,
               below.

          k.   PROCESSING CLAIMS FOR REFUNDS FOR SUBCLASS 1(A) AND 2(A) MEMBERS:

               Within  forty-five  (45) days of the date on which  the  Trustees
               and/or  Claims  Administrator  receive a  completed  Claim  which
               adequately  documents that the Diet Drug Recipient is a member of
               Subclass 1(a) or 2(a) and which adequately documents the duration
               of his or her Diet  Drug use for which a refund  is  sought,  the
               Trustees and/or Claims  Administrator(s) shall certify the amount
               of  the  refund  to  which  that  Diet  Drug   Recipient  or  the
               Representative  Claimant for that Diet Drug Recipient is entitled
               and shall make payment to the Diet  Recipient  or  Representative
               Claimant in  accordance  with the  timetable set forth in Section
               VI.C.3.m, below.

          l.   PROCESSING CLAIMS FOR REFUNDS FOR SUBCLASS 1(B) AND 2(B) MEMBERS:

               Within ninety (90) days after Date 2, the Trustees  and/or Claims
               Administrator(s)  shall determine,  pursuant to Section IV.A.1.d,
               the amount,  if any, of the refunds to which Diet Drug Recipients
               who are members of Subclasses 1(b) or 2(b) or the  Representative
               Claimants for those Diet Drug Recipients are entitled.  Within 45
               days of such time, the Trustees and/or Claims Administrator shall
               pay all Diet Drug Recipients or Representative Claimants who have
               adequately  documented membership in Subclasses 1(b) or 2(b), the
               refund  amounts to which they are entitled,  if any. In the event
               that it is  determined  that the  Settlement  Agreement  will not
               receive  Final  Judicial  Approval  or  in  the  event  that  the
               Settlement  Agreement is terminated for any reason,  the Trustees
               and/or Claims  Administrator(s)  shall  determine  within 90 days
               after the conclusion of the period for providing  Echocardiograms
               and associated  physician visits to Diet Drug Recipients who have
               elected  the AIO  whether  there  are  sufficient  assets to make
               refund payments to Subclass 1(b) or 2(b) members who have entered
               into Individual Agreements pursuant to the AIO. Within 45 days of
               making   such   determination,   the   Trustees   and/or   Claims
               Administrator(s)  shall  pay  to  all  Diet  Drug  Recipients  or
               Representative   Claimants   who   have   adequately   documented
               membership  in  Subclass  1(b)  or 2(b)  and  have  entered  into
               Individual  Agreements  pursuant to the AIO, the amounts to which
               they are entitled, if any.

          m.   The timetable for the benefits  described in Sections VI.C.3. g-k
               above shall be as follows:

               (1)  For Class  Members who have elected the AIO,  such  benefits
                    cannot be provided until after the AIO Start Date;

               (2)  For Class  Members who qualify for  benefits  under  Section
                    IV.A.3.c,  such benefits  cannot be provided until after the
                    Trial Court Approval Date;

               (3)  For  all  other  Class  Members,  such  benefits  cannot  be
                    provided until after the Final Judicial Approval Date.

               During the first full twelve (12) calendar  months  following the
               AIO Start Date, the time periods for the actions  required within
               forty-five (45) days in Sections  VI.C.3.g (1) and (2),  Sections
               VI.C.3.h (1) and (2), Section VI.C.3.i, Section VI.C.3.j, Section
               VI.C.3.k, and Section VI.C.3.l, are extended to sixty (60) days.

          n.   PROCESSING     CLAIMS    FOR     REIMBURSEMENT     FOR    CERTAIN
               PRIVATELY-OBTAINED ECHOCARDIOGRAMS

               Within ninety (90) days after Date 2, the Trustees  and/or Claims
               Administrator(s) shall determine whether a Diet Drug Recipient or
               Representative  Claimant  who has  submitted  a claim  requesting
               reimbursement  pursuant  to Section  IV.A.3.d is entitled to such
               reimbursement and, if so, the amount of reimbursement.  Within 45
               days of such time,  the  Trustees  and/or  Claims  Administrators
               shall pay all such Class  Members  the  reimbursement  amounts to
               which they are  entitled,  if any,  subject to the  limitation of
               Section  IV.A.3.d that said  reimbursement  benefits will be paid
               only if,  and to the extent  that,  Fund A  possesses  sufficient
               assets to pay such  benefits  after  paying or creating a reserve
               for payment of all other  authorized  expenses and benefits to be
               provided by Fund A, except for the refund  benefits  described in
               Section  IV.A.1.d  hereof,  which  shall be  subordinate  to this
               reimbursement  benefit.  In the event that it is determined  that
               the Settlement Agreement will not receive Final Judicial Approval
               or in the event that the  Settlement  Agreement is terminated for
               any reason,  the Trustees  and/or Claims  Administrator(s)  shall
               determine  within 90 days after the  conclusion of the period for
               providing Echocardiograms and associated physician visits to Diet
               Drug  Recipients  who have  elected  the AIO  whether  there  are
               sufficient  assets to make  reimbursement  payments  pursuant  to
               Section   IV.A.3.d  to  Class   Members  who  have  entered  into
               Individual  Agreements  pursuant  to the AIO.  Within  45 days of
               making   such   determination,   the   Trustees   and/or   Claims
               Administrator(s)  shall pay to all such  Class  Members  who have
               entered  into  Individual  Agreements  pursuant  to the AIO,  the
               reimbursement amounts to which they are entitled, if any.

     4.   ADMINISTRATION OF MATRIX COMPENSATION BENEFIT CLAIMS.

          a.   To receive  Matrix  benefits,  the Class  Member must provide the
               Trustees   and/or  Claims   Administrator(s)   with   appropriate
               documentation  of the condition of the Diet Drug  Recipient  that
               forms the basis for the claim.  As set forth in the "GREEN FORM,"
               attached as Exhibit "22", such documentation shall include:

               (1)  all hospital  reports of the admitting  history and physical
                    examination of the Diet Drug Recipient,  operative  reports,
                    pathology   reports,    Echocardiogram   reports,    cardiac
                    catheterization   reports,  and  discharge  summaries  which
                    relate  to the  condition  of the Diet Drug  Recipient  that
                    forms the basis of the Claim;

               (2)  a copy  of  the  videotape  or  disk  of the  Echocardiogram
                    results which, in whole or in part,  forms the basis for the
                    Claim for Matrix  Compensation  Benefits;

               (3)  a  declaration  under  penalty of perjury from the Diet Drug
                    Recipient  that,  to the  best of  his/her  knowledge,  such
                    condition  was not  present  prior to  usage of  Pondimin(R)
                    and/or Redux(TM);

               (4)  a   declaration    under   penalty   of   perjury   from   a
                    Board-Certified   Cardiologist  or  Cardiothoracic   Surgeon
                    setting  forth an opinion to a reasonable  degree of medical
                    certainty that (a) the Diet Drug Recipient has the condition
                    which  qualifies  the Class Member for a  particular  Matrix
                    payment,  including,  where  applicable,  that the causation
                    requirements  applicable  to  conditions  (b)(v)  and (c) of
                    Matrix-Level  V, as defined in Section  IV.B.2.c.(5)  either
                    are or are not present;  (b) to the best of such physician's
                    knowledge  after  reasonable  inquiry,  such condition which
                    qualifies the Class Member for a particular  Matrix  payment
                    was  not  present  prior  to  usage  of  Pondimin(R)  and/or
                    Redux(TM);  and (c) all the  conditions set forth in Section
                    IV.B.2.d.  which  determine  whether  Matrix  A-1  or B-1 is
                    applicable, either are present or are not present;

               (5)  a   declaration    under   penalty   of   perjury   from   a
                    Board-Certified   Cardiologist,    Cardiothoracic   Surgeon,
                    Neurologist  or  Neurosurgeon  with regard to the functional
                    outcome which the patient has had six months after a stroke,
                    if applicable;

               (6)  a   declaration    under   penalty   of   perjury   from   a
                    Board-Certified  Cardiologist,   Cardiothoracic  Surgeon  or
                    Pathologist  regarding  the  existence  of the  pathological
                    criteria for Endocardial  Fibrosis  defined in Section I.21,
                    if applicable;

               (7)  any other  documentation  which the Trustees  and/or  Claims
                    Administrator(s)  are otherwise  authorized to request under
                    this Settlement Agreement; and

               (8)  for  an  Echocardiogram  that  took  place  outside  of  the
                    Screening  Program,  and if not  previously  submitted  in a
                    GREEN FORM, a  certification  from a Qualified  Physician on
                    the GRAY FORM which is appended to the Settlement  Agreement
                    as  Exhibit  "20"  that  the  Diet  Drug  Recipient  met the
                    criteria for having FDA Positive regurgitation as defined in
                    Section  I.22 or Mild  Mitral  Regurgitation  as  defined in
                    Section I.38 prior to the end of the Screening Period.

               The  records  and  information  described  in  (1)  through  (8),
               inclusive,   together  with,  if  applicable,   the   information
               described  in Section  VI.C.4.b  below,  are  referred  to as the
               "Medical  Information."  Subject  to the  provisions  of  Section
               VI.C.4.b,  a Claim for Matrix Compensation  Benefits shall not be
               considered  completed  within the  meaning of Section  VI.C.2 and
               Section  VI.C.4 and ready for  determination  until the  Trustees
               and/or Claims  Administrator(s)  have  received,  either from the
               Class Member or the  healthcare  provider or  applicable  records
               custodian,  all  Medical  Information  and a  properly  and fully
               completed  GREEN FORM (and GRAY FORM, if applicable)  relating to
               such Claim.

          b.   If the Class Member  seeking a Matrix payment is unable to obtain
               the  documentation   described  above  through  the  exercise  of
               reasonable  efforts,  the Trustees  and/or  Claims  Administrator
               shall have the right to consider other  supporting  documentation
               including  but not  limited to  declarations  of other  Qualified
               Physician(s) under penalty of perjury setting forth opinion(s) to
               a  reasonable  degree of medical  certainty  to support the claim
               that the Class Member's condition entitles him or her to a Matrix
               payment,  subject  to review by the Court as set forth in Section
               VIII.D. If this evidence establishes the Class Member's condition
               to   the    satisfaction    of   the   Trustees   and/or   Claims
               Administrator(s),  the Class  Member shall be entitled to receive
               the appropriate Matrix Compensation Benefits.

          c.   Upon  receiving  a claim for Matrix  Compensation  Benefits,  the
               Trustees   and/or  Claims   Administrator(s)   shall  obtain  the
               following information from the Class Member:

               (1)  A copy of any fee agreement between the Class Member and the
                    attorney  representing  that  Class  Member  which  shall be
                    submitted and maintained in confidence;

               (2)  A verified statement of the out-of-pocket  costs incurred by
                    the  Class  Member's  individual  attorney,  which  shall be
                    submitted and maintained in confidence;

               (3)  A written  representation  by the Class  Member or the Class
                    Member's attorney,  made subject to penalties of perjury, as
                    to  whether  or not a  subrogation  lien or  claim  has been
                    asserted with respect to the Class Member's right to receive
                    benefits  under the  Settlement  and, if so, the name of the
                    subrogee; and

               (4)  If the Class Member is a Representative Claimant, such court
                    approvals or authorizations as may be necessary to authorize
                    that person to consummate a Settlement  in a  representative
                    capacity.

               Until the  submission  of all of the  information  referred to in
               Section VI.C.2,  a Claim for Matrix  Compensation  Benefits shall
               not be considered "completed" and ready for determination.

          d.   Subject to the audit  provisions  of this  Settlement  Agreement,
               Section  VI.E  and  Section  VI.F,  the  Trustees  and/or  Claims
               Administrator(s) shall make Matrix Benefits  Determinations based
               upon the Medical  Information  provided to them by an appropriate
               Board-Certified  physician  on  or  with  a  properly  and  fully
               completed GREEN FORM. In making Matrix  Benefits  Determinations,
               if the Trustees  and/or  Claims  Administrator(s)  determine  any
               inconsistency  in the  information  provided in a Claim Form, the
               Trustees and/or Claims  Administrator(s) shall review the Medical
               Information  relating to such Claim to  determine  if the Medical
               Information resolves such inconsistency.

          e.   No earlier than thirty (30) days after AHP receives access to the
               documents   provided  to  AHP  by  the  Trustees   and/or  Claims
               Administrator(s)  pursuant to Section  VI.F.1,  and no later than
               sixty  (60) days after  receiving  a  completed  Claim for Matrix
               Compensation     Benefits,    the    Trustees    and/or    Claims
               Administrator(s) shall make a tentative determination:

               (1)  As  to  whether   the  Class   Member(s)   is   entitled  to
                    compensation  under the  Matrices,  and if so, the amount of
                    compensation to which the individual is entitled,  including
                    an  apportionment   among   Derivative  and   Representative
                    Claimants to the extent necessary;

               (2)  The   amount  of   counsel   fees  to  which  the   attorney
                    representing  the  Class  Member  is  entitled,  making  the
                    appropriate  deduction of 9% to account for the fees paid to
                    Class  Counsel as required by Section  VIII.E.1.b or Section
                    VIII.E.3 of this Agreement, whichever is applicable;

               (3)  The amount of reasonable  out-of-pocket  expenditures  which
                    should be reimbursed to the individual attorney representing
                    the Class Member;

               (4)  The amount to which any  subrogee is entitled in  accordance
                    with the provisions of Section VII.D.2 hereof; and

               (5)  The net amount to which the Class  Member is entitled  after
                    making    appropriate    deductions    for   counsel   fees,
                    reimbursement  of  litigation  expenses,  and payment of all
                    appropriate subrogation liens.

          f.   Immediately  upon  making  the  determination   required  by  the
               preceding paragraph,  the Trustees and/or Claims Administrator(s)
               shall  notify  the Class  Members;  the  attorneys  for the Class
               Members,  if any; and the subrogrees if any, of the determination
               and  provide  them with a period of thirty  (30) days in which to
               contest the tentative determination by the Trustees and/or Claims
               Administrator(s),   and   to   provide   additional   information
               concerning the level of Matrix Compensation Benefits which should
               be paid as well as the  distribution  and  apportionment of those
               benefits.  At the same time as this notice,  the Trustees  and/or
               Claims  Administrators shall also notify AHP of the determination
               required by the preceding paragraph.

          g.   Within sixty (60) days of receiving any explanatory or supporting
               information  pursuant to the preceding paragraph or within ninety
               (90) days of receiving a completed Claim for Matrix  Compensation
               Benefits,   whichever  is  later,   the  Trustees  and/or  Claims
               Administrator(s) shall make a final determination:

               (1)  As to whether the Class  Member is entitled to  compensation
                    under the Matrices,  and, if so, the amount of  compensation
                    to  which  the  Class  Member  is  entitled,   including  an
                    apportionment among Derivative and Representative  Claimants
                    to the extent necessary;

               (2)  The   amount  of   counsel   fees  to  which  the   attorney
                    representing  the  Class  Member  is  entitled,  making  the
                    appropriate  deduction of 9% to account for the fees paid to
                    Class  Counsel as  required  by Section  VIII.E.3 or Section
                    VIII.E.1.b of this Agreement, whichever is applicable;

               (3)  The amount of reasonable  out-of-pocket  expenditures  which
                    should be reimbursed to the individual attorney representing
                    the Class Member;

               (4)  The amount to which any  subrogee is entitled in  accordance
                    with the provisions in Section VII.D hereof; and

               (5)  The net amount to which the Class  Member is entitled  after
                    making    appropriate    deductions    for   counsel   fees,
                    reimbursement  of  litigation  expenses,  and payment of all
                    appropriate subrogation liens.

               At the  same  time as  notice  is  given  to the  affected  Class
               Member(s),   attorney(s),   and/or   subrogees   of   the   final
               determination under Section VI.C.4.g,  the Trustees and/or Claims
               Administrators shall also notify AHP of such final determination.

               During the first full twelve (12) calendar  months  following the
               AIO Start Date, the Trustees and/or Claims Administrator(s) shall
               make this final determination within sixty (60) days of receiving
               any  explanatory  or supporting  information  pursuant to Section
               VI.C.4.f above or within 105 days of receiving a completed  Claim
               for Matrix Compensation Benefits, whichever is later, rather than
               the sixty and ninety day periods stated above.

          h.   Within   fifteen   (15)   days  of   receiving   notice   of  the
               Trustees/Claims Administrators' final determination, the affected
               Class Member(s),  attorney(s),  and/or subrogee(s) may appeal the
               determination  by filing a Notice of Appeal in the form  appended
               hereto as Exhibit "24" with the Trial Court and serving a copy on
               the Trustees and/or Claims Administrator(s).

          i.   In the event of such an appeal,  the Court shall refer the matter
               to Arbitration by a single Arbitrator appointed by the Court from
               a panel of  arbitrators  appointed by the Court for that purpose.
               With  respect  to an appeal  by a Class  Member  relating  to the
               determination of the gross amount of Matrix Compensation Benefits
               to which  the Class  Member is  entitled,  the  Arbitrator  shall
               determine  whether the Trustees  and/or  Claims  Administrator(s)
               have  properly  applied the criteria set forth in the  Settlement
               Agreement  to the  information  submitted  by the Class Member in
               support  of the claim and shall  enter a report  and award  which
               either  affirms  the  decision  of  the  Trustees  and/or  Claims
               Administrator(s)  or directs a different  payment than that which
               was  determined by the Trustees  and/or Claims  Administrator(s).
               With respect to an appeal relating to the distribution of counsel
               fees and costs,  the Arbitrator shall determine the amount of the
               attorneys  fees to which  the  attorney  is  entitled  under  the
               provisions  of the  applicable  state law after  deducting  9% as
               required by Section  VIII.E.1.b of this  Agreement and the extent
               to  which  the  attorney   should   receive   reimbursement   for
               out-of-pocket  costs  from  the  Class  Member's  recovery  under
               applicable  state  law.  In the case of an appeal  relating  to a
               subrogation  issue,  the Arbitrator shall determine the amount to
               which  the  subrogee  is  entitled  to  under  applicable  law to
               consistent  with  the  provisions  of  Section  VII.D.2  of  this
               Agreement.

               The  costs  of  such  Arbitration,  including  the  fees  of  the
               Arbitrator,  shall  be taxed  by the  Arbitrator  in favor of the
               party  who  substantially  prevails  in  the  Arbitration  if the
               Arbitrator  finds  that the  appeal  was taken or  maintained  in
               violation  of  the  standards  set  forth  in  Fed.R.Civ.P.11(b).
               Otherwise,  the  costs of such  Arbitration  shall be paid by the
               Trust.  Any party may  appeal  from the  report  and award of the
               Arbitrator to the Court.

          j.   If there is no appeal initiating an Arbitration process, then the
               decision of the  Trustees  and/or  Claims  Administrator(s)  with
               respect to the gross  amount to be paid on account of a Claim for
               Matrix  Compensation  Benefits shall be final,  unless there is a
               documented  change  in the  physical  condition  of the Diet Drug
               Recipient   after   submission  of  the  claim  which   justifies
               consideration for a greater level of Matrix Compensation Benefits
               than  previously  applied  for  or  justifies  consideration  for
               payment at the same level as previously  applied for by reason of
               a different physical condition than that which was the subject of
               the prior Claim for Benefits by the Class Member.

          k.   If there is no appeal initiating an Arbitration process, then the
               decision of the  Trustees  and/or  Claims  Administrator(s)  with
               respect to the  distribution of any portion of any amount paid on
               account  of a  Claim  for  Matrix  Compensation  Benefits  to any
               attorney or subrogee shall be final.

          l.   If an appeal initiating arbitration is taken, the decision of the
               Arbitrator  or, if an  appeal  from the  report  and award of the
               Arbitrator is taken, the decision of the Court shall be final and
               binding  with  respect  to:  (a) The  gross  amount to be paid on
               account of a Claim for Matrix Compensation  Benefits unless there
               is a documented change in the physical condition of the Diet Drug
               Recipient  after  the  submission  of the claim  which  justifies
               consideration for a greater level of Matrix Compensation Benefits
               than that previously applied for or for payment at the same level
               as  previously  applied  for by  reason of a  different  physical
               condition  than that which was the subject of the prior Claim for
               Benefits by the Class  Member;  and (b) the  distribution  of any
               portion of the gross  amount to be paid for  Matrix  Compensation
               Benefits  to  any  attorney  or  subrogee  for  attorneys'  fees,
               reimbursement of litigation expenses, or subrogation claims.

          m.   Within  forty-five  (45)  days  after  the end of  each  calendar
               quarter or AIO Fiscal Quarter, whichever is applicable, after the
               AIO Start Date and prior to Final Judicial Approval, the Trustees
               and/or Claims  Administrator(s) shall pay the Matrix Compensation
               Benefit claims of all Class Members who:

               (1)  have  completed  Claims  for  Matrix  Compensation  Benefits
                    during  the  period  prior  to  the   commencement   of  the
                    above-referenced  calendar  quarter or AIO  Fiscal  Quarter,
                    whichever  is  applicable,  which  have not been  previously
                    paid; and

               (2)  have executed Individual Agreements pursuant to the AIO; and

               (3)  whose  rights to Matrix  Compensation  Benefits  have become
                    final during the  above-referenced  calendar  quarter or AIO
                    Fiscal Quarter,  whichever is applicable  under this Section
                    and are not then the  subject of an audit under the terms of
                    the Settlement Agreement.

               In distributing the amount due with respect to a claim for Matrix
               Compensation    Benefits,    the   Trustees   and/or   Settlement
               Administrator(s)  shall  pay  all  sums  due  to  the  individual
               attorney  for the Class  Member for  payment of counsel  fees and
               reimbursement  of  litigation  expenses,  and all sums due to any
               subrogee as  determined by the above  procedures.  The net amount
               remaining  after deducting such payments from the gross amount of
               the  Matrix  Compensation  Benefits  to which a Class  Member  is
               determined  to be  entitled,  shall be  distributed  to the Class
               Member.

          n.   Upon Final Judicial Approval,  the preceding paragraph will cease
               to be  effective  and the  following  schedule  will apply to the
               payment of all claims for Matrix Compensation Benefits. Within 45
               days after the close of each Fiscal Quarter,  the Trustees and/or
               Claims  Administrator(s)  shall  pay all  Claims  for the  Matrix
               Compensation Benefits of all Class Members who:

               (1)  have  completed  Claims  for  Matrix  Compensation  Benefits
                    during the period  prior to the  commencement  of the above-
                    referenced 45-day time period which have not been previously
                    paid; and

               (2)  whose  rights to Matrix  Compensation  Benefits  have become
                    final  during  the  above-referenced  Fiscal  Quarter  under
                    Section  VI.C.5,  and are not then the  subject  of an audit
                    under the terms of the Settlement Agreement.

               In distributing the amount due with respect to a claim for Matrix
               Compensation    Benefits,    the   Trustees   and/or   Settlement
               Administrator(s)  shall  pay  all  sums  due  to  the  individual
               attorney  for the Class  Member for  payment of counsel  fees and
               reimbursement  of  litigation  expenses,  and all sums due to any
               subrogee as  determined by the above  procedures.  The net amount
               remaining  after deducting such payments from the gross amount of
               the  Matrix  Compensation  Benefits  to which a Class  Member  is
               determined  to be  entitled,  shall be  distributed  to the Class
               Member.

          o.   The  payment  obligations  in  paragraphs  (m) and (n)  above are
               subject to the provisions of Section III.C.

     5.   Beginning on the Preliminary Approval Date, the Trustees and/or Claims
          Administrators  shall take the steps  reasonably  necessary to receive
          and  process  Claims  for  Benefits  according  to the  terms  of this
          Agreement,  but the time  periods  provided  in  Section  VI.C for the
          processing  of  Claims by Class  Members  and for any  actions  by the
          Trustees and/or Claims Administrator(s)  relating to such Claims shall
          not apply to any Claim until the later of September  30, 2000,  or the
          AIO Start  Date.  Further,  such time  periods  shall not apply to the
          Claims  of Class  Members  who have  submitted  BLUE  FORMS  until the
          earlier  of the Final  Judicial  Approval  Date or  February  1, 2001;
          provided,  however,  that the Trustees and/or Claims  Administrator(s)
          shall have the  authority  to process the Claims of Class  Members who
          have  submitted  BLUE FORMS  before such time if  warranted to achieve
          cost savings in the  processing of Claims.  At any time, the Court may
          extend  any time  period in  Section  VI.C for good  cause  shown upon
          application by the Parties, Trustees, Claims Administrator(s),  and/or
          Interim Claims Administrators, after notice to AHP and Class Counsel.

     D.   PROCEDURE FOR RECOGNITION OF CREDITS.

          1.   AHP shall  receive  Credits in  accordance  with Section VII.A of
               this Settlement Agreement pursuant to the following procedure:

               a.   With  respect to each Class  Member who has opted out of the
                    Settlement and who has received a payment from AHP for which
                    AHP  seeks a Credit  under  Section  VII.A (a  "Request  for
                    Credit"),  AHP  shall  supply  the  Trustees  and/or  Claims
                    Administrator(s)    with   the   following   documents   and
                    information:

                    (1)  a copy of the form  through  which the Class  Member(s)
                         exercised an Opt-Out right;

                    (2)  a copy of the  report  of the  Echocardiogram,  if any,
                         showing  the degree of mitral  and/or  aortic  valvular
                         regurgitation   in  the  Diet  Drug   Recipient   whose
                         condition  is at issue  prior  to  September  30,  1999
                         and/or as of the close of the Screening Period;

                    (3)  a copy of the  check(s)  evidencing  payment  or  other
                         evidence  of payment to the Class  Member(s)  for which
                         AHP seeks credit;

                    (4)  a  copy  of  the  release(s)   executed  by  the  Class
                         Member(s) in favor of AHP;

                    (5)  a "RED FORM" for an Initial or Back-End  Opt-Out  which
                         is appended  to this  Settlement  Agreement  as Exhibit
                         "25"  completed  and  signed  subject to  penalties  of
                         perjury by a knowledgeable  representative of AHP and a
                         Board-Certified    Cardiologist   or    Board-Certified
                         Cardiothoracic Surgeon;

                    (6)  all  hospital  reports  of the  admitting  history  and
                         physical   examination  of  the  Diet  Drug  Recipient,
                         medical   histories,   operative   reports,   pathology
                         reports,      Echocardiogram      reports,      cardiac
                         catheterization  reports and discharge  summaries which
                         relate to the condition of the Diet Drug Recipient that
                         forms the basis of the Request for Credit;

                    (7)  a copy of the  videotape or disk of the  Echocardiogram
                         results which,  in whole or in part, form the basis for
                         the Request for Credit;

                    (8)  a   declaration   under   penalty  of  perjury  from  a
                         Board-Certified Cardiologist or Cardiothoracic Surgeon,
                         regardless of whether that  Cardiologist was originally
                         retained by AHP,  the  plaintiff  or  neither,  setting
                         forth an  opinion  to a  reasonable  degree of  medical
                         certainty  that (1) the  Diet  Drug  Recipient  has the
                         condition which would otherwise  qualify a Class Member
                         for  a  particular  Matrix  payment,  including,  where
                         applicable,  that the causation requirements applicable
                         to conditions  (b)(v) and (c) of Matrix-Level V, either
                         are or  are  not  present;  (2) to  the  best  of  such
                         physician's  knowledge after reasonable  inquiry,  such
                         condition  which  would  otherwise  qualify  the  Class
                         Member for a particular  Matrix payment was not present
                         prior to usage of Pondimin(R) and/or Redux(TM); and (3)
                         all the conditions  which determine  whether Matrix A-1
                         or B-1 are  applicable,  either are  present or are not
                         present;

                    (9)  a   declaration   under   penalty  of  perjury  from  a
                         Board-Certified  Cardiologist,  Cardiothoracic Surgeon,
                         Neurologist   or   Neurosurgeon   with  regard  to  the
                         functional outcome which the patient has had six months
                         after a stroke, if applicable;

                    (10) a   declaration   under   penalty  of  perjury  from  a
                         Board-Certified  Cardiologist,  Cardiothoracic Surgeon,
                         or   Pathologist   regarding   the   existence  of  the
                         pathological  criteria for Endocardial Fibrosis defined
                         in Section I.21 if applicable; and,

                    (11) any  other  documentation  which  the  Trustees  and/or
                         Claims  Administrators(s)  are otherwise  authorized to
                         request under this Settlement Agreement.

                    The records and  information  described in (1) through (11),
                    inclusive,  and/or  the  information  described  in  Section
                    VI.D.1.b. below are referred to as the "Credit Information."
                    Subject to the provisions of Section VI.D.1.b, a Request for
                    Credit shall not be considered  completed within the meaning
                    of Section VI.D.1.c.  and ready for determination  until the
                    Trustees  and/or Claims  Administrator(s)  have received all
                    Credit  Information  and a properly and fully  completed RED
                    FORM relating to such Request for Credit.

               b.   If AHP is unable to obtain the documentation described above
                    through the  exercise of  reasonable  efforts,  the Trustees
                    and/or  Claims  Administrator(s)  shall  have  the  right to
                    consider other  supporting  documentation  including but not
                    limited to  declaration(s)  of other Qualified  Physician(s)
                    under  penalty  of perjury  setting  forth  opinion(s)  to a
                    reasonable  degree of medical certainty to support the claim
                    that the  Class  Members'  condition  would  have  otherwise
                    entitled him or her to a Matrix  payment for which AHP would
                    be entitled  to a Credit,  subject to review by the Court as
                    set forth in Section VI.D.1.g.  If this evidence establishes
                    the Class  Member's  condition  to the  satisfaction  of the
                    Trustees  and/or  Claims  Administrator(s),   AHP  shall  be
                    entitled to receive the appropriate credit.

               c.   Within forty-five (45) days of receiving a completed Request
                    for   Credit   from  AHP,   the   Trustees   and/or   Claims
                    Administrator(s)  shall make a preliminary  determination as
                    to whether  AHP is  entitled  to a Credit,  and,  if so, the
                    amount of the  Credit to which  AHP is  entitled,  and shall
                    advise  AHP  and  Class   Counsel,   in  writing,   of  this
                    determination.

               d.   AHP and Class Counsel shall have  forty-five  (45) days from
                    the date of receiving  such a preliminary  determination  to
                    submit  additional  information  concerning  the question of
                    whether and to what extent a Credit should be given to AHP.

               e.   Within   sixty  (60)  days  of  receiving   any   additional
                    information  which is  submitted  pursuant to the  preceding
                    paragraph  or  within   ninety  (90)  days  of  receiving  a
                    completed  Request for Credit from AHP,  whichever is later,
                    the Trustees and/or Claims Administrators shall make a final
                    determination as to whether AHP is entitled to a Credit and,
                    if so,  the amount of Credit to which AHP is  entitled,  and
                    shall  advise  AHP and  Class  Counsel  in  writing  of this
                    determination.

               f.   Within  fifteen  (15)  days  of  receiving   notice  of  the
                    Trustees' determination, AHP may appeal the determination by
                    filing a notice of the appeal in the form appended hereto as
                    Exhibit  "24"  with the Trial  Court  and  serving a copy on
                    Class    Counsel,    and   the   Trustees    and/or   Claims
                    Administrator(s).

               g.   In the event of such an appeal,  the Court  shall  refer the
                    matter to  Arbitration by a single  Arbitrator  appointed by
                    the Court for that purpose.  The Arbitrator  shall determine
                    whether the Trustees have properly  applied the criteria set
                    forth  in  the  Settlement   Agreement  to  the  information
                    supplied  by AHP in  support of the  Request  for Credit and
                    shall  enter a report and award,  which  either  affirms the
                    decision of the  Trustees,  directs a different  Credit than
                    that which was  determined by the Trustees,  or directs that
                    no Credit shall be given to AHP. If the  Arbitrator  affirms
                    the  decision of the  Trustees or awards a lower Credit than
                    had been  awarded by the  Trustees and finds that the appeal
                    was taken or maintained by AHP in violation of the standards
                    set  forth  in   Fed.R.Civ.P.   11(b),   the  cost  of  this
                    Arbitration shall be borne by AHP.  Otherwise,  the costs of
                    such  Arbitration  shall be paid by the Trust. Any party may
                    appeal  from the report and award of the  Arbitrator  to the
                    Court.

               h.   If there is no appeal  initiating  an  Arbitration  process,
                    then the  decision of the  Trustees  with respect to a claim
                    for  a  Credit  shall  be  final.  If an  appeal  initiating
                    Arbitration is taken,  the decision of the Arbitrator or, if
                    an appeal  from the  report and award of the  Arbitrator  is
                    taken,  the  decision  of the  Court,  shall  be  final  and
                    binding.

          2.   Beginning on the  Preliminary  Approval Date, the Trustees and/or
               Claims  Administrators  shall take the steps reasonably necessary
               to receive and process  Requests  for  Credits  according  to the
               terms of this Agreement, but the time periods provided in Section
               VI.D for the  processing  of Requests  for Credits by AHP and for
               any   actions   by   AHP   and   the   Trustees   and/or   Claims
               Administrators(s) relating to such Requests for Credits shall not
               apply until the later of  September  30,  2000,  or the AIO Start
               Date.  At any  time,  the  Court may  extend  any time  period in
               Section  VI.D  for  good  cause  shown  upon  application  by the
               Parties, Trustees, Claims Administrator(s), and/or Interim Claims
               Administrators, after notice to AHP and Class Counsel.

     E.   AUDITS OF CLAIMS BY TRUSTEES AND/OR CLAIMS ADMINISTRATOR(S)

          1.   After the AIO  Start  Date,  on a  quarterly  basis the  Trustees
               and/or Claims  Administrator(s)  shall audit five percent (5%) of
               the total  Claims  for  Matrix  Compensation  Benefits  completed
               (within  the  meaning of Section  VI.C.2 and  Section  VI.C.4) by
               Class Members during the prior quarter,  and ten percent (10%) of
               the total  Requests  for  Credits  made by AHP  during  the prior
               quarter. Claims for Matrix Compensation Benefits and Requests for
               Credits  shall be selected for audit  pursuant to this Section of
               the Settlement Agreement as follows:

               a.   The Trustees and/or Claims Administrator(s) shall retain one
                    or more Board-Certified Cardiologists, who have successfully
                    completed  level  three  training in  echocardiography,  for
                    purposes  of  reviewing   claims  for  Matrix   Compensation
                    Benefits made by Class Members and Requests for Credits made
                    by  AHP  (hereinafter  "the  Reviewing  Cardiologist").  The
                    Reviewing  Cardiologist  shall review a total of ten percent
                    (10%) of the total Claims for Matrix  Compensation  Benefits
                    completed  (within the meaning of Section VI.C.2 and Section
                    VI.C.4) by Class Members during the prior  quarter,  and ten
                    percent (10%) of the total  Requests for Credits made by AHP
                    during the prior  quarter.  This review  shall  consist of a
                    comparison   between   the  Medical   Information   and  the
                    information  on the GREEN FORM  submitted  by a Class Member
                    (in the case of a Claim for Matrix Compensation Benefits) or
                    a  comparison   between  the  Credit   Information  and  the
                    information on the RED FORM submitted by AHP (in the case of
                    a Request for Credit) for  purposes of  determining  whether
                    there is a  material  discrepancy  between  the  Medical  or
                    Credit  Information  submitted in connection with a Claim or
                    Request  for  Credit and the  information  on the GREEN FORM
                    submitted  by a Class  Member or the RED FORM  submitted  by
                    AHP. In the event that the Reviewing Cardiologist determines
                    that there is such a material discrepancy, then the Claim or
                    Request for Credit shall be referred  for audit  pursuant to
                    this section of the Settlement Agreement.

               b.   In addition to the procedure  provided in Section  VI.E.1.a,
                    the Trustees  and/or  Claims  Administrator(s)  shall select
                    additional Claims for Matrix Compensation  Benefits by Class
                    Members  and  Requests  for  Credits by AHP during the prior
                    quarter for audit pursuant to an audit plan which shall take
                    into account, among other things:

                    (1)  The fact that certain Class Members are  represented by
                         attorneys who represent what the Trustees and/or Claims
                         Administrator(s)  determine  to  be a  disproportionate
                         number of Class Members;

                    (2)  The fact that certain  Class Members or AHP rely on the
                         certifications    of   doctors   who   have    provided
                         certifications  for what  the  Trustees  and/or  Claims
                         Administrator(s)  determine  to  be a  disproportionate
                         number of Class Members or Requests for Credits; and

                    (3)  The need to incorporate  random sampling into the Audit
                         Plan;

                    provided  however,  that under  this  Section  VI.E.1.b  and
                    Section VI.E.1.a  combined the Trustees shall not audit more
                    than  five  percent  (5%) of the  total  Claims  for  Matrix
                    Compensation  Benefits completed by Class Members during the
                    prior quarter and ten percent (10%) of the total Request for
                    Credits made by AHP during the prior quarter, subject to the
                    provisions of Section VI.F.

          2.   A Claim  may not be paid and a Credit  may not be  allowed  while
               that Claim or Credit is  subject of an audit or a request  for an
               audit.  If a Claim of a Diet  Drug  Recipient  or  Representative
               Claimant  is  subject to audit or a request  for audit,  then the
               Claims of all  Derivative  Claimant(s)  based on that Claim shall
               also be subject to the audit or audit  request,  but shall not be
               considered  as part of the  percentage of Claims to be audited by
               the Trustees and/or Claims Administrator(s) in that quarter.

          3.   With respect to Claims which are selected for audit, the Trustees
               and/or  Claims   Administrator(s)  may  require  that  the  Class
               Member(s)  provide  them  with  the  following  information  as a
               condition to consideration of the Claim:

               a.   Identification   of  all   general   practitioners,   family
                    physicians,   primary   care   providers,    internists   or
                    sub-specialists   in   internal   medicine,    surgeons   or
                    sub-specialists    in   surgery,    and   obstetricians   or
                    gynecologists  who, at any time  during the  10-year  period
                    prior to the filing of the Claim subject to audit,  rendered
                    any medical  care to and/or were  consulted by the Diet Drug
                    Recipient  whose Claim forms the basis of the Claim  subject
                    to audit;

               b.   Fully completed and executed authorizations which will allow
                    the Trustees and/or Claims Administrator(s) to obtain copies
                    of the Class Member's medical records; and

               c.   Such other  relevant  documents  or  information  within the
                    Class  Member's  custody,  possession,  or  control  as  may
                    reasonably  be  requested  by  the  Trustees  and/or  Claims
                    Administrator(s).

                    If the Class Member unreasonably fails or refuses to provide
                    any material  documents or information  after being afforded
                    an adequate  opportunity  to do so, the Class Member's Claim
                    shall be denied.

          4.   With respect to requests for Credit which are selected for audit,
               the Trustees and/or Claims  Administrator(s) may require that AHP
               provide  them with the  following  information  as a condition to
               consideration of a Request for Credit:

               a.   All  medical  records  relating  to the Diet Drug  Recipient
                    whose  condition  is the  subject of the Request for Credit,
                    which are in the custody,  possession, or control of AHP and
                    its counsel;

               b.   All  depositions,  interrogatories,  fact  sheets,  and like
                    documents relating to the condition and circumstances of the
                    Diet Drug  Recipient  whose  condition is the subject of the
                    Request for Credit, which are in the custody,  possession or
                    control of AHP and its counsel;

               c.   Such other relevant documents or information within AHP's or
                    its  counsel's   custody,   possession  or  control  as  may
                    reasonably  be  requested  by  the  Trustees  and/or  Claims
                    Administrator(s).

          5.   If AHP  unreasonably  fails or refuses to  provide  any  material
               documents or  information  after being afforded an opportunity to
               do so, its Request for Credit shall be denied.

          6.   In  conducting  an audit of those  Claims and Requests for Credit
               selected for audit,  the Trustees and/or Claims  Administrator(s)
               shall   follow   the   following   procedure:   All   Accelerated
               Implementation   Option   acceptance   form(s)   ("PINK   FORM"),
               registration  form(s)  ("BLUE  FORM"),  videotapes  or  disks  of
               Echocardiograms, medical reports, and other information submitted
               by AHP in support of a Request for Credit or by a Class Member in
               support  of a  Claim,  together  with  a copy  of the  claimant's
               medical records, and Echocardiogram  videotapes or disks obtained
               by the Trustees/Claims  Administrator(s)  shall be forwarded to a
               highly-  qualified,  independent,   Board-Certified  Cardiologist
               (hereinafter referred to as the "Auditing Cardiologist") selected
               by  the   Trustees/Claims   Administrator(s).   After  thoroughly
               reviewing these materials, the Auditing Cardiologist shall make a
               determination as to whether or not there was a reasonable medical
               basis for the representations made by any physician in support of
               the Claim or Request for Credit.

          7.   If the Auditing  Cardiologist  makes the determination that there
               was a  reasonable  medical  basis to support  the Class  Member's
               Claim or AHP's Request for Credit and if there is no  substantial
               evidence  that  the  Class  Member  or AHP  intentionally  made a
               material  misrepresentation of fact in connection with a Claim or
               a Request for Credit,  then the Claim or Credit shall be allowed.
               If,  on the  other  hand,  the  Auditing  Cardiologist  makes the
               determination  that  there  was no  reasonable  medical  basis to
               support any of the material representations made by any physician
               in  support  of the Class  Member's  Claim or AHP's  Request  for
               Credit,  or  if  the  Trustees  and/or  Claims   Administrator(s)
               determine  that the  Class  Member  or AHP  intentionally  made a
               material  misrepresentation  of fact, the Trustees  and/or Claims
               Administrator(s)  shall not pay the Claim or allow the Credit and
               shall apply to the Court for an order to show cause why the Claim
               should be paid or the Credit should be allowed,  and for an order
               to show  cause as to why other  Claims or Credits  involving  the
               same attorney and/or physician should not be subject to an audit.

          8.   If the Court  determines  that  there was no  reasonable  medical
               basis to support a material representation made by a physician in
               support of a Claim or Request for Credit or that the Class Member
               or AHP intentionally made a material misrepresentation of fact in
               connection with Claim or Request for Credit, after the entry of a
               show  cause  order  and  a  hearing  pursuant  to  the  preceding
               paragraph, the Court may grant such relief as may be appropriate,
               including any of the following:

               a.   an order disallowing the Claim or Credit;

               b.   an order  directing an  additional  audit of other Claims or
                    credits  involving the same attorneys and/or  physicians who
                    were  involved in the Claim or Request for Credit  which was
                    the subject of the show cause order;

               c.   an order  directing such other  additional  audits as may be
                    appropriate in light of the Court's findings;

               d.   an order  imposing  penalties  including  the payment of the
                    Trustees' and/or Claims Administrators' costs and attorneys'
                    fees to the extent permitted by law; and/or

               e.   an order  making a  referral  of the  matter  to the  United
                    States   Attorney  or  other   appropriate  law  enforcement
                    officials  for  possible  criminal  prosecution  if there is
                    probable  cause to  believe  that the  Claim  was  submitted
                    fraudulently.

               For good cause shown, including without limitation the results of
               audits  conducted  on any one or more  Claims,  groups of Claims,
               and/or  requests  for Credits made by AHP, the Court at any time,
               upon its own motion  after  notice to AHP and Class  Counsel,  or
               upon motion by any party and after such notice and hearing as the
               Court  may  direct,   may  order  the  Trustees   and/or   Claims
               Administrators  to perform such  additional  audits  and/or adopt
               such  additional  claims  administration  procedures as the Court
               deems appropriate.

     F.   AHP-INITIATED AUDITS OF CLAIMS

          1.   AHP may  have  access  to all  Claim  Forms  for Fund A or Fund B
               benefits submitted to the Trustees and/or Claims Administrator(s)
               and   to  all   medical   records,   videotapes   or   disks   of
               Echocardiograms,  forms  submitted  by  Class  Members,  pharmacy
               records and all other  documents  submitted  by Class  Members in
               support of their Claims, upon reasonable request to the Trustees.
               Access to such documents shall be provided to AHP by the Trustees
               and/or Claim Administrator(s) no later than five (5) days after a
               Claim is  completed  (within  the  meaning of Section  VI.C.2 and
               Section VI.C.4).

          2.   AHP  shall   have  no  right  to   participate   in  the   claims
               determination  process for a particular Class Member as described
               in Section VI.C above; provided, however, that AHP shall have the
               right to  submit  particular  Claims  or  groups of Claims to the
               Trustees and/or Claims  Administrator(s) for audit, up to a total
               per  quarter of 10% of the total  Claims for Matrix  Compensation
               Benefits  and  10% of  the  total  claims  for  Fund  A  Benefits
               completed by Class Members during the prior  quarter.  Along with
               such  submissions,  AHP shall identify to or provide the Trustees
               and/or Claims  Administrator(s)  information or  documentation in
               its possession that it believes establishes either that there was
               no reasonable  medical basis to support the Class  Member's Claim
               or that the Class  Member  made a material  misrepresentation  of
               fact in connection with a Claim.

          3.   The  Trustees  and/or  Claims  Administrator(s)  shall  audit all
               Claims  properly  submitted by AHP for audit under Section VI.F.2
               above in a particular  quarter.  Such Claims shall be in addition
               to and  different  from the 5% of Claims  audited by the Trustees
               and/or  Claims  Administrators  per  quarter  pursuant to Section
               VI.E.1.  Should  any of the  Claims  submitted  for  audit by AHP
               include   those   selected   by  the   Trustees   and/or   Claims
               Administrators  for audit in the same quarter,  then the Trustees
               and/or Claims  Administrators shall select other Claims for audit
               to ensure  their audit of 5% of Claims per quarter as required by
               Section  VI.E.1 in  addition to the Claims  submitted  by AHP for
               audit.

          4.   If Class  Counsel or AHP has a good faith belief that an Auditing
               Cardiologist  employed  by the  Trustees  has  failed to  perform
               his/her duties in accordance  with accepted  standards of medical
               practice,  they may apply to the Court  for  appropriate  relief,
               including an order disqualifying the Auditing  Cardiololgist from
               any further  participation in any audits and requiring a re-audit
               of those  Claims or  Requests  for Credit for which the  Auditing
               Cardiologist made a determination.

          5.   In  connection  with any audit  initiated  by AHP  under  Section
               VI.F.2,  AHP shall have the right to obtain,  at its expense,  an
               independent Transthoracic Echocardiogram of a Diet Drug Recipient
               who has made a claim for  Matrix  Benefits  under  the  following
               circumstances:

               a.   where AHP presents  evidence to the Trustees  and/or  Claims
                    Administrator(s) that the center or physician from which the
                    Echocardiogram was obtained has a disproportionate number of
                    FDA Positive or Matrix-Level Claims; or

               b.   where AHP  submits a  certification  from a  Board-Certified
                    Cardiologist under penalty of perjury that the report of the
                    Echocardiogram   and/or  the   videotape   or  disk  deviate
                    materially from accepted standards of practice in the fields
                    of Cardiology or Echocardiography; or

               c.   where   AHP   submits   to  the   Trustees   and/or   Claims
                    Administrator(s)  evidence  that  the  Class  Member  or any
                    physician  making  representations  in  support  of a  Class
                    Member's Claim made material misrepresentations of fact; or

               d.   where AHP  submits a  certification  from a  Board-Certified
                    Cardiologist  under penalty of perjury that the videotape or
                    disk of the  Echocardiogram  cannot properly be read for any
                    reason,  including,  but not limited to,  poor  quality,  or
                    improper setting.

          6.   Independent  AHP  Echocardiograms  conducted  pursuant to Section
               VI.F.5 above, shall be subject to the following conditions:

               a.   the  affected  Class Member will be afforded at least ninety
                    (90) days within which to schedule the  Echocardiogram  at a
                    time convenient to the Class Member;

               b.   the   Echocardiogram   shall   take   place  not  more  than
                    twenty-five  (25)  miles  from the Class  Member's  place of
                    residence  unless AHP  provides  transportation,  but, in no
                    event, more than 100 miles;

               c.   AHP shall pay for the Echocardiogram;

               d.   Echocardiogram shall be conducted pursuant to the procedures
                    set forth in Section I.54.

               e.   a report of the  Echocardiogram  together with a copy of the
                    videotape and/or disk of the Echocardiogram results shall be
                    submitted to the Trustees and/or Claims Administrator(s) and
                    to the  Diet  Drug  Recipient  who  was the  subject  of the
                    Echocardiogram.

                    If  the  results  of  the  report  of  the  Independent  AHP
                    Echocardiogram  obtained by AHP  pursuant to this  paragraph
                    differ  materially  and  significantly  from the  results or
                    report of the  Echocardiogram  submitted by the Class Member
                    in support of the Class  Member's  Claim for Benefits,  then
                    the Trustees  and/or  Claims  Administrator(s)  may in their
                    discretion take the results into consideration in connection
                    with their audit.




VII.     AHP RIGHTS AND BENEFITS

     A.   CREDITS

          1.   If a Class  Member  timely and  properly  exercises an Initial or
               Back-End  Opt-Out  right  pursuant  to Section  IV.D.2 or Section
               IV.D.4  hereof,  asserts a claim and obtains any payment from AHP
               as a result of such claim (whether  pursuant to a pre-Judgment or
               post-Judgment  settlement of such claim or pursuant to a judgment
               on such  claim),  AHP shall  receive  Credits  against its Fund B
               obligations  to the  extent  set  forth  in  this  Section  VII.A
               ("Credits").

          2.   With respect to an Initial Opt-Out,  if (a) a Diet Drug Recipient
               (or his or her Representative Claimants) timely and properly opts
               out of this  Settlement as an Initial  Opt-Out during the Initial
               Opt-Out  Period and the Diet Drug  Recipient  has a  Matrix-Level
               Condition at the time of such Initial  Opt-Out or payment by AHP,
               and/or (b) a Derivative  Claimant of such Diet Drug  Recipient is
               deemed to have opted out of this  Settlement  pursuant to Section
               IV.D.2,  then AHP shall receive a Full Credit with respect to any
               amounts  paid by AHP to such Diet Drug  Recipient  (or his or her
               Representative  Claimants)  and/or  to  the  Derivative  Claimant
               ("Initial Opt-Out Credits"),  regardless of whether such payments
               were made pursuant to a Judgment or pre-Judgment or post-Judgment
               settlement, subject to the following:

               a.   Initial   Opt-Out  Credits  shall  not  exceed  the  sum  of
                    $300,000,000, in the aggregate.

               b.   Initial  Opt-Out  Credits  shall be  applied  to reduce  the
                    Adjusted Maximum  Available Fund B Amount upon the later of:
                    (i) the date  that is five  calendar  years  after the Final
                    Judicial  Approval  Date;  or (ii)  the  date on  which  the
                    determination  of the Initial  Opt-Out  Credit becomes final
                    under Section VI.D.1.

               c.   Even though the  application of Initial  Opt-Out  Credits to
                    reduce  the  Adjusted  Maximum  Available  Fund B Amount  is
                    deferred pursuant to Section VII.A.2.b above, there shall be
                    no  accretions  on  Initial  Opt-Out  Credits  (or any other
                    Credits due AHP) under this Agreement.

          3.   With respect to a Back-End Opt-Out,  if (a) a Diet Drug Recipient
               (or his or her  Representative  Claimants)  timely  and  properly
               exercises a Back-End  Opt-Out under this Agreement,  and the Diet
               Drug  Recipient has a  Matrix-Level  Condition at the time of the
               exercise  of  such  Back-End  Opt-Out,  and/or  (b) a  Derivative
               Claimant of such Diet Drug  Recipient is deemed to have opted out
               of this Agreement  pursuant to Section IV.D.4 or otherwise,  then
               AHP shall receive a Full Credit ("Back-End  Opt-Out Credit") with
               respect to any  amounts  paid by AHP to such Diet Drug  Recipient
               (or his or her Representative Claimants) and/or to the Derivative
               Claimant,  regardless of whether such payments were made pursuant
               to  a  Judgment  or  pre-Judgment  or  post-Judgment  settlement.
               Back-End  Opt-Out Credits shall be applied to reduce the Adjusted
               Maximum  Available  Fund B Amount  as of the  date on  which  the
               determination  of the Back-End Opt-Out Credit becomes final under
               Section VI.D.1.

          4.   For purposes of this Section VII.A:

               "Judgment" shall mean any decision by a court of law or any other
               authorized tribunal.

               "Full Credit" shall mean a Credit in the amount of the lesser of:

               (a)  the amount of payment to the Diet Drug  Recipient (or his or
                    her Representative Claimant) and/or Derivative Claimant; or

               (b)  the Matrix  payment for which such Diet Drug  Recipient  (or
                    his  or  her  representative   Claimant)  and/or  Derivative
                    Claimant  would have  qualified  (as  determined at the time
                    such  individual  opted out of this Agreement or at the time
                    of payment of such amount, whichever is higher), less Common
                    Benefit  Attorney's  fees  (such  fees  not to  exceed  nine
                    percent (9%) of such Matrix payment).

               "Back-End Opt-Out" includes any Class Member who has exercised or
               purported to exercise  any opt-out  right under the terms of this
               Agreement  where:  (i) the opt-out right was exercised  after the
               end of the Initial  Opt-Out  Period;  (ii) the relevant Diet Drug
               Recipient was first diagnosed with a Matrix-Level Condition after
               September 30, 1999, and before the Matrix  Payment  Cut-Off Date;
               and (iii) the Class Member meets the  eligibility  criteria for a
               Back-End  Opt-Out  under  Section  IV.D.4.a  of  this  Agreement,
               regardless of the manner in which the Class Member  characterized
               the opt-out.

          5.   In order to qualify for any of these  Credits,  AHP must  provide
               the Trustees and/or Claims  Administrator(s) with the appropriate
               Credit Information described in Section VI.D.1.a above.

     B.   EFFECT ON CLAIMS

          1.   Effective  upon Final Judicial  Approval,  every Settled Claim of
               each Class Member  against AHP or any other  Released Party shall
               be conclusively compromised,  settled and released, and each such
               Class  Member  shall be  barred  from  initiating,  asserting  or
               prosecuting  any Settled Claim against AHP or any other  Released
               Party,   except  to  the  extent  permitted  by  this  Settlement
               Agreement  for any  Class  Member  who has  timely  and  properly
               exercised any applicable opt-out right.

          2.   To confirm the  provisions set forth in Section  VII.B.1,  above,
               within  five  days  after  Final  Judicial  Approval,  the  Class
               Representatives,  individually  and on behalf  of the  Settlement
               Class and all of the  Subclasses,  shall  deliver  to AHP a fully
               executed  Release and Covenant Not to Sue in the form attached as
               Exhibit "27" .

          3.   Each Class  Member  shall be  required  to execute an  individual
               Release and Covenant Not to Sue as part of the forms  required to
               be submitted by Class Members in order to seek to  participate in
               the benefits of the Settlement.  Such  individual  releases shall
               become  ineffective,   null  and  void  in  the  event  that  the
               Settlement  fails to obtain  Final  Judicial  Approval  or in the
               event that AHP terminates  this  Agreement for any reason,  other
               than as to persons entering into AIO Individual Agreements.  Such
               individual  releases shall  furthermore be ineffective,  null and
               void as to all Settled  Claims  except those set forth in I.53(e)
               and (g) above,  with  respect to any Class  Member who timely and
               properly  exercises any applicable  opt-out right granted by this
               Agreement subsequent to the execution of the releases.

          4.   For purposes of any statute of  limitations  or similar time bar,
               the AHP  Released  Parties  shall not assert that a Class  Member
               actually  had PPH  unless  and until the  condition  of the Class
               Member meets the definition of PPH set forth in Section I.46.

          5.   In the event that a Class Member  initiates a claim based on PPH,
               the AHP  Released  Parties  shall not  assert a defense  based on
               "splitting" of claims,  causes of action and/or parties by virtue
               of the fact that the Class Member is included in the  Settlement,
               but the claim based on PPH is not a Settled Claim.

          6.   The forms of release  necessary to effectuate this Settlement and
               the Accelerated  Implementation Option set forth in Section V are
               set forth in the PINK FORM (for Class Members  accepting the AIO)
               and the BLUE FORM (for all other Class Members)  appended  hereto
               as Exhibits "9" and "21" respectively.

          7.   The amended  complaint in Sheila  Brown,  et al. v. American Home
               Products  Corporation,  Civil Action No. 99-20593 (E.D. Pa.), and
               all  Settled  Claims  which  were or could  have  been  asserted,
               including  claims  for  punitive   damages,   on  behalf  of  the
               Settlement  Class or any subclass against AHP and/or any Released
               Parties  shall be  dismissed  with  prejudice  upon  Trial  Court
               Approval.  Such  dismissal  will be vacated in the event that the
               Settlement does not receive Final Judicial Approval.

          8.   After Date 2, the  following  persons shall have no further right
               to any benefits  under the  Settlement and shall have no right to
               pursue any  Settled  Claims  against AHP or any  Released  Party,
               except to the extent such persons  timely and properly  exercise,
               or  have  exercised,  an  Initial,   Intermediate,   Back-End  or
               Financial Insecurity Opt-Out:

               a.   with  respect  to  all  Settled  Claims  against  AHP or any
                    Released   Party  other  than  those  based  on  Endocardial
                    Fibrosis, any Class Member asserting a claim based on a Diet
                    Drug  Recipient  who:  (a)  has  not  been  diagnosed  by  a
                    Qualified  Physician  as FDA  Positive  nor as  having  Mild
                    Mitral Regurgitation by an Echocardiogram  performed between
                    the  commencement  of  Diet  Drug  use  and  the  end of the
                    Screening  Period,  or (b) has been diagnosed by a Qualified
                    Physician   as  FDA   Positive  or  as  having  Mild  Mitral
                    Regurgitation  by an  Echocardiogram  performed  between the
                    commencement  of Diet Drug use and the end of the  Screening
                    Period,  but the Class  Member  has not  registered  or been
                    deemed to have registered for settlement benefits by Date 2.

               b.   with respect to Settled  Claims  against AHP or any Released
                    Party  based  on  Endocardial  Fibrosis,  any  Class  Member
                    asserting a claim based on a Diet Drug  Recipient  who:  (a)
                    has not been  diagnosed  by a Qualified  Physician as having
                    Endocardial  Fibrosis by September 30, 2005, or (b) has been
                    diagnosed  by a Qualified  Physician  as having  Endocardial
                    Fibrosis by September 30, 2005, but the Class Member has not
                    registered or been deemed to have  registered for settlement
                    benefits by January 31, 2006.



     C.   PROTECTION OF AHP FROM CLAIMS BY NON-SETTLING DEFENDANTS

          1.   It is the intent of this Settlement  Agreement that no Settlement
               Class Member shall recover, directly or indirectly,  any sums for
               Settled  Claims from AHP or any  Released  Party other than those
               received under the  Settlement  Agreement and that AHP shall make
               no payments to any third party defined  herein as a  Non-Settling
               Defendant for any amounts  arising out of a Settled Claim brought
               by a Class Member against such Non-Settling Defendant,  except to
               the extent that Class  Members  timely and  properly  exercise an
               Initial,  Intermediate, or Back-End Opt-Out right provided by the
               Settlement Agreement. It is the further intent of this Settlement
               Agreement  that  Settlement  Class  Members  agree to reduce  any
               judgments   against   Non-Settling   Defendants   to  the  extent
               necessary,  under applicable law, to relieve AHP and the Released
               Parties  of  liability  for   contribution   or   non-contractual
               indemnity to any Non-Settling Defendant. In particular:

               a.   The Parties shall seek an order from the Court,  which shall
                    be a condition to AHP's  obligations under this Agreement as
                    set forth in Section  VIII.D  hereof,  enjoining and barring
                    all  Non-Settling  Defendants from commencing or prosecuting
                    any  claim  against  AHP or any  other  Released  Party  for
                    contribution and/or non-contractual  indemnity,  arising out
                    of a claim against such Non-Settling  Defendant on behalf of
                    any Class Member asserting  Settled Claims in any present or
                    future  litigation,  other  than any  Class  Member  who has
                    timely and properly  exercised an Initial,  Intermediate  or
                    Back-End  Opt-Out  right  provided  by  this  Agreement  and
                    subject to the provisions of Section VII.C.2 below.

               b.   Nothing in this  Agreement is intended to  adversely  affect
                    any  Non-Settling  Defendant's  right, if any, to set-off or
                    judgment   reduction  under  any  state  contribution  among
                    tortfeasors  act  or  other  applicable  law.   Non-Settling
                    Defendants  will be  entitled,  at a  minimum,  to  whatever
                    set-off or judgment  reduction is afforded them by operation
                    of  applicable  law.  Settlement  Class  Members  who do not
                    timely  and  properly  exercise  Initial,   Intermediate  or
                    Back-End  Opt-Out rights agree that all defendants are joint
                    tortfeasors in cases in which  Settlement Class Members have
                    joined  Non-Settling  Defendants,  AHP,  and/or the Released
                    Parties  or in any other  case in which a  Settled  Claim is
                    asserted.

               c.   The Parties  recognize  that,  under the law of some states,
                    claims for contribution or non-contractual indemnity against
                    a  settling   defendant  survive  a  Settlement  unless  the
                    Settlement  provides  set-off or judgment  reduction  rights
                    that go beyond those that would otherwise exist by operation
                    of applicable  law. In those cases,  the Parties intend that
                    Non-Settling  Defendants shall be entitled to the additional
                    set-off or judgment reduction necessary under applicable law
                    to extinguish  Non-Settling  Defendants' claims, if any, for
                    contribution or  non-contractual  indemnity  against AHP and
                    the  Released  Parties  arising  from  Settled  Claims only.
                    Settlement  Class Members,  however,  reserve their right to
                    contend that, due to the nature of the theories of liability
                    alleged or  presented  against the  Non-Settling  Defendants
                    (i.e.,  conspiracy  or  concert  of  action),   Non-Settling
                    Defendants have no right to contribution or  non-contractual
                    indemnity  from AHP or the  Released  Parties as a matter of
                    law even though they are joint tortfeasors.

               d.   In the event  that any claim that a  Non-Settling  Defendant
                    would have for  contribution  or  non-contractual  indemnity
                    against AHP or the  Released  Parties in the absence of this
                    Settlement  Agreement  with respect to a Settled Claim would
                    not be extinguished  under  applicable law by the set-off or
                    judgment reduction to which the Non-Settling Defendant would
                    be entitled by operation of law, any Settlement Class Member
                    who recovers a judgment against any  Non-Settling  Defendant
                    with  respect  to a Settled  Claim for which AHP  and/or any
                    Released  Party would be liable by a claim for  contribution
                    or non-contractual  indemnity but for the provisions of this
                    Settlement Agreement,  shall reduce his judgment against the
                    Non-Settling Defendant by the amount,  percentage,  or share
                    of such judgment necessary, under applicable law, to relieve
                    AHP and the Released  Parties of liability for  contribution
                    or  non-contractual  indemnity.  By way of example,  under a
                    statute   modeled  on  the  1939   version  of  the  Uniform
                    Contribution Among Tortfeasors Act, Settlement Class Members
                    would reduce their judgments against Non-Settling Defendants
                    in the situation  described in this Section to the extent of
                    the pro rata shares (as determined  under applicable law) of
                    AHP and any  relevant  Released  Party.  In the absence of a
                    statute,   Settlement   Class  Members  would  reduce  their
                    judgments against  Non-Settling  Defendants in the situation
                    described  in this  Section by the  amount,  percentage,  or
                    share of such judgment that would  lawfully be  attributable
                    to AHP and/or  the  Released  Party or  Parties  but for the
                    provisions of this Settlement Agreement.

               e.   To  avoid  inconvenience  and  expense  to  AHP,  the  other
                    Released Parties,  and the Settlement Class Members,  and to
                    eliminate  the objection  that certain  states' law requires
                    that AHP and the  Released  Parties  remain as  parties in a
                    lawsuit  to  facilitate  the  adjudication  of  Non-Settling
                    Defendants'   set-off  or  judgment  reduction  rights  with
                    respect to a Settled Claim, the releases provided under this
                    Settlement  Agreement  shall  incorporate,   to  the  extent
                    required by applicable law, what is known in Pennsylvania as
                    a "Griffin  release"  and/or what is known in Wisconsin  and
                    elsewhere  as a  "Pierringer  release."  By this  provision,
                    Settlement  Class Members and Class Counsel acting on behalf
                    of  Settlement  Class  Members  agree  that  the  lack  of a
                    judicial  determination  that the  settling  defendant  is a
                    joint tortfeasor does not preclude  Non-Settling  Defendants
                    from  obtaining  set-off or judgment  reduction  rights they
                    would otherwise have under  applicable law in the absence of
                    this Agreement.  See Griffin v. United States, 500 F.2d 1059
                    (3d Cir.  1974);  Pierringer v. Hoger,  124 N.W.2d 106 (Wis.
                    1963). By this provision, Settlement Class Members and Class
                    Counsel acting on behalf of Settlement Class Members further
                    agree to waive any  rights  that  they  might  have  against
                    Non-Settling Defendants, the assertion of which would, under
                    applicable  law,  allow  Non-Settling  Defendants  to add or
                    retain AHP  and/or the  Released  Parties as  defendants  in
                    actions   brought  by  Settlement   Class  Members   against
                    Non-Settling  Defendants  with respect to Settled Claims for
                    the purpose of adjudicating Non-Settling Defendants' rights,
                    if any, to set-off or judgment reduction.  This provision is
                    intended to obviate the  necessity and expense of having AHP
                    and the Released  Parties  added or remain as parties on the
                    record and obliged to  participate in a trial merely for the
                    purpose of determining  if in fact they were  tortfeasors so
                    as to  entitle  other  tortfeasors  to a  reduction  of  any
                    verdict.  This provision,  however, in no way constitutes an
                    admission of liability by AHP and the Released Parties or an
                    admission by Settlement  Class Members that any Non-Settling
                    Defendant  is entitled to  contribution  or  non-contractual
                    indemnity from AHP or a Released Party.

               f.   The Parties intend that this Settlement  Agreement result in
                    the termination or bar of all claims for contribution and/or
                    non-contractual  indemnity  against  AHP  and  the  Released
                    Parties with respect to Settled  Claims.  To the extent that
                    the   Parties'   intent  is  not  fully   realized,   and  a
                    Non-Settling  Defendant  obtains a judgment for contribution
                    or  non-contractual  indemnity against AHP and/or a Released
                    Party  with  respect  to Settled  Claims,  Settlement  Class
                    Members agree to reduce their judgments against Non-Settling
                    Defendants  by the  amount,  percentage,  or  share  of such
                    judgment   necessary   to  satisfy  any  such   judgment  or
                    non-contractual  indemnity for the benefit of AHP and/or the
                    Released Party.  If, despite the provisions of this section,
                    AHP or any  Released  Party  incurs any  judgments  due to a
                    claim for  contribution or  non-contractual  indemnification
                    arising out of a claim brought by a Settlement  Class Member
                    against a  Non-Settling  Defendant,  such  Settlement  Class
                    Member shall indemnify AHP and the Released Parties for such
                    amount,  provided  that AHP and the Released  Parties  shall
                    have made all  reasonable  efforts  to avoid  liability  for
                    contribution    and/or    non-contractual    indemnity    to
                    Non-Settling  Defendants under the Settlement Agreement.  In
                    this regard,  AHP shall have the right to recover  indemnity
                    obligations  from any unpaid Matrix payments that may be due
                    to the Class Member.

               g.   If,  despite  the  provisions  of this  section,  AHP or any
                    Released  Party  makes a payment  of any  judgment  due to a
                    claim  for  contribution  and/or  non-contractual  indemnity
                    arising out of a claim brought by a Settlement  Class Member
                    against a  Non-Settling  Defendant with respect to a Settled
                    Claim,  such Settlement Class Member shall indemnify AHP and
                    the  Released  Parties for such  amount,  and AHP shall make
                    reasonable  efforts to reduce such indemnity  obligations to
                    judgment  in  the   underlying   litigation   involving  the
                    Non-Settling  Defendant. To the extent that, for any reason,
                    a Settlement Class Member has failed to satisfy an indemnity
                    obligation   arising  under  this  paragraph  or  the  prior
                    paragraph  (either  directly or through recovery of payments
                    for Matrix-Level  Conditions otherwise due the Class Member)
                    within 90 days after AHP makes any such payment, AHP may, at
                    any time thereafter, assign its indemnity rights against the
                    Class  Member to the  Trustees  and,  in such  event,  shall
                    receive  a  credit  against  its Fund B  obligations  in the
                    amount  of  the  unsatisfied  portion  of the  indemnity  (a
                    "Cross-Claim Credit").  Cross-Claim Credits shall be applied
                    to reduce the Adjusted Maximum Available Fund B Amount as of
                    the  date on  which  the  determination  of the  Cross-Claim
                    Credit becomes final.

          2.   To protect further the Non-Settling  Defendants'  interests,  the
               Parties  have  agreed that the bar order  shall  incorporate  the
               following provisions:

               a.   If,   despite  the  provisions  of  Section   VII.C.1,   (i)
                    applicable  law  precludes  a  Non-Settling  Defendant  from
                    obtaining  a  set-off  or  judgment  reduction  to  which  a
                    Non-Settling  Defendant  would  otherwise be entitled  under
                    applicable law in an individual case brought by a Settlement
                    Class Member with respect to a Settled Claim without  naming
                    AHP or a Released Party as a party in the lawsuit,  and (ii)
                    the  Non-Settling  Defendant and the Settlement Class Member
                    cannot reach agreement on this issue sufficient to eliminate
                    the Non-Settling  Defendant's  alleged need to name AHP or a
                    Released Party in the lawsuit,  the  Non-Settling  Defendant
                    may apply to the Court for relief from the bar order.

               b.   The Non-Settling  Defendant's application to the Court shall
                    set forth with  specificity (i) the facts and law that would
                    give rise to a claim for contribution and/or non-contractual
                    indemnity  but  for  the   provisions  of  this   Settlement
                    Agreement;  (ii) the efforts that the Non-Settling Defendant
                    has made to reach an accommodation with the Settlement Class
                    Member  with  respect  to the need to name AHP or a Released
                    Party as a defendant in the case;  and (iii) the factual and
                    legal  bases for the  Non-Settling  Defendant's  claim that,
                    under the  particular  facts of the case and the  particular
                    provisions of  applicable  law, the  Non-Settling  Defendant
                    must be  permitted  to name AHP or a  Released  Party in the
                    case despite the bar order.

               c.   A copy of the  Non-Settling  Defendant's  application to the
                    Court  shall be served on Class  Counsel  and on counsel for
                    AHP.

               d.   The  Court   shall   modify   the  bar  order  to  permit  a
                    Non-Settling  Defendant to name AHP or a Released Party in a
                    particular case brought against a Non-Settling  Defendant by
                    a Settlement  Class Member with respect to a Settled  Claim,
                    only  where  doing so is  essential  to  protect  set-off or
                    judgment   reduction   rights  to  which  the   Non-Settling
                    Defendant would be entitled under applicable law but for the
                    provisions of this Settlement Agreement. Any order modifying
                    the bar order  will  contain  provisions  that  protect  the
                    interests of AHP and the Released  Parties in finality under
                    this Settlement  Agreement,  including,  among other things,
                    provisions  affirming that the  Settlement  Class Member has
                    agreed (i) to forego any direct or  indirect  recovery  from
                    AHP or the  Released  Parties  of sums over and above  those
                    received under this Settlement Agreement and (ii) to give up
                    any portion of any judgment  obtained against a Non-Settling
                    Defendant  that is attributed  to AHP or any Released  Party
                    with respect to a Settled Claim.

               e.   Applications    made   by   Non-Settling    Defendants   for
                    modification  of  the  bar  order  will  be  subject  to the
                    provisions of Fed. R. Civ. P. 11.

          3.   For purposes of this Section VII.C of the Settlement Agreement:

               a.   "Non-Settling  Defendant"  shall  mean any  person or entity
                    that is not  AHP or a  Released  Party  as  defined  herein,
                    against  whom  or  which  a  Settled  Claim  has  been or is
                    hereafter made, asserted or commenced.  A physician or other
                    Released  Party may be a  Non-Settling  Defendant  as to any
                    claim with respect to which he, she, or it is not a Released
                    Party.  The term  Non-Settling  Defendant  is not limited to
                    persons or  entities  who are sued in an action in which AHP
                    or another Released Party is also a party.

               b.   "Non-Contractual      Indemnity"     or     "Non-Contractual
                    Indemnification"  means a right of indemnity  based upon the
                    relationship between or conduct of the parties.  These terms
                    include,  and the protections  provided AHP and the Released
                    Parties  herein  apply  to,  a  contractual   obligation  of
                    indemnification voluntarily assumed by AHP to the extent AHP
                    would have been liable to such claimant for indemnity in the
                    absence of such contractual indemnification.

               c.   "Settlement  Class  Member"  shall  mean any  member  of the
                    Settlement  Class who has not timely and properly  exercised
                    an Initial Opt-Out right,  an Intermediate  Opt-Out right, a
                    Back-End  Opt-Out right, or a Financial  Insecurity  Opt-Out
                    right  pursuant  to the  terms of this  Agreement.  Upon the
                    timely and proper exercise of any such opt-out  rights,  the
                    provisions of this Section VII.C shall become ineffective in
                    connection  with any action brought by each Class Member who
                    has timely and properly exercised any such right of opt-out.

          4.   To implement  the bar order  provided for in this Section  VII.C,
               all claims pending against AHP or any other Released Party in any
               court which are  prohibited  by such bar order shall be dismissed
               with prejudice upon Trial Court Approval. Such dismissals will be
               vacated in the event that the  Settlement  does not receive Final
               Judicial Approval.

          5.   In the event any Class  Member who has  received a payment  for a
               Matrix-Level  Condition under this Agreement subsequently obtains
               a judgment or award against a Non-Settling Defendant,  other than
               a physician,  and the Non-Settling Defendant successfully asserts
               a  contractual  indemnity  claim  against  AHP  and/or a Released
               Party,  then,  to the extent not  already  required  by  Sections
               VII.C.1-4  above,  the Class  Member shall reduce the judgment or
               award  against the  Non-Settling  Defendant by the  percentage of
               fault,   liability   or   other    liability-producing    conduct
               attributable to AHP and/or a Released Party. In the event a Class
               Member  who  has  not  received  a  payment  for  a  Matrix-Level
               Condition under this Agreement subsequently obtains a judgment or
               award against a Non-Settling  Defendant,  other than a physician,
               and the Non-Settling Defendant successfully asserts a contractual
               indemnity claim against AHP and/or a Released Party, then, to the
               extent not  already  required by Sections  VII.C.1-4  above,  the
               Class  Member  shall  reduce the  judgment  or award  against the
               Non-Settling  Defendant by the percentage of fault,  liability or
               other  liability-producing  conduct  attributable to AHP and/or a
               Released Party or, in the  alternative,  shall waive any claim to
               additional benefits under this Agreement,  including payments for
               a Matrix-Level Condition.


     D.   PROTECTION OF AHP FROM POSSIBLE SUBROGATION CLAIMS

          1.   To the extent that any person has rights of subrogation by virtue
               of a  payment  or  payments  made  to or for the  benefit  of any
               specific Class Member who has not properly and timely exercised a
               right of opt-out, such rights of subrogation may be asserted with
               respect to the  Trustees'  obligation  to make  payments  to that
               Class  Member  from  Fund B but shall  not be  asserted  directly
               against  AHP and/or  the  Released  Parties  except to the extent
               required by  applicable  Federal or State law. AHP will  promptly
               notify  the  Trustees  and/or  Claims  Administrator(s),  and the
               affected  Class  Member of the  assertion  of such a  subrogation
               claim  against  AHP.  The  Parties  shall  move the  Court,  upon
               granting Trial Court  Approval,  to enter a bar order to preclude
               the assertion of such  subrogation  claims against AHP and/or the
               Released  Parties,   except  to  the  extent  that  it  would  be
               impermissible  to bar such claims under  provisions of applicable
               law.

          2.   The Trustees and/or Claims  Administrator(s) shall provide notice
               of subrogation  claims received by the Trustees to affected Class
               Members and afford  them an  opportunity  to  contest,  otherwise
               object to or compromise any such claims.  In making  distribution
               of any amounts to which Class  Members are entitled  from Fund B,
               the Trustees shall recognize and pay subrogation  claims from the
               amount  otherwise  payable to such Class Member,  but only to the
               extent that the  subrogation  claim is  recognized  by applicable
               law. Unless the law clearly sets forth different principles,  the
               Trustees shall not recognize a subrogation  claim unless:  (1) it
               is affirmatively brought to their attention prior to distribution
               of  Funds  to a  Class  Member;  (2) it is  based  on a  positive
               provision  of  law  or a  valid  enforceable  contract;  (3)  the
               putative subrogee clearly  establishes that the subrogee actually
               made a payment  or  payments  to or for the  benefit of the Class
               Member  which is of a type that the  putative  subrogee  would be
               entitled to recover against AHP and/or the Released Parties,  and
               then (4) only to the  extent of the actual  payment  made less an
               equitable  debit for attorneys'  fees, and any other allowable or
               appropriate charges against the putative subrogee.

     E.   WALKAWAY RIGHTS

          1.   AHP shall  have the option to  terminate  and  withdraw  from the
               Settlement  Agreement,  in its sole  discretion,  based  upon the
               number of persons who have timely and properly elected during the
               Initial Opt-Out Period to be excluded from the Settlement  Class.
               If AHP elects to exercise this  "walkaway  right," it shall do so
               by giving written notice to the Court and to Class Counsel within
               30 days of the close of the  Initial  Opt-Out  Period.  AHP shall
               seek to reach  its  decision  with  respect  to  exercise  of its
               "walkaway right"

          2.   The exercise of this "walkaway  right" by AHP will not affect its
               obligation  to provide the  benefits  to those Class  Members who
               have  accepted  the  Accelerated  Implementation  Option prior to
               AHP's  exercise of its "walkaway  right" or during any subsequent
               period in which AHP continues to offer the AIO.

     F.   LIMITATION ON FINANCIAL OBLIGATIONS

          1.   The maximum  amount that AHP shall be obligated to pay under this
               Settlement  Agreement  shall  be  AHP's  obligation  to make  the
               payments to Fund A and the Escrow  Agent as  specified in Section
               III.B  and  AHP's  obligation  to  make  payments  to  Fund  B in
               accordance with Section III.C. These limitations shall also apply
               to AHP's  obligations  under Individual  Agreements  entered into
               pursuant to the Accelerated Implementation Option.

VIII.    SETTLEMENT IMPLEMENTATION

     A.   GENERAL

          1.   In order to become  effective,  the Settlement must receive Final
               Judicial  Approval,  except as to the Accelerated  Implementation
               Option and as otherwise expressly provided herein.

          2.   The  Parties  recommend  that the  Court  establish  an  Advisory
               Committee  of Class  Counsel,  which  would  consist  of  counsel
               actively involved in State and Federal Diet Drug Litigation.  The
               purpose of the Advisory  Committee of Class  Counsel  would be to
               advise  the  Trustees   concerning   the  proper   operation  and
               implementation of the Settlement Agreement.

     B.   JURISDICTION


          1.   The United  States  District  Court for the  Eastern  District of
               Pennsylvania  will have original and exclusive  jurisdiction over
               all  provisions  of this  Agreement,  including  the creation and
               operation  of the  Settlement  Trust and the award of  attorneys'
               fees  and  reimbursement  of  litigation  expenses,   subject  to
               appropriate participation by State Courts in the manner set forth
               herein.  The Parties  agree and intend that the Court retain such
               exclusive  jurisdiction  for all such  purposes:  (i)  during the
               pendency  of any appeal  taken from Trial  Court  Approval or the
               denial  of Trial  Court  Approval;  and  (ii) if  Final  Judicial
               Approval  is  not  obtained,  subject  to  Section  V.H  of  this
               Agreement.

          2.   In order to  become  effective  as to  Class  Members  who do not
               exercise the Accelerated  Implementation  Option,  the Settlement
               contemplated  by this  Settlement  Agreement  must receive  Final
               Judicial Approval within the federal judicial system.

          3.   A State Court  Judicial  Advisory  Committee  will be established
               within 15 days of  Preliminary  Approval  and will consist of the
               judges from the State Courts  which,  as of October 7, 1999,  had
               issued any order certifying  state-wide class actions in relation
               to the effects of Pondimin(R) and/or Redux(TM).

          4.   The State Court Judicial Advisory  Committee shall provide advice
               and  counsel  to  the  Federal  District  Court  on  all  matters
               pertinent   to  the   Settlement,   including   approval  of  the
               Settlement,  which affect Class Members residing in the States of
               each committee member. In addition,  prior to making any award of
               counsel  fees  and  reimbursement  of  litigation  expenses,  the
               Federal  District  Court shall consult with and give  substantial
               deference  to the  views of the  State  Court  Judicial  Advisory
               Committee  concerning the actual  contribution  which was made to
               the overall  resolution of the  litigation by the attorneys  with
               whom the members of the committee are familiar.

          5.   The  costs  incurred  by  members  of the  State  Court  Judicial
               Advisory Committee in fulfillment of their  obligations,  such as
               expenses  for  travel,  shall  be  reimbursed  as  administrative
               expenses of the Settlement Trust.

          6.   During  the  period  of time  from the date on which the Trust is
               established until December 31, 2004, the majority of the Trustees
               or  Administrators  shall be approved by the State Court Judicial
               Advisory Committee.

     C.   APPROVAL PROCESS AND NOTICE PROVISIONS

          1.   Within 10 days after executing this Agreement,  the Parties shall
               jointly  move the  Court,  by filing a motion for the entry of an
               order  granting  Preliminary  Approval,  in the form  attached as
               Exhibit "11". Such Order shall  preliminarily  and  conditionally
               appoint the  Plaintiffs in Sheila Brown,  et al. v. American Home
               Products   Corporation  as  the  Class   Representatives  of  the
               Settlement Class and of each of Subclasses 1(a), 1(b), 2(a), 2(b)
               and 3;  preliminarily and conditionally  appoint counsel for such
               plaintiffs   as  Class   Counsel   for  the   Settlement   Class;
               preliminarily and conditionally certify the Settlement Class, for
               Settlement  purposes  only;  grant  Preliminary  Approval of this
               Agreement;  approve the  appointment  of the Interim Escrow Agent
               and Interim Claims Administrator(s);  authorize the dissemination
               of the Settlement notice in accordance with Section VI.B. hereof;
               designate the Initial  Opt-Out  Period to terminate 90 days after
               the date on which  publication  and/or  mailing of the Settlement
               notice   commences  in   accordance   with  the  Order   granting
               Preliminary Approval;  schedule the date for filing objections to
               the Settlement;  and schedule a formal fairness hearing to review
               comments  concerning  this  Agreement,  to consider its fairness,
               reasonableness  and  adequacy  under Fed. R. Civ. P. 23(e) and to
               determine whether an Order should be entered granting Trial Court
               Approval.

          2.   Fund A will pay 50%,  and Fund B will pay 50% of the total  costs
               of printing,  publishing and otherwise  disseminating the notice.
               In the event that the Settlement  does not receive Final Judicial
               Approval,   the  costs  of  printing,   publishing  or  otherwise
               disseminating  notice shall be borne by AHP,  and the  Settlement
               Trust will  therefore have no obligation to return or refund such
               costs to AHP.

          3.   AHP shall  retain its right to contest  class  certification  for
               litigation purposes.

          4.   The Parties shall  cooperate and assist in all of the filings and
               proceedings  relating to the obtaining of Preliminary Approval as
               well as Trial  Court  Approval  and in any  further  filings  and
               proceedings  necessary to obtain Final  Judicial  Approval of the
               Settlement, and in any related appeals.

          5.   Upon Final  Judicial  Approval,  the Class  Counsel and all Class
               Members shall  cooperate with AHP and any other Released Party to
               cause the dismissal,  with  prejudice and without  costs,  of any
               action  against  AHP or any  Released  Party  asserting a Settled
               Claim  brought  by or on behalf of any Class  Member  who has not
               timely and properly exercised an Initial Opt-Out right, including
               but not limited to class  actions,  whether or not  certified  as
               such,  which are  pending  in any state,  federal or  territorial
               court. Upon Trial Court Approval,  the Class Counsel and all such
               Class Members  shall  cooperate  with AHP and any other  Released
               Party to cause further proceedings in all such settled actions in
               which the Class Members did not timely and properly opt out to be
               stayed pending Final Judicial Approval.

     D.   CONDITIONS

          1.   AHP's   obligations   under  this   Agreement,   other  than  its
               obligations to Class Members who accept the AIO during the period
               in which it is available for  acceptance,  will be subject to the
               following conditions:

               a.   Trial Court Approval of the Settlement, which approval order
                    or orders shall:

                    (1)  Confirm the  certification  of the Settlement Class and
                         the creation of Subclasses  1(a), 1(b), 2(a), 2(b), and
                         (3), under Fed. R. Civ. P. 23(a),  23(b)(2),  23(b)(3),
                         23(c)(1) and 23(e), for Settlement purposes only;

                    (2)  Confirm the  appointment  of the  plaintiffs  in Sheila
                         Brown, et al. v. American Home Products  Corporation as
                         the representatives of the Settlement Class and of each
                         of Subclasses 1(a), 1(b), 2(a), 2(b) and 3;

                    (3)  Approve this Agreement in its entirety pursuant to Fed.
                         R. Civ.  P. 23(e) as fair,  reasonable,  adequate,  and
                         non-collusive;

                    (4)  Dismiss with  prejudice  and without  costs the Amended
                         Complaint  in Sheila  Brown,  et al. v.  American  Home
                         Products  Corporation,  as well as all other  claims or
                         actions  asserting  Settled  Claims against AHP pending
                         before  the  Court,   with  the  condition   that  such
                         complaints  may be  reinstated  in the event that Final
                         Judicial Approval is not obtained;

                    (5)  Bar and  enjoin all Class  Members  who have not timely
                         and  properly   exercised   an  Initial   Intermediate,
                         Back-End,  or Financial  Insecurity  Opt-Out right from
                         asserting and/or continuing to prosecute against AHP or
                         any other  Released  Party any and all  Settled  Claims
                         which the Class  Member  had,  has,  or may have in the
                         future in any federal, state or territorial court;

                    (6)  Bar and enjoin the commencement  and/or  prosecution of
                         any  claim  for  contribution  and/or   non-contractual
                         indemnity, pursuant to Section VII.C hereof and subject
                         to the provisions of Section  VII.C.2,  in any federal,
                         state or  territorial  court  against  AHP or any other
                         Released Party by any  Non-Settling  Defendant  arising
                         from or relating to any Settled  Claim  asserted by any
                         Class Member;

                    (7)  Bar and enjoin the commencement  and/or  prosecution of
                         any claim or action  against AHP in any federal,  state
                         or territorial  court based on rights of subrogation by
                         virtue  of a  payment  or  payments  made to or for the
                         benefit of a Class Member arising out of or in relation
                         to any  Settled  Claims,  except to the extent  that it
                         would  be   impermissible  to  bar  such  claims  under
                         provisions of applicable law;

                    (8)  Reserve   the   Court's    continuing   and   exclusive
                         jurisdiction  over the Parties,  including  AHP and the
                         Class Members, to administer, supervise, interpret, and
                         enforce this Agreement in accordance with its terms and
                         to supervise the operation of the Settlement Trust; and

                    (9)  Enter such other orders as are needed to effectuate the
                         terms of the Settlement;

               b.   Final Judicial Approval of this Agreement.

          2.   AHP may at its election  terminate this  Settlement  Agreement if
               the Final Judicial  Approval does not meet all the conditions set
               forth in Section VIII.D.1.a above.

     E.   ATTORNEYS' FEES

          1.   In  the  event  that  the  Settlement   receives  Final  Judicial
               Approval,  the Court  shall  award  counsel  fees and  litigation
               expenses  from  the  Settlement  funds  to  those  attorneys  who
               actually  contributed  to the  creation of the  Settlement  funds
               through  work devoted to the "common  benefit" of Class  Members,
               including any attorney who actually  conferred  benefits upon the
               class through State Court litigation ("Common Benefit Attorneys")
               and may award Class Action  Representative  Incentive Fees to the
               certified  State  and  Federal  Court  Class  Representatives  in
               accordance with  applicable  principles of law and subject to the
               following provisions.

               a.   As  provided  in this  Section,  AHP  agrees to pay to Class
                    Counsel,  Common Benefit  Attorneys and the certified  State
                    and  Federal  Class  Action   Representatives   fees  in  an
                    aggregate  amount of up to  $200,000,000,  together with any
                    accrued  interest  thereon from the date of deposit into the
                    Fund A Escrow Account,  for the services  related to Fund A,
                    subject to  approval  by the Court.  To the extent that such
                    fees are  awarded  by the  Court,  they shall be paid by the
                    Escrow  Agent  from the  escrow  account  into  which AHP is
                    required to deposit  said amounts for that  purpose,  as set
                    forth above in Section III.B.3 (Fund A Escrow Account)

               b.   Attorneys'  fees  relating to Fund B shall be paid from Fund
                    B. For purposes of awarding attorneys' fees from Fund B, AHP
                    agrees that  attorneys' fees should be awarded and paid as a
                    percentage of or otherwise  based on the net present  value,
                    as of the  Final  Judicial  Approval  Date,  of the  maximum
                    amounts which AHP may be legally  obligated to pay to Fund B
                    for the benefit of the Settlement  Class,  regardless of the
                    amount of claims  actually  paid at any given point in time,
                    pursuant to the  principle  expressed  in the case law,  see
                    Boeing v. Van  Gemert,  444 U.S.  472  (1980).  The  Parties
                    stipulate that, only for purposes of calculating  payment of
                    attorneys'  fees,  the net  present  value,  as of the Final
                    Judicial Approval Date, of the maximum amounts which AHP may
                    be legally obligated to pay to Fund B for the benefit of the
                    class is $2,550,000,000.  The Parties further agree that the
                    attorneys'  fees  payable  from  Fund B to  counsel  for the
                    Settlement  Class  ("Class   Counsel")  and  Common  Benefit
                    Attorneys  from Fund B shall not exceed $229 million,  which
                    is 9% of the  $2,550,000,000  dollar  amount,  and  that the
                    actual amount of  attorneys'  fees shall be as determined by
                    the Court.  An amount  shall be deducted  from each  payment
                    made to a Class  Member from Fund B in an amount equal to 9%
                    of the total Matrix  payment due the Class Member before any
                    deductions.  Individual Class Members who are represented by
                    attorneys  entitled  to a  contingent  fee  under  any valid
                    written  contingent  fee  agreement  with such Class  Member
                    shall be subject to a further  reduction for attorneys' fees
                    due to their  attorney.  The  amount to be paid to the Class
                    Member's  attorney  shall be the  total  attorneys'  fee due
                    under the terms of the contingency  fee arrangement  less 9%
                    of the total Matrix  payment due to the Class Member  before
                    any    deductions.    Fund   B   payments    to   any   such
                    individually-represented Class Members shall also be reduced
                    by the  amount  of  reasonable  out-of-pocket  costs of such
                    Class  Member's  attorney  to the extent  authorized  in the
                    document  evidencing  such  attorney's   retention  and  the
                    individual attorneys' agreement with the Class Member and to
                    the extent  permitted or allowed by applicable  law in which
                    the agreement was entered.  It is expected that the Trustees
                    will  not  honor  contingent  fee  agreements  with  private
                    counsel  which were entered into in violation of  applicable
                    law.  In the event that the Trial  Court has not entered any
                    order with  respect to the payment of  attorneys'  fees from
                    Fund B by the end of the first Fiscal  Quarter,  then within
                    five  business  days  after  the  end  of the  first  Fiscal
                    Quarter,  AHP shall  establish  and  thereafter  maintain an
                    interest-bearing escrow account (the "Fund B Attorneys' Fees
                    Account") in the amount of $229 million,  for payment of the
                    maximum  attorneys'  fees payable  under this  section.  The
                    establishment  and  funding of such Fund B  Attorneys'  Fees
                    Account shall reduce the Adjusted  Maximum  Available Fund B
                    Amount  as of that  time  in the  same  fashion  as a Fund B
                    Deposit  Amount.  All income earned by the Fund B Attorneys'
                    Fees  Account  shall  remain  in and be  added to the Fund B
                    Attorneys'  Fees  Account,  except that any taxes payable on
                    such income shall be paid out of such income.  The amount in
                    the Fund B Attorneys'  Fees Account shall be available to be
                    distributed  as  attorneys'  fees as  directed  by the Trial
                    Court or by a court with  appellate  jurisdiction  over such
                    ruling.  Any  portion  of the  total  balance  in the Fund B
                    Attorneys'  Fees Account not finally  awarded as  attorneys'
                    fees shall be paid to AHP within  five  business  days after
                    the order regarding such fees becomes final and the Adjusted
                    Maximum Available Fund B Amount shall be increased as of the
                    date of such payment by the total amount paid to AHP.

               c.   If the Court awards less than 9% of the present value amount
                    stated  above as payment  for the  attorneys'  fees of Class
                    Counsel and Common Benefit  Attorneys from Fund B, the Court
                    shall  direct that  appropriate  adjustments  be made in the
                    distribution  of Fund B amounts to Class  Members  and their
                    individual attorneys,  including,  if necessary,  additional
                    payments  to Class  Members  and  individual  attorneys  who
                    received Fund B distributions  prior to the Court's decision
                    concerning  the award of counsel  fees to Class  Counsel and
                    Common Benefit Attorneys.

          2.   In the event that the Settlement  does not receive Final Judicial
               Approval or is terminated by AHP for any reason, AHP shall make a
               payment for attorneys'  fees for Fund A benefits paid or provided
               under the AIO to an  account  to be  established,  subject to the
               supervision of the Court.  The first such payment shall be in the
               amount of 20% of the dollar value of all Fund A benefits  paid or
               provided to individuals  under the AIO as of the date of such fee
               payment.  At quarterly intervals  thereafter,  AHP shall pay into
               the  account an amount  equal to 20% of the  dollar  value of all
               Fund A benefits  paid or  provided to  individuals  under the AIO
               during the preceding quarter.  Any amounts paid into this account
               which are not awarded in attorneys' fees shall be returned to AHP
               by order of the Court. Any attorney who reasonably  believes that
               he or she actually conferred  benefits upon individuals  electing
               the AIO through  State Court  litigation,  may apply to the Court
               for a portion of the amount  deposited  in such  account  and may
               receive  payment of such common  benefit fees in accordance  with
               applicable  provisions  of law.  Those  accepting  the  AIO  must
               expressly  agree to this provision  regarding fees as a condition
               to exercising the option.  This paragraph  shall not be construed
               to require AHP to make any payment for attorneys' fees for Fund A
               benefits prior to Final Judicial  Approval  unless this Agreement
               is terminated prior to that date.

          3.   Prior to the time that the  Settlement  receives  Final  Judicial
               Approval  or in the event that the  Settlement  does not  receive
               Final  Judicial  Approval or is terminated by AHP for any reason,
               AHP shall deduct from any Fund B benefits paid to those accepting
               the AIO an amount equal to 9% of the total Matrix  payment due to
               the Class Member  before any  deductions  and shall  deposit such
               amounts in the  account  to be  established  pursuant  to Section
               VIII.E.2 above.  At such time as the Settlement  fails to receive
               Final  Judicial  Approval or is terminated by AHP for any reason,
               any  attorney  who  reasonably  believes  that he or she actually
               conferred  benefits  upon  individuals  electing  the AIO through
               State Court  litigation,  may apply to the Court for a portion of
               the amount  deposited in such account and may receive  payment of
               such common benefit fees and costs in accordance  with applicable
               provisions of law.  Individual  Class Members who are represented
               by attorneys entitled to a contingent fee under any valid written
               contingent  fee agreement with such Class Member shall be subject
               to a further reduction for attorneys' fees due to their attorney.
               The amount to be paid to the Class Member's attorney shall be the
               total  attorneys' fee due under the terms of the  contingency fee
               arrangement  less 9% of the total Matrix payment due to the Class
               Member before any  deductions.  Payment of Fund B benefits to any
               such individually-represented  Class Member shall also be reduced
               by the  amount of  reasonable  out-of-pocket  costs of such Class
               Member's  attorney  to the  extent  authorized  in  the  document
               evidencing  such attorney's  retention and individual  attorney's
               agreement  with the Class  Member and to the extent  permitted or
               allowed by law. Those  accepting the AIO must expressly  agree to
               this  provision  regarding  fees as a condition to exercising the
               option.  If the Court  awards  less than 9% of the amount  stated
               above as payment  for the  attorneys'  fees of Class  Counsel and
               Common  Benefit  Attorneys  from the amount  paid to  individuals
               accepting  the AIO,  the  Court  shall  direct  that  appropriate
               adjustments be made in the  distribution of these fund amounts to
               individuals  accepting  the AIO and their  individual  attorneys,
               including,  if necessary,  additional payments to individuals who
               accepted  the AIO and their  individual  attorneys  who  received
               payment  prior to the Court's  decision  concerning  the award of
               counsel fees to Class Counsel and Common Benefit Attorneys.

          4.   In  the  event  that  the  Settlement   receives  Final  Judicial
               Approval,  no additional  attorneys' fees or litigation  expenses
               shall be paid for  benefits  conferred on those  individuals  who
               accepted the AIO.

          5.   The  Parties  shall  recommend  that  the  Court  enter  an Order
               precluding a Class Member's individual attorney from recovering a
               fee in  connection  with the  recovery of the $3,000 cash benefit
               provided by Section  IV.A.2.c or the $6,000 cash benefit provided
               by Section  IV.A.1.c,  which is greater than 20% of such amounts.
               This 20% fee for a Class Member's  individual  attorney shall not
               be  affected  by fees paid to Class  Counsel  or  Common  Benefit
               Attorneys, pursuant to the Court's order.

     F.   OTHER PROVISIONS

          1.   Any  information  provided  by or  regarding  a Class  Member  or
               otherwise  obtained  pursuant  to this  Agreement  shall  be kept
               confidential  and shall not be  disclosed  except to  appropriate
               persons to the  extent  necessary  to  process  Claims or provide
               benefits under this Agreement or as otherwise  expressly provided
               in this  Agreement.  All  Class  Members  shall be deemed to have
               consented  to  the  disclosure  of  this  information  for  these
               purposes.

          2.   This Settlement  Agreement shall be binding on the successors and
               assigns of the Parties.

          3.   The  Parties  to the  Settlement,  including  AHP,  the  Released
               Parties, or any Class Member,  shall not seek to introduce and/or
               offer  the  terms of the  Settlement  Agreement,  any  statement,
               transaction  or proceeding in  connection  with the  negotiation,
               execution or  implementation  of this Settlement  Agreement,  any
               statements in the notice  documents  appended to this  Settlement
               Agreement,  stipulations,   agreements,  or  admissions  made  or
               entered  into in  connection  with the  fairness  hearing  or any
               finding of fact or conclusion of law made by the Trial Court,  or
               otherwise rely on the terms of this  Settlement,  in any judicial
               proceeding,  except  insofar as it is  necessary  to enforce  the
               terms of the  Settlement.  If a Class  Member  who has timely and
               properly  exercised an Opt-Out  right seeks to  introduce  and/or
               offer any of the matters described herein in any proceeding,  the
               restrictions  of this Section  shall not be applicable to AHP and
               the Released Parties with respect to that Class Member.

          4.   Neither this  Agreement  nor any exhibit,  document or instrument
               delivered  hereunder  nor  any of the  statements  in the  notice
               documents appended to this Settlement  Agreement or in connection
               herewith,  nor  any  statement,   transaction  or  proceeding  in
               connection with the negotiation,  execution or  implementation of
               this  Agreement,  is intended to be or shall be  construed  as or
               deemed to be evidence of an admission or concession by AHP or the
               Released  Parties of any  liability or wrongdoing or of the truth
               of any allegations  asserted by any plaintiff against it or them,
               or as an admission by the Class Representatives or members of the
               Settlement  Class of any lack of  merit in their  claims,  and no
               such statement,  transaction or proceeding shall be admissible in
               evidence  for any such  purpose  except for purposes of obtaining
               approval  of this  Settlement  Agreement  in  this  or any  other
               proceeding.

          5.   The headings of the sections and paragraphs of this Agreement are
               included  for  convenience  only  and  shall  not  be  deemed  to
               constitute part of this Agreement or to affect its construction.

          6.   As soon as  practicable  after the  execution  of the  Settlement
               Agreement,  the Parties shall take all steps which are reasonably
               necessary to enable the Trustees  and/or Claims  Administrator(s)
               promptly to provide Fund A benefits upon Final Judicial  Approval
               to all Class Members not exercising Initial Opt-Out rights.  This
               includes   reasonable  and  necessary   steps  to  establish  the
               Settlement  Trust;  to  establish  a  mechanism  to  operate  the
               Settlement Trust and administer  claims; to solicit,  receive and
               process  claims from Class  Members  which will be  necessary  to
               provide  benefits to Class  Members;  to establish a mechanism to
               provide  medical  screening,  services and cash to members of the
               class;  to  communicate  with Class Members and like  activities.
               These  expenses  shall not exceed  $45  million,  or such  higher
               amount as may be  requested  in  writing  by the  Interim  Claims
               Administrators  and/or Trustees,  agreed upon by the Parties, and
               approved by the Court.  In the event that the  Settlement  is not
               approved,  AHP will  not be  entitled  to a refund  of any of the
               money spent for these purposes.

          7.   Any notice, request, instruction or other document to be given by
               AHP to Class  Counsel or Class Counsel to AHP shall be in writing
               and delivered  personally or sent by Federal Express or facsimile
               as follows,  or as otherwise  instructed by a notice delivered to
               the other Party pursuant to this subsection:

               a.   If to AHP:

                    Louis L. Hoynes, Jr., Esquire
                    Senior Vice President and General Counsel
                    American Home Products Corporation
                    5 Giralda Farms
                    Madison, NJ 07940-0874

               b.   If to the Class Representatives or Class Counsel:

                    Arnold Levin, Esquire
                    Levin, Fishbein, Sedran & Berman
                    510 Walnut Street
                    Suite 500
                    Philadelphia, PA 19106

                    Gene Locks, Esquire
                    Greitzer & Locks
                    1500 Walnut Street
                    20th Floor
                    Philadelphia, PA  19102

          8.   Any form or other  documentation  required to be submitted  under
               this Agreement  shall be deemed timely if postmarked on or before
               the date by which  it is  required  to be  submitted  under  this
               Settlement   Agreement.   Subject   to   other   provisions   for
               eligibility,  a properly  completed  and executed AIO  Individual
               Agreement  or Opt-Out  Form will be  effective  on the date it is
               postmarked.

          9.   No provision of this Settlement  Agreement or any Exhibit thereto
               is  intended  to  create  any  third-party  beneficiary  to  this
               Settlement Agreement.

          10.  Upon execution of the Memorandum of  Understanding  dated October
               7, 1999  ("MOU"),  AHP and Class  Counsel  jointly  established a
               toll-free  telephone  number and website  for persons  requesting
               additional information regarding the Settlement.  This number and
               website  has been and shall  continue  to be used to  record  the
               names and addresses of such individuals and other information, so
               that individual  notice concerning the Settlement may be provided
               to  them.  These  names  and  addresses  shall  be kept  strictly
               confidential and shall not be disclosed to any person or used for
               any purpose  other than for  issuance of  settlement  notice upon
               prior  order of the Court  pursuant to Section  VI.B.1.f(3).  AHP
               shall pay all costs relating to the toll-free  telephone line and
               website. In the event that the settlement receives Final Judicial
               Approval,  all  expenditures  made  by  AHP  in  relation  to the
               toll-free   telephone   line  and  website  shall  be  considered
               administrative expenses of Fund A, and AHP shall receive a credit
               in the amount of all such  expenditures  in calculating  its next
               payment to Fund A.

          11.  This Agreement  contains the entire Agreement between the Parties
               with  respect to the subject  matter  hereof and  supersedes  and
               cancels all previous Agreements, negotiations, and commitments in
               writings  between the Parties  hereto with respect to the subject
               matter  hereof,   including  without  limitation  the  MOU.  This
               Agreement  may not be changed or modified in any manner unless in
               writing and signed by a duly  authorized  officer of AHP and by a
               duly authorized representative of the Class Representatives.

IN WITNESS WHEREOF,  the Parties have duly executed this Nationwide Class Action
Settlement  Agreement  between American Home Products  Corporation and the Class
Representatives,  by their respective  counsel as set forth below, on this _____
day of November, 1999.

   AMERICAN HOME PRODUCTS CORPORATION



BY:__________________________________
         LOUIS L. HOYNES, JR., ESQUIRE
         GENERAL COUNSEL





<PAGE>
                                  CLASS COUNSEL


---------------------------------          ---------------------------------
ARNOLD LEVIN, ESQUIRE                      GENE LOCKS, ESQUIRE
LEVIN, FISHBEIN, SEDRAN & BERMAN           GREITZER & LOCKS
510 WALNUT STREET, SUITE 500               1500 WALNUT STREET, 20TH FLOOR
PHILADELPHIA, PA  19106                    PHILADELPHIA, PA  19102
215-592-1500                               800-828-3489


---------------------------------          ---------------------------------
MICHAEL D. FISHBEIN, ESQUIRE               SOL H. WEISS, ESQUIRE
LEVIN, FISHBEIN, SEDRAN & BERMAN           ANAPOL, SCHWARTZ, WEISS, COHAN,
510 WALNUT STREET, SUITE 500                 FELDMAN & SMALLEY, P.C.
PHILADELPHIA, PA  19106                    1900 DELANCEY PLACE
215-592-1500                               PHILADELPHIA, PA  19103
                                           215-735-2098

---------------------------------          ---------------------------------
STANLEY CHESLEY, ESQUIRE                   CHARLES R. PARKER, ESQUIRE
WAITE, SCHNEIDER, BAYLESS & CHESLEY        HILL & PARKER
1513 CENTRAL TRUST TOWER                   5300 MEMORIAL, SUITE 700
FOURTH & VINE STREETS                      HOUTON, TX  77007-8292
CINCINNATI, OH  45202                      713-868-5581
513-621-0267


---------------------------------
JOHN J. CUMMINGS, ESQUIRE
CUMMINGS, CUMMINGS & DUDENHEFER
416 GRAVIER STREET
NEW ORLEANS, LA  70130
504-586-0000


FOR THE PLAINTIFFS' MANAGEMENT COMMITTEE

FOR SUBCLASS 1(a):


---------------------------------
DIANNE NAST, ESQUIRE
RODA & NAST
801 ESTELLE DRIVE
LANCASTER, PA  17601
717-892-3000


FOR SUBCLASS 1(b):


---------------------------------
RICHARD LEWIS, ESQUIRE
COHEN, MILSTEIN, HAUSFELD & TOLL
1100 NEW YORK AVENUE, N.W.
SUITE 500, WEST TOWER
WASHINGTON, DC  20005-3934
202-408-4600


FOR SUBCLASS 2(a):


---------------------------------
MARK W. TANNER, ESQUIRE
FELDMAN, SHEPHERD & WOHLGELERNTER
1845 WALNUT STREET, 25TH FLOOR
PHILADELPHIA, PA  19103
215-567-8300

<PAGE>


FOR SUBCLASS 2(b):


---------------------------------
R. ERIC KENNEDY, ESQUIRE
WEISMAN, GOLDBERG, WEISMAN & KAUFMAN
1600 MIDLAND BUILDING
101 PROSPECT AVENUE WEST
CLEVELAND, OH  44115
216-781-1111


FOR SUBCLASS 3:


---------------------------------
RICHARD WAYNE, ESQUIRE
STRAUSS & TROY
THE FEDERAL RESERVE BUILDING
150 EAST 4TH
CINCINNATI, OH  45202-4018
513-621-2120

<PAGE>


1    Heart  Disease:  A Textbook  of  Cardiovascular  Medicine  1433-34  (Eugene
     Braunwald ed., 5th ed. 1997) [hereinafter "Braunwald I"].

2    J. P.  Singh,  et al.,  Prevalence  of  Clinical  Determinants  of  Mitral,
     Tricuspid and Aortic  Regurgitation (The Framingham Heart Study), 83 Am. J.
     Cardiology 897, 898 (1999) [hereinafter "Singh"].

3    Harvey  Feigenbaum,  Echocardiography  68-133 (5th ed.  1994)  [hereinafter
     "Feigenbaum"].

4    Arthur E. Weyman, Principles and Practice of Echocardiography 75-97 (2d ed.
     1994) [hereinafter "Weyman"].

5    Singh, supra note 2.

6    Feigenbaum, supra note 3.

7    Weyman, supra note 4.

8    See Lisa A. Freed, et al., Prevalence and Clinical Outcomes of Mitral Valve
     Prolapse, 341 New Eng. J. Med. 1, 2 (1999) [hereinafter "Freed"].

9    See,  L. J.  Rubin & S.  Rich,  99 Primary  Pulmonary  Hypertension  (1997)
     [hereinafter "Rubin & Rich"].

10   See Eugene Braunwald,  Essential Atlas of Heart Diseases,  Current Med. For
     Atty's 10-9 (1997) [hereinafter "Braunwald II"].

11   See, Rubin & Rich, supra note 9.

12   See Braunwald I, supra note 1 at 796-798.

13   Stuart  Rich,  Executive  Summary from the  Symposium on Primary  Pulmonary
     Hypertension, Evian, France, co-sponsored by the World Health Organization,
     September 6-10, 1998, http://www.who.int/ncd/cvd/pph.html.

14   See Centers for Disease  Control and  Prevention,  U.S. Dep't of Health and
     Human   Services,   Cardiac   Valvulopathy   Associated  with  Exposure  to
     Fenfluramine or Dexfenfluramine: US Department of Health and Human Services
     Interim Public Health Recommendations, 46 Morbidity & Mortality Weekly Rep.
     1061, 1061-1066 (1997).

15   See Braunwald I, supra note 1 at 796-98.

16   See Feigenbaum, supra note 3 at 201-03.

17   See Kwan-Leung Chan, et al., Comparison of Three Doppler Ultrasound Methods
     in the Prediction of Pulmonary Artery Disease,  9 J. Am. C. Cardiology 549,
     550 (1987) [hereinafter "Chan"].

18   See Robert O. Bonow, et al., Guidelines for the Management of Patients With
     Valvular   Heart   Disease:   A  Report   of  the   American   College   of
     Cardiology/American  Heart  Association  Task Force on Practice  Guidelines
     (Committee on Management of Patients With Valvular  Heart  Disease),  32 J.
     Am. C. Cardiology 1486, 1511 (1998) [hereinafter "Bonow"].

19   See id.

20   See id. at 1512

21   See Singh, supra note 2.

22   See id.

23   See Braunwald I, supra note 1 at 796-98.

24   See Weyman, supra note 4 at 1290-92.

25   See  Walter  L.  Henry,  et  al.,   Report  of  the  American   Society  of
     Echocardiography Committee on Nomenclature and Standards in Two-dimensional
     Echocardiography, 62 Circulation 212, 212-13 (1980) [hereinafter "Henry"].

26   See Bonow, supra note 23 at 1533-35.

27   See id.

28   See id. at 1510.

29   See id. at 1533-35.

30   See Margaret  Kelley-Hayes,  et al., The American Heart Association  Stroke
     Outcome  Classification,  29 Stroke 1274,  1275 (1998).  It should be noted
     that this  classification  was approved by the American  Heart  Association
     Science Advisory and Coordinating Committee [hereinafter "Kelley-Hayes"].

31   See id.

32   See id.

33   See Braunwald I, supra note 1 at 1433-34.

34   See Kelley-Hayes, supra note 35.

35   See Braunwald I, supra note 1 at 796-98.

36   See Encyclopedia of Neuroscience 268 (George Adelman ed., 1987).

37   See Harrison's Principles of Internal Medicine 1878, 1885 (14th ed. 1998).

38   See C. Otto,  The  Practice  of  Clinical  Echocardiography  589-93  (1997)
     [hereinafter "Otto"].

39   See Feigenbaum, supra note 3.

40   See Weyman, supra note 4.

41   See Singh, supra note 2.

42   See A.S.  Pearlman et al.,  Guidelines  for Optimal  Physician  Training in
     Echocardiography:    Recommendations    of   the   American    Society   of
     Echocardiography Committee on Physician Training in Echocardiography, 60 Am
     J. Cardiol 158-163 (1987).

43   As  set  forth  in  Section  VI.C.3.f.  below,  "deidentified"  shall  mean
     redaction of all patient identifying information, including but not limited
     to  patient  name,  address ,  telephone  number,  e-mail  address,  social
     security number and other personal identifiying information.