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

NATIONWIDE CLASS ACTION
SETTLEMENT AGREEMENT WITH
AMERICAN HOME PRODUCTS CORPORATION

Dated: November 18, 1999

PREAMBLE

I. DEFINITIONS

II. SCOPE OF THE SETTLEMENT CLASS

III. AHP'S PAYMENT OBLIGATIONS

A. ESTABLISHMENT OF SETTLEMENT TRUST
B. FUND A
C. FUND B
D. OTHER PROVISIONS
E. SECURITY ARRANGEMENTS

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® AND/OR
REDUX™ FOR 61 OR MORE DAYS

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

2. BENEFITS FOR CLASS MEMBERS WHO INGESTED PONDIMIN®AND/OR
REDUX™ FOR 60 DAYS OR LESS

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

3. BENEFITS FOR ALL CLASS MEMBERS

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

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

B. COMPENSATION BENEFITS PAYABLE FROM FUND B

1. ELIGIBLE CLASS MEMBERS.
2. BENEFITS AVAILABLE

C. PAYMENT PROVISIONS

D. OPT-OUT RIGHTS

1. DERIVATIVE CLAIMANTS

2. INITIAL OPT-OUT

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

3. INTERMEDIATE OPT-OUT

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

4. BACK-END OPT-OUT

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

V. ACCELERATED IMPLEMENTATION OPTION

VI. CLAIMS ADMINISTRATION

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

B. NOTICE

C. CLAIMS ADMINISTRATION AND CRITERIA FOR BENEFITS DETERMINATIONS.

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

D. PROCEDURE FOR RECOGNITION OF CREDITS.

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

F. AHP-INITIATED AUDITS OF CLAIMS

VII. AHP RIGHTS AND BENEFITS

A. CREDITS

B. EFFECT ON CLAIMS

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

D. PROTECTION OF AHP FROM POSSIBLE SUBROGATION CLAIMS

E. WALKAWAY RIGHTS

F. LIMITATION ON FINANCIAL OBLIGATIONS

VIII. SETTLEMENT IMPLEMENTATION

A. GENERAL

B. JURISDICTION

C. APPROVAL PROCESS AND NOTICE PROVISIONS

D. CONDITIONS

E. ATTORNEYS' FEES

F. OTHER PROVISIONS

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)
10. Interim Escrow Agreement
11. Proposed Preliminary Approval Order
12. A Class Member's Guide to Settlement Benefits
13. Official Court Notice
14. Matrix Compensation Benefits Guide for Physicians, Attorneys and Class Members
15. Publication Notice
16. Plan of Media Notice
17. Script of Television Notice
18. Summary Notice to Physicians
19. WHITE FORM (for reimbursement of Echocardiogram expenses incurred independent of the Screening Program)
20. GRAY FORM (for qualifications of Board-Certified Cardiologist and Echocardiogram results)
21. BLUE FORM (for registration of Settlement Benefits)
22. GREEN FORM (for Matrix Compensation Benefits)
23. BROWN FORM (for compassionate and humanitarian and true financial hardship Echocardiograms)
24. Notice of Appeal of Determination of Trustees and/or Claims Administrator(s)
25. RED FORM #1 (Credits for Initial and Back-End Opt-Out)
26. RED FORM #2 (Credits for Intermediate Opt-Out)
27. Class Representative's release and covenant not to sue

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® and Redux™, 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® and Redux™ 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 Annual Payment Amount," or "Adjusted MAPA," shall mean the maximum amount that AHP shall be obligated to deposit in Fund B during any Fiscal Year beginning with the second Fiscal Year after the Final Judicial Approval Date through the sixteenth Fiscal Year after the Final Judicial Approval Date. The Pre-Adjusted MAPA for each such year is set forth in Section III.C.2 below. The Adjusted MAPA with regard to any Fiscal Year refers to the amount of the Pre-Adjusted MAPA for that year, as adjusted by increases due to Unused Adjusted MAPAs, as defined in Section III.C.3 from prior years and accretions thereon as set forth therein, and as adjusted by decreases due to accumulated accreted Credits applied thereto as provided herein.

2. "Administrative Reserve" has the meaning provided in Section III.C.1.d.

3. "Aggregate Intermediate Opt-Out Credit Cap" has the meaning provided in Section VII.A.7.

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 any 12-month period beginning on the first day of the month following the month in which Final Judicial Approval is not obtained or the Settlement Agreement is otherwise terminated. In counting AIO Fiscal Years, the first AIO Fiscal Year shall be the year which begins on the first day of the month following the month in which Final Judicial Approval is not obtained or the Settlement Agreement is otherwise terminated. The second AIO Fiscal Year shall be the twelve-month period beginning on the first day of the month following the first anniversary of the date on 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® and/or Dexfenfluramine marketed under the brand name Redux™.

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 Braunwald (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 Singh (1999) and measured by an echocardiographic examination performed and evaluated by qualified medical personnel following the protocol as outlined in Feigenbaum (1994) or Weyman (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 any twelve-month period beginning on the first day of the month following the month in which the Final Judicial Approval Date occurs. In counting Fiscal Years, the first Fiscal Year shall be the year which begins on the first day of the month following the Final Judicial Approval Date, the second Fiscal Year shall be the twelve-month period beginning on the first day of the month following the first anniversary of the Final Judicial Approval Date, and so forth. This definition applies only to the payment terms set forth herein and will have no effect on the tax or accounting year of the Settlement Trust.

26. "Full Credit" has the meaning provided in Section VII.A.5.

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.1.d.

31. "Fund B Quarterly Notice" has the meaning provided in Section III.C.1.d.

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.6 herein.

35. "Intermediate Opt-Out Credit" has the meaning provided in Section VII.A.6.

36. "Judgment" has the meaning provided in Section VII.A.5.

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 Singh (1999) and measured by an echocardiographic examination performed and evaluated by qualified medical personnel following the protocol as outlined in Feigenbaum (1994) or Weyman (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.

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. "Pre-Adjusted MAPA" has the meaning provided in Section III.C.2.

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) 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 Hg ; 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 results :

(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 hypertension , , 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.

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® and/or Redux™, 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® and/or Redux™, 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 and (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;

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

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

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

(3) the prescription or dispensing of Pondimin® and/or Redux™ 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® and/or Redux™; 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, 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"); Interneuron Pharmaceuticals, Inc. (hereinafter "Interneuron"); and any manufacturer, seller, wholesaler, or distributor of any Phentermine hydrochloride or Phentermine resin pharmaceutical product 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® and/or Redux™, 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.

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.

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® and/or Redux™ ("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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ 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.

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® and Redux™: 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.); and Washington (St. John v. AHP, 97-2-06368-4). 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 Adjusted MAPA for the year in which any unused portion of Fund A is transferred, and said transfer will not reduce the maximum obligation of AHP to make payments to Fund B.

C. FUND B

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

a. $25 million five Business Days after the Preliminary Approval Date.

b. $625 million five Business Days after the Final Judicial Approval Date.

c. The $25 million which is paid to Fund B after the Preliminary Approval Date and the $625 million which is paid to Fund B at the Final Judicial Approval Date shall be available and shall be used to pay Class Members who qualify to receive benefits from Fund B, all common benefit fees and costs awarded by the Court in relation to Fund B, and all administrative expenses authorized under the Settlement Agreement associated with the administration of the Settlement and the Settlement Trust insofar as they relate to Fund B.

d. Beginning in the second Fiscal Year after the Final Judicial Approval Date, the Trustees may request in writing on a quarterly basis (each a "Fund B Quarterly Notice") an additional amount (said amount being referred to as a "Fund B Deposit Amount") (i) to pay claims received which qualify for payment from Fund B pursuant to Section IV.B (including claims for counsel fees and authorized administrative expenses) but which have not been paid due to an insufficient cash balance in Fund B, and/or (ii) to maintain a $50 million reserve in Fund B for administrative expenses (the "Administrative Reserve"). AHP shall pay the Fund B Deposit Amount so requested no later than 15 days after the date on which the Trustees provide AHP with a Fund B Quarterly Notice requesting such Fund B Deposit Amount; provided, however, that AHP's obligation to pay Fund B Deposit Amounts during any Fiscal Year shall at all times be limited to the Adjusted MAPA.

2. The Pre-Adjusted MAPA for each Fiscal Year shall be as set forth below:

Fiscal Year	Fund B Pre-Adjusted Maximum Annual Payment Amount
2nd Fiscal Year after the Final Judicial Approval Date	$182,863,500
3rd Fiscal Year after the Final Judicial Approval Date	$182,863,500
4th Fiscal Year after the Final Judicial Approval Date	$182,863,500
5th Fiscal Year after the Final Judicial Approval Date	$182,863,500
6th Fiscal Year after the Final Judicial Approval Date	$182,863,500
7th Fiscal Year after the Final Judicial Approval Date	$182,863,500
8th Fiscal Year after the Final Judicial Approval Date	$182,863,500
9th Fiscal Year after the Final Judicial Approval Date	$182,863,500
10th Fiscal Year after the Final Judicial Approval Date	$182,863,500
11th Fiscal Year after the Final Judicial Approval Date	$182,863,500
12th Fiscal Year after the Final Judicial Approval Date	$182,863,500
13th Fiscal Year after the Final Judicial Approval Date	$182,863,500
14th Fiscal Year after the Final Judicial Approval Date	$182,863,500
15th Fiscal Year after the Final Judicial Approval Date	$182,863,500
16th Fiscal Year after the Final Judicial Approval Date	$480,000,000

3. In the event that the Adjusted MAPA in any Fiscal Year is not required to be paid in its entirety, the difference between the Adjusted MAPA for that Fiscal Year and the payment amounts actually made by AHP to Fund B in that Fiscal Year (the "Unused Adjusted MAPA") shall accrete as follows: an average shall be taken of the Unused Adjusted MAPA that exists at the end of each Fiscal quarter for the Fiscal Year in question; that average Unused Adjusted MAPA shall accrete at 6% for that year; and the Unused Adjusted MAPA that exists at the end of the fourth quarter of that Fiscal Year, plus the accretion as calculated in accordance with the provisions set forth above, shall be added to the Adjusted MAPA available to the Settlement Trust in the following year. For example and by way of explanation, assume that an Unused Adjusted MAPA of $50 million was generated by the end of the first quarter of the third Fiscal Year and remains unchanged for the next two Fiscal quarters, but is reduced to $40 million by the end of the fourth quarter of the third Fiscal Year. The average quarterly Unused Adjusted MAPA for the third Fiscal Year would be $47.5 million. Accreting at 6%, a total accretion of $2,850,000 would then be added to the Unused Adjusted MAPA of $40,000,000 at the end of the fourth quarter of the third Fiscal Year, resulting in a total of $42,850,000 of Unused Adjusted MAPA to be added to the Adjusted MAPA available to the Settlement Trust in the following Fiscal Year (the fourth Fiscal Year). Because the Pre-Adjusted MAPA for the fourth Fiscal Year is $182,863,500, the Adjusted MAPA for that year, assuming no other adjustments, would be $225,713,500. If the Trustees did not require any Fund B Deposit in the fourth Fiscal Year, the quarterly average of the Unused Adjusted MAPA for the fourth Fiscal Year would be $225,713,500, which would accrete at 6%, and the accreted amount, $239,256,310, would be added to the Pre-Adjusted MAPA for the fifth Fiscal Year, so that the Adjusted MAPA at the beginning of the fifth Fiscal Year will be $422,119,810, provided there are no further adjustments.

4. The Credits referred to in Section VII.A shall accrete at 6% per year, compounded annually, commencing at the end of the Fiscal quarter during which each Credit is generated and ending on the date of the Adjusted MAPA which is reduced by the application of the Credit, irrespective of the actual passage of time. The determination of the amount of such Credits generated in any Fiscal Year shall be made at the end of each Fiscal Year after the Final Judicial Approval Date unless an earlier determination is necessary to carry out the intention of the Parties. Such accreted Credits shall accumulate and shall be applied to reduce the Adjusted MAPAs in reverse order starting with the first day of the sixteenth Fiscal Year after the Final Judicial Approval Date. For example and by way of explanation, assuming a $1 million Credit were generated during the last quarter of the first Fiscal Year after the Final Judicial Approval Date, and assuming no other adjustments to the Adjusted MAPA, this Credit would accrete until the first day of the sixteenth Fiscal Year after the Final Judicial Approval Date, would have an accreted value of $2,260,904 and would be applied at that date to reduce the Adjusted MAPA for that year. As a further example by way of explanation, assuming that $300 million of Credits were generated during the last quarter of the third Fiscal Year after the Final Judicial Approval Date, and assuming no other adjustments to the Adjusted MAPA, $238,545,295 of those credits would accrete until the first day of the sixteenth Fiscal Year after the Final Judicial Approval Date, at which time those credits would have an accreted value of $480 million and would be applied at that date to eliminate the full amount of the Pre-Adjusted MAPA for that year; the remaining $61,454,705 of those third-year credits would accrete until the first day of the fifteenth Fiscal Year after the Final Judicial Approval Date, at which time those credits would have an accreted value of $116,659,378 and would be applied at that date to reduce the Pre-Adjusted MAPA for the fifteenth Fiscal Year by that amount; the Pre-Adjusted MAPA for the fifteenth Fiscal Year would therefore be $66,204,122 (namely, $182,863,500 minus $116,659,378).

5. Prior to the end of the first quarter of the sixteenth Fiscal Year after the Final Judicial Approval Date, the Trustees shall make a calculation as to a final payment to be made by AHP to Fund B (the "Final Payment"). The Final Payment, if any, by AHP into Fund B, shall be the lesser of two amounts, "X" or "Y," where:

a. Amount "X" refers to the projected amount of additional funds necessary to meet the obligations of Fund B. To make this projection, 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 obligations to Class Members who have qualified or are likely in the future to qualify for benefits from Fund B and associated administrative expenses. In determining Amount "X," 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.

b. Amount "Y" refers to the difference between (i) the Adjusted MAPA computed as of the first day of the sixteenth Fiscal Year following the Final Judicial Approval Date, giving due credit for all Unused Adjusted MAPAs with 6% accretions thereon, and all Credits and Cross-Claim Credits to which AHP is entitled under the Settlement Agreement with 6% accretions thereon, and (ii) any amounts paid by AHP to Fund B during the first quarter of the sixteenth Fiscal Year.

6. After making the foregoing calculation, but prior to payment thereof, the Trustees shall provide a 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 above. The report shall contain all supporting information necessary to allow Class Counsel and AHP to evaluate the accuracy and reasonableness of the projection. Such supporting information shall include, without limitation, the Trustees' methodology for making the projection and any assumptions used in making the projection. Either AHP or Class Counsel shall have the right to seek any additional information reasonably requested by them, and to contest the Trustees' projections to the Court, which shall modify such projection if it is determined to be unreasonable or lacking in substantial support. AHP shall make the Final Payment within 15 days after a final determination of the amount thereof. In the event AHP seeks a stay of such determination pending appeal and posts adequate bond, Class Counsel shall not oppose such a stay.

7. At such time as the accumulated accreted Credits and Cross-Claim Credits are equal to or exceed the remaining maximum payment obligations of AHP, as calculated hereunder, the Final Payment shall be deemed to have been made at that time if that date is prior to the date on which the Final Payment is required to be made under Section III.C.6 above, and no Final Payment shall be required to be made pursuant to Section III.C.6.

8. If no Final Payment is required pursuant to the preceding provision, or if a Final Payment is made pursuant to Section III.C.6, AHP shall have no further obligation to make any payments to Fund B under the Settlement Agreement.

9. The monies held by Fund B shall be available and shall be used to pay all benefits payable from Fund B, all 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.

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, or being deemed to have made, the Final Payment provided for in Sections III.C.5, III.C.6 and III.C.7, respectively.

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 following AHP's remittance (or deemed remittance) of the Final Payment pursuant to Section III.C.6 (or Section III.C.7), any remaining balance of the Security Fund, including any income earned thereon, shall be released to AHP.

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® AND/OR REDUX™ 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® and $60 per month of use for Redux™, 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® AND/OR REDUX™ 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® and $60 per month of use for Redux™. 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, 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. The Trustees may also, in their discretion, reimburse members of Subclasses 1(a) and 1(b), in cases of true financial hardship, for Echocardiograms and associated interpretive physician visits that were previously performed where (i) such procedures were performed prior to September 30, 1999 in response to a statewide class action notice, or (ii) the Trustees, in their discretion, determine that there are compelling reasons for such reimbursement. Such reimbursement shall be limited to the lesser of (i) the direct cost to the Trust of providing 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.
.

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.

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:

Matrix A-1	Age at diagnosis/event
Severity	< 24	25-29	30-34	35-39	40-44	45-49	50-54	55-59	60-64	65-69	70 - 79
I	$123,750	$117,563	$111,685	$106,100	$100,795	$95,755	$90,967	$86,419	$82,098	$73,888	$36,944
II	$643,500	$611,325	$580,759	$551,721	$524,135	$497,928	$473,032	$449,381	$426,912	$384,221	$192,111
III	$940,500	$893,475	$848,801	$806,361	$766,043	$727,741	$691,354	$656,786	$623,947	$561,552	$280,776
IV	$1,336,500	$1,269,675	$1,206,191	$1,145,881	$1,088,587	$1,034,158	$982,450	$933,327	$886,661	$797,995	$398,998
V	$1,485,000	$1,410,750	$1,340,213	$1,273,202	$1,209,542	$1,149,065	$1,091,612	$1,037,031	$985,180	$886,662	$443,331

Matrix A-2	Age at diagnosis/event
Severity	< 24	25-29	30-34	35-39	40-44	45-49	50-54	55-59	60-64	65-69	70 - 79
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

Matrix B-1	Age at diagnosis/event
Severity	< 24	25-29	30-34	35-39	40-44	45-49	50-54	55-59	60-64	65-69	70 - 79
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

Matrix B-2	Age at diagnosis/event
Severity	< 24	25-29	30-34	35-39	40-44	45-49	50-54	55-59	60-64	65-69	70 - 79
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

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) > 50% jet height/left ventricular outflow tract height (JH/LVOTH) and/or severe mitral regurgitation (MR) > 40% regurgitant jet area/left atrial area (RJA/LAA) , and no complicating factors as defined below;

(b) FDA Positive valvular regurgitation with bacterial endocarditis contracted after commencement of Pondimin® and/or Redux™ 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) or Severe AR (> 50% JH/LVOTH) 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 Hg measured by Doppler Echocardiography, at rest, utilizing standard procedures , assuming a right atrial pressure of 10 mm Hg;

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

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

(b) Moderate MR (20% - 40% RJA/LAA) or Severe MR (> 40% RJA/LAA) 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 Hg 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 cm (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;

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

iv) Ejection fraction of < 60% ;

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® and/or Redux™; or

(b) Severe regurgitation and the presence of ACC/AHA Class I indications for surgery to repair or replace the aortic and/or mitral 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® and/or Redux™ 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 Classification 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® and/or Redux™ 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 Classification 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® and/or Redux™ 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 Classification 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) , 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® and/or Redux™ 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 Classification 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 of 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 Hg (by cardiac catheterization) at rest following repair or replacement surgery of the aortic and/or mitral valve(s);

v) Persistent non-cognitive state 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® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™); or

(b) Diet Drug Recipients who ingested Pondimin® and/or Redux™ 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® and/or Redux™ 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® and/or Redux™ use on the valve that is the basis of claim;

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

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

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

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