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7 <br /> Background Statement <br /> Capitalized terms not defined below have the meanings set forth in the Definitions section of the <br /> Statement of Agreement. <br /> WHEREAS, the State of North Carolina (the "State"), North Carolina counties and <br /> municipalities, and their people have been harmed by misconduct committed by certain entities <br /> that engage in or have engaged in the manufacture, marketing, promotion, distribution, or <br /> dispensing of an opioid analgesic ("Pharmaceutical Supply Chain Participants"); and <br /> WHEREAS, certain North Carolina counties and municipalities, through their counsel, <br /> and the State, through its Attorney General, are separately engaged in ongoing investigations, <br /> litigation and settlement discussions seeking to hold Pharmaceutical Supply Chain Participants <br /> accountable for the damage caused by their misconduct; and <br /> WHEREAS, the State and the Local Governments share a common desire to abate and <br /> alleviate the impacts of the misconduct described above throughout North Carolina and in its local <br /> communities; and <br /> WHEREAS, while the Local Governments and the State recognize the sums which may <br /> be available from the aforementioned litigation will likely be insufficient to fully abate the public <br /> health crisis caused by the opioid epidemic, they share a common interest in dedicating the most <br /> resources possible to the abatement effort; and <br /> WHEREAS, settlements resulting from the investigations and litigation with Johnson & <br /> Johnson,AmerisourceBergen, Cardinal Health, and McKesson are anticipated to take the form of <br /> a National Settlement Agreement; and <br /> WHEREAS, this Memorandum of Agreement ("MOA") is intended to facilitate <br /> compliance by the State and by the Local Governments with the terms of the National Settlement <br /> Agreement and, to the extent appropriate, in other settlements related to the opioid epidemic <br /> reached by the state of North Carolina; and <br /> WHEREAS, North Carolina's share of settlement funds from the National Settlement <br /> Agreement will be maximized only if all North Carolina counties, and municipalities of a certain <br /> size, participate in the settlement; and <br /> WHEREAS,the National Settlement Agreement will set a default allocation between each <br /> state and its political subdivisions unless they enter into a state-specific agreement regarding the <br /> distribution and use of settlement amounts (a"State-Subdivision Agreement"); and <br /> WHEREAS,this MOA is intended to serve as such a State-Subdivision Agreement under <br /> the National Settlement Agreement; and <br /> WHEREAS, the aforementioned investigations and litigation have caused some <br /> Pharmaceutical Supply Chain Participants to declare bankruptcy, and it may cause additional <br /> entities to declare bankruptcy in the future; and <br /> 3 <br />