exv10w2



 





Exhibit 10.2




EXECUTION COPY




TRANSITION SERVICES AGREEMENT




     THIS TRANSITION SERVICES AGREEMENT (this “Agreement”), is entered into as
of June 30, 2004 (the “Effective Date”) by and between Advancis Pharmaceutical
Corporation (“Advancis”), a corporation organized and existing under the laws
of the State of Delaware with offices located at 20425 Seneca Meadows Parkway,
Germantown, Maryland 20876, and Eli Lilly and Company (“Lilly”), a corporation
organized and existing under the laws of the State of Indiana with offices
located at Lilly Corporate Center, Indianapolis, Indiana 46285. Advancis and
Lilly are sometimes referred to herein individually as a “Party” and
collectively as “Parties”.



     WITNESSETH:



     WHEREAS, Lilly and Advancis have entered into an Asset Purchase Agreement
of even date herewith (the “Purchase Agreement”) and a Manufacturing Agreement
of even date herewith (the “Manufacturing Agreement”);



     WHEREAS, pursuant to the Purchase Agreement, Lilly has agreed, among other
things, to sell to Advancis the Purchased Assets and Advancis has agreed to
purchase the Purchased Assets, including the Marketed Product;



     WHEREAS, the Parties wish to provide for the warehousing, distribution,
medical inquiries, complaint management and other transition services to be
provided by Lilly and its Affiliates (collectively, “Service Provider”) to
Advancis, including sales and accounts receivable, during the [***] after the
Effective Date;



     WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Purchase Agreement and the Manufacturing Agreement that
Lilly and Advancis enter into this Agreement; and



     WHEREAS, the Service Provider is willing to provide certain transitional
services to Advancis upon the terms and conditions set forth below.



     NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Parties agree as follows:



     1. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below and capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Purchase Agreement and Manufacturing Agreement.



          (a) "Advancis Sale” has the meaning specified in Section 5.



          (b) "Business Day” means any day that is not a Saturday, Sunday or other
day on which banks are authorized or required to close in the state of New
York.









	[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.




 









 










          (c) "Distribution Fee” has the meaning specified in Section 4.



          (d) "Independent Accounting Firm” has the meaning specified in Annex A.



          (e) "Order” has the meaning specified in Section 5.



          (f) "Order Purchase Price” has the meaning specified in Section 5.



          (g) "Parties” has the meaning specified in the Introduction.



          (h) "Services” has the meaning specified in Section 2.



          (i) "Service Provider” has the meaning specified in the recitals.



          (j) "Service Period” has the meaning specified in Section 3.



          (k) "Settlement Calculation” has the meaning specified in Annex A.



          (l) "Settlement Calculation Objection Notice” has the meaning specified in
Annex A.



          (m) "Settlement Calculation Resolution Period” has the meaning specified
in Annex A.



          (n) "Transferred Inventory” has the meaning specified in Section 6.



          (o) "Inventory Transfer Notice” has the meaning specified in Section 6.



     2. Services to be Provided.



          (a) During the Service Period, the Service Provider shall provide to
Advancis or its Affiliates the following services described on Annex A
attached hereto solely with respect to the sale of the Marketed Product in the
United States (collectively, the “Services”):



               (i) Inventory, Warehousing and Management Services;



               (ii) Medical Inquires and Complaint Management Services;



               (iii) Distribution Services; and



               (iv) Accounting and Reconciliation Services.



          (b) Advancis hereby grants to the Service Provider, for no additional
consideration, a non-exclusive license to use the Trademarks solely in
connection with



-2-









 





the Services. The foregoing license shall terminate
automatically, simultaneously with the expiration or termination of this
Agreement.



          (c) The Service Provider shall render the Services in accordance with the
standards and guidelines described in Annex A. The Services shall be of
the same nature and of the same or higher quality as such similar services
provided by the Service Provider, Lilly and/or its Affiliates in connection
with the sale of the Marketed Product in the United States immediately prior to
the Effective Date. Any Marketed Product that is manufactured, sold or
distributed by the Service Provider pursuant to this Agreement shall be in
compliance with the Quality Control and Assurance provisions set forth in
Section 3.3 of the Manufacturing Agreement and the MRD/Quality Agreement (as
defined therein). All Marketed Product shall be labeled, prepared and packaged
in accordance with Section 5.1 of the Manufacturing Agreement and the
MRD/Quality Agreement.



          (d) During the Service Period and subject to the requirements of Section
8.4 of the Asset Purchase Agreement, Lilly shall provide
pharmacovigilance
reporting in according with its standard procedures until such time as the
Pharmacovigilance Agreement is completed and entered by the Parties. At such
time, all such matters shall be handled in accordance with the
Pharmacovigilance Agreement.



     3. Term; Termination.



          (a) The “Service Period” shall commence on the Effective Date and shall
expire on [***], with respect to Medical Inquiries and Complaint Management
Services, and [***], with respect to all other Services, unless sooner
terminated in accordance with the provisions of this Section 3 (such period
during which any of the Services are provided, the “Service Period”).



          (b) In the event that either Party materially fails to perform any of its
duties or obligations pursuant to this Agreement and such failure is not cured
within ten (10) Business Days after notice to such Party specifying the nature
of such material failure, the other Party may terminate this Agreement upon
further notice to the defaulting Party.



          (c) Advancis may terminate this Agreement upon ten (10) Business Days’
prior written notice to the Service Provider. Advancis will be relieved of any
obligation to pay for terminated Services from and after the effective date of
such termination; provided, however, that Advancis will continue to pay for any
reasonable noncancellable commitments reasonably made by the Service Provider
in anticipation of providing the Services as required herein.



          (d) The expiration or termination of this Agreement, for any reason, will
not release either Party from any liability which at said time it has already
incurred to
the other Party, nor affect in any way the survival of any rights, duties
or obligations of either Party that are expressly stated elsewhere in this
Agreement to survive said expiration or prior termination. Nothing in the
immediately preceding sentence will









	[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.




-3-









 










affect the right of the Party aggrieved by
any breach of this Agreement to be compensated for any injury or damage
resulting therefrom that is incurred before or after such expiration or
termination.



          (e) Upon expiration or termination of this Agreement, other than fees
related to rebates, returns or chargebacks, all fees and payments owed by
either Party to the other Party hereunder as of the date of such expiration or
termination will be paid within thirty (30) days of the date of such expiration
or termination.



          (f) Promptly after the expiration or termination of this Agreement,
Service Provider will deliver to Advancis a report which will contain the same
categories of information as the Semi-Monthly Reports (as defined herein),
together with any other information that Advancis shall reasonably request and
can reasonably be provided by Service Provider relating to the sale of Marketed
Products.



     4. Distribution Fee. For providing the Services during the Service
Period, Service Provider will be entitled to the fees (the “Distribution Fees”)
listed on Exhibit A for each of the Marketed Products. The Distribution
Fees will be equal to [***] of each of the Marketed Products listed on
Exhibit A and invoiced by Service Provider during the Service Period.



     5. Sale of Inventory and Distribution Services. Commencing on July
1, 2004, Service Provider shall be responsible for receiving purchase orders
for the sale of Marketed Product, which orders are received (each, an “Order”)
directly from wholesalers with which Lilly has established wholesaler
relationships. Within one (1) Business Day after receipt by Service Provider
of an Order (or on such later date as the wholesaler requests shipment of
Marketed Product), Service Provider shall sell the same quantity and type of
Marketed Product specified in the Order to Advancis at the applicable Purchase
Price set forth on Schedule 2.2A of the Manufacturing Agreement (the
"Order Purchase Price”). Immediately after such sale and purchase, Advancis
shall sell to Service Provider (the “Advancis Sale”) the same amount and type
of Marketed Product sold to Advancis by Service Provider as specified in the
Order at the Order Purchase Price. Within one (1) Business Day of the Advancis
Sale, Service Provider will distribute the same quantity and type of Marketed
Product specified in the Order. Service Provider will distribute Marketed
Products sold pursuant to this Section 5 in accordance with Annex A.



     6. Delivery of Inventory. During the Service Period, from time to
time, Service Provider shall ship the quantity and amount of Inventory (the
"Transferred Inventory”) to a warehouse location specified by Advancis in a
written notice from Advancis (the “Inventory Transfer Notice”). The
Transferred Inventory shall be shipped by Service Provider FOB Advancis’
carrier within three (3) Business Days following delivery of the Inventory
Transfer Notice from Advancis to Service Provider.



     7. Notification to Customers, Wholesalers and Distributors. At a
time mutually agreed upon by Service Provider and Advancis, Service Provider
shall notify all customers, wholesalers and distributors of the Marketed
Product in the United States of









	[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.




-4-









 










the transfer of the Marketed Product and
Inventory to Advancis and the change in the distribution of the Marketed
Product.



     8. Confidentiality Obligations. The Parties acknowledge that the
information provided to them and their representatives in connection with this
Agreement is subject to, and the Parties shall, and shall cause their
representatives to, fully comply with their respective obligations under
Article IX of the Purchase Agreement and Article IX of the Manufacturing
Agreement.



     9. Service Provider’s Employees. Service Provider shall be solely
responsible for payment of compensation to Service Provider’s employees and for
any injury to them in the course of their employment. Service Provider shall
assume full responsibility for payment of all federal, state and local taxes or
contributions imposed or required under unemployment insurance, social security
and income tax laws with respect to such persons. Advancis has no power to
supervise, give directions or otherwise regulate the operations of Service
Provider or its employees.



     10. Assignment. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns. No Party may assign either this Agreement or any of its rights,
interests or obligations hereunder without the prior written approval of the
other Party; provided, however, that Advancis may assign its
rights, interests and/or obligations hereunder to any of its Affiliates without
the prior written approval of Lilly, so long as such assignment does not
release Advancis from any liability to Lilly hereunder. Lilly may contract
with one or more of its Affiliates or Third Persons for the performance of all
or any part of Lilly’s obligations under this Agreement.



     11. Indemnification. In addition to the Parties’ rights and
obligations to indemnify any Person in connection with the transactions
contemplated herein which are set forth in the Purchase Agreement, Advancis
agrees to indemnify and hold harmless Lilly and it Affiliates and their
respective, officers, directors, agents and employees from and against any
claims for Damages related to or arising out of Lilly’s or its Affiliates
provision of Services hereunder, or the failure to so provide Services or
perform, except for Damages that are a result of the willful misconduct or
gross negligence of Lilly or its Affiliates.



     12. Miscellaneous.



          (a) Amendment and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by duly
authorized representatives of each of the Parties. No waiver by any Party
hereto of any default, misrepresentation or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence. No
course of dealing or failure of any Party to strictly enforce any term, right
or condition of this Agreement shall be construed as a waiver of such term,
right or condition.



-5-









 





          (b) Notices. All notices, requests, claims, demands or other
communications that are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be delivered to the Parties in
accordance with Section 12.3 of the Purchase Agreement.



          (c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.



          (d) Headings. The headings and numbering of sections in this
Agreement are for convenience only and shall not be construed to define or
limit any of the terms or provisions of this Agreement or affect the scope,
meaning, or interpretation of this Agreement or the particular sections to
which they relate.



          (e) Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.



          (f) Entire Agreement. The Purchase Agreement, the Manufacturing
Agreement and this Agreement (including the documents referred to therein and
herein) constitute the entire agreement between the Parties and supersede any
prior understandings, agreements or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.



          (g) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.



          (h) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The word “including” shall mean
including, without limitation.



          (i) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Indiana without
giving effect to any choice or conflict of law provision or rule.



          (j) Relationship of Parties. Nothing contained in this Agreement
shall be construed as creating a partnership, joint venture, agency, trust or
other association of any kind, each Party being individually responsible only
for its obligations as set forth in this Agreement.



-6-









 





          (k) Further Assurances. Subject to the provisions hereof, each of
the Parties will execute and deliver such other agreements, documents or
instruments and take or cause to be taken such other actions as may be
reasonably required in order to effect the purposes of this Agreement and to
consummate the transactions contemplated hereby. Subject to the provisions
hereof, each of the Parties will, in connection with entering into this
Agreement, performing its obligations hereunder and taking any and all actions
relating hereto, comply with all applicable laws, obtain all required consents
and approvals and make all required filings with any Governmental Authority and
promptly provide the other with all such information as the other Party may
reasonably request in order to be able to comply with the provisions of this
sentence.



          (l) Incorporation of Annexes. The Annexes identified in this
Agreement are incorporated herein by reference and made a part hereof.



          (l) Impracticality. Service Provider shall not be required to
provide any Services to the extent the performance of such Services becomes
impractical as a result of a cause or causes outside the reasonable control of
Service Provider, or to the extent the performance of such Services would
require Service Provider to violate any applicable laws, rules or regulations.



[Signature Page Follows]




-7-









 








     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.



	 	 	 	 	 	 	 
	 	 	ELI LILLY AND COMPANY
	 
	 	 	 	 	 	 
	

	 	By: /s/ John C. Lechleiter	 	 
	

	 	 	
	 	 
	 
	 	 	 	 	 	 
	

	 	Printed Name: John C. Lechleiter	 	 
	 
	 	 	 	 	 	 
	

	 	Title: Executive Vice President Pharmaceutical Operations	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ADVANCIS PHARMACEUTICAL CORPORATION
	 
	 	 	 	 	 	 
	

	 	By: /s/ Edward M. Rudnic, Ph.D.	 	 
	

	 	 	
	 	 
	 
	 	 	 	 	 	 
	

	 	Printed Name: Edward M. Rudnic, Ph.D.	 	 
	 
	 	 	 	 	 	 
	

	 	Title: Chairman & CEO	 	 







Signature Page to Transition Services Agreement




 









 








ANNEX A




SERVICES




I. WAREHOUSING AND INVENTORY MANAGEMENT SERVICES



Service Provider will warehouse and inventory Marketed Product at Service
Provider’s distribution facility. Service Provider will store all Marketed
Product in compliance with current good manufacturing practice regulations and
guidelines and other requirements of the FDA and all other Applicable Laws.
Upon the Effective Date and thereafter, together with the Semi-Monthly Reports
(defined below), Service Provider will deliver system generated inventory by
SKU, expiration date, lot number and warehouse. In addition to and together
with the Semi-Monthly Reports (defined below) and only if readily available
using Service Provider’s standard reporting systems, Service Provider will
provide to Advancis semi-monthly Inventory transaction histories detailing the
transaction history of each lot of Marketed Product in or sold from Inventory.



II. DISTRIBUTION SERVICES



A. Service Provider will distribute Marketed Products in accordance with (i)
good manufacturing practice guidelines and other requirements of the FDA, (ii)
other Applicable Laws, and (iii) using policies, procedures and practices in
effect immediately prior to the Effective Date, that are consistent with
services normally provided by Service Provider in connection with the
distribution of products and services and in substantially the same manner as
provided by Service Provider in connection with the Marketed Product
immediately prior to the Effective Date.



B. Service Provider will be responsible for distribution and inventory tasks,
including:




	 	1.	 	To continually maintain Marketed Product inventory in accordance
with the terms of this Agreement;
	 
	 	2.	 	To provide Advancis, at Service Provider’s expense, one (1)
physical inventory of Marketed Product. A physical inventory will
be scheduled based upon a written request from Advancis and a
mutually agreed upon inventory date;
	 
	 	3.	 	To allow Advancis, at Advancis’ expense, to inspect Marketed
Product at Service Provider’s facility upon reasonable prior
request provided that Advancis does not interfere with Service
Provider’s operations; and
	 
	 	4.	 	To provide tracking for all shipments in accordance with Service
Provider’s standard procedures.




 









 











III. MEDICAL INQUIRES AND COMPLAINT MANAGEMENT SERVICES



Service Provider shall continue to operate a call center for customers and
physicians to contact regarding the Marketed Product. The Parties shall
mutually agree on policies and procedures for addressing any complaints or
inquiries including, without limitation, quality assurance/quality control or
similar issues concerning Marketed Product, received by Service Provider that
will enable Advancis to satisfy any regulatory requirements and/or Applicable
Laws; provided, however, unless the Parties agree otherwise, any complaint or
inquiry received by Service Provider at the call center or otherwise that
requires or may require Service Provider to notify any regulatory or
Governmental Authority pursuant to Applicable Law or in accordance with Service
Provider’s existing policies and procedures shall be reported to Advancis
within 24 hours of receipt of such complaint or inquiry. All notices required
to be delivered by Service Provider in accordance with this paragraph shall be
sent by e-mail and fax to Advancis, Attention: James Bruno, Vice President,
Pharmaceutical Sales, 20425 Seneca Meadows Parkway, Germantown, Maryland 20876;
email: [***]; fax: (301) 944-6700. Service Provider shall
continue to operate the call center in accordance with policies and procedures
in existence on the Effective Date.



IV. ACCOUNTING AND RECONCILIATION





[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



 









 








A. Periodic Reporting. During the Service Period, Service Provider will
prepare a report on a semi-monthly basis, detailing the Marketed Products sold
and delivered during the applicable time period (the “Semi-Monthly Report”).
The Semi-Monthly Report will consist of the following information: date of
sale, customer, to whom shipped, lot number, quantity, and Net Wholesale Price.
The Semi-Monthly Reports shall cover activity during the following periods:
[***]. The Semi-Monthly
Reports should be available within seven (7) Business Days and will be sent by
e-mail and fax to: Advancis Finance Dept, Attention: Robert C. Low,
Controller, 20425 Seneca Meadows Parkway, Germantown, Maryland 20876; email:
[***]; fax: (301) 944-6700.



B. Transition Period Settlement. Amounts due to each of the Parties will be
settled on a net basis at the end of the Service Period. Amounts due to a
Party from the other Party will be calculated, and the Party having a net
liability to the other will wire to the other Party the amount of such net
liability within 15 days of agreement on the settlement calculation. The
settlement calculation will consist of the following elements (the “Settlement
Calculation”):




	 	1.	 	Amount due to Service Provider for each sale of Marketed Product

to Advancis to fulfill customer orders during the Service Period;
	 
	 	2.	 	Amount due to Advancis for each sale of Marketed Product to
Service Provider to fulfill Orders during the Service Period;
	 
	 	3.	 	Net amount due to Advancis for each sale invoiced by Service
Provider during the Service Period, calculated as follows: Service
Provider’s Net Wholesale Price (“NWP”) for Marketed Product sold to
wholesalers, less the Purchase Price set forth in Schedule 2.2 of
the Manufacturing Agreement, [***];
	 
	 	4.	 	Amount due to Service Provider for its Distribution Fee for all
invoiced sales during the Service Period (the Distribution Fee is
calculated as the quantity of each Marketed Product shipped to
Customers multiplied by the applicable distribution fee price in
accordance with Exhibit A);
	 
	 	5.	 	Amounts due for Transferred Inventory calculated based upon the
Purchase Price set forth on Schedule 2.2A of the Manufacturing
Agreement; and
	 
	 	6.	 	Amount due to Service Provider for the purchase of remaining,
unsold Inventory by Advancis at the end of the Service Period.





C. Transition Period Settlement Review. Within 15 days following the
expiration of









	[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.




 









 










the Service Period, the Settlement Calculation will be prepared
and submitted by Service Provider to Advancis for review and approval. The
Settlement Calculation shall be conclusive and binding on the Parties unless
Advancis gives written notice of any objections thereto setting forth in
reasonable detail the amounts in dispute and the basis for such dispute (a
"Settlement Calculation Objection Notice”) to Service Provider within thirty
(30) days after receipt of the Settlement Calculation and all work papers and
back-up materials relating thereto. Advancis shall submit therewith payment in
full for any amounts not in dispute. If Advancis delivers a Settlement
Calculation Objection Notice as provided above, the Parties shall attempt in
good faith to resolve such dispute, and any resolution by them as to any
disputed amounts shall be final, binding and conclusive on the Parties. If the
Parties are unable to resolve, despite good faith negotiations, all disputes
reflected in the Settlement Calculation Objection Notice within thirty (30)
days thereafter (the “Settlement Calculation Resolution Period”), then the
Parties will, within ten (10) days after the expiration of the Settlement
Calculation Resolution Period, submit any such unresolved dispute to Ernst &
Young LLP (the “Independent Accounting Firm”). Advancis and Service Provider
shall provide to the Independent Accounting Firm all work papers and back-up
materials relating to the unresolved disputes requested by the Independent
Accounting Firm to the extent available to Advancis or Service Provider.
Advancis and Service Provider shall be afforded the opportunity to present to
the Independent Accounting Firm any material related to the unresolved disputes
and to discuss the issues with the Independent Accounting Firm. The
determination by the Independent Accounting Firm, as set forth in a notice to
be delivered to Advancis and Service Provider thirty (30) days after the
submission of the unresolved disputes to the Independent Accounting Firm, shall
be final, binding and conclusive on the Parties. The fees and expenses of the
Independent Accounting Firm shall be split equally between Advancis and Service
Provider. The Settlement Calculation, as revised to reflect the resolution of
any and all disputes by the Parties and/or the Independent Accounting Firm,
shall be deemed to be the “Settlement Calculation.”



 









 








EXHIBIT A




NET WHOLESALE PRICES AND DISTRIBUTION FEES FOR TRANSITION PERIOD




	 	 	 	 	 
	 	 	Net Wholesale	 	Distribution
	 	 	Price (NWP)	 	Fee
	500 mg, 100 count
	 	[***]	 	[***]
	500 mg, 20 count
	 	[***]	 	[***]
	250 mg, 100 count
	 	[***]	 	[***]
	250 mg, 20 count
	 	[***]	 	[***]













	[***]  INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.