This excerpt taken from the BDY 10-Q filed Nov 8, 2007.
Distribution Agreement Fee
A Service Fee, as outlined below, will be calculated and paid quarterly based on the total volume of all branded pharmaceutical product purchases by McKesson from Manufacturer during that quarter valued at the Manufacturers list price at the time the products were purchased.
McKesson will provide quarterly Service Fee profitability information and invoices, if applicable, to Manufacturer within twenty (20) days of the end of each quarter and Manufacturer shall pay such invoices no later than thirty (30) days after invoice.
Service Fee: *** %
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Service Fee Credits: Manufacturer will receive credit towards Service Fee for the following items:
In any quarter where Service Fee Credits exceed the Service Fee (Carryover Credits), such Carryover Credits will be credited against the Service Fee due in future quarters. McKesson shall provide appropriate documentation to support the calculation of the Service Fee and Service Fee Credits.
Between August 1, 2007 and December 31, 2007, McKesson will use its best efforts to gradually reduce on hand inventory levels on all products as follows:
After December 31, 2007, McKesson will use its best efforts to maintain efficient inventory levels to reflect true customer demand.
The benefit provided by Manufacturer, as calculated in accordance with Attachment A, is provided with the understanding that it is McKessons responsibility to manage sell side (sales to customer) profitability and Manufacturer is not guaranteeing the economic or other terms governing McKessons resale of the Manufacturers products to McKessons customers.
2. All capitalized terms used in this Amendment shall have the same meaning as said capitalized terms in the Agreement.
3. The terms and conditions of the Agreement are renewed and continued in full force and effect except as specifically amended hereby.
Agreed to and signed on the dates below shown.