EX-10.19.3 2 ex10193-upssecondamendment.htm UPS SECOND AMENDMENT TO MSA Exhibit
Exhibit 10.19.3

The confidential portions of this exhibit have been filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities and Exchange Act of 1934, as amended. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.

UPS Supply Chain Solutions, Inc.
12380 Morris Road
Alpharetta, GA 30005

June 1, 2015

Ms. Lisa Walker
Assoc. Director Cust. Svc. & Dist.
Endo Pharmaceuticals Inc.
1400 Atwater Drive
Malvern, Pennsylvania 19355


Dear Ms. Walker:

This letter serves as notice that the following revisions are made to Service Schedule No. 1 for Warehouse Distribution Services as revised (“Service Schedule No. 1”) and Service Schedule No. 2 for Transportation Management Services (“Service Schedule No. 2”), which is a part of the Master Services Agreement dated April 1, 2010 (“MSA”) between UPS Supply Chain Solutions, Inc. (“SCS”) and Endo Pharmaceuticals Inc. (“Endo”). The MSA and any associated Service Schedule are collectively referenced as the Agreement. The effective date of these revisions is July 1, 2015 (“Effective Date”). All references to “Effective Date” in this letter shall mean July 1, 2015.

1.
Section 2.1 of Service Schedule 1 is deleted in its entirety and replaced with the following:

Term. The term of this Schedule shall commence on the Effective Date and shall continue up to and including June 30, 2020 (“Term”), unless earlier terminated in accordance with the MSA. Thereafter, this Schedule will automatically renew for successive one-year renewal terms, unless either Party gives the other Party written notice of non-renewal at least ninety (90) days prior to the expiration of the then-current term. Notwithstanding the foregoing, in the event that SCS continues to provide the Services to Customer following the expiration or termination of this Schedule, and the Parties fail to enter into a written extension of this Schedule, then this Schedule (except that the Fees may be adjusted by SCS in its sole discretion) shall remain in effect on a month-to-month basis after the expiration or termination date until terminated in writing by either Party upon thirty (30) days prior written notice.
2.
Exhibits A, B, C, and D are deleted in their entirety and replaced with Exhibits A.1, B.1, C.1 and D.1 attached hereto and made a part of the Agreement.

3.
Section 2 of Service Schedule No. 2 is deleted in its entirety and replaced with the following:

Term and Termination. The term of this Schedule shall commence on the Effective Date and shall continue up to and including June 30, 2020 (“Term”), unless earlier terminated in accordance with the MSA. Thereafter, this Schedule will automatically renew for successive one-year renewal terms, unless either Party gives the other Party written notice of non-renewal at least ninety (90) days prior to the expiration of the then-current term. In addition to the termination provision in the MSA, this Schedule may be terminated by either Party; (a) without cause upon one hundred eighty (180) days prior written notice or (b) with cause upon the commission of a material breach of this Schedule which is not cured within ninety (90) days after the breaching Party receives notice.

4.
The following provision is added to Service Schedule No. 2:

Customer acknowledges and agrees that small package services (“Small Package Services”) are provided by SCS’ affiliate, United Parcel Service, Inc. (“UPS”). Small Package Services will be provided in accordance with the applicable UPS Rate and Service Guides and Tariff in effect at the time of shipping (collectively, “Service Guides”) all of which are incorporated herein by reference as though fully set forth herein (available upon request and on the Internet at www.ups.com).

5.
Exhibits A “Fees” and B “Operating Parameters” are deleted in their entirety and replaced with Exhibits A-1 “Fees” and B-1 Operating Parameters” attached hereto and made a part of the Agreement.



UPS Supply Chain Solutions, Inc.
12380 Morris Road
Alpharetta, GA 30005

6.
Service Schedule No. 5_ *** Agreement for All Ocean Freight Services is deleted in its entirety and replaced with the new Service Schedule No. 5_Amended and Restated *** Agreement for All Ocean Freight Services.



Agreed to and accepted by on behalf of UPS Supply Chain Solutions, Inc.:
/s/Matt Kristufek
Signature
 
Matt Kristukef
Printed Name
 
Vice President
Title
 
June 19, 2015
Date


Agreed to and accepted by on behalf of Endo Pharmaceuticals Inc.:
/s/Brian Lortie
Signature
 
Brian Lortie
Printed Name
 
President, Branded Pharmaceuticals
Title
 
June 11, 2015
Date



Confidential & Proprietary

EXHIBIT A.1 - STATEMENT OF WORK
TO SERVICE SCHEDULE NO. 1 - WAREHOUSE DISTRIBUTION SERVICES

1.Specialized Handling. Hazardous Materials or Other Regulated Products will not be accepted for handling and storage under this SOW unless a separate service schedule expressly authorizing such has been executed by the Parties.
2.Training. SCS shall train its personnel to perform standard warehouse logistics Services with respect to the Products. Client shall provide SCS with training materials and applicable reference manuals relating to any specialized training for processes or systems to be provided to Client under this Statement of Work (SOW) which are different from standard warehouse logistics services.
3.Operating Parameters. As of the Effective Date, the Facilities and warehouse space are those as listed on Exhibit C. The warehouse space within a Facility available to Client from time to time for the storage of the Products shall be referred to as the “Storage Area.”
4.Hours of Operation. Facility hours of Operation for warehouse Services are defined in the Operating Parameters. Business Day is defined as Monday through Friday, excluding Holidays (“Business Day”). US Holidays are: Memorial Day, 4th of July, Labor Day, Thanksgiving, Day after Thanksgiving, Christmas Day, New Year’s Eve, New Year’s Day (“Holidays”).
5.Access to Storage Area. Only individuals authorized by SCS or Client shall be permitted access to the Storage Areas, provided however, that Client must provide SCS reasonable advance notice prior to such access, and provided further, that any such individual must agree to comply with the security provisions applicable to such Facility. Authorization by Client for Client personnel shall be controlled through an approved access list provided to SCS by Client.
6.Client Designated Contact. Client will provide the name, job title, and contact information, to include telephone numbers (business, cell phones, facsimile, pager numbers, etc.) of a designated manager within Client’s organization to serve as continuously available liaison with SCS for communication of all reporting and issue escalation to Client. (“Client Designated Contact”). If there is any change in the Designated Contact, Client shall promptly submit the above information to SCS by facsimile or email.
7.Equipment. SCS will provide all required general purpose equipment necessary to perform the Services, except that any special, customized or unique equipment needed to perform the Services shall be provided by Client and maintained at Client’s sole expense.
8.Products Master File. The inventory system will be SCS’s Warehouse Management System (WMS). Prior to the initial shipment of any Products to a Facility, Client will provide SCS with a master list of all Products that are to be handled pursuant to this SOW. SCS will keep the information contained on such list in a file in its WMS (the “Master File”). Client will provide SCS with the information needed to update the Master File, including all new additions to the Products to be handled pursuant to this SOW and any changes to information relating to Products on the Master File by a mutually agreed upon method.
9.Incoming Product Quality Assurance (“QA”). Client is responsible for all control over QA hold and release of Product.
10.Information System. SCS will use the Warehouse Management System (“WMS”) for inventory management and Client custom Services. On request, SCS has the ability to forward reports via e-mail. If e-mail reporting is requested, any manipulation of the report data by Client, and subsequent reporting discrepancies caused thereby, are the responsibility of Client. If requested, SCS can provide additional EDI interface capability to Client's systems at the Information Services rates set forth in Exhibit B. The cost to develop EDI will be quoted by SCS on request. Client will receive standard WMS reporting. If requested, report modifications or new reports can be provided by SCS, subject to the Information Services rates set forth in Exhibit B.
11. Customer Service Support. SCS will provide support to Client’s warehouse operations as needed to facilitate the Services. For regulated products, SCS will maintain a name and address database of all Clients’ customers. SCS client service support will provide reporting to Client.
12.Product Delivery Requirements. Client shall arrange for Products to be delivered to the Facility in a segregated manner, free from contamination, properly marked and packaged for handling. Any special delivery requirements are set forth in the Work Instructions. At or prior to delivery of the Products to any Facility, Client shall provide to SCS a manifest indicating the Products to be tendered for storage, with any special instructions, including but not limited to the applicable material safety data sheets (MSDS), concerning storage, services, accounting, segregation or any other requirements relating to the Products.

Page 1



Confidential & Proprietary

13.Warehouse Services. Services to be performed pursuant to this Schedule are as follows:
13.1
Product Receipt. SCS will receive all delivered Products, including stock from Client’s manufacturer.
13.1.1
Unloading, counting, checking and putting away of stock.
13.1.2
Recording products, quantities, and lot numbers received, noting visual damages, shortages and overages.
13.1.3
Data entry of warehouse receipts into computer system.
13.1.4
Special handling such as receiving unmarked cartons or breaking down pallets or cartons on receipt is subject to an assessorial labor charge.
13.1.5
Transmission of receipt transaction to Client and stock putaway in accordance with date expiration methodologies.
13.2
Product Storage. SCS will provide storage as required in accordance with Client’s WI. Temperature controlled storage will be provided based on the following guidelines:
13.2.1
General warehouse: 15-30 degrees Celsius
13.2.2
Vault: 15-25 degrees Celsius
13.2.3
Cooler: 2-8 degrees Celsius
13.2.4
Warehouse temperature and humidity will be monitored.
13.2.5
SCS will track product by lot number and expiration date.
13.3
Inventory Management.
13.3.1
SCS will maintain a cycle count program in accordance with SCS’s standard practice and agreed upon client’s work instructions. SCS will maintain records of all counts taken and, if requested, provide monthly reporting to Client on results achieved.
13.3.2
SCS will track lot number and expiration date, and identify product receipts and orders by lot number and expiry date where applicable.
13.3.3
SCS will support Customer’s product recall procedures.
13.3.4
SCS can provide automatic lot selection, e.g. FIFO, shortest expiry date, specific lot selection, as requested.
13.3.5
SCS will perform physical inventory at Client’s request: *** day advanced notice is required and Client will be billed for the labor hours.
13.4
Damaged or Expired Products. Client will be notified of damaged or expired Product. Damaged or expired Product will be returned to manufacturer or sent out to an authorized destruction company. The agreement with the authorized destruction company will be between Client and the destruction company.
13.5
Order Processing. SCS will provide pick, pack and shipping package labeling Services.
13.5.1
SCS will pick and pack carton quantities, and include bill of lading, and if instructed by WI, include invoice.
13.6
Product Shipment.
13.6.1
Client orders are made available to the warehouse on a *** basis.
13.6.2
Orders are prepared according to WI.
13.6.3
With the exception of the Cold chain product, next day processing for orders is based upon orders received in the DC by 4PM local warehouse time. All cooler parcel orders received by 6 PM LWT will be shipped the same day.
Regarding handling of the cold chain product, all orders received by the 5PM ( LWT) order cut off time will be shipped the same day per Client’s routing instructions.
13.7
Routing. SCS will make routing decisions consistent with instructions provided by Client.
13.8
Rush Order and Emergency Order Management. Orders requiring exception handling during regular business hours, on a rush order basis, outside of normal procedures, can be handled. Rush or Emergency orders are subject to additional Fees.
13.9
Backorders.

Page 2



Confidential & Proprietary

13.9.1
Client will maintain backorders in Client ERP system and SCS fill backorders based on client direction. On Client’s direction, SCS will allocate Product when there is insufficient stock to fill all orders received.
13.10
Returns. SCS will provide the management of returned Product, according to Client’s WI. SCS will:
13.10.1
Receive returned Product into segregated area.
13.10.2
Provide visual inspection of incoming returns for quantity discrepancies or damage.
13.10.3
Transfer of returned Product back to Client.
13.10.4
Contact Client to obtain disposition instructions, and if requested by Client, arranging the destruction of returned Product with Clients’ standing pre-authorization.
13.10.5
Process customer credits for returned Product.
13.11
Packaging. Should Client require SCS to purchase packaging supplies, Client will identify the components required and packing specifications. Client is responsible for validation of packaging specifications. SCS will bill Client monthly for all packaging supplies utilized.
14.Transition Assistance. In connection with the termination or expiration of this SOW, SCS will:
14.1
Return Client’s customer information database to Client.
14.2
Perform a complete physical inventory of all Client’s Product. SCS’s standard physical inventory Fee applies to such physical inventory.
14.3
Package the Product and other materials of Client and make same available on the shipping dock for pickup. The outbound transaction Fee applies on all Products to be removed from the Facility.
14.4
Client will arrange for pickup and transportation of all such Product and materials, at Client’s expense, by the date of such termination or expiration.
14.5
Provide termination assistance Services at Clients request, at Client’s expense.
14.6
SCS will retain records as required by regulatory agencies.
15.Full Customer Service for Client. SCS will provide a full range of customer service support for Client for order processing, telephone support for customer inquiries and other customer service duties as detailed in the Work Instructions.
16.Full Customer Service Hours of Operation. Standard hours of operation are 8 A.M. to 8:00 P.M. EST, Monday through Thursday and 8:00 A.M to 6:00 PM on Friday, excluding Holidays. Holidays are: Thanksgiving, Day after Thanksgiving, Christmas Day, New Year's Eve, New Year's Day, Memorial Day, 4th of July, Labor Day. After hours emergency coverage can be provided as a standard service at a mutually agreed upon rate. With advance notice, special Services can be provided outside standard hours at an agreed upon rate.
17.Customer Information Database. SCS will maintain a name and address database of all Clients’ customers. Special projects for extraordinary changes to customer database information, or other request outside the scope of the standard database maintenance Services, are subject to an assessorial Fee for the required labor hours.
18.Customer Account Establishment. Client will be responsible for decisions regarding customer new account set-ups.
19.Customer Order Processing. SCS will provide customer order collection by telephone, mail, fax or electronically, and respond to customer inquiries. SCS will:
19.1
Forward technical inquiries to Client or Client’s designee.
19.2
Provide information to customers on Clients’ policies as per WI.
19.3
As per Client’s instructions, advise customers on deals, pricing, optimum order quantities and available discounts (if applicable).
19.4
Provide backorder information and product availability.
19.5
Process return authorization requests per Client policy and WI.



Page 3



Confidential & Proprietary

19.6
Provide standard reporting to Client.
19.7
Where instructed by Client, process Customer credits for returned Products destroyed at customer site.
20.Customer Accounts Receivable Management and Collections. SCS will not provide AR services
21.Chargeback. SCS will not provide Chargeback services

Page 4



Confidential & Proprietary

EXHIBIT B.1 – FEES
TO SERVICE SCHEDULE NO. 1 - WAREHOUSE DISTRIBUTION SERVICES


1.
Fixed Monthly Fees
1.1
Memphis, TN Fixed Monthly: $***
1.2
Harrisburg, PA Fixed Monthly: $***
1.3
Customer Service Fixed Monthly: $***


2.
Variable Fees
2.1
Memphis, TN:
2.1.1
Non Controlled Inbound Pallets: $***
2.1.2
Vault Inbound Pallets: $***
2.1.3
Cage Inbound Pallet: $***
2.1.4
Cold Chain Inbound Pallets: $***
2.1.5
Non Controlled Orders: $***
2.1.6
Vault Orders: $***
2.1.7
Cage Orders: $***
2.1.8
Cold Chain Regular Orders: $***
2.1.9
Cold Chain *** Orders: $***
2.1.10
Non Controlled Lines: $***
2.1.11
Vault Lines: $***
2.1.12
Cage Lines: $***
2.1.13
Cold Chain Regular Lines: $***
2.1.14
Cold Chain ***Lines: $***
2.1.15
Cold Chain *** eaches: $***
2.1.16
Non Controlled Return Receipt: $***
2.1.17
Vault Return Receipt: $***
2.1.18
Cage Return Receipt: $***
2.1.19
Cold Chain Return Receipt: $***No volumes associated with this
2.1.20
Return Lines Vault: $***
2.1.21
Order Entry Lines Vault: $***
2.1.22
CSOS Order Line: $***

2.2
Harrisburg, PA:
2.2.1
Inbound Transfer Pallets: $***
2.2.2
Outbound Transfer Pallets: $***
2.2.3
Inbound Pallets: $***
2.2.4
Non Controlled Orders: $***
2.2.5
Non Controlled Lines: $***
2.2.6
Non Controlled Return Receipt: $***
The inbound and outbound transfer pallet cost only apply while Harrisburg is performing an overflow function

2.3
Value Added Services:
2.3.1
Label Fee: $***per label (applies only to)
2.3.2
McKesson Label: $***per label
2.3.3
Inverted Pallet Fee: $***per pallet


Page 5



Confidential & Proprietary

2.4
Customer Service
2.4.1
IB ASN Order: $***
2.4.2
IB ASN Line: $***
2.4.3
Manual Order: $***
2.4.4
Manual Line: $***
2.4.5
EDI Line: $***
2.4.6
Master Data Updates: $***
2.4.7
Phone Inquiries: $***
2.4.8
Return Line: $***

2.5
For the Variable Fees –
2.5.1    Memphis Facility: A quarterly minimum variable fee of ***% of the expected fees as per the volumes detailed in Exhibit C, and the rates shown above in this Section 2 will be assessed. The expected fees do not include assessorial charges for transportation, packaging, or communication.
2.5.2    Harrisburg Facility: A quarterly minimum variable fee of ***% of the expected fees as per the volumes detailed in Exhibit C, and the rates shown above in this Section 2 will be assessed. The expected fees do not include assessorial charges for transportation, packaging, or communication.

2.6
A square footage surcharge as denoted below per square foot per month will apply when additional staging or processing floor space (for 15-25oC ambient space) is required beyond the allocated square footage level stated in Exhibit C.3:
2.6.1
Ambient: $***per sq. ft.
2.6.2
Cage: $***per sq. ft.
2.6.3
Vault: $***per sq. ft.
2.6.4
Cooler: $***per sq. ft.


3.
Adhoc Labor Rates - Assessorial labor for physical inventory on request, visual inspection, quarantine, and special projects or additional work or special handling that is not within the scope of Services.
3.1
Standard Weekdays: $***/hour
Standard Overtime: $***/hour
Material Handling Operator: $***/hour
Saturday: $***/hour (*** hour minimum)
Sunday/Holiday: $***/hour (*** hour minimum)
Admin/Order to Cash: $***/hour
Operation Manager: $***per hour
Operation Supervisor: $***per hour

3.2
On each anniversary of the effective date, all ad hoc Labor Rates Fees shall be subject to an adjustment. The adjustment shall be equal to the greater of *** or the same percentage increase as reflected in the unadjusted published change for the *** month period in the most recent publication, at the time of rate calculation, of the Half-Year Consumer Price Index for All Urban Consumers, U.S. All Items, Not Seasonally Adjusted (using 1982-1984 base period) (“CPI-U”), as published by the United States Department of Labor, Bureau of Labor Statistics.Assessorial Charges.


4.
Assessorial Charges
4.1
Communication expenses to the extent paid by SCS on Client’s behalf: Telephone, facsimile: ***.
4.2
Packaging materials and operational supplies to the extent paid by SCS on Client’s behalf: ***.
4.3
Client add: $***per new customer
4.4
Product add: $***per new product over ***
4.5
Contract add: $***per new contract

Page 6



Confidential & Proprietary

4.6
Travel and related expenses: ***


5.    Information Systems Development Rates
5.1
Information Technology Labor Rates: $***


6.    Billing administration of Services
6.1
SCS will submit documented invoices under a single account number for the Services provided under this Schedule to Client’s designated Accounts Payable location. SCS will reference Client PO number on each invoices. PO will be provided by client
6.2
SCS billing cycle is to be structured to allow transmission of invoices as follows:
6.2.1
SCS will invoice *** in advance on a ***basis.
6.2.2
SCS will invoice ***at the end of each ***.

Page 7



Confidential & Proprietary

EXHIBIT C.1 - OPERATING PARAMETERS
TO SERVICE SCHEDULE NO. 1 - WAREHOUSE DISTRIBUTION SERVICES


Based on the data supplied by Client, SCS anticipates the following Operating Parameters for the initial term of the Schedule. Operating parameters will be periodically reviewed, and subject to the Changes in Operating Parameters or Conditions Section of the MSA.

1.
General
1.1.
If unsuspected seasonality (not included in the twelve month forecast or the historical operation experience) is experienced, it may have an impact on cost that will be billed back to Endo.
1.2.
Expected Volume Growth
1.2.1.
***% annual volume growth for Generic product.
1.2.2.
***% annual volume growth for Brand product.
1.3.
Volume split between the 2 facilities is assumed as follows:
 
Memphis
Harrisburg
Ambient
***
***
Cage
***
***
Vault
***
***
Cooler
***
***
1.4.
Cost is based on an average of one 8-hour shift per day, 52 working weeks per year.
1.5.
Shift will operate Monday through Friday from 8:00 AM to 5:00 PM Local Warehouse Time.
1.6.
A schedule of activities will be agreed upon in advance of the major shipment cycles.
1.7.
SCS will determine staffing and schedules for the distribution facility.

1.
Facilities:
1.1
A *** dedicated warehouse square footage operation will reside in the Memphis, TN facility. Space requirements exceeding this square footage shall be subject to additional Fees as listed in Exhibit B.
1.2
A ***dedicated warehouse square footage operation will reside in the Harrisburg, PA facility. Space requirements exceeding this square footage shall be subject to additional Fees as listed in Exhibit B.
1.3
Security will be provided 24 hours per day. All facilities are card access and maintain a closed circuit surveillance system.
1.4
Facilities will be ambient controlled at 15 - 25°C, cooler will be maintained at 2-8°C.
1.5
Cooler and Controlled product storage will be provided in the Memphis, TN location:
1.5.1
Cooler product storage – ***
1.5.2
DEA Vault for CII product storage – ***.
1.5.3
DEA Cage for CIII to CV product storage – ***.
1.6
Cooler will be provided in the Harrisburg, PA location:
1.6.1
Cooler product storage – ***.
1.7
SCS, in the spirit of joint cooperation. may from time-to-time, deploy the use of under-utilized assets, which assets have been in whole, or in part, allocated to this business model. SCS shall notify Customer of such request in advance, and shall compensate Customer for same, at rates to be mutually agreed upon.



Page 8



Confidential & Proprietary

1.8
SCS will provide and maintain ownership of all material handling, warehouse, storage, and information systems equipment as required to conduct warehousing operations for Client.
1.9
SCS will provide all necessary I.T. equipment to support the project.

2.
Service Requirements Hours:
2.1
One 8 hour shift per day, 52 weeks per year, excluding weekends.
2.2
The hours of operation are 8AM – 5PM local warehouse time.

3.
Inbound
3.1
Annual Inbound pallets by product type are as follows
 
Memphis
Harrisburg
Total
Ambient
***
***
***
Cage
***
***
***
Vault
***
***
***
Cooler
***
***
***
3.2
The unit of measure for the inbound product is a pallet.
3.3
Palletized Product Inbound Shipments: ***% of receipts
3.3.1
***% single SKU single lot pallets
3.3.2
***
3.3.3
Pallets dimensions are assumed to be 48”x40”x52”.
3.4
100% of inbound product has a barcode.
3.5
Upon receipt, the SKU and carton quantity will be captured. All can be captured from barcodes on the outer carton.
3.6
Inbound inspection consists of a count and visual check for damage.
3.7
Damaged or not suitable product will be clearly marked and stored in a segregated area.
3.8
***% Expected volume growth over the life of the contract.
3.9
Serial number tracking is not required for inbound goods.

4.
Inventory and Storage
4.1
There is an average of *** cartons per pallet. Average of all in product
4.2
There is an average of *** units per pallet.
4.3
Peak to average ratio is assumed to be ***.
4.4
Average inventory turns per year are ***
4.5
Storage has been designed to include the following:
Storage Media (Pallets)
Total
Memphis
Harrisburg
Ambient
***
***
***
DEA Vault
***
***
***
DEA Cage
***
***
***
Cooler
***
***
***
Total
***
***
***



Page 9



Confidential & Proprietary

4.6
Pallet storage quantities stated above include the packaging materials pallet storage requirements.
4.6.1
Includes freezer storage for gel packs – *** pallets in Memphis and *** pallets in Harrisburg.
4.7
Pallets cannot be double stacked on the floor.
4.8
Standard SCS cycle counting is included. Cycle counting will be performed based on Clients direction as outline in the work instructions.
4.9
Should Client require a physical inventory, this service will be performed at ad-hoc staffing rates.
4.10
Client will be responsible for managing the reorder points and direct replenishment of merchandise.
4.11
SCS will determine all storage and picking locations and configurations.
4.12
*** growth is anticipated.

5.
Order Profile
5.1
The following details the Annual Outbound Volume:
 
 
Memphis
Harrisburg
TOTAL
Ambient
Outbound Line
***
***
***
Outbound Order
***
***
***
Cage
Outbound Line
***
***
***
Outbound Order
***
***
***
Vault
Outbound Line
***
***
***
Outbound Order
***
***
***
Cooler
Outbound Line
***
***
***
Outbound Order
***
***
***
*** Order
***
***
***
*** Line
***
***
***
*** Unit
***
***
***
5.2
Pick mode breakdown is assumed as follows:
5.2.1
Pallet pick orders constitute ***% of the unit volume.
5.2.2
Carton pick orders constitute ***% of the unit volume.
5.2.3
Unit pick orders constitute ***% of the unit volume.
5.3
Orders are planned to have the following pick profile by type:













Page 10



Confidential & Proprietary

5.3.1
Ambient non controlled order lines have an average of *** units per line.
5.3.2
CII order lines have an average of *** units per line.
5.3.3
CIII-V order lines have an average of *** units per line.
5.3.4
Cooler lines have an average of *** units per line.
5.3.4.1
Each *** order consists of *** lines and *** units.
5.3.4.2
Each direct order consists of *** lines and *** units.
5.3.4.3
Each drop ship order consist of *** line and *** unit
5.4
The unit of measure for the outbound product is a unit (“each”).
5.5
Pricing assumes no seasonality and spikes in volume. If high seasonality is experience, it will have an impact on cost that will be billed back to the customer.
5.6
***% of product requires over-packing before shipment.
5.7
Outbound packaging consists of a corrugated carton, dunnage, a packing list, and a shipping label. Cold storage packaging includes shipping carton, inner cooler, frozen gel packs and shipping labels. Packing supplies are not included in the pricing.

6.
Shipping Profile
6.1
Product is shipped UPS Parcel and LTL
6.2
Parcel shipments represent ***% of orders and ***% of unit volume.
6.3
LTL shipments represent ***% of orders and ***% of unit volume.
6.4
International Order processing is not included. ***% of orders are domestic shipments.
6.5
All ambient parcel orders received by 5 PM Local Warehouse Time (LWT) will be shipped the following day. All cooler parcel orders received by 6 PM LWT will be shipped the same day.
6.6
All LTL orders received by 5 PM LWT will be shipped the following day.
6.7
Any orders requiring expedited or alternate service levels will have full shipping/routing instruction included in the download instructions. Additional fees may apply to expedited orders.

7.
Returns
7.1
The following details the returns volume and profile:
Returns
UOM
Non Controlled
CII
CII-V
Average Daily
Returns
***
***
***
Average Daily
Lines
***
***
***
Average Daily
Units
***
***
***
Average Monthly
Returns
***
***
***
Average Monthly
Lines
***
***
***
Average Monthly
Units
***
***
***
Annual
Returns
***
***
***
Annual
Lines
***
***
***
Annual
Units
***
***
***
7.2
***% returns are received via parcel.
7.3
Client will provide all Return Merchandise Authorizations prior to receipt of goods in the warehouse.
7.4
Inspection of inbound returns does not require any additional training or special equipment to process.


Page 11



Confidential & Proprietary

7.5
Returned product will be received into a “segregated area” and not used to fill orders. Client will periodically request this product to be shipped for destruction.
7.6
Any processing required after the return has been received, inspected, and put-away will be subject to ad-hoc labor rates.
8.    Customer Service
8.1
SCS will provide the following customer service activities:
8.1.1
***
8.1.2
***
8.1.3
***
8.1.4
***
8.1.5
***
8.1.6
***
8.1.7
***
8.1.8
***
8.2
Customer Service hours of operation are Monday – Thursday 8:00 AM – 8:00 PM and Friday 8:00AM to 6:00PM Eastern Standard Time (EST). Additional hours due to holiday or other reasons must be communicated in advance to ensure coverage.
8.3
Daily order cut-off time will be ***. Orders received after ***will be processed during the next business day. *** for cold chain. Emergency orders processed after hours *** rate.
8.4
All procedures will be documented using SCS standard work instruction format and approved by Client.
8.5
There will be ***SKUs maintained in the OMS Product Master.
8.6
SCS will provide Client a file format for new products for the purpose of manually loading to the OMS Product Master.
8.7
SCS will not manage product substitution.
8.8
SCS and Client will ensure that there is only one ship-to account for each ship-to location.
8.9
SCS will load any additional ship-to/bill-to/parent records manually in the OMS Customer Master. Ad Hoc rates may apply.
8.10
SCS will operate based on the following order arrival criteria:
8.10.1
EDI – ***%
8.10.2
Phone/Fax/Email - ***%
8.11
Credit card processing is not included in the pricing.
8.12
SCS will perform licensure verification for all orders.
8.13
Annual volume information for CS Operation:
 
Year 1
Manual Inbound ASN Order Entry
***
Manual Inbound ASN Lines
***
Manual Lines
***
EDI Lines
***
Orders
***
Calls/Email Inquiries
***
Return Lines per Year
***
Client Master Updates
***
1.8.
Average inquiry duration is 3 minutes per inquiry.

Page 12



Confidential & Proprietary

1.9.
SCS will ***.
1.10.
SCS is not responsible to answer any medical inquiries. Endo will provide a medical inquiry telephone number so that customer service may perform a trunk-to-trunk transfer. Process will be documented in the Endo specific work instructions.
1.11.
Patient Assistance Program is not in scope.
1.12.
Customer maintenance will be handled by SCS.
1.13.
Any new product launches/acquisitions must be communicated at least *** days before receipt of product can occur.
1.14.
SCS Customer Service team needs to have visibility to pricing to provide information to customers.
1.15.
The system will price the order based on pricing information provided by Endo.
1.16.
*** Paper invoices will be printed and mailed by Endo.
1.17.
There is ***
1.18.
Sample distribution is not in scope.
1.19.
Subscription or solicitation orders will be treated as future orders.
1.20.
No charge order procedure will be documented in Endo specific work instructions.
1.21.
SCS is required to process shipments to PR.
1.22.
Rush orders will be processed based on Endo’s authorization.
1.23.
Daily pro-active proof of delivery is not in scope.
1.24.
Destruction orders will be scheduled in advance by Endo and entered manually by customer service staff.
1.25.
SCS will manage backorders. All backorders are maintained in Endo’s SAP system. Backorders will be released based on direction from Endo.
1.26.
Returns will be managed by SCS using the Endo’s return policy which will include damaged return and restocking fee rules.
1.27.
All return credits will be keyed at current price. Returns will be received in the lowest unit of measure.
1.28.
Call tags will be issued by SCS for all returns due to shipping error.

11.
IT Assumptions
11.1
SCS will use a Warehouse Management System (WMS) to manage receiving, storage, picking, packing, shipping, and inventory. All order processing, will be perform in Client’s ***
11.2
The WMS may accommodate from *** up to *** warehouses for Clients. If more than *** locations are desired appropriate implementation costs will be incurred.
11.3
SCS will use the current Client ID.
11.4
New customer or SKU’s will be added according to the current Work Instructions.
11.5
Inventory rotation strategy is First Expire, First Out (FEFO) or as defined in client work instructions
11.6
Lot tracking is required.
11.7
The SCS WMS is the inventory system of record.
11.8
Client will provide a manual (fax, email or paper) Advanced Ship Notification (ASNs) for all orders shipped to the warehouse prior to receipt of goods and will include SKU level detail.
11.9
In the future, an electronic ASN is required for inbound receipt of e-Pedigree SKU’s.
11.10
Integration with Client’s host system is in place using the EDI AS2 Connection
Client to SCS
Sales Order



Page 13



Confidential & Proprietary

CSOS Sales Order
SCS to Client
Receiving Advice
Warehouse Shipping Confirmation
Warehouse Inventory Adjustment
Customer ASN
11.11
Client will provide *** day notice should Client or Client third party vendors make changes to any part of the host system or related supporting systems that impacts the SCS integration. Client will provide a detailed test script / plan and SCS may request additional testing. Additional costs will apply.
11.12
SCS is not responsible for service failures related to Client or Client's third party vendor system upgrades, changes or enhancements.
11.13
Data will be exchanged with Client’s via AS2 connection.
11.14
Nominal User Acceptance Testing is included to test integration for new warehouses.
11.15
Additional trading partner integration (if required) will be handled on a per request basis.
11.16
Electronic interfaces with Client’s trading partners / customers will utilize a Value Added Network (VAN).
11.17
Client is responsible for their VAN charges.
11.18
All orders will be received electronically from Client’s host system.
11.19
CII orders must have the DEA 222 form mailed to the SCS distribution center for manual order entry and processing or client can transmit CII orders electronically. Trading partner CII order processing / Controlled Substance Ordering System (CSOS) is included in this agreement. Additional trading partner set-up will be performed at no additional charge for CSOS. However SCS ad-hoc IT rates will apply for any new customer EDI 850 set up activity.
11.20
Standard order validation rules apply. Orders that do not pass validation criteria will go on hold until resolved.
11.21
Backorder handling will follow current Work Instruction.
11.22
Lot number allocation is determined by the WMS.
11.23
Order cancellations are handled manually.
11.24
Client will pass the SCS carrier code in each order. The WMS does not determine the carrier.
11.25
Client will determine fulfilling warehouse for customer orders or a default warehouse can be established in the ship to record in the customer master.
11.26
SCS will migrate client to a laser pick pack.
11.27
The WMS interfaces with UPS Worldship and auto-populates the ship-to customer name, address and SCS service level to the shipping station. Any non-UPS carrier tracking numbers (including Bill of Ladings for TL/LTL carriers) will be manually entered by operations. Client is responsible to install any non-SCS shipping stations.
11.28
A standard shipping label is included.
11.29
Standard reports are included. Reports are generated by SCS and placed on a secured website for Client retrieval.
11.30
SCS is filed as a Central Reporter with the DEA and will submit monthly or quarterly state and quarterly DEA ARCOS reporting of inventory transactions by warehouse to the appropriate agencies.
11.31
Standard return functionality is included.
11.32
IT hardware such as workstations, printers, scanners, etc. is included.
11.33
Any changes or customization to any SCS reports, documents (invoice, pack list, etc), labels, integration specifications and system will incur additional costs. Prior to any necessary customization, modification, or enhancement, Client will submit in writing both the business reason for the change and the functional design via SCS IT Change Control process.





Page 14



Confidential & Proprietary

12.
SCS IT Change Control
12.1
Any modification to SCS systems or interfaces will be managed through a SCS Change Request. Client must submit change requests to SCS according to SCS’ applicable IT change control procedure. Each change request should contain the business need and the desired date of implementation. SCS response may include: alternatives to the requested change; an estimate for completion and costs; additional requests for more detail; or a decision to not provide the change. SCS and Client will make reasonable efforts to resolve any issues with the request. Should SCS agree to implement the change request additional charges could apply. The exact completion date and time will be negotiated between the Parties. Any charges for SCS IT system changes will be billed in accordance with the Information Technology Labor rate listed in Exhibit B Fees.

Page 15



Confidential & Proprietary

EXHIBIT D.1 – EARLY TERMINATION COSTS
TO SERVICE SCHEDULE NO. 1 - WAREHOUSE DISTRIBUTION SERVICES


In accordance with section 2.2 of Service Schedule No1, the Client is required to pay the following Early Termination Costs:


Memphis, TN
Month 1
***
Month 21
***
Month 41
***
Month 2
***
Month 22
***
Month 42
***
Month 3
***
Month 23
***
Month 43
***
Month 4
***
Month 24
***
Month 44
***
Month 5
***
Month 25
***
Month 45
***
Month 6
***
Month 26
***
Month 46
***
Month 7
***
Month 27
***
Month 47
***
Month 8
***
Month 28
***
Month 48
***
Month 9
***
Month 29
***
Month 49
***
Month 10
***
Month 30
***
Month 50
***
Month 11
***
Month 31
***
Month 51
***
Month 12
***
Month 32
***
Month 52
***
Month 13
***
Month 33
***
Month 53
***
Month 14
***
Month 34
***
Month 54
***
Month 15
***
Month 35
***
Month 55
***
Month 16
***
Month 36
***
Month 56
***
Month 17
***
Month 37
***
Month 57
***
Month 18
***
Month 38
***
Month 58
***
Month 19
***
Month 39
***
Month 59
***
Month 20
***
Month 40
***
Month 60
***

Page 16



Confidential & Proprietary

Harrisburg, PA
Month 1
***
Month 21
***
Month 41
***
Month 2
***
Month 22
***
Month 42
***
Month 3
***
Month 23
***
Month 43
***
Month 4
***
Month 24
***
Month 44
***
Month 5
***
Month 25
***
Month 45
***
Month 6
***
Month 26
***
Month 46
***
Month 7
***
Month 27
***
Month 47
***
Month 8
***
Month 28
***
Month 48
***
Month 9
***
Month 29
***
Month 49
***
Month 10
***
Month 30
***
Month 50
***
Month 11
***
Month 31
***
Month 51
***
Month 12
***
Month 32
***
Month 52
***
Month 13
***
Month 33
***
Month 53
***
Month 14
***
Month 34
***
Month 54
***
Month 15
***
Month 35
***
Month 55
***
Month 16
***
Month 36
***
Month 56
***
Month 17
***
Month 37
***
Month 57
***
Month 18
***
Month 38
***
Month 58
***
Month 19
***
Month 39
***
Month 59
***
Month 20
***
Month 40
***
Month 60
***

Page 17



Confidential & Proprietary

Customer Service
Month-1
***
Month-21
***
Month-41
***
Month-2
***
Month-22
***
Month-42
***
Month-3
***
Month-23
***
Month-43
***
Month-4
***
Month-24
***
Month-44
***
Month-5
***
Month-25
***
Month-45
***
Month-6
***
Month-26
***
Month-46
***
Month-7
***
Month-27
***
Month-47
***
Month-8
***
Month-28
***
Month-48
***
Month-9
***
Month-29
***
Month-49
***
Month-10
***
Month-30
***
Month-50
***
Month-11
***
Month-31
***
Month-51
***
Month-12
***
Month-32
***
Month-52
***
Month-13
***
Month-33
***
Month-53
***
Month-14
***
Month-34
***
Month-54
***
Month-15
***
Month-35
***
Month-55
***
Month-16
***
Month-36
***
Month-56
***
Month-17
***
Month-37
***
Month-57
***
Month-18
***
Month-38
***
Month-58
***
Month-19
***
Month-39
***
Month-59
***
Month-20
***
Month-40
***
Month-60
***

Page 18



Confidential & Proprietary

EXHIBIT A-1 – FEES


1.
Management Fees
1.1.
Nonstandard implementation travel expenses will be billed to the customer at cost plus *** percent upon mutual agreement prior to travel
1.2.
Management Fee: ***% of invoiced transportation expense on air freight shipments
1.3.
Invoices received from carriers not identified in the SCS routing guide will be paid according to the carrier invoice amount. Customer will be billed a ***% surcharge per occurrence in addition to carrier freight charges.

2.
LTL Fees
2.1.
Rates published herein apply to shipments where SCS is shown on the original bill of lading as the payer of freight charges.
2.2.
LTL shipments will be rated off of the CZAR Lite 2000 Tariff.
2.3.
Management Fee: ***% of invoiced transportation expense on lanes not published in this agreement

Page 1



Confidential & Proprietary

LTL Rate Base: Czar Lite Effective 10/01/2000
FAK Structure: NMFC Class 50 - 65 as FAK 50, NMFC Class 70 - 150 as FAK 70 and all else at actual class
The listed discounts and minimums below are not inclusive of the UPS SCS Fuel Surcharge or other accessorial charges
Carrier
Discount
Min
Coverage
AACT
***
***
Interstate between: TX and MS
***
***
Intrastate: TN
***
***
To/From KY (40219) to/from the states: OH (45066, 45242), WI (54016)
***
***
Interstate between: KY (42701) and GA
***
***
To/From KY (40219) to/from MN (55303, 55344, 55402, 55432, 55438); Intrastate: TX
***
***
Interstate between: TN and SC
***
***
Interstate between: KY (40219, 42701) and TX
***
***
To/From TN to/from the states: NC, MN (55344); To/From TX to/from the states: TN, AR
***
***
To/From TN to/from the states: AR, TX; Interstate between: IN (47274) and FL, TX and LA
***
***
Interstate between: TN and AL
***
***
Interstate between: KY (40219) and VA (24148)
***
***
Interstate between: TN and OH (45240)
***
***
Interstate between: KY (40219) and IL (60031, 60047-60048, 60056, 60060, 60064, 60085,60115, 60123-60124, 60133, 60139, 60141, 60435, 60440, 60446, 60450, 60477, 60502, 60504, 60527, 60602, 60612, 60616, 60622, 60631, 60652, 60803, 61080); To/From TN to/from the states: FL, IL (60446, 60527)
***
***
Interstate between: KY (40219) and IN (46075, 46140, 46168, 46176, 46205, 46219, 46231, 46268, 46278, 47274, 47933); To/From TN to/from the states: KY (40109, 40228), IN (46241, 47933)
***
***
Interstate between: TX and KY (40219, 40228)
***
***
Interstate between: TX and IL (60674)
AVRT
***
***
To/From KY (40219) to/from the states: LA, MS, OK, TX
***
***
To/From TN (38114) and TX (76167) to/from the states: AL, AR, FL, GA, KY, LA, MS, NC, OK, SC, TN, TX, VA
***
***
To/From KY (40219) to/from KY
***
***
To/From KY (40219) to/from the states: AL, AR, FL, GA, NC, SC, TN, VA
DAFG
***
***
Between IA, IL, IN, KS (660-662), KY, MI, MN (550-554), MO, OH, WI and within IL, IN, KY, MI, MO, OH, WI
***
***
To/From the provinces: PQ, ON, MB to/from the states: IA, IL, IN, KS (660-662), KY, MI, MN (550-554), MO, OH, WI
***
***
To/From the province: BC to/from the states: IA, IL, IN, KS (660-662), KY, MI, MN (550-554), MO, OH, WI
EXLA
***
***
To/From KY to/from the states: AZ, NV
***
***
To/From PA to/from the states: AZ, CA, CO, ID, NV, OR, WA
***
***
To/From KY to/from the states: LA, SC
***
***
Interstate between: CA and TX; To/From DE to/from the states: AZ, CA, NV; To/From NV to/from the states: NC, TN; To/From TN to/from the states: AZ, CA, CO, NV, WA; To/From TX to/from the states: AZ, CA
***
***
To/From PA (17112) to/from NY (10017-10018, 11218, 11357, 11374, 11378, 11572, 11701); To/From KY (40219) to/from NY (10004, 10461, 10466-10468, 11106, 11204, 11220, 11230, 11235, 11357, 11359, 11373, 11378, 11432, 11590, 11701, 11713, 11768, 11777, 11779, 11788); To/From the states DE (19702) and TN (38114) to/from NY (11701)
***
***
To/From TN to/from the states: DE, MA, NJ, NY, PA, VT; Interstate between: TX and NJ
***
***
To/From KY to/from the states: CA, CO, ID, NM, OR, UT, WA, WY
***
***
To/From KY to/from the states: CT, DC, MA, MD, ME, VT
***
***
To/From KY to/from the states: AL, DE, FL, GA, IA, MI, MN, NC, ND, NE, NH, NJ, NY, OK, RI, SD, TX, VA, WI
***
***
Intrastate: AZ, CA, DE, TN, TX; To/From CA to/from the states: AZ, WA; To/From DE to/from the states: AL, FL, IL, IN, KY, LA, MI, MO, MS, NJ, NY, OH, PA, RI, SC, TN, TX, VA; To/From NV to/from the states: AZ, WA; To/From PA to/from the states: FL, IA, MN, ND, TN, TX; To/From TN to/from the states AL, AR, FL, GA, IL, IN, KY, LA, MI, MN, MO, NC, OH, SC, TX, VA; To/From TX to/from the states: AR, FL, IL, KY, LA, MO, MS, OH, TN
***
***
To/From KY to/from the states: IL, IN, PA, TN
***
***
To/From PA to/from the states: AL, CT, GA, IL, KY, MA, ME, MI, MO, NH, SC, VT, WI
***
***
Intrastate: KY; To/From KY to/from the states: AR, KS, MO, MS, OH, WV; To/From PA to/from the states: IN, NC, OH
***
***
Intrastate: PA; To/From PA to/from the states: MD, NJ, NY, RI, VA, WV
***
***
All other US direct points not listed above

Page 2



Confidential & Proprietary

NEMF
***
***
To/From PA to/from the states: ME, NH, VT
***
***
Interstate between: PA and IL
***
***
To/From PA to/from the states: CT, MA, RI
***
***
To/From PA to/from the states: DE, MD, NY (103-149), VA
***
***
To/From PA to/from the states: DC (200, 202-205), NY (100-102)
***
***
Intrastate: PA; Interstate between: PA and NJ
***
***
Interstate between: PA and OH
RDFS
***
***
DE to AZ
***
***
DE to CA
***
***
DE to IL
***
***
DE to MO
***
***
DE to NV
***
***
DE to TX
***
***
KY to AZ
***
***
KY to CA
***
***
KY to CO
***
***
KY to ID
***
***
KY to NM
***
***
KY to NV
***
***
KY to OR
***
***
KY to UT
***
***
KY to WA
***
***
PA to AZ
***
***
PA to CA
***
***
PA to CO
***
***
PA to IL
***
***
PA to MO
***
***
PA to NV
***
***
PA to TX
***
***
PA to WA
***
***
PA to WI
***
***
TN to AZ
***
***
TN to CA
***
***
TN to CO
***
***
TN to IL
***
***
TN to MN
***
***
TN to NJ
***
***
TN to NV
***
***
TN to NY
***
***
TN to WA
***
***
TX to CA
***
***
TX to MO
***
***
TX to OH
***
***
TX to TN
RDWY
***
***
From KY to TN
***
***
From KY to CT, NH, UT
***
***
From KY to WI
***
***
From KY to CO, NC
***
***
From KY to IA
***
***
From KY to DE, FL, GA, LA, MN, MO, MS, OR, SC, WA
***
***
From CA to TX
***
***
From KY to VA
***
***
From TN to PA
***
***
From KY to AL, AZ, TX
***
***
From KY to CA
***
***
From KY to IL, NY
***
***
From KY to NJ, PA
***
***
From CA to AZ, PA. From KY to MI. From PA to AZ,

Page 3



Confidential & Proprietary

 
***
***
From AZ to AZ. From CA to CO, WA. From DE to AL, AZ, CA, DE, FL, GA, IL, IN, KY, LA, MI, MO, MS, NJ, NV. From KY to DC, ID, MA, ME, ND, NE, NM, NV, OK, RI, SD, TN, TX, VT, WV, WY. From IN to FL. From NV to AZ, MS, NC, TN, WA. From PA to CA, CO, ID, KY, MA, ME, MN, MO, NV, OR, RI,VA, VT, WA. From TN to AL, AR, AZ, CA, CO, DE, FL, GA, IL, IN, KY, LA, MA, MI, MN, MO, NC, NJ, NV, NY, OH, SC, TN, TX, VA, VT, WA. From TX to AR, AZ, CA, FL, IL, KY, LA, MO, MS, NJ, OH, TN. From WA to CA, IL, OH.
***
***
From KY to AR, MD
***
***
From PA to ND, TX, WV
***
***
From CA to CA. From PA to CT, FL, GA. From TX to TX.
***
***
All shipments between US and Canada
***
***
From KY to KS
***
***
From KY to KY. From PA to AL, NH, PA.
***
***
From KY to OH
***
***
From PA to WI
***
***
From KY to IN
***
***
From PA to TN
***
***
From PA to NC, IA
***
***
From PA to MD, MI, NJ, NY, OH, SC,
***
***
From PA to IL, IN
***
***
All other US direct points not listed above
UPGF
***
***
Inbound & Outbound, Interstates & Intrastate shipments between all points in the states of AL, AR, GA, IL, IN, KY, MD, MI, MS, NC, OH, SC, TN & VA
***
***
Inbound & Outbound, Interstates & Intrastate shipments between all points in the states of AZ, CA, ID, MT, ND, NV, OR, SD, UT & WA
***
***
Outbound Interstate & Intrastate shipments from shipper locations in DE to all points in the states of DE, IL, IN, KY, MD, MI, NC, NJ, NY, PA, OH, TN, VA & WV
***
***
All Inbound, outbound & 3rd party interstate & intrastate shipments not otherwise provided for
***
***
Inbound, Outbound & 3rd Party shipments moving between points in the U.S. and all points in Canada direct

Page 4



Confidential & Proprietary


3.
TL Fees
3.1.
Management Fee: ***% of invoiced transportation expense on lanes not published in this agreement

4.
GPS Monitoring Services Fees – These Fees are based on Ad Hoc usage. These Fees will be assessed only when the service is requested.
4.1.
Customer agrees to pay the follow fees for the Monitoring Services:
Service Level
Service Description
Unit Price per Shipment
Tier 1
Active Monitoring
$***
Tier 2
Exception Monitoring
$***
Tier 3
Emergency Response Center (ERC) Service
$***
4.2.
In the event that additional devices are required for ad-hoc activity or to accommodate special one time shipments, a rental fee will be assessed for each tracking device: The rental fee is $*** for a *** day usage plus shipping costs incurred.
4.3.
Lost Geo F1 tracking devices will be charged at $*** per device.
4.4.
Lost F2 tracking devices will be charged at $*** per device.
4.5.
The foregoing fees shall be paid in accordance with the terms of the Agreement.

5.
UPS Small Package Fees
5.1.
Small Package shipments will be rated off of the UPS Small Package Standard List Rate.

Page 5



Confidential & Proprietary

Each eligible package will receive an incentive off of the Standard List rate per the following schedule. These incentives are offered
in connection with at least Nineteen Thousand two Hundred dollars ($83,200) per month of net transportation chareges.
At the end of each calendar quarter UPS will determine Customer's average monthly net transporation charges (excluding Additional
unless otherwise specified). UPS reserves the right to modify these incentives upon notification to Customer.
The incentives will be administered on a monthly basis.
Service(s)
Baseline Incentives
Tier 1
Tier 2
Tier 3
UPS Next Day Air® - Letter FC TP UP RS RTP
***
***
***
***
UPS Next Day Air® - Package FC TP UP RS RTP
***
***
***
***
UPS Next Day Air® UPS Hundredweight Service® FC TP UP
***
***
***
***
UPS Next Day Air Saver® - Letter FC TP UP
***
***
***
***
UPS Next Day Air Saver® - Package FC TP UP
***
***
***
***
UPS Next Day Air Saver® UPS Hundredweight Service® FC TP UP
***
***
***
***
UPS 2nd Day Air A.M.® - Letter FC TP UP
***
***
***
***
UPS 2nd Day Air A.M.® - Package FC TP UP
***
***
***
***
UPS 2nd Day Air A.M.® UPS Hundredweight Service® FC TP UP
***
***
***
***
UPS 2nd Day Air® - Letter FC TP UP RS RTP
***
***
***
***
UPS 2nd Day Air® - Package FC TP UP RS RTP
***
***
***
***
UPS 2nd Day Air® UPS Hundredweight Service® FC TP UP
***
***
***
***
UPS 3 Day Select® - Package FC TP UP RS RTP
***
***
***
***
UPS 3 Day Select® UPS Hundredweight Service® FC TP UP
***
***
***
***
UPS Hundredweight Service® - Ground FC TP UP
***
***
***
***
UPS Standard - Export to Canada All
***
***
***
***
UPS Standard - Export to Mexico All
***
***
***
***
UPS Worldwide Express® - Export Letter All
***
***
***
***
UPS Worldwide Express® - Export Document All
***
***
***
***
UPS Worldwide Express® - Export Pak 1 - 2 lb. All
***
***
***
***
UPS Worldwide Express® - Export Package All
***
***
***
***
UPS Worldwide Saver® - Export Letter All
***
***
***
***
UPS Worldwide Saver® - Export Document All
***
***
***
***
UPS Worldwide Saver® - Export Pak 1 - 2 lb. All
***
***
***
***
UPS Worldwide Saver® - Export Package All
***
***
***
***
UPS Worldwide Expedited® - Export Document All
***
***
***
***
UPS Worldwide Expedited® - Export Package All
***
***
***
***
UPS Standard - Import from Canada All
***
***
***
***
UPS Standard - Import from Mexico All
***
***
***
***
UPS 3 Day Select® from Canada All
***
***
***
***
UPS Worldwide Express® - Import Letter All
***
***
***
***
UPS Worldwide Express® - Import Document All
***
***
***
***
UPS Worldwide Express® - Import Package All
***
***
***
***
UPS Worldwide Saver® - Import Letter All
***
***
***
***
UPS Worldwide Saver® - Import Document All
***
***
***
***
UPS Worldwide Saver® - Import Package All
***
***
***
***


Page 6



Confidential & Proprietary

UPS Worldwide Expedited® - Import Document All
***
***
***
***
UPS Worldwide Expedited® - Import Package All
***
***
***
***

FC – The incentives shall also be extended to Freight Collect Shipments and Undeliverable Packages Freight Collect
TP – The incentives shall also be extended to Third Party Shipments and Undeliverable Packages Third Party
UP – The incentives shall also be extended to Undeliverable Packages
RS – The incentives shall also be extended to Return Service
RTP – The incentives shall also be extended to Third Party Return Service
All – Includes all available billing options and return services with the exception of Consolidated Clearance, WorldEase® and UPS Authorized Return Service®.
Please refer to the UPS® Tariff/Terms and Conditions for additional information on available billing options. US returns will be billed at Import Service Rate.


UPS Ground - Single Piece Commercial PackageFC TP UP RS RTP
Weight (lbs) / Zone
Baseline
Tier 1
Tier 2
Tier 3
1
--
5
***
***
***
***
6
--
10
***
***
***
***
11
--
15
***
***
***
***
16
--
20
***
***
***
***
21
--
30
***
***
***
***
31
--
150
***
***
***
***
151
--
or more
***
***
***
***

UPS Ground - Single Piece Residential PackageFC TP RS RTP
Weight (lbs) / Zone
Baseline
Tier 1
Tier 2
Tier 3
1
--
5
***
***
***
***
6
--
10
***
***
***
***
11
--
15
***
***
***
***
16
--
20
***
***
***
***
21
--
30
***
***
***
***
31
--
150
***
***
***
***
151
--
or more
***
***
***
***

Gross Monthly Transportation Charge Band
Baseline
--
$ 0.00 - $ 476,666.66
Tier 1
--
$ 476,666.67 - $ 606,666.63
Tier 2
--
$ 606,666.64 - $ 909,999.96
Tier 3
--
$ 909,999.97 - up


Page 7



Confidential & Proprietary

Minimum Net Charge
For each shipment, Customer agrees to pay the greater of the net shipment charge based on the incentives above or the minimum net shipment charge. Minimum net shipment charge is calculated by deducting the adjustment amount in the table
Service(s)
Minimum Per
Zone
Base Rate
 
Baseline Adjustment
Tier 1 Adjustment
Tier 2 Adjustment
Tier 3 Adjustment
UPS Next Day Air® FC TP UP RS RTP
Letter
ALL
UPS Next Day Air® - Letter
Zone 102 Letter
***
***
***
***
UPS Next Day Air® FC TP UP RS RTP
Package
ALL
UPS Next Day Air® - Package
Zone 102 1 Pound
***
***
***
***
UPS Next Day Saver® FC TP UP RS RTP
Letter
ALL
UPS Next Day Saver® - Letter
Zone 132 Letter
***
***
***
***
UPS Next Day Saver® FC TP UP RS RTP
Package
ALL
UPS Next Day Saver® - Package
Zone 132 1 Pound
***
***
***
***
UPS 2nd Day Air A.M.® FC TP UP
Letter
ALL
UPS 2nd Day Air A.M.® - Letter
Zone 242 Letter
***
***
***
***
UPS 2nd Day Air A.M.® FC TP UP
Package
ALL
UPS 2nd Day Air A.M.® - Package
Zone 242 1 Pound
***
***
***
***
UPS 2nd Day Air® FC TP UP
Letter
ALL
UPS 2nd Day Air® - Letter
Zone 202 Letter
***
***
***
***
UPS 2nd Day Air® FC TP UP
Package
ALL
UPS 2nd Day Air® - Package
Zone 202 1 Pound
***
***
***
***
UPS 3 Day Select® FC TP UP RS RTP
Package
ALL
UPS 3 Day Select®
Zone 302 1 Pound
***
***
***
***
UPS Ground - Commercial Delivery FC TP UP RS RTP
Package
ALL
UPS Ground
Zone 2 1 Pound
***
***
***
***
UPS Ground - Commercial Return FC TP UP RS RTP
Package
ALL
UPS Ground
Zone 2 1 Pound
***
***
***
***
UPS Ground - Residential Delivery FC TP UP RS RTP
Package
ALL
UPS Ground
Zone 2 1 Pound
***
***
***
***
FC – The minimum shipment charge shall also be extended to Freight Collect Shipments and Undeliverable Packages Freight Collect
TP – The minimum shipment charge shall also be extended to Third Party Shipments and Undeliverable Packages Third Party
UP – The minimum shipment charge shall also be extended to Undeliverable Packages
RS – The minimum shipment charge shall also be extended to Return Service
RTP – The minimum shipment charge shall also be extended to Third Party Return Service

Minimum Net Charge
For each shipment, Customer agrees to pay the greater of the net shipment charge based on the incentives above or the minimum net shipment charge. Minimum net shipment charge is calculated by deducting the adjustment amount in the table below from the published letter or applicable 1 pound rate in the zone shown below as listed in the UPS Rate and Service Guide in effect at the time of shipping

Page 8



Confidential & Proprietary

Minimum Net Charge
For each shipment, Customer agrees to pay the greater of the net shipment charge based on the incentives above or the minimum net shipment charge. Minimum net shipment charge is calculated by deducting the applicable amount (by zone) in the table below from the published 1 pound rate as listed in the UPS Rate and Service Guide in effect at the time of shipping.

UPS Worldwide Express® - Export
Zone
81
82
84
901
903
904
905
906
907
908
Letter
***
***
***
***
***
***
***
***
***
***
Pak 1-2 lbs
***
***
***
***
***
***
***
***
***
***
Document
***
***
***
***
***
***
***
***
***
***
Package
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
909
911
912
913
921
 
 
 
 
 
Letter
***
***
***
***
***
 
 
 
 
 
Pak 1-2 lbs
***
***
***
***
***
 
 
 
 
 
Document
***
***
***
***
***
 
 
 
 
 
Package
***
***
***
***
***
 
 
 
 
 

UPS Worldwide Express® - Freight Export
Zone
481
482
484
401
402
403
404
406
407
409
150 lbs +
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
411
412
413
420
421
 
 
 
 
 
150 lbs +
***
***
***
***
***
 
 
 
 
 

UPS Worldwide Saver® - Export
Zone
481
482
484
401
402
403
404
405
406
407
Letter
***
***
***
***
***
***
***
***
***
***
Pak 1-2 lbs
***
***
***
***
***
***
***
***
***
***
Document
***
***
***
***
***
***
***
***
***
***
Package
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
408
409
411
412
413
420
421
 
 
 
Letter
***
***
***
***
***
***
***
 
 
 
Pak 1-2 lbs
***
***
***
***
***
***
***
 
 
 
Document
***
***
***
***
***
***
***
 
 
 
Package
***
***
***
***
***
***
***
 
 
 

UPS Worldwide Expedited® - Export
Zone
71
72
74
601/631
602/632
603/633
604/634
605/635
606/636
607/637
Document
***
***
***
***
***
***
***
***
***
***
Package
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
608/638
609/639
611/641
612/642
613/643
620
621
 
 
 
Document
***
***
***
***
***
***
***
 
 
 
Package
***
***
***
***
***
***
***
 
 
 

UPS Standard – Export to Canada
Zone
51
52
53
54
55
56
Package
***
***
***
***
***
***

OR

The minimum net shipment charge for UPS Standard – Export to Canada service will be the same as the one pound list rate for the applicable UPS Standard – Export to Canada as published in the UPS Rate and Service Guides and UPS® Tariff/Terms and Conditions.

UPS Standard – Export to Mexico
Zone
32
33
34
35
36
37
38
Package
***
***
***
***
***
***
***

Page 9



Confidential & Proprietary

For each shipment, Customer agrees to pay the greater of the net shipment charge based on the incentives above or the minimum net shipment charge. The minimum net shipment charge is calculated by deducting the applicable amount (by zone) in the table below from the published 1 pound rate as listed in the UPS Rate and Service Guide in effect at the time of shipping.

UPS Worldwide Express® - Import
Zone
91
94
951
952
953
954
955
956
957
958
Letter
***
***
***
***
***
***
***
***
***
***
Document
***
***
***
***
***
***
***
***
***
***
Package
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
959
961
962
963
970
971
 
 
 
 
Letter
***
***
***
***
***
***
 
 
 
 
Document
***
***
***
***
***
***
 
 
 
 
Package
***
***
***
***
***
***
 
 
 
 

UPS Worldwide Express® - Freight Import
Zone
491
494
451
452
453
454
456
457
459
461
150 lbs +
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
462
463
470
471
 
 
 
 
 
 
150 lbs +
***
***
***
***
 
 
 
 
 
 

UPS Worldwide Saver® - Import
Zone
491
494
451
452
453
454
455
456
457
458
Letter
***
***
***
***
***
***
***
***
***
***
Document
***
***
***
***
***
***
***
***
***
***
Package
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
459
461
462
463
470
471
 
 
 
 
Letter
***
***
***
***
***
***
 
 
 
 
Document
***
***
***
***
***
***
 
 
 
 
Package
***
***
***
***
***
***
 
 
 
 

UPS Worldwide Expedited® - Import
Zone
61
64
651/681
652/682
653/683
654/684
655/685
656/686
657/687
658/688
Document
***
***
***
***
***
***
***
***
***
***
Package
***
***
***
***
***
***
***
***
***
***
 
 
 
 
 
 
 
 
 
 
 
Zone
659/689
661/691
662/692
663/693
670
671
 
 
 
 
Document
***
***
***
***
***
***
 
 
 
 
Package
***
***
***
***
***
***
 
 
 
 

UPS Standard - Import from Canada
Zone
376
378
380
Package
***
***
***

OR

The minimum net shipment charge for UPS Standard - Import from Canada service will be the same as the one pound list rate for the applicable UPS Standard - Import from Canada as published in the UPS Rate and Service Guides and UPS® Tariff/Terms and Conditions.

UPS 3 Day Select® - Import from Canada
Zone
475
476
477
Package
***
***
***

UPS Standard - Import from Mexico
Zone
362
363
364
365
366
367
368
Package
***
***
***
***
***
***
***
Custom Size Variance

Page 10



Confidential & Proprietary

For the purpose of determining Shipping Charge Corrections (billing adjustments) based on the size-related additional charges listed below, UPS will apply the Custom Size Variance set forth below. The Custom Size Variance shall only apply to Shipping Charge Corrections. Customer agrees to compute, rate and declare the billable weight and size of each package at the time of shipping per the guidelines stated in the UPS Rate and Service Guide and Tariff in effect at the time of shipping (available at www.ups.com).

Packages not assessed a Shipping Charge Correction will be billed pursuant to the size limits set forth in the applicable UPS Rate and Service guide in effect at the time of shipment. The Custom Size Variance listed below indicates the variance allowed before a Shipping Charge Correction is assessed.

Domestic - Custom Variance
Additional Handling Non Corrugated: Exempt
Export - Custom Variance
Additional Handling Non Corrugated: Exempt
Import - Custom Variance
Additional Handling Non Corrugated: Exempt

Page 11


Confidential & Proprietary

EXHIBIT B-1 – OPERATING PARAMETERS
1.
General Project Assumptions
1.1.
Commodities: Pharmaceuticals
1.2.
Origin locations: Memphis, TN and Harrisburg, PA
1.3.
Rates and charges within this Schedule are subject to modification in the event that operating parameters vary from the project assumptions listed herein.
1.4.
Normal business hours are 8:00 AM through 5:00 PM Monday through Friday Local Warehouse Time, excluding Holidays specified in this Schedule.
1.5.
Holiday Schedule:
New Year’s Day    Memorial Day
Fourth of July    Labor Day
Thanksgiving Day    Day After Thanksgiving
Christmas Day    New Year’s Eve
1.6.
Customer locations will route shipments according to the SCS supplied routing guide.
1.7.
Standard Transportation management Services
1.7.1.
Carrier sourcing and contract management
1.7.2.
Consolidated transportation invoice for modes serviced under this agreement
1.7.3.
Carrier routing guide management
1.7.4.
Standard carrier and financial reporting
1.7.5.
Bill Audit of Responsible Carrier bills and payment services
1.7.6.
Shipment exceptions management
1.8.
Premium Transportation management services
1.8.1.
Carrier claims processing.
1.9.
Other Value Added Services can be added as mutually agreed upon in writing with fees and services provided on a spot quote basis.
1.10.
Service requirements under this Schedule exclude:
1.10.1.
Transportation of hazardous, dangerous, or other regulated goods (meaning no special handling is requirements).
1.10.2.
Specialized security measures for high value or high risk goods.
1.10.3.
Temperature or climate controlled transportation.
1.10.4.
Team driver service.
1.10.5.
Flatbed or other specialized equipment.
1.10.6.
Expedited or guaranteed transit.
1.10.7.
Customs House Brokerage, Customs Clearance, Duties, Taxes, Fees or any other charge based on International shipments.
2.
General Freight Characteristic Assumptions
2.1.
Freight is packaged, palletized and shrink-wrapped.
2.2.
Driver no touch, dock to dock deliveries
2.3.
Pricing will undergo a sixty (60) day review to validate FAK and operating parameters. If determined the FAK or operating parameters are different than originally presented, SCS pricing will be modified to account for new FAK structure and operating parameters. Modified pricing will be retroactive back to original start date.
2.4.
Carrier charges shall be billed to Customer at the agreed upon rates. SCS will use commercially reasonable efforts to minimize or eliminate price increases from its core carriers. However, SCS will pass any carrier price increases on to Customer
2.5.
Accessorial fees, including fuel surcharge, is not included. Charges will be billed as incurred
2.6.
In event a third party (i.e NMFC changes the commodity classification, rates may change
2.7.
Pricing is based on current NMFC guidelines in the effect at the time of shipping
2.8.
LTL shipments will be rated off of the CZAR 2000 Tariff.
2.9.
Customer is to provide commodity type – SCS will pass that info to commodity type – customer description of commodity
2.10.
Volume expectations, change in mode, change mixture LTL, TL and Small Package – and
2.11.
Lane frequency changes
3.
LTL Specific Assumptions
3.1.
Standard transit based on carrier published transit times
4.
TL Specific Assumptions
4.1.
Single driver service transit time.
4.2.
53’ Dry Vans
4.3.
Freight will be tendered 48 hours prior to pickup.
4.4.
Rates are based on an average of top carriers rates. Therefore, rates may fluctuate based on capacity
5.
High Value High Risk Asset Protection Plan (v.1.0)


Page 12
Endo SS2 Trans Mgt Exhibits 060115

Confidential & Proprietary

5.1.
Purpose
5.1.1.
To provide a transportation asset protection plan for High Value High Risk (HVHR) shipments.
5.2.
Scope
5.2.1.
US distribution clients utilizing SCS Transportation Management services for TL shipments.
5.2.2.
HVHR requirements must be documented in the client contract under the transportation service schedule.
5.3.
Responsibility
5.3.1.
UPS Carrier Relations- the carrier vetting & contract administration.
5.3.2.
UPS Finance & Accounting – approval of carrier financial stability.
5.3.3.
UPS Risk Management –approval of carrier insurance and liability.
5.3.4.
UPS Security – approval of carrier security procedures and ability to keep freight secure.
5.3.5.
SCS Warehouse Operations – load transfer to the carrier.
5.3.6.
SCS Transportation Management – driver dispatch and client contracts
5.4.
Definitions
5.4.1.
High Value High Risk – (HVHR)
5.4.2.
Master Transportation Service Agreement – (“MTSA”)
5.4.3.
Truckload Carriers – (TL)
5.5.
References
5.5.1.
Master Transportation Service Agreement
5.5.2.
Carrier Profile
5.5.3.
Asset Protection Plan
5.5.4.
Asset Protection Plan – Driver Checklist
5.6.
General
5.6.1.
N/A
5.7.
Work Instructions
5.7.1.
Only approved carriers under contract with SCS are used to transport HVHR shipments for SCS.
5.7.2.
Carriers will complete the SCS Carrier Profile documents maintained by UPS Carrier Relations.
5.7.3.
All carriers approved to transport HVHR loads will have a signed copy of the UPS Asset Protection Plan in their carrier file maintained by UPS Carrier Relations.
5.8.
No HVHR load is to be brokered to another carrier.
5.8.1.
SCS Transportation Management is to provide a HVHR approved carrier routing guide to UPS-SCS Warehouse Operations when HVHR requirements are documented in the agreement
5.9.
Driver Dispatch – SCS Transportation Management
5.9.1.
Team drivers should be utilized for any truckload that would require a rest period per DOT regulations.
5.9.2.
Prior to arrival at the origin location, the driver must inspect each piece of equipment to be used on an HVHR load to ensure it is in acceptable condition and in compliance with the DOT.
5.10.
Prior to arrival at the point of pickup the driver is to fuel the equipment.
5.11.
Solo drivers are to be rested prior to beginning any HVHR shipment.
5.12.
Prior to driver(s) arrival, carriers will need to provide:
5.12.1.
Driver(s) names
5.12.2.
Tractor Number
5.12.3.
Trailer Number
5.12.4.
DOT Number
5.12.5.
PRO Number
5.13.
Driver Pickup – UPS-SCS Operations Warehouse
5.13.1.
All information verified prior to dispatching drivers
5.13.2.
Verify driver(s) against driver’s license photo
5.13.3.
Verify driver(s) for Class A CDL license
5.13.4.
Drivers are not to carry unauthorized passengers.
5.13.5.
Take photos of
5.13.5.1.
Driver(s)
5.13.5.2.
Tractor and Trail