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3.1 Pricin . (a) Ingredient Cost. Administrator will offer an average aggregate annual discount as reflected below on Client utilization to be calculated as follows. The pricing below will be implemented as of the Addendum Effective Date. The pricing below will be guaranteed upon the start of Client's Renewal Term (as described in Article VI(A) of the Agreement) that begins on or after the Addendum Effective Date. [1 -(total discounted AWP ingredient cost (including any retrospective pharmacy payments) but excluding dispensing fees and ancillary charges, and prior to application of Copayments) of applicable Prescription Drug Claims for the annual period divided by total undiscounted AWP ingredient cost (both amounts will be calculated as of the date of adjudication) for the annual period)]. Discounted ingredient cost will be the lesser of MAC (as applicable), U&C or AWP discount. Notwithstanding anything herein to the contrary: (i) a Prescription Drug Claim that processes at the Brand rates (Participating Pharmacy Reimbursement Rates) and (Mail Pharmacy Reimbursement Rates), as indicated on the ingredient cost field of the Prescription Drug Claim's data record, shall be reconciled as part of the Brand guarantee below; and (ii) a Prescription Drug Claim that processes at the Generic Drug rates (Participating Pharmacy Reimbursement Rates) and (Mail Pharmacy Reimbursement Rates) above, as indicated on the ingredient cost field of the Prescription Drug Claim's data record, shall be reconciled as part of the Generic Drug guarantee below. The only Prescription Drug Claims that may be excluded from the reconciliation of the pricing guarantees are as identified in the "Claims Excluded" column of the table below in addition to claims dispensed in Puerto Rico, Guam, Northern Mariana Islands, Virgin Islands, Hawaii, Massachusetts, and Alaska. All other Prescription Drug Claims may be included in the reconciliation of the guarantees. PARTICIPATING BRAND AWP— 18.50% GENERIC AWP — 1 . 83.00% BRAND AWP — 21.50% 77 GENERIC MAIL SERVICE PHARMACY AWP — 83.00% BRAND AWP — 25.00% GENERIC AWP — 86.50% Claims Excluded: OTC, compounds, U&C claims, Member Submitted Claims, Subrogation Claims, Coordination of Benefit Claims, Exclusive and Limited Distribution Products/Claims, vaccines, Specialty Products (other than specialty guarantee), biosimilar products (other than Specialty Product guarantee, if applicable), long term care pharmacy claims and/or claims with ancillary charges and products filled through in-house or 340b pharmacies (if applicable) (b) Dispensing Fee. ESI will guarantee an average aggregate annual per Prescription Drug Claim dispensing fee on Client utilization to be calculated as follows: [total dispensing fee of applicable Prescription Drug Claims for the annual period divided by total of applicable Prescription Drug Claims for the annual period which will represent the same underlying claims dataset used to calculate the "Ingredient Cost Guarantee" of this Exhibit A]. Dispensing fees will be calculated using the NOT FOR DISTRIBUTION. THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL, PROPRIETARY AND CONSTITUTES TRADE SECRETS OF ESI AND RXBENEFITS 8