Vendor Contracts - Sample Document

This Prime Vendor Agreement (“Agreement”) is made as of September15, 2003 (“Effective Date”) by AmerisourceBergen Drug Corporation, a Delaware corporation (“Distributor”) and Allion Healthcare Inc., a Delaware Corporation (“Customer”).

A.      Distributor is a national distributor of pharmaceutical and other products and services, including prescription (Rx) and over-the-counter (OTC) pharmaceuticals, nutritional, health and beauty care (HBC) and home health care (DME) products (collectively, “Products”);

B.     Customer owns and operates one or more specialty pharmacies (Facilities”); and

C.     The parties intend by this Agreement to set forth their obligations to each other for an arrangement under which Distributor will provide Products and services to Customer (“Program”).

NOW THEREFORE, the parties agree as follows:

1.       PRICING AND PAYMENT TERMS

Distributor will be the Primary Vendor of all requirements of Customer’s Facilities for Products. Customer will pay, within terms, Product costs and Program fees pursuant to payment terms in Exhibit “1” (“Pricing/Payment Terms”). “Primary Vendor” means Customer purchases from Distributor no less than *% of all prescription pharmaceuticals Products it purchases (excluding Products that Distributor does not sell), as verified quarterly, and meets minimum periodic purchase levels in Paragraph 3(A) of the Pricing/Payment Terms. Orders for Products will be electronically transmitted (other than Schedule II controlled substances) and will describe Products that Distributor will provide to Customer, the quantity and designated delivery location. All payment plans (except pre-pay) must be by electronic funds transfer (EFT).

2.       PRO GENERICS PROGRAM PARTICIPATION

Customer will participate in Distributor’s preferred generic formulary program, “Preferred Rx Options (PRO Generics)”, pursuant to requirements as amended from time to time by Distributor. Customer will order all generic pharmaceutical Products from Distributor and will participate in the PRO Generics automatic substitution (ACAP or its successor). Customer authorizes Distributor as its sole agent to develop and implement a generic pharmaceutical Product list for the Term, including Product selection, the way substitutions are made and all agreements with generic suppliers.

3.       CUSTOMER LOCATIONS & DELIVERIES

Facility means each of Customer’s specialty pharmacies, together with any other facilities Customer acquires, is Affiliated (as defined below) with or operates during the Term in the United States. For purposes of this Agreement, a facility that Customer is Affiliated with is one that controls, is controlled by or under common control with Customer. Newly acquired facilities with existing agreements with other distributors will become Facilities under this Agreement upon the earlier of expiration of such existing agreement or the date Customer may terminate such agreement, with or without cause, without breaching it or paying any termination penalty. Newly opened “start up” locations will also become “Facilities” under this agreement. All Facilities listed will receive normal daily deliveries by 9:00 AM the next business day except the Facility located at 33 Walt Whitman Road, Suite 200A, Huntington Station, NY will received a delivery by 7:30 AM, five days a week (Monday - Friday).

4.      RETURNED GOODS POLICY

5.      ADDITIONAL SERVICES & PROVISIONS

Services are listed in Exhibit “2” . Terms, conditions and other provisions are set forth in Exhibit “3” (“Provisions”). Distributor may, from time to time, develop policies and procedures relative to new or existing services offered to customers, on an interim or as-needed basis. If Distributor develops such policies or procedures or changes current ones, Distributor will provide Customer with written notice at least thirty (30) days before such changes are effective.

6.      TERM OF AGREEMENT

7.      NOTICES

8.      EXHIBITS

The following exhibits to this Agreement are incorporated by this reference.

IN WITNESS WHEREOF, the parties have had a duly authorized officer, partner or principal execute this Prime Vendor Agreement as of the Effective Date.

EXHIBIT 1 TO

PRIME VENDOR AGREEMENT

PRICING / PAYMENT TERMS

In addition to payment for Products, Customer will pay Distributor the following Program and other fees for Distributor’s Product distribution and Services for Customer and its Facilities. Except as otherwise provided, payments for other services not specifically set forth in this Agreement are due within 10 days from Distributor’s invoice date. Pricing does not reflect any administrative or other fees to a group purchasing organization or buying group (“GPO”). If Customer contracts with a GPO, Customer will pay any such fees to the applicable GPO.

1.      PROGRAM FEES

A.        Distribution Fee (P