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AmerisourceBergen Drug Corporation | Standard Management Corporation

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Title: Supply Agreement-PRIME VENDOR AGREEMENT
Date: 5/15/2006
Industry: Medical Equipment and Supplies     Law Firm: AmerisourceBergen Corporation     Sector: Healthcare

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                                                Confidential Treatment Requested
                                                                    Exhibit 10.1

                             PRIME VENDOR AGREEMENT

      This Prime Vendor Agreement ("Agreement") is made as of March 1, 2006
("Effective Date") by AmerisourceBergen Drug Corporation, a Delaware corporation
("ABDC"), and Standard Management Corporation, an Indiana corporation

      A. ABDC is a national distributor of pharmaceutical and other products,
including prescription ("Rx") and over-the-counter ("OTC") pharmaceuticals,
nutritional, health and beauty care ("HBC") and home health care ("DME")
products ("Product" or "Products"), and services ("Services");

      B. Customer owns and operates one or more long term care pharmacies
("Facilities"); and

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

      NOW THEREFORE, the parties agree as follows:


      ABDC 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 ABDC no less than ***% of all
prescription pharmaceutical Products it purchases, 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 (including
Schedule II controlled substances when allowed) and will describe Products that
ABDC will provide to Customer, the quantity and designated delivery location.
All payment plans (except pre-pay) must be by electronic funds transfer (EFT).


      Customer must elect to participate in ABDC's preferred generic formulary
program ("Preferred Rx Options" or "PRxO Generics") pursuant to requirements as
amended from time to time by ABDC. If participating, Customer will purchase no
less than ***% of its purchases of the "Top 100" generic pharmaceutical Products
from ABDC. The Top 100 is a list determined from time to time by ABDC of more
than one hundred commonly used generic pharmaceutical Products. Customer
authorizes ABDC as its sole agent to develop and implement a generic
pharmaceutical Product list for the Term. Customer will purchase from ABDC each
calendar quarter no less than the minimum Net Purchase volume of generic
pharmaceutical Products as set forth in the Pricing/Payment Terms.


      ABDC will deliver Products to each Facility five days a week (Monday -
Friday), once a day except holidays and warehouse physical inventory days.
Additionally, Customer will be entitled to one emergency delivery per calendar
quarter at no additional charge. Customer may be charged for each additional
emergency order. Facility means each of Customer's long term care pharmacies,
together with any other facilities Customer acquires, is affiliated with or
operates during the Term in the United States. Newly acquired facilities with
existing agreements will become Facilities under this Agreement upon the earlier
of expiration of such existing agreement or the date Customer may terminate such
agreement according to its terms, with or without cause, without breaching it or
paying a material termination penalty; provided, however, service to Facilities
outside ABDC's normal service area (which does not include Alaska, Hawaii or
U.S. territories) may be subject to a delivery surcharge.

*****Denotes information that has been omitted from this Exhibit pursuant to a
confidential treatment request filed with the Commission.



                                                Confidential Treatment Requested
                                                                    Exhibit 10.1


      Customer will only return Products to ABDC in accordance with ABDC's
standard policy for returned Products ("Returned Goods Policy"), as amended from
time to time by ABDC. If Customer returns more than 3% of its OTC Net Purchases,
or 3% of its pharmaceutical Net Purchases in any month, Customer may be assessed
an additional restocking fee over and above any standard stocking fee in the
Returned Goods Policy or ABDC may adjust the Price of Goods or both. Customer
will return only Product purchased from ABDC for which Customer has submitted
the invoice number and date of purchase. ABDC may reject returns not accompanied
by the invoice number and date of purchase or that exceed in amount either the
3% return limit or the amount on the referenced invoice number. ABDC reserves
the right to refuse all future returns from Customer in the event that Customer
submits any counterfeit Product for return. In the event ABDC changes the
Returned Goods Policy, ABDC will provide Customer with written notice of such
change no less than thirty (30) days before it is due to become effective.


      Services are listed in Exhibit "2". Terms, conditions and other provisions
are set forth in Exhibit "3" ("Provisions"). ABDC 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 ABDC develops such policies or
procedures or changes current ones, ABDC will notify Customer in writing at
least thirty (30) days before such changes are effective.


      Subject to Paragraph 5 of the Provisions, the Term will be from the
Effective Date until February 28, 2011. The Term will, thereafter, be extended
on a month-to-month basis until either party gives at least ninety (90) days
prior written notice to the other of its intention not to extend this Agreement.

7.     RECORDS

      To the extent required by 42 U.S.C. Section 1395x(v)(1), until four (4)
years after termination of this Agreement, ABDC will make available upon written
request to the Secretary of the U.S. Department of Health & Human Services
("HHS"), the Comptroller General, or their authorized representatives, a copy of
this Agreement and all records required to certify the nature and extent of
costs of Products and Services provided by ABDC under this Agreement. ABDC will
ensure, to the extent it carries out its duties through a subcontract with a
value or cost of $10,000 or more in a twelve (12) month period with a related
organization, such subcontract will contain similar provisions. Notwithstanding
the foregoing, ABDC will have no obligation to make public documents subject to
attorney-client privilege.

8.     NOTICES

      Notices must be in writing and sent certified mail, prepaid, return
receipt requested, or sent by facsimile to the address or facsimile number
below. Parties may change this information by written notice to the other party.
Pursuant to the Telephone Consumer Protection Act of 1991, 47 U.S.C. Section
227, Customer consents to receiving notices, including product updates, recalls,
new product launches and programs, advertisements and other marketing materials
by telephone facsimile ("fax") machine from ABDC, its affiliates and their
related companies, to the fax number set forth below.

*****Denotes information that has been omitted from this Exhibit pursuant to a
confidential treatment request filed with the Commission.



                                                Confidential Treatment Requested
                                                                    Exhibit 10.1

      To Customer:      Standard Management Corporation
                       10689 North Pennsylvania St.
                       Indianapolis, IN 46280
                       Attn: Chief Executive Officer
                       Fax: 317-574-6227
      To ABDC:          AmerisourceBergen Drug Corporation
                       1300 Morris Drive
                       Chesterbrook, PA   19087-5594
                       Attn: Vice President, Health Systems
                       Fax: 610-727-3601
      with a copy to:   AmerisourceBergen Corporation
                       1300 Morris Drive
                       Chesterbrook, Pennsylvania 19087-5594
                       Attn: General Counsel
                       Fax: (610) 727-3612


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

                   1      Pricing/Payment Terms

                  2      Value-Added Services

                  3      Provisions

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

CUSTOMER:                              ABDC:
Standard Management Corporation        AmerisourceBergen Drug Corporation

By:    /s/ Ronald D. Hunter             By: /s/ James F. Riley, III
      -------------------------            ----------------------------------
Name: Ronald D. Hunter                     Name: James F. Riley, III
Title: Chairman, President & CEO           Title: V. P. Strategic Accounts

DATED MARCH 8, 2006                        DATED MARCH 8, 2006

*****Denotes information that has been omitted from this Exhibit pursuant to a
confidential treatment request filed with the Commission.



                                                Confidential Treatment Requested
                                                                    Exhibit 10.1

                                  EXHIBIT 1 TO
                             PRIME VENDOR AGREEMENT
                             PRICING / PAYMENT TERMS

In addition to payment for Products, Customer will pay ABDC the following
Program and other fees for ABDC's Product distribution and Services for Customer
and its Facilities. Except as otherwise provided, payments are due within ten
(10) days from ABDC's invoice date. Pricing does not reflect any administrative
or other fee to a group purchasing organization or buying group ("GPO"). If
Customer contracts with a GPO, Customer will pay any such fees to the applicable


      A. Price of Goods. Customer will pay the following Price of Goods based
upon the definition of "Cost" below, subject to the following adjustments for
Total Average Annual Volume Net Purchase volume and payment terms, for Products
other than Products and Services designated as ABDC Special Price Products. ABDC
will add to the billed amount any applicable sales, use, business and
occupation, gross receipts or other tax. Price of Goods will begin at Tier No. 1
and may be adjusted quarterly based upon Customer's Total Average Annual Monthly
Net Purchase volume over the prior three (3) months.

                PRICING TIERS                PRICE OF GOODS
      --------------------------------       --------------
NO.    Total Annual Net Purchase Volume           ******
---    --------------------------------       --------------
<S>    <C>                                    <C>
1      ******       to             ******           ******
2      ******       to             ******           ******
3      ******       to             ******           ******
4      ******       to             ******           ******
5      ******       to             ******           ******
6      ******       to             ******           ******
7      ******       &              ******           ******

"Cost" with respect to any Product means the lower of (i)
********************************** is allocated to Customer or (ii)
***********************, in each case *************************************.
Cost outside the continental U.S. may be higher than manufacturer's/supplier's
normal price list.

Selected Products ("ABDC Special Price Products") including but not limited to
************************************ will not be billed based upon ABDC's Cost
(as defined above), but will instead be billed in accordance with the terms and
conditions established by ABDC from time to time for such Products and Services.
Purchases of ABDC Special Price Products count toward total Monthly Net Purchase

      B. PRxO Generics Rebates. If Customer continues to use ABDC as its Primary
Vendor and otherwise complies with ABDC's PRxO Generics requirements, ABDC will
adjust Customer's Price of Goods for the following calendar quarter if
Customer's PRxO Generics purchases are ******% or more of Customer's total Rx
Net Purchase volume, as follows.

<S>                                  <C>
    ******                                     *****
    ******                                     *****

ABDC will provide electronic price data to customer upon request and match
pricing. Should Customer achieve PRxO Generics compliance levels above **%, ABDC
and Customer will meet to discuss additional opportunities for rebates. Purchase
rebates are not cumulative; only one level will be paid each quarter.
Calculations are quarterly, with no carryover from one quarter to the next.
Customer's PRxO Generics purchases will be invoiced at ABDC's standard ABDC
Special Price. Pending rebates will be noted in Customer's invoices and
statements. Customer hereby indemnifies ABDC pursuant to Provisions Paragraph 6
for any inappropriate use of such invoices. ABDC will issue any credit to
Customer within forty-five (45) days of

*****Denotes information that has been omitted from this Exhibit pursuant to a
confidential treatment request filed with the Commission.

       Customer will delete this Exhibit "1" (or request confidential treatment)
     if it discloses this Agreement for any reason, including in any SEC filing.


                                                Confidential Treatment Requested
                                                                     Exhibit 10.1

the end of each calendar quarter. If Net Purchases of PRxO Generics are less
than ****% of total Rx Net Purchases, no rebate credit will be given and ABDC
may reasonably adjust Price of Goods to reflect the lower than expected purchase
volume. Customer must be compliant with payment terms to be eligible for any
rebate under this paragraph.

      C. Additional Value-Added Services. The additional value-added Services in
Exhibit "2" will be provided to Customer by ABDC for ******* for Facilities that
meet minimum Net Purchase levels.

      D. Ordering Hardware/Software. In addition to the foregoing value-added
Services fee, Customer will pay the per-month fees in Exhibit "2" for ordering
and reporting software and hardware selected by Customer for each installation
on system hardware at Customer's Facilities and other locations.

      E. Contract Administration. In administering Customer's GPO/supplier
contracts, Customer must (i) provide a copy of new contracts, (ii) comply with
supplier's terms, (iii) use all products for its "own use" (as defined in
judicial and legislative interpretations), (iv) notify ABDC at least forty-five
(45) days before it changes suppliers, and (v) upon changing suppliers, assist
ABDC in disposing of any excess inventory acquired for Customer. Additionally,
Customer will notify ABDC before discontinuing purchases of any special
inventory that it has requested that ABDC stock (whether or not pursuant to a
contract) and assist ABDC in disposing of any excess of such inventory. When
invoiced, Customer will promptly reimburse ABDC for any unpaid chargebacks that
are (x) denied by a GPO or manufacturer/supplier or (y) not paid within
forty-five (45) days and, in either case, Customer will look solely to such GPO
or manufacturer/supplier for redress.


      A. Options. Customer agrees to the following payment terms for Product

Semi-Monthly Pay (Default if no box checked).

[X] Payment for invoices dated the *** through the *** must be received by the
*** of the same month. Payment for invoices dated the **** through the last day
of each calendar month must be received by the *** of the following calendar

      B. Terms. All payments must be received for deposit to ABDC's account by
the due date by EFT . ABDC shall initiate EFT payment. ABDC may change available
payment plans from time to time. Payment term changes may affect Price of Goods.
If Customer does not select an option or the option selected is not available,
ABDC will bill Customer on Semi-Monthly terms until otherwise notified by
Customer. Subject to credit approval, Customer may change payment terms upon
thirty (30) days written notice prior to the beginning of a calendar month.
Price of Goods adjustments for different payment terms are subject to change
from time to time by ABDC to reflect ABDC's cost of money and any resulting
credit risk.


      A. Annual Purchases. Customer's minimum annual Net Purchase (total
purchases less returns, credits, rebates, late payment fees and similar items)
volume during Year 1 is ****** . Year 1 is from the Effective Date to February
28, 2007. Subsequent contract years are the following twelve (12) month periods.
Customer's Net Purchases during subsequent years are projected to increase at a
rate of ***% per year during each year of the Term. Customer's aggregate Net
Purchase volume over the life of this Agreement will be no less than .In
addition, Credit limit is set at $****** per pay period(semi-monthly)for first
six months of agreement .ABC will review credit after first six months of
agreement or sooner as conditions permit. Additionally, total monthly PRxO
Generics Net Purchases from all Facilities will be at least ****% of total Rx
purchases from all Facilities. Calculations are quarterly, with no carryover
from one q

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