Exhibit 10.18


 





 


Managed Healthcare Associates, Inc.


 


MHA 2000 Member Agreement


 


This Agreement is entered into this 5th day of July, 1995
between Managed Healthcare Associates, Inc. of Florham Park, NJ and BJK/Chem RX
(herein referred to as the MHA 2000 “Provider”) with offices at, 3700
Oceanside, RD, Oceanside, NY


 


Realizing the special needs and objectives of our larger LTC Providers,
MHA has launched its MHA 2000 that offers additional incentives based on
program commitment, volume, and enhanced professional service. Listed below are
the services provided by MHA and the MHA 2000 Member commitments.


 


I.                                       Services
Performed by MHA:


 


a.               MHA will negotiate special volume based
incentives and market share rebate programs, geared towards the committed MHA
2000 Member.


 


b.              MHA will institute a “Preferred Rebate”
Processing Program in cooperation with the participating MHA 2000
Pharmaceutical Manufacturers and Wholesalers.


 


c.               MHA will provide personal corporate
support to the branch level of our MHA 2000 Providers.


 


d.              MHA will have a dedicated Professional
Account Representative (PAR) both internal and external to handle and expedite
the day to day business issues that develop.


 


e.               MHA will provide Drug Utilization
Information analysis to its MHA 2000 members. This service will include cash
flow improvement, management of most profitable RX items and Clinical Education
Services.


 


100 Campus Drive, P.O. Box 789, Florham Park, New Jersey 07932-9200  (201) 966-9200  Fax (201) 966-5529


 


 

















 


II.                                   MHA
2000 Provider Commitments:


 


a.               BJK/CHEM RX and all of it’s locations
agree that Managed Healthcare Associates will act as it’s sole and exclusive
LTC Group Purchasing Organization for pharmaceutical products. This will not
limit the ability of the provider to enter into agreements of its own or
utilize other group contracts that are not available from MHA, except for
provision c.


 


b.              MHA 2000 Provider agrees to the
confidential nature of our pricing program. Any reproduction or information
sharing of these confidential prices and programs can be deemed grounds for
contract termination.


 


c.               MHA 2000 Provider agrees to a contract
utilization rate of a minimum of 70% on MHA 2000 contracts.


 


d.              MHA 2000 Provider agrees to a periodic
contract compliance audit to further enhance the cost savings derived from participation
in the MHA 2000 Program.


 


e.               MHA 2000 Provider agrees that products
purchased under the MHA 2000 program are solely for eligible patients with the “own
use” definition in the Portland Retailers Case (425 US 1 - 1976).


 


III.                               Program
Termination:


 


a.               MHA 2000 Provider may terminate this
agreement at any time by giving MHA Headquarters ninety (90) days written
notice of it’s intention to succeed.


 


b.              MHA reserves the right to terminate this
agreement if any of the MHA 2000 Provider commitments are not being complied
to, as per the section entitled “Provider Commitments”.


 


c.               Termination shall not affect the rights
and obligations of the parties occurring prior to the effective date of such
termination.


 


This agreement shall be effective upon execution by both parties and
shall be in effect for a period of two (2) years with an automatic renewable
feature upon the anniversary date of aforementioned agreement.


 


	
  Managed Healthcare Associates, Inc.

  	
   

  	
  Provider

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  /s/ Raymond Schwartz

  	
   

  	
  Name:

  	
  /s/ Mark Baldinger

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  V.P.O

  	
   

  	
  Title:

  	
  VICE PRESIDENT, COO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  7/11/95

  	
   

  	
  Date:

  	
  7/5/95

  	
   

  



 

















 


NEW ADDENDUM TO MEMBERSHIP AGREEMENT


 


THIS ADDENDUM TO MEMBERSHIP AGREEMENT is
made and entered into this 1st day of April, 2005 (“Addendum”), by and between
MANAGED HEALTH CARE ASSOCIATES, INC., a New Jersey corporation and ChemRx a
New York corporation (“Member”).


 


WHEREAS, the parties hereto are parties to a Membership Agreement dated
July 5th, 1995. (“Membership Agreement”); and


 


WHEREAS, the parties hereto desire to continue the arrangement under
the Membership Agreement as specifically amended and modified herein.


 


NOW, THEREFORE, intending to be legally bound hereby, the parties
hereby agree as follows:


 


1.                                       The
Membership Agreement is hereby specifically amended as follows:


 


A.                                   The following
additional terms and provisions shall be included in the Membership Agreement,
effective as of the date and year first above written:


 


(i)                                     Member hereby
agrees to engage MHA as its EXCLUSIVE group purchasing organization. Member
warrants that all group purchasing organization purchases of products and
services made on its behalf shall be under MHA-negotiated contracts. For the
purposes of this Addendum, group purchasing organization purchases do not
include purchases made through a wholesaler’s generic drug source program or
generic purchases from any distributor or direct.


 


(ii)                                  In consideration for
this exclusive arrangement, MHA agrees to waive all membership fees during the
Amended and Renewal Terms (as hereinafter defined). In addition, MHA agrees to
provide Member with such items as set forth on Exhibit A attached hereto.


 


A-1

















 


B.                                     The provisions of
the Membership Agreement regarding term and termination are hereby amended,
effective as of the date and year first above written, as follows:


 


(i)                                     The term of the
Membership Agreement is hereby deleted and replaced in its entirety, effective
as of the date and year first above written, as follows:


 


“The initial term of the Membership Agreement shall be April 1, 2005
through June 30, 2006 (“Amended Term”). The Membership Agreement, including
this Addendum, shall be automatically renewed for additional one-year periods
unless at least thirty (30) days prior to the expiration of the Amended Term or
any Renewal Term, MHA or Member shall provide written notice to the other of
its desire to not renew the Membership Agreement.


 


2.                                       Except
as amended pursuant to Section 1 of this Addendum and only to the extent
amended hereby, all other terms and conditions of the Membership Agreement
shall remain in full force and effect. If there are any conflicts between the
terms of this Addendum, any previous addendum, or the Membership Agreement, the
terms of this Addendum shall control.


 


A-2

















 


IN WITNESS WHEREOF, the parties hereto have executed this Addendum as
of the day and year first set forth above.


 


 


	
   

  	
  MANAGED HEALTH CARE ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond Schwartz

  	
   

  
	
   

  	
   

  	
  Name: Raymond Schwartz

  
	
   

  	
   

  	
  Title: VPO

  
	
   

  	
   

  
	
   

  	
  Chem RX

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Baldinger

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark Baldinger

  
	
   

  	
   

  	
  Title:

  	
  VP COO

  
					



 


A-3

















 


EXHIBIT A


 


This Exhibit Shall Remain Confidential And Not Be Disclosed To Any
Third Party Without The Prior Written Consent Of MHA & Member Except In
Accordance With The Membership Agreement.


 


In addition to the consideration stated in paragraph 1 (ii) of this
Addendum, MHA will pay Member a rebate of 25% of all administrative fees
actually collected by MHA for Member’s contract purchases through MHA’s
portfolio of products and services with approved manufacturers and wholesalers.
MHA will pay $25,000 at the end of each month, beginning on or around April 30th,
2005. Beginning on or around September 30, 2005 MHA will conduct quarterly
reconciliations and will add or deduct the amount required to pay exactly 25%
of all collected admin fees and provide members with documentation as to how
numbers were arrived. MHA will then continue to pay $25,000 per month and
conduct quarterly reconciliations on or around December 31, 2005, March 31st,
2006, and every quarter thereafter through the duration of the contract. MHA
will adjust the monthly cash number as it becomes clear that Member’s earned
administrative fees warrant such an increase or decrease. Should Member’s sales
through MHA contracts “C Sales” become in excess of $100 million annually ($25
million per quarter) MHA will adjust the rebate percentage to 33% of administrative
fees actually collected by MHA.


 


Within thirty (30) days following the end of each quarter, MHA shall
provide Member with a document, whose final content and appearance shall be
acceptable to both parties that details, by vendor, the amount of actual fees.


 


MHA agrees that Member’s engaging in “direct contracts” with vendors is
not a violation of this agreement. Member agrees to make best efforts to have
all contracts with vendors run through MHA’s purchasing program and to create a
fair and equitable business relationship between Member and MHA when approached
by vendors for direct contracts.


 


Member may redirect its IV solutions business to another vendor if and
only if all of the following apply:


 


•                  The agreement is
direct with a vendor that does not involve loading that vendor’s portfolio with
any wholesales that service Member’s purchasing of other, non IV products.


 


•                  The pricing is
materially better than MHA’s pricing for the same or similar items.


 


•                  The total
aggregate amount of product purchased through this other entity is less than
$500,000 per year.


 


A-4

















 


AMENDMENT TO NEW ADDENDUM TO MEMBERSHIP
AGREEMENT


 


THIS AMENDMENT TO NEW ADDENDUM TO MEMBERSHIP
AGREEMENT (“Amendment”) is made and entered into this
1st of June 2006 (the “Effective Date”), by and between MANAGED
HEALTH CARE ASSOCIATES, INC., a New Jersey corporation (“MHA”) and BJK, Inc.,
dba Chem Rx, at New York corporation (“Member”).


 


WHEREAS, the parties hereto are parties to a Membership Agreement dated
July 5 1995 (“Membership Agreement”), as amended by that certain addendum,
including most recently, the New Addendum to Membership Agreement, dated April
1, 2005 (“Addendum”); and


 


WHEREAS, the parties hereto desire to continue the arrangement under
the Membership Agreement, as specifically further amended and modified herein.


 


NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:


 


1.                                       MHA
and Member hereby agree that as of the Effective Date, the Addendum shall be
specifically amended as follows:


 


A.                                   The
Second sentence of Section 1.A.ii) of the Addendum shall be deleted in its
entirety and without any force or effect. Such amendment to the Addendum shall
be without any liability to or further obligation of MHA.


 


B.                                     Section
1.B.i) of the Addendum is hereby deleted and replaced in its entirety,
effective as of the Effective Date, with the following:


 


“The term of this Membership Agreement shall be June 1, 2006 through
May 31, 2009 (the “Amended Term”). This Membership Agreement, as amended, shall
be automatically renewed for additional one (1) year periods (each, a “Renewal
Term”) unless at least sixty (60) days prior to the expiration of the Amended
Term or any Renewal Term, either party provides to the other party written
notice of its desire to not renew this Membership Agreement.”


 


C.                                     The
following additional terms and provisions shall be included in the Membership
Agreement, effective as of the Effective Date:


 


i)                                         Member
shall be eligible to receive certain rebates (as defined under the discounts
safe harbor at 42 C.F.R. § 1001.952(h)) on the purchase of products and
services (“Products and Services”) purchased under MHA negotiated vendor
agreements, in accordance with the terms and conditions set forth on Exhibit A
attached hereto and incorporated by reference herein.


 


2.                                       Except
as amended pursuant to Section 1 of this Amendment and only to the extent
amended hereby, all other terms and conditions of the Membership Agreement and
the 


 

















 


Addendum (or any previous addendum to the extent not subsequently
amended or modified), shall remain in full force and effect. If there are any
conflicts between the terms of this Amendment, the Membership Agreement or the
Addendum (or any previous addendum), the terms of this Amendment shall control.


 


IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first set forth above.


 


 


	
   

  	
  MANAGED HEALTH CARE ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Stephen J. Andrew

  	
   

  
	
   

  	
   

  	
  Name: Stephen J. Andrew

  	
   

  
	
   

  	
   

  	
  Title: COO & CFO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BJK, INC., DBA CHEM RX

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Evan Selzer

  	
   

  
	
   

  	
   

  	
  Name: Evan Selzer

  	
   

  
	
   

  	
   

  	
  Title: Director of Purchasing

  	
   

  



 

















 


EXHIBIT A


 


Product and Services Rebates


 


1.                                       Calculation
of Rebates.  Member shall be eligible
to receive from MHA certain quarterly rebates (“Rebates”) for Purchases (as
hereinafter defined) of Products and Services made under Approved Vendor
Agreements (as hereinafter defined) during each calendar quarter of the Amended
Term. The Rebates shall be equal to 36% of the administrative fees received by
MHA for Member’s purchases of Products and Services (collectively, “Purchases”)
on Approved Vendor Agreements during the applicable calendar quarter. “Approved
Vendor Agreements” shall mean MHA-negotiated vendor, supplier or distributor
(each, a “Vendor”) agreements under which Member Purchases are credited to MHA
for purposes of determining MHA’s administrative fees thereunder.


 


2.                                       Payment
of Rebates.  Payment of Rebates shall
be made to Member on a quarterly calendar year basis and will be based on
Purchases made during the immediately preceding calendar quarter; provided,
however, that the Purchases for such immediately preceding calendar quarter
have been credited to Member’s account and the corresponding administrative fees
for such Purchases have been received by MHA.


 


3.                                       Purchasing
Reports and Payment Adjustments.  The
parties acknowledge and agree that the crediting and final reporting of Member
Purchases to MHA generally occur three to six months after Member’s Purchases
are made under an Approved Vendor Agreement. Accordingly, to account for the
lag in such crediting and reporting, payment of Rebates for a particular
calendar quarter will initially be estimated (“Estimated Rebates”) at $28,000
per month. As soon as the final crediting and reporting of Member’s Purchases
under the Approved Vendor Agreement and corresponding administrative fees
earned by MHA on such Purchases for the applicable quarter are available to
MHA, it shall calculate the actual Rebates (“Actual Rebates”) earned by Member
for such quarter. In the event the amount of the Estimated Rebates paid to
Member is less than the amount of the Actual Rebates owed to Member hereunder,
then MHA shall issue a rebate check for the difference to Member during the next
following quarterly rebate payment cycle. Conversely, in the event the amount
of the Estimated Rebates paid to Member is more than the amount of the Actual
Rebates owed to Member, then the difference shall be deducted from Rebates due
and owing to Member during the next following quarterly rebate payment cycle.
Records maintained by MHA concerning Member’s Purchases and the administrative
fees received by MHA for such Purchases shall control in the event of any
dispute between the parties regarding the amount of any Rebates due to Member
hereunder.


 


4.                                       Compliance
with Law.  Member and MHA each agree
that it will comply with all applicable laws, including the disclosure and
reporting obligations under 42 U.S.C. § 1320a-7b(b), the regulations
promulgated thereunder, including, without limitation, the discounts safe
harbor regulations at 42 C.F.R. § 1001.952(h) and comparable state laws and
regulations. The parties acknowledge and agree that the terms of the Membership
Agreement, as amended, are commercially reasonable and have been negotiated in
an arms-length transaction. Member represents and warrants that, except as
otherwise permitted or required by applicable federal or state law, Member
shall not influence or attempt to influence the prescribing practices of
practitioners regarding the ordering of Products and Services covered by the
Membership


 

















 


Agreement, as amended. Moreover, it is acknowledged by the parties
hereto that a central purpose of this arrangement is for Member to achieve
price savings and cost-reduction and to promote quality patient care through
increased access to competitive products and services.


 


5.                                       Responsibilities
of MHA and Member.  MHA agrees that
Member’s engaging in “direct contracts” with Vendors is not a violation of this
Membership Agreement. Member agrees to make best efforts to have all contracts
with Vendors run through MHA’s purchasing program and to create a fair and
equitable business relationship between Member and MHA when approached by
Vendors for direct contracts. Additionally, Member may redirect its IV
solutions business to another vendor if and only if all of the following
conditions apply:


 


•                  The agreement is
direct with a vendor that does not involve loading that vendor’s portfolio with
any wholesalers that service Member’s purchasing of other, non IV products;


 


•                  The pricing is
materially better than MHA’s pricing for the same or similar items


 
















 


ADDENDUM TO MEMBERSHIP AGREEMENT


 


THIS ADDENDUM TO MEMBERSHIP AGREEMENT
is made and entered into this 27th day of June, 2006 (“Addendum”),
by and between MANAGED HEALTH CARE ASSOCIATES, INC., a New Jersey corporation (“MHA”)
and ChemRx New Jersey LLC, a Limited Liability Company organized under the laws
of the state of New Jersey (“Member”).


 


WHEREAS, the parties hereto are parties to a Membership Agreement dated
June 29, 2006 (“Membership Agreement”); and


 


WHEREAS, the parties hereto desire to continue the arrangement under
the Membership Agreement as specifically amended and modified herein.


 


NOW, THEREFORE, intending to be legally bound hereby, the parties
hereby agree as follows:


 


1.                                       MHA
and Member hereby agree that the Membership Agreement is specifically amended
as follows, such amendments to take effect upon the date and year first above
written:


 


A.                                   The
following additional terms and provisions shall be added to and included in the
Membership Agreement:


 


i)                                         For
and in consideration of the mutual promises and covenants contained in this
Addendum and the Membership Agreement and other good and valuable
consideration, Member hereby agrees to engage MHA as its exclusive group
purchasing organization. Accordingly, Member warrants that all group purchasing
organization purchases of products and services (“Products and Services”) made
on its behalf shall be under MHA-negotiated vendor contracts. For the purposes
of this Addendum and the Membership Agreement, group purchasing organization
purchases do not include purchases made through a wholesaler’s generic drug
source program.


 


B.                                     Section
11 of the Membership Agreement concerning the payment of membership dues shall
be deleted and be without any force or effect.


 


C.                                     The
provisions of the Membership Agreement regarding term and termination are
hereby amended as follows:


 


i)                                         Any
provisions of the Membership Agreement that permit the Member to terminate the
Membership Agreement without cause shall be deleted in their entirety and shall
be without force or effect.


 


ii)                                      The
term of the Membership Agreement is hereby deleted and replaced in its entirety
as follows:


 


The initial term of the Membership Agreement shall begin on            1,
200    and terminate on May 31, 2009 (“Amended Term”). The


 

















 


Membership Agreement, including this Addendum, shall be automatically
renewed for additional one-year periods (each additional one-year period, a “Renewal
Term”), unless at least sixty (60) days’ prior to the expiration of the Amended
Term or any Renewal Term, MHA or Member shall provide written notice to the
other of its desire to not renew the Membership Agreement.


 


D.                                    The
following additional terms and provisions shall be included in the Membership
Agreement, effective as of the Amended Term:


 


i)                                         Member
shall eligible to receive certain rebates (as defined under the discounts safe harbor
at 42 C.F.R. § 1001.952(h)) on the purchase of products and services (“Products
and Services”) purchased under MHA negotiated vendor agreements, in accordance
with the terms and conditions set forth on Exhibit A attached hereto and
incorporated by reference herein.


 


ii)                                      In
the event that any provision of this Addendum or the Membership Agreement is
determined to be contrary to applicable law, either party hereto may
immediately terminate this Addendum and the Membership Agreement or amend the
contrary provision in accordance with such applicable law and continue to
perform its obligations hereunder and there under.


 


2.                                       Except
as amended pursuant to Section 1 of this Addendum and only to the extent
amended hereby, all other terms and conditions of the Membership Agreement
shall remain in full force and effect. If there are any conflicts between the
terms of this Addendum, any previous addendum, or the Membership Agreement, the
terms of this Addendum shall control.


 


IN WITNESS WHEREOF, the parties hereto have executed this Addendum as
of the day and year first set forth above.


 


	
   

  	
  MANAGED HEALTH CARE ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen J. Andrew

  	
   

  
	
   

  	
   

  	
  Name: Stephen J. Andrew

  
	
   

  	
   

  	
  Title: Chief Operating Officer and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ChemRx of New Jersey, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Segal

  	
   

  
	
   

  	
   

  	
  Name: Michael Segal

  
	
   

  	
   

  	
  Title: President

  



 

















 


Agreement, as amended. Moreover, it is acknowledged by the parties
hereto that a central purpose of this arrangement is for Member to achieve
price savings and cost-reduction and to promote quality patient care through
increased access to competitive products and services.


 


5.                                       Responsibilities
of MHA and Member.  MHA agrees that
Member’s engaging in “direct contracts” with Vendors is not a violation of this
Membership Agreement. Member agrees to make best efforts to have all contracts
with Vendors run through MHA’s purchasing program and to create a fair and
equitable business relationship between Member and MHA when approached by
Vendors for direct contracts. Additionally, Member may redirect its IV
solutions business to another vendor if and only if all of the following
conditions apply:


 


•                  The agreement is
direct with a vendor that does not involve loading that vendor’s portfolio with
any wholesalers that service Member’s purchasing of other, non IV products;


•                  The pricing is
materially better than MHA’s pricing for the same or similar items


 


 

















 


1st AMENDMENT TO


 


MHA LONG TERM CARE NETWORK, INC.


 


PARTICIPATING PROVIDER AGREEMENT


 


The participating LTC Pharmacy Agreement between MHA Long Term Care
Network, Inc. (“Network”) and ChemRx of New
Jersey, LLC (“LTC Pharmacy”) (“Agreement”) is hereby amended, effective


 


Exhibit A, which provides for an administrative fee equal to Five
($.05) Cents for each claim LTC Pharmacy submits and which is successfully
adjudicated is deleted and replaced in its entirety with the following new
Exhibit A:


 


EXHIBIT A


 


FEES DUE TO NETWORK


 


LTC Pharmacy shall pay Network an administrative fee equal to Three
($.03) Cents for each claim LTC Pharmacy submits and which is successfully
adjudicated and paid by a Third Party Payor which has contracted with Network (“Administrative Fee”).


 


LTC Pharmacy agrees that a Third Party Payor may withhold the amount of
the above administrative fee from the payments otherwise due to LTC Pharmacy
from the Third-Party Payor and may pay the administrative fee directly to
Network.


 


In the event a Third-Party Payor does not withhold the amount of the
administrative fee, LTC Pharmacy shall pay Network the administrative fee
within 30 days of Network’s bill for such administrative fee.


 


Except as set forth above, the Agreement remains in full force and
effect.


 


	
  Dated:

  	
   

  	
  , 2006

  	
   

  
	
   

  	
   

  
	
   

  	
  MHA Long Term Care Network, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas A. Present

  	
   

  
	
   

  	
   

  	
  Douglas A. Present

  	
   

  
	
   

  	
   

  	
  CEO-MHA LTC Network, Inc.