abdcvendoragreement.htm


     

    EXHIBIT
10.1


     

    Note:
Certain material has been omitted from this Prime Vendor Agreement in accordance
with a request for confidential treatment submitted to the Securities and
Exchange Commission. [*****] indicates omitted material. The omitted material
has been filed separately with the Securities and Exchange
Commission.

    


    


    PRIME
VENDOR AGREEMENT

     

    This
Prime Vendor Agreement ("Agreement") is made as of July 1, 2009
("Agreement Date") by AmerisourceBergen Drug Corporation, a Delaware corporation
("ABDC"), and BioScrip, Inc., a Delaware corporation, on
behalf of itself and its subsidiaries (collectively,
"Customer").

     

    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
(collectively, "Products"), and services (“Services”);

     

    B.           Customer
owns and/or operates one or more pharmacies and distribution centers
("Facilities") at each location in Exhibit A, as updated from time to time to
include other facilities Customer opens, closes, acquires, is affiliated with or
otherwise operates during the Term in the United States; and

     

    C.           The
parties agree to the following obligations to each other under which ABDC will
provide Products and Services to Customer (“Program”).

     

    1.           PRICING
AND PAYMENT TERMS

     

    ABDC will
be Customer’s Primary Vendor for all of Customer's Facilities for Products and
ABDC agrees to sell to Customer as Customer’s Primary Vendor, all in accordance
with the terms and conditions of this Agreement. Customer will pay Product costs
and Program fees pursuant to the payment terms in Exhibit "1"
("Pricing/Payment Terms").  As Customer’s "Primary Vendor" Customer
agrees to purchase from ABDC and ABDC agrees to sell to Customer, [*****],
measured on a dollar basis, of all prescription pharmaceutical Products it
purchases that are available through pharmaceutical wholesaler distributors,
generally, but excluding
purchases of therapeutic plasma products (i.e., IVIG, Albumin and Hemophilia
clotting Factors), as
verified quarterly.  ABDC agrees that any Customer purchases of such
therapeutic plasma products that are purchased from ABDC's affiliate,
AmerisourceBergen Specialty Group, will be included in the calculation of “Net
Purchases” (as defined in Paragraph 1(A)(4) of Exhibit 1.  In
addition, Customer will purchase, at a minimum, the minimum aggregate annual
purchase amount in Paragraph 5(A) of Exhibit 1. Orders for Products, including
controlled substances (CSOS for Schedule IIs) will be electronically transmitted
and will describe Products that ABDC will provide to Customer, the quantity and
designated delivery location. Payment (except pre-pay) must be by automated
clearinghouse electronic funds transfer (ACH/EFT).  If Customer is
unable to transmit Orders for Products electronically due to system failure
(whether Customer’s or ABDC’s) or otherwise, Customer may transmit orders
manually by telephone, fax or other available method.

     

    2.           PRxO
GENERICS PROGRAM PARTICIPATION

     

    Customer
must participate in ABDC's preferred generic formulary program ("Preferred Rx
Options” or “PRxO Generics”) pursuant to Paragraph 3 of the Pricing/Payment
Terms.

     

    3.           CUSTOMER
LOCATIONS & DELIVERIES

     

    ABDC will
deliver Products (i) twice a day, five (5) days a week (or 10 deliveries per
week) except ABDC holidays and warehouse physical inventory days to Customer’s
primary distribution Facility (located in Columbus, Ohio); and (ii) once a day
to Customer’s other Facilities, five days a week (Monday –
Friday).  ABDC will provide Customer with a copy of its
holiday list and inventory dates at such time as the list becomes generally
available to ABDC employees, but in any event, no later than December 15 of the
prior year.  [*****] Customer will be charged [*****] for each additional emergency order
to a Facility (plus ABDC's actual out-of-pocket expense for courier or other
non-standard or expediited deliver service).  Newly acquired facilities
with existing agreements with other distributors will become Facilities under
this Agreement upon the first date that Customer may terminate
such


    
      
         


      

      
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    existing
agreement in accordance with its terms, with or without cause, without breaching
it or paying an early termination penalty.  Service to Facilities
outside of the continental United States may be subject to a delivery
surcharge.  Customer may order Products for which it needs pedigree
service pursuant to Paragraph 6 of Exhibit 2 (Additional Value Added
Services).

     

    4.           FILL RATES.

     

    ABDC
commits to a [*****] “Adjusted Fill Rate” on a chain-wide basis measured
quarterly.  The ”Adjusted Fill Rate” is calculated as
follows:  (a)  An item shorted on an original order will not
be counted as a short for the second time until 72 hours from the initial
receipt of the short order have passed.  (b)  Where only a
partial quantity is received of an individual line item, it will be a short only
if fifty percent (50%) or less of the quantity ordered is
shipped.  (c)  On any new item, or an item previously not
ordered by Customer, a period of thirty (30) days will be given to add the item
to ABDC’s inventory.  This period is computed from the date Customer
places the original order and provides estimates on
usage.  (d)  The quantity of an item ordered in a week by a
facility that is [*****] of Customer's average weekly volume during the
preceding month for such item will not be considered
short.  (e)  Manufacturers' legitimate back orders,
unavailability or shortages are not computed as a short order in determining the
Adjusted Fill Rate.  Achievement of the [*****] Adjusted Fill Rate
will be deemed a material term of this Agreement.

     

    5.           CUSTOMER
SERVICE

     

    ABDC will provide Customer with a
[*****] customer support representative.  [*****].

     

    6.           RETURNED
GOODS POLICY

     

    In
returning Product to ABDC, Customer will comply with ABDC's standard policy
("Returned Goods Policy"), as amended from time to time by ABDC.  If
Customer returns more than 3% of its Rx Net Purchases or 3% of its non-Rx Net
Purchases in any month, ABDC may assess Customer an additional restocking
fee.  Customer may only return Product purchased from ABDC and for
which Customer provides the invoice number and purchase date.  ABDC
may reject returns that do not have an invoice number or purchase date or that
exceed in amount either 3% return limit or the amount on the referenced
invoice.  ABDC may refuse all future returns from Customer if Customer
submits any counterfeit Product for return; provided, however, Customer may
return to ABDC any counterfeit, adulterated, mislabeled or otherwise suspicious
product purchased from ABDC if Customer identifies it as such so as to help
minimize the risk such product will be re-sold or otherwise placed back into the
stream of commerce.

     

    7.           ADDITIONAL SERVICES &
PROVISIONS.

     

    Services
to be provided by ABDC 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 related 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.  [*****]

     

    8.           TERM
OF AGREEMENT

     

    Subject
to Provisions Paragraph 5, the Term will be from August 26, 2009 ("Effective
Date") until August 31, 2012.  The parties may extend this Agreement
up to two (2) additional years upon mutual written consent.  If not
terminated, the Term will thereafter extend on a month-to-month basis until
either party gives 90 days' prior written notice to the other of its intention
to have this Agreement terminate.


    
      
         


      

      
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    9.           EARLY
TERMINATION

     

    If (1)
Customer terminates the Agreement prior to the expiration of the Term under any
circumstances other than a default by ABDC; or (2) ABDC terminates the Agreement
prior to the expiration of the Term as a result of a default by Customer,
Customer will pay ABDC as an early termination payment and not as a
penalty:  [*****].  Any such amount is in addition to other
amounts, lost profits or other actual damages caused by Customer’s breach of
this Agreement.  This Section 9 does not grant Customer any right to
terminate this Agreement except as otherwise expressly provided in this
Agreement.

     

    10.           RECORDS

     

    To the
extent required by 42 U.S.C. §1395x(v)(1), until four years after the Term, ABDC
will make available to the U.S. Department of Health & Human Services
Secretary, the Comptroller General, or their respective authorized
representatives, upon their written request, a copy of this Agreement and all
records required to certify the nature and extent of pricing for Products and
Services from 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 12 month period with a related organization, such
subcontract will contain similar provisions.  Notwithstanding the
foregoing, ABDC has no duty to make public attorney-client privileged
documents.

     

    11.           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. §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 its
fax numbers.

     

    
      	
               
      

            	
              To
      Customer:

            	
              BioScrip,
      Inc.

            


    

    100 Clearbrook Road

    Elmsford, NY 10523

    Attn: Chief Procurement Officer

    Fax:  (914)
460-1661

    With a
copy
to:                    BioScrip,
Inc.

    100
Clearbrook Road

    Elmsford,
NY 10523

    Attn:  General
Counsel

    Fax:  (914)
460-1670

     

    
      	
               
      

            	
              To
      ABDC:

            	
              AmerisourceBergen
      Drug Corporation

            


    

    1300 Morris Drive

    Chesterbrook, PA  19087-5594

    Attn: Group Vice President, Alternate Care

    Fax:  (610) 727-3601

    
      	
               
      

            	
              with
      a copy to:

            	
              AmerisourceBergen
      Corporation

            


    

    1300
Morris Drive

    Chesterbrook,
Pennsylvania 19087-5594

    Attn:
General Counsel

    Fax:
(610) 727-3612


    
      
         


      

      
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    12.           EXHIBITS

     

    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 its Agreement
Date.

     

    
      	
              CUSTOMER:

              BioScrip,
      Inc., on behalf of itself and its subsidiaries

              By:
      /s/ Rick
      Smith                                                                

              Name:
      Rick
      Smith                                                                

              Title:
      President and Chief
      Operating Officer

            	
              ABDC:

              AmerisourceBergen
      Drug Corporation

              By:
      /s/ John
      Palumbo 

              Name:
      John
      Palumbo 

              Title:
      Senior Vice President,
      Health Systems
Solutions

            


    


    
      
         


      

      
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    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.
Pricing does not reflect any administrative or other fee to a buying group or
group purchasing organization ("GPO"). If Customer contracts with a GPO,
Customer will pay any such fees required to be paid by ABDC as a result of
Customer’s business under this Agreement to the applicable GPO.  In any event, ABDC shall not pay a GPO fee until a GPO designation
form signed by Customer is filed with ABDC.  Customer will pay any
increase in GPO administrative fees during the Term that are required to be paid
by ABDC as a result of Customer’s business under this
Agreement.

     

    1.           PROGRAM
FEES

     

    A.           (1)
Customer will pay the following Price of Goods based upon the definition of
“Cost” below, subject to the following adjustments for Customer’s Total Combined Monthly Net Purchases and its average
monthly purchases of PRxO Generic Purchases as a percentage of Customer’s total
Rx Purchases (“PRxO Generics Compliance”) under this Agreement, 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 taxes that ABDC is
required to collect and pay.  Customer will promptly return to ABDC
non-disposable equipment and material (e.g., totes, padding, pallets,
packs/coolers/insulation, monitors/loggers, etc.) or pay replacement cost of
items not made available for pickup at the later to occur of (i) the next
scheduled delivery; or (ii) five business days thereafter.  Tiers will
be adjusted once per quarter, with any change effective on the 15th day
of the quarter and based on Net Purchases for the prior calendar
quarter.

     

    

      
        	 
      	
                Extended Semi-Monthly Pay (EFT)
      – [*****]

              
	 
      	
                [*****]

              
	
                Monthly
      Net Purchases

              	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              
	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              
	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              
	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              	
                [*****]

              


      

    

     

    Notes:    (1)
The Price of Goods for OTC will be [*****].

    (2) The
Price of Goods for Drop shipments will be [*****].

    (3) The
Price of Goods for [*****].

     

    (2)           “Cost"
with respect to any Product means the lower of (i) the price of the Product on a
supplier’s price list on the date the Product is allocated to Customer or (ii)
any applicable Customer/GPO contract price for the Product authorized by a
supplier and maintained in an ABDC bid file, in each case exclusive of discounts
for prompt payment given to ABDC by its manufacturers.  Cost outside
the continental U.S. may be higher than manufacturer’s/supplier's normal price
list.

     

    (3)           Selected
Products (“ABDC Special Price Products”) including but not limited to food, gift
items, HBC items, home healthcare (DME), items deemed operationally difficult to
manage, items purchased from suppliers not offering cash discounts of [*****] or better, deliveries
FOB destination or other standard terms, generics, nutritionals, private label,
school and office items, slow-moving items, supplies (bottles & vials) and
Services will not be billed based upon  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
Purchases.

     

    (4)           The
above Price of Goods is conditioned upon Customer's PRxO Generics Net Purchases
being at least (i) [*****] of its total Net Purchases
from ABDC or (ii) [*****] of its total generic Rx
Net Purchases from all sources.  Customer will still qualify for the
Cost of Goods applicable to [*****] PRxO Generic compliance
even if its Net Purchase volume is less than [*****] as long as its PRxO
Generics purchases from ABDC are at least [*****] of its total generic Rx
purchases from all sources; provided, however, if Customer's generic Rx Net
Purchases meet the [*****] level but is less than
[*****] of its total Net Purchases, ABDC may reasonably adjust brand Rx Price of
Goods to reflect lower profitability pursuant to Paragraph
5.  Customer’s generic Rx purchases will be evaluated quarterly for
compliance with this condition, with any Price of Goods adjustments made
accordingly.

     

    B.           [*****]

     

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




    
      
        
                                                                                                                                                                                                                                                                                        

        

         


      

      
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    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 to ABDC 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.  The parties will coordinate to ensure C-II controlled
substance electronic ordering systems (CSOS) interface correctly.

     

    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, provided ABDC’s inventory
levels are commercially reasonable relative to Customer’s historic purchase
orders of such Products, 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.

     

    3.           PRxO
GENERICS PROGRAM

     

    A.           PRxO
Generics.  Customer must participate in PRxO Generics Program
pursuant to requirements as amended from time to time by ABDC and must purchase
from ABDC no less than [*****] of its total generic Rx
purchases or [*****] of its total Net Purchases from ABDC in the PRxO Generic
Program; provided, however, Customer’s total generic Rx Net Purchases may be
less than [*****]
(but at least [*****]) as provided in Paragraph 1(A)(4) of this Exhibit
1.  A GCN is the number assigned to one strength of one Product in the
multiple sizes offered of that Product (e.g. Atenolol 25mg, in unit sizes of
100, 500 and 1000 are one GCN). GCN counts are subject to change with new
Product launches. The Top 100 is a list of more than one hundred commonly used
generic Rx Products set by ABDC from time to time.

     

    B.           Custom Price
File.  ABDC created a custom PRxO Generics price file for
Customer that is based on an analysis of Customer's top generic purchases, [*****] and representing
[*****] of Customer's
generic spending prior to the Agreement Date.  [*****]  ABDC
will assign a generic specialist to participate in a monthly call with Customer
to evaluate generic purchases, monitor the competitive landscape for generic Rx,
present opportunities and drive additional generic Rx savings.  In
addition ABDC will conduct quarterly business reviews to benchmark Customer's
PRxO Generics performance and pricing.

     

    C.           [*****]

     

    D.           Compliance & Price
Adjustment.  ABDC may audit Customer's total generic Rx
purchases from all sources other than ABDC.  Purchase rebates are not
cumulative, with calculations quarterly and no carryover from one quarter to the
next.  Pending rebates will be noted in Customer's invoices and
statements. Customer indemnifies ABDC pursuant to Paragraph 6 of Exhibit 3 for
any inappropriate use of such invoices and statements.  ABDC will
issue any credit to Customer within 30 days of the end of each calendar
quarter.

     

    4.           PAYMENT
TERMS

     

    A.           Payment.  Customer
agrees to [*****] payment terms for Product
purchases.

     

    Payments
for invoices dated between the [*****] and the [*****] of the
month are due on or before the [*****]  of the same month
[*****] and invoices
dated from the [*****] to the end of the month are due and payable on the
[*****] of the
following month.

     

    B.           Terms.  All
payments must be received for deposit to ABDC's account by the due date by
ACH/EFT. Payment term changes may affect Price of Goods.

     

    5.           MINIMUM
ORDER VOLUME

     

    A.           Annual
Purchases.  Customer must comply with (i) Primary Vendor
obligations under Section 1 of the Agreement, with Net Purchases [*****] during each Contract Year,
and (ii) minimum Net Purchases of PRxO Generics under Paragraph 1(A)(4) of this
Exhibit 1.  "Net Purchases" during a period means total purchases less
returns, credits, rebates, late payment fees and similar items, with no
carryover from one period to the next and with any minimums prorated for any
partial period, including Contract Year 1.  Contract Year 1 is from
the Effective Date until August 31, 2010.  Subsequent Contract Years
are the following 12 calendar-month periods. Customer's Net Purchases during
subsequent Contract Years are projected (but not obligated) to increase at a
rate of [*****] per
Contract Year.

     

    
    

     

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


    

     

    
      
        
           

        

         


      

      
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    B.           Small Order
Charge.  If a Facility purchases less than [*****] per month, a
delivery charge of [*****] per delivery will be assessed during the following
month for each order that is less than [*****] until at least
[*****] per month is purchased by such Facility.

     

    C.           Price of Goods
Adjustments.  Customer acknowledges that Price of Goods and
Program fees available under this Agreement are based upon Customer's meeting
such minimum annual, PRxO Generics and other Net Purchases and, if Customer
fails to do so, in addition to any other remedies, including Paragraph 1(A)(4),
ABDC may reasonably adjust Price of Goods and Program fees on 10 days' notice to
reflect Net Purchases that average less than [*****] per month in any three (3)
consecutive months.

     

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




    
      
        
                                                                                                                                                                                                                                                                                                


        

         


      

      
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    EXHIBIT
2 TO

    PRIME
VENDOR AGREEMENT

    ADDITIONAL VALUE-ADDED
SERVICES

     

    1.           Services

     

    A.           ABDC
offers Customer the following Services for the monthly fees in
Paragraph 1(C) of Pricing/Payment Terms.

     

    · Bar-Coded
Shelf Labels

    · DEA
Scheduled Pharmaceuticals Purchased Report

    · Monthly
Usage and 80/20 Report

    · Price
stickers – Rx and OTC

     

    B.           Other
than pedigree services required by applicable law, ABDC may discontinue any
Services as it deems appropriate, in which case ABDC will make a reasonable
proportionate reduction in the monthly fee based upon the value of the
discontinued Services. In addition, from time to time ABDC may offer such new
Services, at such additional fees as it determines.

     

    2.           Ordering & Reporting
Software and Hardware

     

    A.           ABDC
offers Customer the following ordering and reporting software and
hardware.

     

    
      	
              ·  

            	
              Custom
      Reporting software for [*****].

            


    

    
      	
              ·  

            	
              Internet
      ordering software (Catalog and Order Entry (COE), iEcho
      or similar software, as appropriate)
      [*****].

            


    

    
      	
              ·  

            	
              iScan PPC hardware technology for a [*****] per unit covering
      hardware, software and
maintenance.

            


    

    
      	
              ·  

            	
              UltraPhase/Telxon
      handheld electronic order entry terminal ([*****] per pharmacy)
      [*****].

            


    

    
      	
              ·  

            	
              Ordering
      hardware will be included for Customer at no additional monthly charge per
      installation. Any such hardware may be used solely with ABDC's ordering
      and reporting software.  Customer is responsible for hardware
      maintenance and repair.

            


    

    


    B.           ABDC
retains title to all ordering and reporting hardware and software and, pursuant
to Provisions Paragraph 5.2, Customer must return them upon termination of this
Agreement.

    


    C.           Computer
consulting and related services will be offered at ABDC's then-current standard
charges for such services.

     

    3.           Monthly Select Special Price
Product Report

     

    Each month, ABDC will provide to
Customer the list of current ABDC Special Price Products.

     

    4.           Recalls

     

    ABDC will notify Customer of all
recalls as instructed in the supplier's notification.

     

    5.           Drop Ship
Service

     

    From time
to time upon Customer's or a supplier's request, ABDC may provide drop shipment
billing service as a convenience where Products are shipped directly to Customer
by the supplier and the supplier bills Customer through
ABDC.  Suppliers must meet ABDC's liability insurance and other
requirements.  Customer's ability to return such Products through ABDC
may be subject to different terms orotherwise restricted.


    
      
         


      

      
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    Drop
shipments may be subject to an additional charge.  Other terms,
including title, insurance and risk of loss, are set by each supplier and ABDC
disclaims all liability in connection with drop shipments.

     

    6.           Pedigree
Services

     

    


    
      	
              A.

            	
              If Customer plans to resell Product, Customer may choose to
      receive pedigree service under the following terms and conditions by
      choosing one of the following options to receive pedigree
      services.

               

            
	
              o

            	
              Retrieve
      PDF Version of Pedigree via ABC Portal

               

            
	o	
              Electronic
      Pedigree File That Complies With the 04182006 EPC Global
      Standard

               

            
	
              B.

            	
              Customer
      will be responsible for paying all shipments expenses going outside the
      state of Florida.

               

            
	
              C.

            	
              Customer
      understands any damage to Product during shipment is to be handled through
      Customer’s carrier.  Customer is responsible for providing
      adequate insurance on its deliveries.

               

            
	
              D.

            	
              Customer
      understands that returns are allowed within seven (7) days of the
      sale.  If ABDC makes a mistake in order fulfillment, ABDC will
      pay freight for the return and for the shipment to correct the
      mistake.  Otherwise, Customer must pay freight for the
      return.

               

            
	
              E.

            	
              Customer
      will pay a monthly pedigree service fee of [*****]. ABDC reserves the right
      to increase monthly fees with [*****] notice if overall
      distributor customer Rx volume significantly increases over
      time.

               

            
	
              F.

            	
              Customer
      will be invoiced for pedigree service charges, including freight, on the
      first day of each calendar month.  Payment is due under the
      payment terms in this
Agreement.

            


    



    
      
         


      

      
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    EXHIBIT
3 TO

    PRIME
VENDOR AGREEMENT

    PROVISIONS

    1.
DUTIES OF ABDC

    1.1           Orders. Orders may be
subject to minimum order size requirements. Other than supplier back-ordered
Products, ABDC will make reasonable efforts to deliver orders placed by ABDC's
normal order cut-off time by the next delivery day. Hawaii, Alaska, U.S.
territories and foreign deliveries may be subject to a delivery
surcharge.

    1.2           Emergency Orders.
ABDC will use commercially reasonable efforts to meet a requested delivery time
for emergency orders, which may be subject to an additional charge. If ABDC
cannot do so, Customer may fill emergency orders outside the Program on such
occasions using another provider notwithstanding minimum purchase commitments in
this Agreement.

    1.3           Records, Audits. ABDC
will maintain records of transactions for one year during the Term and after.
Such audits may be conducted only during ordinary business hours and upon
reasonable notice. No audit may cover any period previously audited for the same
issue. All costs will be borne by Customer, including costs to produce records.
If an audit establishes net overcharges or undercharges, ABDC will credit or
charge Customer within thirty (30) days of receipt of written notice of the net
overcharge (or, if later, within thirty (30) days of receiving an applicable
supplier's credit) or undercharge.

    2.
DUTIES OF CUSTOMER

    2.1           Primary Vendor
Orders. For Products required by Facilities, Customer will submit an
order for all Products (electronic or as otherwise provided).

    2.2           Disclosure. Customer
will comply with all laws, including reporting or reflecting discounts, rebates
and other price reductions pursuant to 42 U.S.C. §1320a-7b(b)(3)(A) on cost
reports or claims submitted to federal or state healthcare programs, retaining
invoices and related pricing documentation and making them available on request
to healthcare program representatives.

    2.3           Notice of Changes.
Customer will promptly notify ABDC of changes in ownership, name, business form
(e.g., sole proprietorship, partnership or corporation) or state of
incorporation or formation, or any intent to sell, close, move or modify its
operations.

    2.4           No Set-Off.
Customer's obligation to pay for Products will be absolute, unconditional and
not subject to reduction, set-off, counterclaim or delay.

    2.5           Billing Statements.
Billing disputes must be brought promptly to attention of ABDC's accounts
receivable department or Customer will be deemed to accept the accuracy of
statements and waive its right to dispute any amounts 12 months after receipt of
the first statement containing the disputed amount.

    2.6           Late Payment. All
payments must be received in ABDC's account during normal business hours on the
date due. Drivers and other ABDC employees cannot accept cash. Price of Goods
reflects a prompt payment discount.  If payment is not received by the
due date, ABDC will invoice Customer such unearned discount by recalculating
Price of Goods based on Cost + 2% (or, if greater, 2% more than the invoiced
Price of Goods) effective as of the due date. Thereafter, if payment is
delinquent, ABDC may withhold any payments to Customer and will assess a per-day
late payment fee of the lower of 0.05% (18%/360) or the maximum rate permitted
by law on the outstanding balance until paid, beginning on the first business
day after such due date. Additionally, ABDC may adjust future Price of Goods to
reflect Customer's payment history. Such rights are in addition to ABDC's other
remedies and will not relieve Customer of its obligation to pay
promptly.

    2.7           Title And Risk Of
Loss. All goods are F.O.B. Customer’s location, with freight prepaid for
normal delivery. Expedited delivery is extra. Title and risk of loss pass upon
delivery to Customer.

    2.8           Extension Of Credit.
Payment terms are an extension of credit based upon an evaluation of Customer's
financial condition upon commencement of this Agreement as reflected in written
information from Customer. Customer will abide by ABDC's standard credit terms
as amended from time to time by ABDC. Customer will promptly notify ABDC in
writing of any Claim that, with an unfavorable result, would have a material
adverse effect on Customer's financial condition or operation. Upon request,
Customer will furnish ABDC complete annual and quarterly financial statements
and other evidence of its financial condition necessary to establish, in ABDC's
opinion, Customer's ability to perform its obligations. If ABDC reasonably
believes Customer's ability to make payments is materially impaired or its
financial condition has materially deteriorated, ABDC may from time to time
amend Customer's payment terms, require past due amounts to be paid and/or
require posting of adequate security or such other documents as ABDC may
require. Pending receipt of requested items, ABDC may withhold delivery of
Products and providing Services; place Customer on a C.O.D. basis if ABDC has
not received payment when due after giving notice by 10:00 a.m. and giving
Customer until 2:00 p.m. the same day for ABDC to receive payment; and/or
require Customer to pay part or all of any past due amount as a condition to
continued service.

    3.
NO WARRANTIES

    Customer
acknowledges that ABDC is not the manufacturer of any Products and ABDC
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THOSE OF
MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE, FOR
PRODUCTS AND SERVICES. No oral or written information provided by ABDC, its
employees or other representatives will create any such warranty. In no event
will ABDC be liable for any special, incidental or consequential damages in
connection with or related to Products, hardware, Software, including ordering
software, or Services.  [*****]

    4.
CONFIDENTIALITY

    The
Confidentiality Agreement between the parties, dated February 22, 2007, is
incorporated by this reference and its term is hereby extended to the Term of
this Agreement.  Pursuant to the Confidentiality Agreement, each party
and its employees or representatives ("Receiving Party") is obligated to protect
all proprietary and confidential information ("Confidential Information")
disclosed by the other ("Disclosing Party") and to not use or disclose it except
in connection with the Program or as otherwise agreed; provided, however, either
party may make such disclosure as is required by applicable securities laws and
rules of NASDAQ or another stock exchange, with any such disclosure subject to
the other party's reasonable prior review and approval.  Confidential
Information does not include information (i) available on a non-confidential
basis, (ii) known or able to be formulated by Receiving Party, or (iii) required
to be disclosed by law. Pricing and payment terms are confidential and may not
be shared with any third party. Customer will remove Exhibit "1" (or
request confidential treatment) if it discloses this Agreement for any reason,
including in a Securities and Exchange Commission filing.

    5.
TERMINATION OF AGREEMENT

    5.1           Default. In addition
to other available remedies, either party may immediately terminate this
Agreement for cause upon written notice to the other party upon:

    (a)      The
other party's (i) filing an application for or consenting to appointment of a
trustee, receiver or custodian of its assets; (ii) having an order for relief
entered in Bankruptcy Code proceedings; (iii) making a general assignment for
the benefit of creditors; (iv) having a trustee, receiver or custodian of its
assets appointed unless proceedings and the person appointed are dismissed
within thirty (30) days; (v) insolvency within the meaning of Uniform Commercial
Code Section 1-201 or failing generally to pay its debts as they become due
within the meaning of Bankruptcy Code Title 11, Section 303(h)(1) (11 U.S.C.
§303(h)(1)), as amended; or (vi) certification in writing of its inability to
pay its debts as they become due (and either party may periodically require the
other to certify its


    
      
         


      

      
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    ability
to pay its debts as they become due) (collectively, "Bankruptcy");

    (b)      The
other party's failure to pay any amount due or failure to deliver Product and
such failure continues five (5) days after written notice;

    (c)      The
other party's failure to perform any other material obligation of this Agreement
or any other agreement now or hereafter entered into between the parties and
such failure continues for thirty (30) days after it receives notice of such
breach from the non-breaching party; provided, however, if the other party has
commenced to cure such breach within such thirty (30) days, but such cure is not
completed within such thirty (30) days, it will have a reasonable time to
complete its cure if it diligently pursues the cure until completion; and
further provided that if such breach occurs more than three times during any
twelve (12) month period, the non-breaching party may terminate this Agreement
upon thirty (30) days written notice. "For cause" does not include Customer's
receiving a more favorable offer from an ABDC competitor.

    5.2           Survival Upon
Termination. Within five (5) days of expiration or earlier termination of
this Agreement for any reason, all amounts owed by Customer will be immediately
due and payable, Customer will (i) pay ABDC any amount owed and (ii) return to
ABDC all hardware, Software and other equipment, including ordering devices and
totes, or pay to ABDC the replacement cost of such items that are not returned.
Obligations in Provisions Paragraphs 4, 5.2, 6 and 9 and any provision the
context of which shows the parties intended it to survive will remain in effect
after the Term.

    6.
INDEMNIFICATION

    Each
party ("Indemnifying Party") will indemnify and defend the other, its employees
and representatives ("Indemnified Party") against all claims and damages
(including expenses and attorneys' fees) ("Claim") to the extent arising out of
Indemnifying Party's obligations under this Agreement. Failure to give prompt
written notice of a Claim will not relieve Indemnifying Party of liability
except to the extent caused by such failure. Indemnifying Party will defend a
Claim with counsel reasonably satisfactory to Indemnified Party and Indemnified
Party will cooperate fully in such defense.

    7.
CUSTOMER'S INSURANCE

    Customer
will maintain sufficient insurance to cover all unpaid inventory in its
possession. Customer will maintain professional liability insurance with limits
of no less than $2,000,000 per incident and $10,000,000 aggregate. ABDC will be
named on such policies as an additional insured. ABDC may reasonably increase
such required limits from time to time.

    8.
SOFTWARE LICENSE

    8.1           License. ABDC grants
Customer a non-exclusive, nontransferable and revocable license to use software
and related documentation ABDC provides for use in the Program ("Software").
Customer may not make, or allow others to make, copies except one backup copy.
Customer must include all proprietary notices in permitted copies. Customer may
not modify Software or create derivative works and may not translate, reverse
engineer, disassemble or decompile Software.

    8.2           Limited Warranty.
ABDC warrants that, during the Term, (i) Software will perform substantially in
accordance with its documentation if operated as directed and (ii) hardware
provided by ABDC and diskettes, CD-ROMs or other media on which the Software is
provided will be free from defects under normal use. ABDC DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THOSE OF MERCHANTABILITY,
NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE, FOR HARDWARE AND
SOFTWARE, AND ACCURACY
OF ANY DATA. ALL DATA IS PROVIDED "AS IS." DUE TO THE NATURE OF SOFTWARE,
HARDWARE AND DATA, ERRORS AND INTERRUPTIONS MAY OCCUR AND CUSTOMER HAS ALL RISKS
FOR QUALITY AND PERFORMANCE. No oral or written information provided by ABDC,
its employees or other representatives will create any warranty.

    8.3           Remedy. ABDC's
liability and Customer’s exclusive remedy for breach of warranties in Paragraph
8.2 will be, at ABDC's option, to (i) repair or replace Software or hardware so
it performs substantially in accordance with its documentation; (ii) advise
Customer how to achieve substantially the same functionality using different
procedures, or (iii) replace defective media returned within ninety (90) days of
the Effective Date. Such replacement will not extend such ninety (90) day
period.

    9.
MISCELLANEOUS

    9.1           Force Majeure. If
ABDC's performance is prevented or delayed by labor disputes, fire, terrorism,
acts of God or any other cause beyond its control, including unavailability of
Products, transportation, materials or fuel, delays by suppliers, internet,
telecommunication or electrical system failures or interruptions, compliance
with any law or any other cause beyond its control ("Force Majeure"), ABDC may
reduce or eliminate Products without liability or obligation during the Force
Majeure period. In addition, if Force Majeure affects ABDC's cost of operations,
ABDC may, at its discretion, add to the cost of Products its increased fuel
costs, including taxes, and other costs associated with Product handling or
operations, so long as Force Majeure affects its costs if such costs rise more
than [*****].

    9.2           Security Interest. In
addition to any security interest previously or hereafter provided by Customer
to ABDC, Customer hereby grants to ABDC a security interest which may be a
purchase money security interest in inventory of Products until all amounts owed
to ABDC are paid. ABDC may do such things as are necessary to achieve the
purposes of this Paragraph.

    9.3           Assignment. This
Agreement inures to the benefit of and is binding upon the heirs, successors and
assigns of each party; provided, however that Customer may only assign its
rights or delegate its duties under this Agreement with ABDC's written consent,
including the sale, transfer or assignment of the business of Customer, in whole
or in part, whether by merger, change of control, asset sale, operation of law
or otherwise, including any change of 25% or more of the voting equity in
Customer or in the power to vote 25% or more of the voting interest in Customer
in connection with an acquisition.  Customer hereby consents to ABDC's
assigning part or all of its obligations to any affiliate and to assigning or
granting a security interest in this Agreement in connection with any financing
or securitization by ABDC or any affiliate.

    9.4           Legal Requirements.
ABDC warrants it does not and will not discriminate against any employee or
applicant for employment because of race, creed, color, national origin,
religion, gender, sexual preference, veteran status, handicap or as otherwise
may be prohibited by law and will meet affirmative action obligations as are
imposed by law. ABDC agrees to comply with the provisions of 29 CFR Part
470.

    9.5           Miscellaneous. The
successful party in any legal action, including in a Bankruptcy proceeding, may
recover all costs, including reasonable attorneys’ fees. Pennsylvania law will
govern this Agreement without reference to conflict of laws provisions. Any
waiver or delay in enforcing this Agreement will not deprive a party of the
right to act at another time or due to another breach. All provisions are
severable.  In the event of a conflict between a prior document
between the parties and this Agreement, this Agreement will control. This
Agreement supersedes prior oral or written representations by the parties that
relate to its subject matter other than the security interest, which is in
addition to and not in lieu of any security interest created in other
agreements. Captions are intended for convenience of reference only. The parties
may not modify this Agreement other than by a subsequent writing signed by each
party. This Agreement will be interpreted as if written jointly by the parties.
The parties are independent contractors.

    


    
      
         


      

      
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