Document:

Exhibit 10.8.3

 

 

ADOPTION AND AMENDMENT

OF

PHARMACY DISTRIBUTION AND SERVICES AGREEMENT

 

THIS ADOPTION AND AMENDMENT OF PHARMACY DISTRIBUTION AND SERVICES AGREEMENT (“Agreement”) is effective March 21, 2014 (“Effective Date”) by and between Celgene Corporation (together with its subsidiaries and affiliates hereinafter collectively, “Celgene”) and Diplomat Pharmacy, Inc. d/b/a Diplomat Specialty Pharmacy (hereinafter, “Pharmacy”).

 

WITNESSETH:

 

WHEREAS, Celgene and Pharmacy are the parties to that certain Pharmacy Distribution and Services Agreement effective as of the 1st day of July, 2013 (“PDSA”); and

 

WHEREAS, Celgene, in anticipation of an approval by the Food and Drug Administration (FDA) to market and sell Otezla® (apremilast) in the United States of America and its territories, desires to appoint certain pharmacy distributors to provide quality services to Customers and to provide data reporting and other services to Celgene related thereto; and

 

WHEREAS, Celgene and Pharmacy wish to enter into this Agreement under which Pharmacy will distribute and sell Otezla® (apremilast) to Customers, provide data reporting and other services to Celgene.

 

NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereby agree as follows:

 

ADOPTION AND AMENDMENT. The parties adopt the PDSA and then amend it, as follows:

 

For the purposes of this Agreement, and only as it relates specifically to Pharmacy’s distribution and sale of Otezla, the following terms shall be modified or added to the Agreement.

 

Definitions:

 

1.              The term “Adverse Drug Experience” or “ADE” shall NOT include any occurrence of an elevated Beta HCG or positive urine pregnancy tests, or a pregnancy or a possible exposure of a pregnant woman.

 

2.              The term “Certified Counselor” shall NOT apply.

 

3.              The term “Certified Prescriber” shall be changed to “Prescriber” which shall mean a licensed healthcare professional who is licensed to prescribe medication.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

Page 1 of 31

 

 

4.              The term “Customers” shall be changed to mean persons who are prescribed Product(s) by a Prescriber.

 

5.              The term “Dispensing Site” shall be changed to mean Pharmacy’s facility(ies) that fill and ship prescriptions, listed on Schedule 1.8(a), attached hereto, as may be amended from time to time upon mutual agreement of the parties. In the case of physician networks who are dispensing, the Dispensing Site shall be responsible for placing and receiving orders of Product(s), administration, and record keeping.

 

6.              The term “High Risk Deviation” shall NOT apply.

 

7.              The term Otezla® Free Trial Offers” shall mean optional titration and bridge product supply from the Celgene designated Otezla® Patient Support Pharmacy, at no cost, for eligible patients only, and not contingent on purchase requirements of any kind.

 

8.              The term “Product” shall be included to mean Celgene’s Otezla® (apremilast).

 

9.              The terms “POMALYST REMSTM and REVLIMID REMSTM” shall NOT apply.

 

10.       The term “Third Party Data Provider” shall mean ZS Associates, Inc., or any other data provider under contract with Celgene to whom Pharmacy will submit various data required under or relating to this Agreement, including de-identified patient information, physician information, prescription information, and any other Data as specified in Appendices A and B. The data will be shared for purposes of compiling and analyzing the Data.

 

11.       Wherever the terms Revlimid® (lenalidomide), Pomalyst® (pomalidomide), and Thalomid® (thalidomide) arise, add the term “Otezla” and wherever the term “Product(s)” arises, include it to also include Otezla.

 

12.       Under Section 2.3, Inventory reports for Otezla shall be sent to Celgene within five (5) days after the Date of Count (the “Date of Count” means that day which is always the fifteenth (15th) day of the month).

 

13.       Under Section 3.1, subparagraphs (a), (b) and (c) shall NOT apply.

 

14.       The following paragraphs shall be added to Section 3.1 as paragraph (d), (e) and (f) and apply to the distribution and sale of Otezla:

 

(d)                         Pharmacy shall accept the Celgene Patient Start Form (Please see: Figure 3), by the Prescriber or designee.

 

(e)                          Most Prescribers will complete a Pharmacy specific enrollment/intake form at their office. If Pharmacy has a Pharmacy-specific enrollment form that Pharmacy distributes to Prescribers, Pharmacy must use a HIPAA authorization that is the same or consistent with the HIPAA authorization in Figure 3. Pharmacy must also include information

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 2 of 31

 

 

about Celgene Product(s) Free Trial Offers in the Pharmacy specific form. Pharmacy shall also ensure that all required elements from Celgene’s Patient Start Form, regarding treatment, specifically Special instructions, is included in Pharmacy specific form. Other Prescribers may choose to utilize the Celgene specific Patient Start Form at their office. If the Customer’s insurance provider directs that the Customer use a particular pharmacy, or Customer indicates a preferred pharmacy, then Customer information will be forwarded to that pharmacy by Prescriber. If the Customer’s insurance provider permits the Customer to choose among pharmacies, or the Customer does not express a preference, Prescriber shall send the completed Celgene Patient Start Form to Celgene’s contractor, who will contact the Customer to begin the benefit verification process. Celgene’s contractor will use a rotational method to determine to which pharmacy to forward the Customer information for filling the prescription and dispensing the Product. Pharmacy understands and agrees this rotational method will not prefer any pharmacy able to serve the Customer, and that Pharmacy will receive no special treatment under this system. In the cases where Pharmacy is chosen for one of the above reasons for a Customer utilizing the Celgene Patient Start Form, Pharmacy will receive information about Customers from Celgene, and contact Customers to fill their prescriptions and provide any other services required by this Agreement. Pharmacy will not ship the Product(s) to a Customer unless it has received a completed prescription from the Prescriber (by facsimile or otherwise). Pharmacy shall fill valid prescriptions for Product(s) in accordance with all applicable laws and regulations. Pharmacy shall keep a record of the Start Form, if applicable and the prescription with each Product prescription.

 

(f)                           In addition to Pharmacy meeting all of its obligations under this Agreement for “new Customers” (for purposes of this Section 3.1(f) and for greater clarity, the term “new Customers” shall mean those customers that have not received Product(s) in the prior twelve (12) months and/or those Customers that have not previously been prescribed Product(s)), Pharmacy shall: (A) upon receipt of a prescription for Product(s) immediately time-stamp such prescription; (B) contact Customer to assess if titration sample was provided to them by their Prescriber (refer to Schedule 1.17 for detail); (C) request that Prescriber transfer Product Free Trial Offer prescriptions to Celgene’s designated pharmacy, when applicable, for the designated pharmacy to dispense Free Trial Offer prescriptions to such eligible new Customers, within twenty four (24) hours of receiving the prescription; and (D) in addition to the other reporting obligations under this Agreement, also provide Celgene with a report of the prescriptions for Product received that week which report shall, at minimum, contain: prescription numbers, the date and time which such prescriptions were received from the Prescriber based upon the time-stamp, and dispensed within that week, as well as all other information, as required by Appendix A, and in such form and substance as set forth in Appendix D, and with such Report, as defined below, to be delivered to Celgene no later than five (5) days following the end of that week. Pharmacy shall ensure that the prescription is dispensed intact; as one complete, whole unit: Pharmacy shall not split the prescription for any reason, and capsules cannot be repackaged, unless mandated by a payor split fill program.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 3 of 31

 

 

15.       Under Section 5, the following terms shall be added and apply to the Otezla Product:

 

5.1                               Data. Pharmacy shall maintain a Celgene-specific data management system (the “Database”) from which reports can be generated and provided to Celgene and that contains information as required herein. The parties acknowledge that such Database may be Pharmacy’s general database system. In addition, and subject to Pharmacy obtaining appropriate Customer consent, Pharmacy shall maintain in the Database Customer-specific information as set forth herein. Pharmacy shall regularly update the Database with Product(s) and Customer information set forth in Schedule 5.1(a), attached hereto. Celgene may amend Schedule 5.1(a), from time to time to add or delete requested information pursuant to a written amendment agreed upon by both parties. Celgene shall be the sole owner of the information compiled therein, provided, however, that Pharmacy shall have full access to the Database in order to fulfill its obligations under this Agreement and to comply with all applicable laws and regulations. Celgene’s authorization is required before Pharmacy may release the data to third parties, including but not limited to, sales data, or prescriptions filled, unless the release is required by applicable law. Furthermore, Celgene reserves the right to share the Data from the reports with other vendors it may contract with to perform data management services on Celgene’s behalf.

 

5.2                               Reports.

Celgene is requesting Pharmacy to provide transaction level data with Physician-Prescription-Patient-Status information in the form of electronic feed (“Report”). The Report will contain the information on patients currently serviced by the Pharmacy for Celgene internal business purposes. The format and frequency of the data is outlined in Schedule 5.1(a) for Product(s).

 

Reports may be further defined or amended by Schedule 5.1(a). At Celgene’s request, Pharmacy will deliver the Reports specified under this Section electronically through a secure connection in the format identified in Schedule 5.1(a). Pharmacy may be requested to provide Reports to a Third Party Data Provider on Celgene’s behalf.

 

5.3                               Materials. Pharmacy shall maintain an inventory of Product(s) and current promotional and/or educational materials developed and provided by Celgene regarding Customer treatment. Pharmacy agrees that it shall not alter materials without Celgene’s prior written review and approval. Pharmacy shall include in shipments of Product(s) any required material supplied and designated by Celgene for inclusion in Product(s) shipments. Celgene reserves the right to include Pharmacy name in materials announcing our contracted network of pharmacies.

 

16.       Under Section 6, PAYMENT, the following Sections 6.1, 6.2 and 6.3 shall apply to Otezla:

 

6.1                               Service Fee. Celgene shall pay Pharmacy a service fee for the performance of the services described in Schedule 6.1 provided in accordance with the detailed Requirements Document, subject to the terms set forth in Schedule 6.1(a) (“Service

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 4 of 31

 

 

Fee”).

 

6.2                               Service Fee Calculation. The Service Fee will be calculated and paid quarterly based on Celgene’s evaluation of Pharmacy’s achievement of performance metrics, as specified above. Pharmacy acknowledges and agrees that the fees provided herein are fair market value for the services described herein. Pharmacy understands and agrees that any prescribing decision will be made solely by the Prescriber. Nothing in this Agreement requires or permits Pharmacy to interfere with a prescribing decision. Pharmacy will not seek to maximize its Service Fees or any other payment by Celgene by interfering with a Prescriber’s clinical judgment or by counseling any Customer to continue to take the Product where the Product’s label calls for the Customer to discontinue the Product in the event Customer experiences a serious adverse reaction. Pharmacy at all times will exercise its independent clinical judgment as a duly licensed Pharmacy.

 

6.3                               Financial Condition. At any time, when in Celgene’s reasonable opinion, the financial condition of Pharmacy or its parent company so warrants, or if Pharmacy consistently fails to make payments when due or otherwise defaults under this Agreement, Celgene may alter terms of payment (including but not limited to requiring full or partial payment in advance of delivery, eliminating the Prompt Pay Discount), suspend credit, delay or cancel shipping, request quarterly financial statements or other financial information on an ongoing basis, terminate this Agreement in accordance with Section 12, or pursue any remedies available at law or under this Agreement.

 

17.       Under Section 9.1, Pharmacy shall suspend distribution of Product(s) if requested by Celgene as the result of a problem with Product(s) quality or a directive from the FDA. The remainder of the terms of Section 9.1 shall NOT apply to the dispense of Otezla.

 

18.       Under Section 10.2, Pharmacy represents and warrants that it shall use a well-trained, knowledgeable team of employees to handle Product(s) and to perform the services to be performed by Pharmacy under this Agreement. The remainder of the terms of Section 10.2 shall NOT apply to the dispense of Otezla.

 

19.       With regards to the Term, set forth in Section 12.1, for the purposes of Otezla, this Addendum shall have an initial term ending on September 30, 2015.

 

20.       Schedule 1.8 of the Agreement is hereby supplemented with a new Schedule 1.8(a), which is attached hereto and incorporated herein by reference.

 

21.       A new Otezla Requirements Document, attached hereto as Schedule 1.17(a) and incorporated herein by reference, hereby supplements Schedule 1.17.

 

22.       Schedule 2.3, Sample Inventory Report of the Agreement shall NOT apply.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 5 of 31

 

 

23.         Schedule 5.1, Data Reports of the Agreement is hereby supplemented with a new Schedule 5.1.(a), which is attached hereto and incorporated herein by reference.

 

24.       Schedule 6.1, Performance Metrics of the Agreement is hereby supplemented with a new Schedule 6.1(a) and 6.1(b), which is attached hereto and incorporated herein by reference.

 

25.       A new Appendix A — Detailed Data Elements Requested in Pharmacy Report is hereby added to the Agreement and shall apply to the Otezla Product.

26.       A new Appendix B - Inventory File Layout is hereby added to the Agreement and shall apply to the Otezla Product.

27.       A new Appendix C — Patient Status Types and Associated Description is hereby added to the Agreement and shall apply to the Otezla Product.

28.       A new Appendix D — Data Format and Transfer Protocol is hereby added to the Agreement and shall apply to the Otezla Product.

 

29.    GENERAL. For the avoidance of doubt, the parties confirm: except as amended above, there are no other amendments to this Agreement; the amendments above, are in connection with the terms and conditions of this Agreement; and the amendments above and this Agreement, do not in any way amend or modify the original underlying PDSA.

 

IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the Effective Date first above written.

 

	
CELGENE CORPORATION 
    	
 
    	
DIPLOMAT PHARMACY, INC.
    
	
 
    	
 
    	
 
    
	
/s/ Kimberly Metcalf
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name: 
    	
Kimberly Metcalf  
    	
 
    	
Name:
    	
/s/ Gary W. Kadlec
    
	
 
    	
 
    	
 
    
	
Title: 
    	
US Head National &

Regional Accounts 
    	
 
    	
Title: 
    	
President
    
	
 
    	
 
    	
 
    	
 
    
	
Date: 
    	
3/25/14
    	
 
    	
Date: 
    	
3/19/2014
    
	
 
    	
 
    	
 
    
	
Approved by Legal
    	
RHO
    	
 
    	
 
    
	
 
    	
3/25/2014
    	
 
    	
 
    
	
Legal Dept.
    	
 
    	
 
    
						

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 6 of 31

 

 

SCHEDULE 1.8(a)

 

PHARMACY DISPENSING SITE LIST

 

	
Pharmacy Sites
    	
 
    	
Address
    	
 
    	
Phone #
    	
 
    	
Fax #
    	
 
    	
DEA#
    	
 
    	
NABP#
    	
 
    	
Affiliation
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4100 S.
    	
 
    	
810-230- 
   5045
    	
 
    	
 
    	
 
    	
FD0286244
    	
 
    	
2369797
    	
 
    	
 
    
	
Great Lakes
    	
 
    	
Saginaw
    	
 
    	
 
    	
810-732-
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Distribution Center
    	
 
    	
Street, Flint,
    	
 
    	
 
    	
7021
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
MI 48507
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
810-732- 
   8720
    	
 
    	
 
    	
 
    	
AD6448446
    	
 
    	
2321052
    	
 
    	
 
    
	
 
    	
 
    	
G-3320
    	
 
    	
 
    	
810-732-
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Flint
    	
 
    	
Beecher
    	
 
    	
 
    	
2580
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Road
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
847-664- 
   8100
    	
 
    	
 
    	
 
    	
BD9628542
    	
 
    	
1478189
    	
 
    	
 
    
	
 
    	
 
    	
1370 Busch
    	
 
    	
 
    	
847-664-
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pkwy
    	
 
    	
 
    	
8101
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Chicago
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
214 E.
    	
 
    	
616-356- 
   1800
    	
 
    	
616-356-
    	
 
    	
BD9076008
    	
 
    	
2366791
    	
 
    	
 
    
	
 
    	
 
    	
Fulton
    	
 
    	
 
    	
6049
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Grand Rapids
    	
 
    	
Street
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
500 SE 15th
    	
 
    	
954-527- 
   0440
    	
 
    	
 
    	
 
    	
FD0417825
    	
 
    	
1093929
    	
 
    	
 
    
	
 
    	
 
    	
Street, Suite
    	
 
    	
 
    	
954-527-
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Florida
    	
 
    	
102
    	
 
    	
 
    	
0940
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
1809 Excise
    	
 
    	
909-881- 
   1728
    	
 
    	
 
    	
 
    	
FD1746835
    	
 
    	
0574764
    	
 
    	
 
    
	
 
    	
 
    	
Avenue
    	
 
    	
 
    	
909-882-
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Suite 205-
    	
 
    	
 
    	
3621
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
California
    	
 
    	
208
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 7 of 31

 

 

SCHEDULE 1.17(a)

 

REQUIREMENTS DOCUMENT

 

1.                                      BACKGROUND

 

1.1.                            OTEZLA®

 

Upon anticipated approval, by the United States Food and Drug Administration (FDA) Otezla ® will be for use in patients with active psoriatic arthritis.

 

Psoriatic Arthritis: The recommended starting dose of Otezla ® is via a 7 day titration starting at l0mg, once daily on Day 1, and increasing by l0mg daily until taking 30mg twice daily thereafter. Treatment is continued or modified based upon clinical and laboratory findings.

 

2.                                      PHARMACY BUSINESS REQUIREMENTS

 

2.1                               Pharmacy Certification

 

Pharmacy must have executed a Pharmacy Distribution and Services Agreement (“Agreement”) with Celgene.

 

2.2                               Dispensing Requirements

 

A.                                    Upon receipt of an Otezla® prescription for the first time, Pharmacy must confirm the following:

1)             Customer received 14 day titration sample from Prescriber or titration prescription from Celgene designated Otezla® Patient Support Pharmacy.

·                  If the Customer did not receive the 14 day titration supply, then Pharmacy shall:

·                  Contact the Prescriber to obtain the following:

i                           14 day Titration prescription

ii.                    14 day Bridge prescription (in anticipation of commercial insurance reimbursement delays) for eligible Customers prescribed Product for an on-label indication (ICD-9 CM 696.0)

iii.                Full prescription, if not already received

·                  Pharmacy shall then:

i.                        Forward Titration & Bridge Rx, if applicable, to Otezla Patient Support (OPS) Pharmacy within four (4) business hours of receipt from Prescriber

1.                     OPS Pharmacy is the only source for supplying Titration Rx and Bridge Rx, in absence of Prescriber providing Titration Rx

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 8 of 31

 

 

as a sample directly to Customer.

2.                     Bridge Rx is designed to assist Customers prescribed Product for an on-label indication with continuing treatment during commercial insurance delays.

	
ii.
    	
 
    	
Initiate benefits verification and prior authorization process
    
	
iii.
    	
 
    	
Secure Prior-Authorization
    
	
iv.
    	
 
    	
Initiate Dispense of Prescription
    
	
v.
    	
 
    	
Refer to OPS for Appeal Support
    
	
vi.
    	
 
    	
Schedule Delivery
    
	
vii.
    	
 
    	
Provide Counsel
    
	
viii.
    	
 
    	
Coordinate co-pay assistance through Celgene’s commercial co-pay   program
    
	
ix.
    	
 
    	
Refer appropriate Customers to 501(c)(3) foundations for co-pay   support
    
	
x.
    	
 
    	
Collect Payment
    
	
xi.
    	
 
    	
Enroll in Pharmacy specific adherence program
    

 

2)             Pharmacy shall coordinate efforts with OPS Pharmacy to assist Customer in continuing treatment via Bridge supply, where necessary.

 

B.                                    If the Customer did receive the 14 day titration supply from Prescriber, then Pharmacy shall:

1) Determine need and eligibility for Bridge product

·                  Contact the Prescriber to obtain the following:

	
i.
    	
 
    	
14 day Bridge prescription (in anticipation of commercial insurance   reimbursement delays for eligible patients prescribed Product for an on-label   indication)
    
	
ii.
    	
 
    	
30 day prescription, if not already received
    

·                  Pharmacy shall then:

	
i.
    	
 
    	
Initiate benefits verification and prior authorization process
    
	
ii.
    	
 
    	
If applicable, forward Bridge prescription to OPS Pharmacy within   four (4) business hours of receipt, in anticipation of delays in   commercial reimbursement approval
    
	
iii.
    	
 
    	
Coordinate efforts with OPS Pharmacy to assist Customer in continuing   treatment via Bridge supply, where necessary
    
	
iv.
    	
 
    	
Secure Prior-Authorization
    
	
v.
    	
 
    	
Initiate Dispense of Prescription
    
	
vi.
    	
 
    	
Refer to OPS for Appeal Support
    
	
vii.
    	
 
    	
Schedule Delivery
    
	
viii.
    	
 
    	
Provide Counsel
    
	
ix.
    	
 
    	
Coordinate co-pay assistance through Celgene’s commercial co-pay   Program
    
	
x.
    	
 
    	
Refer appropriate patients to 501(c)(3) foundations for co-pay   support
    
	
xi.
    	
 
    	
Collect Payment
    

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 9 of 31

 

 

	
xii.
    	
 
    	
Enroll in Pharmacy specific adherence program
    

 

C.                                    For the avoidance of doubt, Pharmacy: (1) shall perform the Services in this Schedule 1.17 with respect to a Customer only after receiving a prescription for that Customer for Product; and (2) shall contact the Prescriber to obtain a 14 day titration and/or Bridge prescription, as necessary and forward any completed titration and/or Bridge prescription to OPS Pharmacy, only with respect to eligible Customers, as determined based on eligibility rules provided to Pharmacy by Celgene.

 

D.                                    Timeliness of Patient Services:

 

·                                          If Pharmacy cannot verify third party benefits or has determined that the patient is unable to pay for therapy, Pharmacy will refer patient to OPS within twenty four (24) hours from such determination.

 

·                                          If the Pharmacy cannot fill the prescription because it does not have a contract with a MCO (Managed Care Org.) or PBM (Pharmacy Benefit Manager), the Pharmacy will be required to send that prescription, within twenty four (24) hours to another Celgene contracted pharmacy for fulfillment, if known to have payor coverage. The twenty four (24) hour time period is measured from either the referral receipt or the determination that another network pharmacy has capacity to dispense.

 

·                                          Turn-around time from receipt to shipment or close of investigation for patients with no missing information should be no more than ten (10) business days.

 

2.3                               Shipping Requirements

 

To avoid delays in the start of therapy, Product must be provided to patients as follows:

 

·             Product must be shipped within twenty four (24) hours of obtaining insurance approval or picked-up within twenty four (24) hours of obtaining insurance approval. Product will be shipped to patient by their need by date. Ship date and receive date will be mutually agreed upon by patient and Pharmacy.

·             Use appropriate packing materials to protect the Product in transit.

 

·             Track each shipment to ensure on-time delivery.

 

·             Ship all packages Monday through Friday utilizing next calendar day delivery.

 

·             All shipments on Fridays may be shipped for either Saturday delivery or Monday delivery.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 10 of 31

 

 

2.4                               Communication Requirements

 

·                                          Physician and patient are notified of patient’s health benefits, cost sharing amount, and non-profit foundations (if needed) once benefits are determined.

·                                          For prolonged benefit investigations, prior authorizations, and medical exception cases — physician and patient shall be updated every forty eight (48) hours on status.

 

·                                          If patient requires reimbursement support (benefits, appeals, co-pay assistance), titration supply or bridge supply, Pharmacy shall refer the cases to OPS within twenty four (24) hours of status determination.

 

·                                          If patient cannot afford their out-of-pocket, Pharmacy shall initiate patient enrollment into Celgene’s Commercial Co-Pay program, refer patient to alternative funding sources, or refer to OPS.

 

·                                          Pharmacy shall refer all cases deemed as “No-Go” status (cannot be filled by the Pharmacy for any and all reasons) to OPS within twenty four (24) hours of “No-Go” status determination.

 

·                                          Pharmacy shall refer prescription transfers to the assigned or preferred pharmacy provider within twenty four (24) hours of determination of benefits, based on outcome of benefits verification and consistent with Customer pharmacy preference.

 

2.5                               Referrals to Otezla Patient Support®

 

·                  Pharmacy will apply its reimbursement services of benefit verification, alternate funding, prior authorizations, invoicing, billing, and account/receivables management.

 

·                  The following may be reasons to refer a patient to Otezla Patient Support®:

 

·                  Free Trial Offers

 

·                  Denial of Prior Authorizations;

 

·                  Inability to meet out of pocket responsibility;

 

·                  Investigation of potential co-pay assistance; or

 

·                  Uninsured or Underinsured patient.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 11 of 31

 

 

3.                                      FIGURE 2: WORKFLOW FOR DISPENSING OTEZLA®

 

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 12 of 31

 

 

FIGURE 3: OTEZLA® PATIENT START FORM

 

DRAFT —Pending Approval

Instructions for healthcare providers

 

To prescribe Otezla (apremilast tablets), please follow these steps:

 

1                 Have your patient read the Patient Consent Information and request that the patient sign the accompanying areas on the Start Form. Celgene takes your patient’s confidentiality very seriously. While patients are not required to sign the Start Form in order to receive Otezla, the patient must sign the form in order to participate in Celgene support services, such as the Patient Assistance programs and our Free Trial Offers.

 

2                 Complete the rest of the Start Form and copy both sides of the patient’s insurance card and pharmacy benefit card, if available.

 

3                 Once the Start Form is complete, give your patient the Instructions for Patients and Patient Consent Information pages. Then, please fax the Start Form to (855) 850-2955

 

Your patient will be contacted by a pharmacy in the Otezla Pharmacy Network to arrange for delivery of the prescription.

 

Please be sure to fill out all of the sections of the Start Form. Incomplete areas may delay the start of treatment.

 

 

If you have any questions or want to learn more about Otezla, please call 877-CELGENE (877-235-4363) or visit Otezla.com.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 13 of 31

 

 

Instructions for patients

 

 

What happens now?

 

1                 Read the Patient Consent Information and sign as indicated in the shaded area of the Start Form if you would like to enroll in Celgene support services, such as the Patient Assistance programs and Free Trial Offers.

 

2                 Your doctor fills out the rest of the Start Form and faxes it to us or one of the specialty pharmacies in the Otezla Pharmacy Network.

 

 

What’s next?

 

·                  You’ll be contacted by one of the specialty pharmacies in the Otezla Pharmacy Network within 48 hours to confirm insurance coverage and delivery details

·                  Please note — this call might come from an unfamiliar phone number

·                  Your prescription can be shipped directly to your home

 

 

Help is here if you need it

 

With Otezla (apremilast tablets), you can take advantage of a collection of support services to help you receive Otezla as prescribed by your doctor:

 

·                  Insurance counseling and financial assistance programs. Visit Otezla.com for enrollment details.

·                  Expert guidance and advice from specially trained nurses 24 hours a day.

 

If you have any questions or want to learn more about Otezla, please call 877-CELGENE (877-235-4363) or visit Otezla.com.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 14 of 31

 

 

PATIENT CONSENT INFORMATION

 

I.                HIPAA Authorization to Share Health Information

 

By signing this Authorization, I authorize my healthcare providers, my health insurance company, and my pharmacy providers to disclose to Celgene and companies working with Celgene (collectively, “Celgene”) health information relating to my medical condition, treatment, and insurance coverage to (1) provide me with Celgene-sponsored treatment support services, including online support, financial assistance services, co-pay assistance, reimbursement services, nurse services, and compliance and persistency services, as well as any information or materials related to such services or Celgene products, including promotional or educational communications, (2) provide me with information about, or ask me about my experience with or thoughts about, products, services, and programs that Celgene offers or sponsors, including treatment support services, and (3) allow Celgene to analyze the usage patterns and the effectiveness of Celgene products, services, and programs and help develop new products, services, and programs, and for other Celgene general business and administrative purposes.

 

I further authorize my health care providers, including my pharmacy providers, to use my health information to communicate with me by mail, e-mail, phone, fax or otherwise, about drugs that are currently being prescribed for me, including to remind me about refills of such drugs and adherence to my prescribed drug therapy. I understand that my health care providers, including my pharmacy providers, may receive remuneration from Celgene for using my health information to contact me with communications about Celgene products which have been prescribed to me and Celgene-sponsored services.

 

Once my health information has been disclosed to Celgene and/or such other individuals, I understand that federal privacy laws may no longer protect the information. However, I understand that Celgene and other companies authorized to receive my health information pursuant to this Authorization agree to protect my health information by using and disclosing it only for purposes authorized in this Authorization or as required by law or regulations.

 

I understand that I may refuse to sign this Authorization, but that if I do I will

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 15 of 31

 

 

be unable to participate in Celgene support services, such as the Patient Assistance programs (see Otezla.com for eligibility guidelines) and Free Trial Offers.

 

I further understand that my treatment (including with a Celgene product), insurance enrollment, and eligibility for insurance benefits are not conditioned upon my signing this Authorization.

 

I may cancel this Authorization at any time by mailing a letter to Celgene at 9801 Washingtonian Blvd, Gaithersburg, Maryland 20878 or by sending an e-mail to privacy@celgene.com. I understand that if I revoke this authorization, it will not have any effect on the use of my information by the parties referenced herein before Celgene received the revocation. This Authorization expires ten [10] years from the day I sign it as indicated by the date next to my signature unless otherwise earlier canceled as set forth above. I understand that I may receive a copy of this Authorization.

 

I have read and understand the HIPAA Authorization to Share Health Information and agree to the terms.

 

	
 
    	
 
    	
 
    	
 
    
	
Signature of patient or patient representative
    	
 
    	
Date
    	
 
    

 

If signed by patient representative, please explain authority to act on behalf of patient.

 

 

Please see last page and full Prescribing Information and Patient Information for important safety information. This file is an electronic PDF from Otezla.com.

 

Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

 

Page 16 of 31

	
  

  	
  [LOGO] START
  ORM Phone: 1-877-235-4363 ax: 1-855-850-2955 Patient In ormation  Male 
  emale Insurance Bene it In ormation Attach copies o both sides o
  patient’s medical and pharmacy bene it card(s). irst name Last name Primary
  Insurance Policy # Address Group # Insurance company phone City State Zip
  Policy holder irst name Policy holder last name Date o birth Email
  address  Check i patient has no
  insurance  Pre erred number  Check i patient has secondary insurance
  Home phone  OK to leave message  Pre erred number  OK to leave message Patient pre erred
  specialty pharmacy Cell phone/Designee phone Best time to reach me:  Morning 
  A ternoon  Evening THE OLLOWING
  IN ORMATION SHOULD BE ILLED OUT BY YOUR HEALTHCARE PROVIDER Prescription or
  Otezla Statement o medical necessity 
  Otezla Rx Primary diagnosis: 30mg PO BID x30 days Re ills  ICD-9 CM 696.0 Special instructions: Prior
  therapy: Date titration sample provided to patient / / Current or most recent
  therapy Dates / duration  Bridge Rx –
  14 days* 30mg PO BID x14 days 28 tablets 4 Re ills  No prior disease modi ying therapies *
  Bridge Rx is at no cost, or commercially insured patients only, and not
  contingent on purchase requirements o any kind. Prescriber in ormation Enrollees
  in Medicare, Medicaid, and other ederal and state programs, as well as
  Minnesota and Massachusetts residents, are not eligible. Intended to promote
  patient access to prescribed therapy i there is a delay in determining
  whether commercial irst name Last name prescription coverage is available.  Titration Rx – 14 days** Address Take as
  Directed x14 days 27 tablets 0 Re ills “Titration Rx is only or patients who
  did not receive a sample during their o ice visit, optional, at no cost. I
  authorize Celgene to orward this prescription to the Celgene City State Zip
  designated pharmacy in order to dispense Otezla Titration Rx and/or Bridge Rx
  product ( or eligible patients prescribed Otezla or on-label indications)
  directly to the above named patient. Otezla Patient Support Services will
  noti y the patient via telephone prior to each ree O er Phone ax shipment. It
  is not necessary to check the Otezla Rx box above or patient to receive ree O
  ers. Please see last page and ull Prescribing In ormation and Patient In
  ormation or important sa ety in ormation. This ile is an electronic PD rom
  Otezla.com. Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB
  rao 

  

 

	
  

  	
  [LOGO] Page 17
  o 31 OtezlaÒ apremilast tablets NPI # Tax ID # Clinical/Hospital a iliation O
  ice contact name Best time to contact: 
  Morning  A ternoon Please see
  last page and ull Prescribing In ormation and Patient In ormation or
  important sa ety in ormation. This ile is an electronic PD rom Otezla.com.
  Diplomat Specialty ADOPTION AND AMENDMENT (Otezla) 12.9.13 TLB rao

  

 

 

 

Prescriber authorization*

 

I certify that I have prescribed Otezla based on my professional judgment of medical necessity and that I will supervise the patient’s medical treatment. I authorize Celgene as my designated agent and on behalf of my patient to (1) forward the above statement of medical necessity and furnish any information on this form to the insurer of the above-named patient and (2) forward the above prescription, by fax or other mode of delivery, to the pharmacy chosen by the above-named patient.

 

	
 
    	
 
    	
 
    	
 
    
	
Prescriber signature (Dispense as Written)
    	
 
    	
Date
    	
 
    

 

Signature stamps not acceptable.

 

*lf required by applicable law, please attach copies of all prescriptions on official state prescription forms

 

Page 19 of 31

 

SCHEDULE 5.1(a)

 

DATA REPORTS

 

General:

 

Celgene is requesting Pharmacy to provide transaction level data with Physician-Prescription-Patient-Status information in the form of electronic feed. The data feed will contain the information on patients currently serviced by the Pharmacy for Celgene internal business purposes.

 

	
Dimension
    	
 
    	
Specification
    
	
Data Format
    	
 
    	
ASCII   Text File, containing 1 data record per prescription (Rx)/status and each   data record containing PIPE Delimited (“|”) data fields/elements
    
	
Data Frequency
    	
 
    	
Weekly
    
	
Data Granularity
    	
 
    	
Transaction   level data with Physician-Prescription-Patient-Status details. If the patient   status changes multiple times in a week, all the transactions are recorded in   the data feed.

 

Example   for one patient —

 

i)   Line 1: Jan l, Status — Pending, Physician A, Patient B

 

ii)   Line 2: Jan 1, Status — Shipped, Physician A, Patient B
    
	
Summary of Data Fields/Elements
    	
 
    	
· Physician   profile (Name, address and identifiers DEA/NPI)

 

· Rx number,   Rx fill number, product dispensed, dispensed date

 

· Patient   status (Pending/ Denied/ Shipped/ Discontinued/Referred)

 

· HIPAA   compliant de-identified patient details
    

 

·                  All Data shall be provided via electronic transmission as Pipe Delimited Text Files. The number of delimiters must be consistent and ordered properly as required by the data specifications, which will be provided by Celgene (the “Data Specifications”), and data fields must be populated in the proper format, as required by the Data Specifications.

 

·                   Each Report shall be delivered within five (5) business days after the end of the applicable reporting period — for example, five (5) business days after the end of the reporting week or month as applicable (the “Due Date”).

 

·                  The “Due Date” for the first Report shall be five (5) business days after the product is launched by Celgene.

 

Page 20 of 31

 

Reports:

 

1.              Report 1: Product Referral Report. This data shall include weekly reporting of data fields listed in Appendix A as “Mandatory” or “Where Available” under the column “Requirement (Status File)”.

 

2.              Report 2: Product Shipment Report. This data shall include weekly reporting of data fields listed in Appendix A as “Mandatory” or “Where Available” under the column “Requirement (Shipment File)”.

 

3.              Report 3: Inventory Data Report. This data shall include monthly inventory levels described in Appendix B.

 

Data Format and Transfer Protocol:

 

Refer to Appendix D for the data format and file transfer protocol to be followed for each data delivery.

 

Page 21 of 31

 

SCHEDULE 6.1(a)

 

SERVICE FEES

 

Otezla

 

1.              Initial Dispensing Services Fee: [*] Per Initial Prescription Dispensed

 

·                  Celgene will pay Pharmacy [*] per initial prescription of Product dispensed for performing the services specified in Section 2 of Schedule 1.17, other than those services listed identified for other separate payment under this Schedule 6.1.

·                  The parties agree that all of the services compensated under this Initial Dispensing Services Fees are either: (1) incremental to those normally performed by Pharmacy without compensation; or (2) require Pharmacy to incur incremental costs to perform routine services in an expedited manner.

·                  Payment of the Initial Dispensing Services Fee is payable only once per patient, and only for the first prescription of Product filled for that patient.

·                  Pharmacy agrees to perform these services promptly after receiving the patient’s initial prescription and authorization forms. Accordingly, Pharmacy will not be entitled to the Initial Dispensing Services Fee for any prescription that Pharmacy ships more than ten (10) days after receiving the initial prescription from the Prescriber.

·                  If Pharmacy has not received a signed the HIPAA Authorization to Share Health Information, Pharmacy will attempt to obtain such signed authorization; if Pharmacy cannot obtain such signed authorization, Pharmacy will perform the services described herein to the extent permitted by HIPAA.

 

2.     Titration Rx and Bridge Rx Coordination Fee: [*] Per Unique Patient Serviced

 

·                  Within one (1) business day of Pharmacy’s receipt of a patient’s initial prescription and enrollment form for a patient’s first commercial Rx, make “live” outbound call by Pharmacist or Pharmacy Technician to patient to provide a detailed “Welcome to Therapy” message with clinical discussion regarding what to expect on therapy, including dosing schedule and side effects. Pharmacy will use its clinical judgment in answering patient questions about the medication and side effect management, and will encourage patients to follow up with their Prescribers as appropriate. Pharmacy shall disclose during the Welcome to Therapy call that Celgene has paid for the call and explain optional enrollment into Celgene’s support and concierge services for co-pay assistance, and adherence.

·                  Coordinate Bridge Rx fulfillment with physician to eligible patients prescribed Product for an on-label indication, as needed, consistent with Schedule 1.17, Section 2.2 (Dispensing Requirements).

·                  Coordinate Titration Rx fulfillment with physician, as needed, consistent with Schedule 1.17, Section 2.2 (Dispensing Requirements).

·                  In no event shall Titration Rx and Bridge Rx Coordination services be performed for a patient who has not signed the HIPAA Authorization to Share Health Information, or who has opted out of receiving such services.

·                  Pharmacy will make “Welcome to Therapy” calls only for patients prescribed Product for on-label indications.

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

Page 22 of 31

 

3.              Enhanced Adherence Program Enrollment Fee: [*] Per Unique Patient Per Completed Call

 

·                  LPN shall make “live” outbound check-in calls to patients for all commercial dispenses

·                  Pharmacy shall call at Day 10 post ship date for each commercial dispense. Pharmacy will make no more than two (2) attempts to reach a patient for this call.

·                  Counsel re: disease and treatment, side effect management, assess compliance and provide educational materials (as required)

·                  During each adherence call compensated under this Agreement, Pharmacy shall disclose that Celgene has paid for the call.

·                  In no event shall Enhanced Adherence Program services be performed for a patient who has not signed the HIPAA Authorization to Share Health Information, or who has opted out of receiving such services.

·                  Pharmacy will make check-in calls only for patients prescribed Product for on-label indications.

·                  Pharmacy shall not receive payment for calls in which the patient could not be reached.

 

4.              Data Fee: [*] per quarter

 

·                  Pharmacy will provide the data described in Appendices A and B provided the provision of such data is HIPAA compliant (the “Data”) in the format described in Schedule 5.1 and Appendices C-D. Celgene will pay Pharmacy [*] per quarter for this Data (the “Data Fee”).

·                  Pharmacy agrees to provide complete Data in a timely and accurate manner. Accordingly, Celgene will reduce the Data Fee as set forth in Schedule 6.1(b) for incomplete, inaccurate, or late Data.

·                  In no event shall Pharmacy provide any Data element if the provision of such Data element is prohibited by patient confidentiality or other applicable laws. Pharmacy withholding a Data element for this reason shall not count as a failure to provide timely and complete Data under Schedule 6.1(a).

 

5.              Program Development Fee: [*]

 

·                  Development of data/testing

·                  Staffing and Training

·                  Implementation of Program Rules/Project Plan

·                  Physical Properties

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

Page 23 of 31

 

SCHEDULE 6.1 (b)

COMPLETENESS AND TIMELINESS OF REPORTS

 

Completeness of Reports:

 

·                   One hundred percent (100%) of the Mandatory Data fields (as indicated on Appendix A hereto) must be complete and properly-formatted in order for Pharmacy to be eligible for full payment of the Data Fee set forth above.

 

·                   At least ninety-five percent (95%) of the other (non-Mandatory Data) fields in each Report must be complete and properly-formatted in order for Pharmacy to be eligible for full payment of the Data Fee set forth above.

 

·                   In the event that Pharmacy delivers a Report timely which provides less than one hundred percent (100%) of the Mandatory Data fields and/or less than ninety-five percent (95%) of the non-Mandatory Data fields, then Celgene shall notify Pharmacy of the missing information, after which Pharmacy shall have an additional five (5) business days to provide the missing information and still receive full payment of the Data Fee, as set forth above without the Report being deemed late. If such missing information is not provided within five (5) business days, then the Report(s) will be deemed late and Data Fees due to Pharmacy will be subject to the reductions listed below.

 

Timing of Reports:

 

Pharmacy acknowledges that the timeliness of the Data is of the essence for Celgene and that the value of the data to Celgene is reduced if the Data is late. Accordingly, Data Fee (Reporting) set forth in Schedule 6.1(a) will be reduced if Data is provided after the Due Date.

 

·                  Data provided 1-10 calendar days late: deduction in Data Fees of twenty percent (20%)

·                  Data provided 11-20 calendar days late: deduction in Data Fees of thirty percent (30%)

·                  Data provided 21-30 calendar days late: deduction in Data Fees of fifty percent (50%)

·                  Data provided more than 31 calendar days late: no Data Fees due and ongoing participation in Otezla® distribution network will be at risk.

 

Page 24 of 31

 

Appendix A: Detailed Data Elements Requested in the Pharmacy Report

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Requirement
    
	
 
    	
 
    	
 
    	
 
    	
Element
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Requirement
    	
 
    	
(Shipment
    
	
#
    	
 
    	
Category
    	
 
    	
Name
    	
 
    	
Description
    	
 
    	
Data type
    	
 
    	
(Status File)
    	
 
    	
File)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Data   management
    	
 
    	
Unique   record ID
    	
 
    	
Unique   transaction ID generated by specialty pharmacy. It will be mandatory while   reporting a restatement that the same unique record ID be used as the   original record. YYYYMMDD part of the record ID should represent the date   when the record was first time created 
    	
 
    	
Text   (SPNAME_YYYYM MDD_RECORD NUMBER)
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
2
    	
 
    	
Data   management
    	
 
    	
Restatement   flag
    	
 
    	
This   field is normally left BLANK. It is only set to Y, if the data record being   sent is a restatement of information that was sent in a previous feed
    	
 
    	
Text   (Blank of Y)
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
3
    	
 
    	
Patient
    	
 
    	
Status   type
    	
 
    	
Patient   status type (Active/Pending/Discontinued
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Not   Applicable
    
	
4
    	
 
    	
Patient
    	
 
    	
Status   reason
    	
 
    	
appendix   C for sample status reasons)Active/Pending/ Discontinued
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Not   Applicable
    
	
5
    	
 
    	
Patient
    	
 
    	
SP   unique patient ID
    	
 
    	
Unique   patient ID at the SP
    	
 
    	
Alphanumeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
6
    	
 
    	
Patient
    	
 
    	
Patient   consent flag
    	
 
    	
Set   to Y/N based on the consent obtained from the patient
    	
 
    	
Text
    	
 
    	
Where   available
    	
 
    	
Where   available
    
	
7
    	
 
    	
Patient
    	
 
    	
Birth   year
    	
 
    	
Health   Insurance Portability and Accountability Act (HIPAA) compliant patient birth   year
    	
 
    	
Numeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
8
    	
 
    	
Patient
    	
 
    	
Gender
    	
 
    	
Patient   Gender (F—Female, M—Male, U—Unknown)
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
9
    	
 
    	
Patient
    	
 
    	
Zip
    	
 
    	
De-identified   patient zip (3 digit)
    	
 
    	
Numeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
10
    	
 
    	
Patient
    	
 
    	
HUB   Unique patient ID
    	
 
    	
Unique   Patient ID at the HUB (OPS)
    	
 
    	
Alphanumeric
    	
 
    	
Where   available
    	
 
    	
Where   available
    
	
11
    	
 
    	
Physician
    	
 
    	
Physician   DEA
    	
 
    	
DEA   number for the physician. If multiple DEA’s please provide Primary DEA (Drug   Enforcement Administration License number)
    	
 
    	
Alphanumeric
    	
 
    	
Where   available
    	
 
    	
Where   available
    
	
12
    	
 
    	
Physician
    	
 
    	
Physician   NPI
    	
 
    	
NPI   identifier for the physician
    	
 
    	
Alphanumeric
    	
 
    	
Where   Available
    	
 
    	
Where   available
    
	
13
    	
 
    	
Physician
    	
 
    	
First   name
    	
 
    	
Physician   first name
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
14
    	
 
    	
Physician
    	
 
    	
Last   name
    	
 
    	
Physician   last name
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
15
    	
 
    	
Physician
    	
 
    	
Address1
    	
 
    	
Physician   street address line1
    	
 
    	
Alphanumeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    

 

Page 25 of 31

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Requirement
    
	
 
    	
 
    	
 
    	
 
    	
Element
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Requirement
    	
 
    	
(Shipment
    
	
#
    	
 
    	
Category
    	
 
    	
Name
    	
 
    	
Description
    	
 
    	
Data type
    	
 
    	
(Status File)
    	
 
    	
File)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
16
    	
 
    	
Physician
    	
 
    	
Address2
    	
 
    	
Physician   street address line 2
    	
 
    	
Alphanumeric
    	
 
    	
Where   available
    	
 
    	
Where   available
    
	
17
    	
 
    	
Physician
    	
 
    	
City
    	
 
    	
Physician   city
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
18
    	
 
    	
Physician
    	
 
    	
State
    	
 
    	
Physician   state (2 letter abbreviation)
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
19
    	
 
    	
Physician
    	
 
    	
Zip
    	
 
    	
Physician   zip (5 digit)
    	
 
    	
Numeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
20
    	
 
    	
Rx
    	
 
    	
Date   Rx received
    	
 
    	
Date   the Rx was received by the specialty pharmacy. (Referral date) 
    	
 
    	
YYYYMMDD
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
21
    	
 
    	
Rx
    	
 
    	
Rx   fill/ status update date
    	
 
    	
Date   the Rx was filled or status was updated
    	
 
    	
YYYYMMDD
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
22
    	
 
    	
Rx
    	
 
    	
Rx   Ship date
    	
 
    	
Date   the Rx was shipped
    	
 
    	
YYYYMMDD
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
23
    	
 
    	
Rx
    	
 
    	
Rx   number
    	
 
    	
De-identified   Prescription number 
    	
 
    	
Numeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
24
    	
 
    	
Rx
    	
 
    	
Dose   prescribed 
    	
 
    	
Dosage   prescribed by physician 
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
25
    	
 
    	
Rx
    	
 
    	
Dose   frequency 
    	
 
    	
Number   of dosage prescribed per day
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
26
    	
 
    	
Rx
    	
 
    	
Product   item code (NDC code)
    	
 
    	
Identifier   to track which item was shipped. Product   National Drug Code (NDC) in 11 Digit 5-4-2 format e.g. 99999-9999-99
    	
 
    	
Numeric
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
27
    	
 
    	
Rx
    	
 
    	
Rx   label information
    	
 
    	
Directions   for taking the medication 

List   of sample values — Direction codes to be provided by Celgene: QD: Every Day,   BID: Twice a day, TID: Three times a day, QID: Four times a day and QOD:   Every other day
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
28
    	
 
    	
Rx
    	
 
    	
Days   supplied
    	
 
    	
Number   of days of medication supplied based on SIG
    	
 
    	
Numeric
    	
 
    	
Not   applicable
    	
 
    	
Mandatory
    
	
29
    	
 
    	
Rx
    	
 
    	
Quantity   shipped
    	
 
    	
Number   of units of drug shipped
    	
 
    	
Numeric
    	
 
    	
Not   applicable
    	
 
    	
Mandatory
    
	
30
    	
 
    	
Rx
    	
 
    	
Refill   number
    	
 
    	
Cumulative   fill for therapy; 0 indicates first fill, then 1, 2, etc.
    	
 
    	
Numeric
    	
 
    	
Not   applicable
    	
 
    	
Mandatory
    
	
31
    	
 
    	
Rx
    	
 
    	
ICD-9/10   Codes
    	
 
    	
Indicates   primary diagnosis of patient (Disease Classification code)
    	
 
    	
Text
    	
 
    	
Mandatory
    	
 
    	
Mandatory
    
	
32
    	
 
    	
Performance   Metric 1
    	
 
    	
Welcome   to Therapy Call
    	
 
    	
Indicates   if the Pharmacy has conducted “live” call with patient within 4 hours of   first Rx receipt
    	
 
    	
Text   (Y/N)
    	
 
    	
Not   applicable
    	
 
    	
Mandatory
    
	
33
    	
 
    	
Performance   Metric 2
    	
 
    	
Enhanced   Adherence Program Enrollment
    	
 
    	
Indicates   if the Pharmacy has enrolled patient into program and conducted the “live”   call
    	
 
    	
Text   (Y/N)
    	
 
    	
Not   applicable
    	
 
    	
Mandatory
    
	
34
    	
 
    	
Patient   support
    	
 
    	
Patient   out-of- pocket financial support
    	
 
    	
Indicates   if the Pharmacy has secured patient out-of- pocket financial support approval   via commercial co- pay program or foundations
    	
 
    	
Text   (Y/N)
    	
 
    	
Not   applicable
    	
 
    	
Mandatory
    

 

Page 26 of 31

 

Appendix B: Inventory File Layout

 

	
#
    	
 
    	
Element Name
    	
 
    	
Description
    	
 
    	
Data type
    
	
1
    	
 
    	
Pharmacy   name
    	
 
    	
Name   of Pharmacy
    	
 
    	
Text
    
	
2
    	
 
    	
Pharmacy   location name
    	
 
    	
Name   of Location of the Pharmacy
    	
 
    	
Text
    
	
3
    	
 
    	
Location   DEA number
    	
 
    	
DEA   # associated with the Pharmacy
    	
 
    	
Text
    
	
4
    	
 
    	
Location   NPI number
    	
 
    	
NPI   # associated with the Pharmacy
    	
 
    	
Text
    
	
5
    	
 
    	
Inventory   date
    	
 
    	
Inventory   date (YYYYMMDD) format
    	
 
    	
Date
    
	
6
    	
 
    	
NDC
    	
 
    	
11   Digit 5-4-2 Format e.g. 99999-9999-99
    	
 
    	
Text
    
	
7
    	
 
    	
Quantity   Received
    	
 
    	
Quantity   of Product received in current inventory period (Month)
    	
 
    	
Numeric(1)
    
	
8
    	
 
    	
Quantity   Returned
    	
 
    	
Quantity   of Product returned to Celgene in accordance with Celgene’s Return Goods   Policy
    	
 
    	
Numeric(2)
    
	
9
    	
 
    	
Quantity   dispensed
    	
 
    	
Total   quantity dispensed to Customers
    	
 
    	
Numeric
    
	
10
    	
 
    	
Quantity   on hand
    	
 
    	
Total   quantity on hand
    	
 
    	
Numeric
    

 

(1) To be provided by Pharmacy manually until Pharmacy system has automated the information.

(2) To be provided by Pharmacy manually until Pharmacy system has automated the information.

 

Page 27 of 31

 

Appendix C: Patient Status Types and Associated Description

 

Following is a description of each patient status type and the associated description. The descriptions listed below are a few samples and Pharmacy will need to provide an initial file capturing all the status types and their associated descriptions during the test phase. Subsequent additional descriptions could be shared directly in the weekly files during the operations phase.

 

1.      PENDING — Status assigned to a patient who has been assigned to the Pharmacy but product has not yet been shipped to the patient.

 

2.      ACTIVE— Status assigned to a patient for whom product has been shipped and is actively receiving product.

 

3.      PENDING— Status assigned to a patient whose insurance has denied coverage.

 

4.      DISCONTINUED — Status assigned to a patient with a shipped product from Pharmacy but has since been discontinued.

 

5.      DISCONTINUED— Status assigned to a patient for whom pharmacy was unable to provide assistance and patient was therefore referred to another source for assistance.

 

	
Pending Descriptions
    	
 
    
	
New   referral
    	
 
    
	
Pending   benefits investigation
    	
 
    
	
Prior   authorization approved
    	
 
    
	
Unable   to contact patient
    	
 
    
	
Pending   patient decision
    	
 
    
	
Pending   physician decision
    	
 
    
	
Other
    	
 
    

 

Page 28 of 31

 

	
Denied Descriptions
    	
 
    
	
Product   not covered by insurance plan
    	
 
    
	
Other
    	
 
    

 

	
Discontinued Descriptions
    	
 
    
	
Deceased
    	
 
    
	
Patient’s   choice, other
    	
 
    
	
Physician   choice
    	
 
    
	
Other
    	
 
    

 

	
Shipped Descriptions
    	
 
    
	
Shipped
    	
 
    

 

	
Referred Descriptions
    	
 
    
	
SP   unable to service and patient is triaged to another SP
    	
 
    
	
SP   unable to service and redirected to OPS
    	
 
    
	
Patient/Family   choice, financial/co-pay too high
    	
 
    
	
Unable   to contact physician
    	
 
    
	
Unable   to contact patient
    	
 
    
	
No   insurance/insurance terminated
    	
 
    
	
Other
    	
 
    

 

Page 29 of 31

 

Appendix D: Data Format and Transfer Protocol

 

Data File Dimensions and Specifications

 

The table below outlines the characteristics of the data specifications (Appendix A and B) from the following context

 

	
 

Frequency
    	
 
    	
 

Weekly   data feed delivered by end of business day Monday every week
    
	
 
    	
 
    	
 
    
	
Format
    	
 
    	
 

PIPE   delimited, with one patient record per row. Data elements in the file should   not contain embedded CR or LF fields as this will cause errors in the record   layout and processing at the receiving system end.

 

Each   record line will end with CR-LF. Empty files (zero byte) will be sent in the   event when there is no data to report.

 

Files   are expected to contain a HEADER record detailing the data element names in   the first row.
    
	
 
    	
 
    	
 
    
	
Specialty pharmacy identifier
    	
 
    	
 

This   is a mandatory data element. It will be in the format ‘SPxx’.

 

This   is the identifier assigned to the Pharmacy by Celgene and is used to uniquely   identify the source of the data records. xx  is a 2 digit number.

Examples of valid Pharmacy ID are SP01, SP02 etc.
    
	
 
    	
 
    	
 
    
	
File name convention
    	
 
    	
 

Weekly_Otezla_SPxx_YYYYMMDDhhmmss.txt

 

Weekly_lnventory_Otezla_SPxx_YYYYMMDDhhmmss.txt

 

Note:

YYYYMMDDhhmmss refers to the Year, Month, Date, hour, minutes, seconds timestamp 

 

xx is a 2 digit number   assigned by Celgene

 

If   separate status and shipment files are provided then the following naming convention   should be used:

 

Weekly_Status_Otezla   SPxx_YYYYMMDDhhmmss.txt   Weekly_Shipment_Otezla_SPxx_YYYYMMDDhhmmss.txt

 

Example:
    

 

Page 30 of 31

 

	
 
    	
 
    	
Weekly_ Otezla _SP01_ 20111122124056.txt
    
	
 
    	
 
    	
 
    
	
Data file encryption
    	
 
    	
 

Data   file transmitted to Third Party Data Provider is already encrypted via Secure   FTP. Third Party Data Provider recommends the use of pgp encryption software,   for Pharmacy if it requires additional encryption.

 

The   encrypted file provided would have an extension of .enc.

 

The   Pharmacy will need to provide Third Party Data Provider with their public certificate,   in order for Third Party Data Provider to decrypt their data files

 
    

 

Data Transfer Protocol

 

	
 

Delivery destination
    	
 
    	
 

Pharmacy   will deliver the data feed files to Third Party Data Provider’s FTP server
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Server:
    
	
 
    	
 
    	
via HTTPS: https://ftp2.zsassociates.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Folder structure
    
	
 
    	
 
    	
/inbox — Inbox for   sending files to Third Party Data Provider
    
	
 
    	
 
    	
 
    
	
 

Protocol
    	
 
    	
 

Secure   FTP (FTP over ssh)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Note:
    
	
 
    	
 
    	
http://en.wikipedia.org/wiki/SSH_file_transfer_protocol
    

 

Page 31 of 31Exhibit 10.9.1

 

	
Acct#
    	
 
    	
 
    	
Region:
    	
 
    	
 
    	
DC(s):
    	
 
    

 

PRIME VENDOR AGREEMENT

 

This Prime Vendor Agreement (“Agreement”) is made as of January 1, 2012 (“Effective Date”) by AmerisourceBergen Drug Corporation, a Delaware corporation (“ABDC”) on the one hand, and Diplomat Pharmacy, Inc., a Michigan corporation (“Diplomat”) for itself and on behalf of the following limited liability companies of which Diplomat is the sole member: Diplomat Specialty Pharmacy of Flint, LLC, Navigator Health Services, LLC, Diplomat Health Services, LLC, Diplomat Specialty Pharmacy of Grand Rapids, LLC, Diplomat Specialty Pharmacy of Chicago, LLC, Diplomat Specialty Pharmacy of Ft. Lauderdale, LLC, Diplomat Specialty Pharmacy of Swartz Creek, LLC and Diplomat Specialty Pharmacy of Southern California, LLC (Diplomat and such limited liability companies being referred to herein collectively as “Customer”) on the other hand.

 

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 operates one or more Facilities (as defined in Section 3); and

 

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

 

D.                                    ABDC and Diplomat recognize that they are parties to a certain Prime Vendor Agreement dated November 1, 2006, as amended (“Prior PVA”). Upon execution of this Agreement, the Prior PVA will automatically and concurrently terminate.

 

1.                                      PRICING AND PAYMENT TERMSABDC 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 95% of all brand Rx Products it purchases, as verified quarterly, and meets minimum periodic purchase levels in Pricing/Payment Terms Paragraph 3(A). If Product is not available from ABDC, or if Customer is required contractually to buy direct from manufacturer, Customer may purchase such Product outside of ABDC with such purchases excluded from the 95% requirement. Orders for Products, including controlled substances, will be electronically transmitted (CSOS for Schedule lls; Customer will endeavor to transition remaining low-volume locations to CSOS ordering by December 31, 2012) and will describe Products that ABDC will provide to Customer, the quantity and designated delivery location. Payment must be by automated clearinghouse electronic funds transfer (ACH/EFT) with either ABDC initiating the transaction or Customer initiating the transaction (so long as ABDC receives the amount owed in readily available funds on or before the due date).

 

2.                                      FILL RATES

 

For Rx Products, ABDC will meet an adjusted fill rate service level of 97% each calendar month. Should ABDC fail to meet its adjusted fill rate service level for two (2) consecutive months and such failure to meet the adjusted fill rate service level is not due to Force Majeure events (as defined in Paragraph 9.1 of Exhibit 3), ABDC will credit to Customer the following penalty:

 

	
 
    	
 
    	
97 - 96%
    	
=
    	
[*]%
    
	
 
    	
 
    	
95.9 - 95%
    	
=
    	
[*]%
    
	
 
    	
 
    	
< 95%
    	
=
    	
[*]%
    

 

on the Net Purchases for which the rolling average falls below such level. This credit shall only be available if Customer complies with the payment and other terms of this Agreement and continues to use ABDC as its Primary Vendor. The fill rate will be adjusted to reflect unavailable Product (manufacturer’s backorders or Product otherwise unavailable without fault by ABDC, including common carrier delays), partial ships (50% or more), repeat orders within 72 hours, Products not ordered by Customer during the prior sixty (60) days, if Customer’s usage exceeds its estimates by

 

Diplomat PVA December 2011

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

1

 

more than 120%, and Force Majeure events. ABDC’s computerized reports will be used to determine the actual level achieved. Customer will provide its best usage estimates on Products at least 30 days prior to its first order of a Product (both new Products and Products that have not been ordered during the prior 30 days) so that ABDC can maintain its service level commitment. Products must be purchased once per month to remain on the list of Products for which the service level commitment applies. Any Product not ordered in a given month can be reinstated on such list when Customer notifies ABDC that it is resuming the ordering of such Product on a monthly basis.

 

3.                                      GENERICS PROGRAM PARTICIPATION

 

(A)                               Customer must participate in ABDC’s “PRxO® Generics” preferred generic formulary program pursuant to requirements as amended from time to time by ABDC. Customer authorizes ABDC as its agent solely to develop and implement a generic Rx Product list for the Term. Under the PRxO Generics, ABDC will maintain a PRxO Generics formulary of commonly used Generic Rx, other than generic injectables, which ABDC may amend or supplement from time-to-time. Customer agrees (i) to purchase from ABDC no less than 98% of its purchases of all Generic Rx, other than generic injectables, from the PRxO Generics formulary, and (ii) that the Generic Rx included in the PRxO Generics formulary applicable to Customer shall be primary over Generic Rx of any group purchasing organization, regardless of the availability of equivalent Generic Rx from any group purchasing organization. Calculations are quarterly, with no carryover from one quarter to the next. Customer’s PRxO Generics purchases will be treated as Special Priced Products.

 

(B)                               Customer agrees that all of its Facilities will participate in ABDC’s auto-substitution feature (“ACAP”) pursuant to which purchases will be automatically directed to the single, preferred, competitively-priced generic Rx within the formulary in lieu of other Rx Products.

 

4.                                      CUSTOMER LOCATIONS & DELIVERIES

 

ABDC will deliver Products to each Facilityfive 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 pharmacies, together with any other pharmacies Customer acquires, is affiliated with or operates during the Term in the United States. Newly acquired pharmacies with existing agreements with other distributors will become Facilities under this Agreement upon the earlier of expiration of such existing agreement or the date Customer may terminate such agreement, with or without cause, without breaching it or paying a material termination penalty. Service to Facilities outside ABDC’s normal service area may be subject to a delivery surcharge. Customer shall cause each Facility to satisfy each obligation imposed on a Facility hereunder and to refrain from taking any action in contravention of such obligations and Customer shall be liable for any breach of this Agreement by any individual Facility when the context of this Agreement suggests that a particular obligation is Facility specific.

 

5.                                      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 with the following exceptions: (a) Saleable Product returned within 180 days will be accepted without a fee provided it has 9 months dating remaining, (b) Product returned after 180 days will be subject to a 20% fee if it is salable or 30% if is is unsalable, and (c) Customer must call the servicing distribution center within 30 days of Product receipt in the event Customer wishes to return damaged Product. If Customer returns more than 3% of its Rx Net Purchases (defined as Customer’s total purchases from ABDC less returns, credits, rebates, Price of Goods adjustments, late payment fees and similar items) or 3% of its non-Rx Net Purchases in any month, ABDC may assess Customer an additional restocking fee, adjust its Price of Goods, or both. 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

 

Diplomat PVA December 2011

 

2

 

amount on the referenced invoice. ABDC may refuse all future returns from Customer if Customer submits any counterfeit Product for return.

 

6.                                      ADDITIONAL SERVICES & PROVISIONS.

 

Services as of the Effective Date are listed in Exhibit “2”. Terms, conditions and other provisions are set forth in Exhibit “3” (“Provisions”).

 

7.                                      TERM OF AGREEMENT

 

Subject to Provisions Paragraph 5, the term will be from the Effective Date until December 31, 2016 (“Initial Term”) and may be extended, upon the mutual written consent of both parties, for two (2) additional (1) year periods (each a “Renewal Term”). Upon the expiration of the Initial Term, if applicable, or Renewal Term, the Agreement will 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.

 

8.                                      RECORDS

 

To the extent required by 42 U.S.C. §1395x(v)(1), until four years after the Term, upon written request ABDC will make available to the U.S. Department of Health & Human Services Secretary, the Comptroller General, or their authorized representatives, 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.

 

9.                                      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
    	
Diplomat Pharmacy, Inc.
    
	
(for all entities):
    	
4100 S. Saginaw Street
    
	
 
    	
Flint, Ml 48507
    
	
 
    	
Attn: General Counsel
    
	
 
    	
 
    
	
With a copy to:
    	
Diplomat Pharmacy, inc.
    
	
 
    	
4100 S.Saginaw Street
    
	
 
    	
Flint, Michigan 48507
    
	
 
    	
Attention: Sean Whelan
    
	
 
    	
 
    
	
To ABDC:
    	
AmerisourceBergen Drug Corporation
    
	
 
    	
1300 Morris Drive
    
	
 
    	
Chesterbrook, PA 19087-5594
    
	
 
    	
Attn: Senior 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
    

 

Diplomat PVA December 2011

 

3

 

10.                               JOINT AND SEVERAL LIABILITY

 

Each of the entities named as a Customer in this Agreement shall be jointly and severally liable for any obligations (including payment or indemnification obligations), breaches or other liabilities of each of the other Customer entities arising under this Agreement.

 

11.                               EXHIBITS

 

These exhibits 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 Effective Date.

 

ABDC:

AmerisourceBergen Drug Corporation

 

	
By:
    	
/s/ Brenda Axe
    	
 
    
	
Name:
    	
Brenda Axe
    	
 
    
	
Title:
    	
VP Strategic Accts
    	
 
    

 

CUSTOMER:

 

Diplomat Pharmacy, Inc., for itself and on behalf

of the following other entities of which Diplomat

is the sole member:

 

Diplomat Specialty Pharmacy of Flint, LLC

Navigator Health Services, LLC

Diplomat Health Services, LLC Diplomat

Specialty Pharmacy of Grand Rapids, LLC

Diplomat Specialty Pharmacy of Chicago, LLC

Diplomat Specialty Pharmacy of Ft. Lauderdale, LLC

Diplomat Specialty Pharmacy of Swartz Creek, LLC

Diplomat Specialty Pharmacy of Southern California, LLC

 

	
By:
    	
/s/ Sean Whelan
    	
 
    
	
Name:
    	
Sean Whelan
    	
 
    
	
Title:
    	
Chief Financial Officer
    	
 
    

 

Diplomat PVA December 2011

 

4

 

CONFIDENTIAL

Customer will delete this Exhibit “1” (or request confidential treatment)

if it discloses this Agreement for any reason, including in any SEC filing.

 

Diplomat PVA December 2011

 

5

 

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 reflects one administrative or other fee to a buying group or group purchasing organization (“GPO”). If Customer contracts with another or an additional GPO, Customer will pay any such fees 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.

 

1.                                      PROGRAM FEES

 

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 Monthly Net Purchase volume and total monthly PRxO Generics purchases as a percentage of Customer’s total monthly net Rx purchases (“PRxO Compliance Level”), for Products other than those designated as Special Price Products. ABDC will add to the billed amount any applicable sales, use, business and occupation, gross receipts or other tax. 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 returned within five business days. Price of Goods will begin at Cost minus [*] and may be adjusted quarterly based upon Customer’s Total Monthly Net Purchase volume and PRxO Compliance Level over the prior three (3) months.

 

	
 
    	
 
    	
Branded Price of Goods
    	
 
    
	
Average Aggregate Monthly Net Purchase
    	
 
    	
Extended Semi-Monthly (37
    	
 
    
	
Volume
    	
 
    	
DSO) EFT
    	
 
    
	
[*] & Above
    	
 
    	
Cost [*]
    	
 
    
	
Amgen Enbrel
    	
 
    	
Cost [*]
    	
 
    
	
OTC
    	
 
    	
Cost [*]
    	
 
    
	
Schedule II Brand Products
    	
 
    	
Cost [*]
    	
 
    

 

“Cost” for any non-contract Product means the price of the Product on a supplier’s price list (also known as Wholesale Acquisition Cost (WAC)) and means the applicable Customer/GPO contract price authorized by a supplier and maintained in an ABDC bid file for any contract Product. Brand Rx contract Products are priced at the applicable cost +/- markup]. In all cases, Cost (or WAC) is determined on the date Product is allocated to Customer by ABDC and is calculated after excluding any discount for prompt payment given to ABDC by its suppliers.

 

Drop Shipments will be based on volume. Drop Shipments will be billed at Cost minus [*], with a quarterly re-calculation based on the incremental dollar volume tiers noted below. The parties acknowledge that after each contract Year, the Drop Shipment volume tiers will increase 15% per year.

 

	
Quarterly Drop Shipments
    	
 
    	
 
    	
 
    
	
Purchase Volume
    	
 
    	
 
    	
 
    
	
(YEAR 1)
    	
 
    	
Fee for Service
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    

 

CONFIDENTIAL

Customer will delete this Exhibit “1” (or request confidential treatment)

if it discloses this Agreement for any reason, including in any SEC filing.

 

Diplomat PVA December 2011

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

6

 

	
Quarterly Drop Shipments
    	
 
    	
 
    	
 
    
	
Purchase Volume
    	
 
    	
 
    	
 
    
	
(YEAR 2)
    	
 
    	
Fee for Service
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Quarterly Drop Shipments
    	
 
    	
 
    	
 
    
	
Purchase Volume
    	
 
    	
 
    	
 
    
	
(YEAR   3)
    	
 
    	
Fee for Service
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Quarterly Drop Shipments
    	
 
    	
 
    	
 
    
	
Purchase Volume
    	
 
    	
 
    	
 
    
	
(YEAR   4)
    	
 
    	
Fee for Service
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Quarterly Drop Shipments
    	
 
    	
 
    	
 
    
	
Purchase Volume
    	
 
    	
 
    	
 
    
	
(YEAR   5)
    	
 
    	
Fee for Service
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    
	
[*]
    	
 
    	
Cost [*]
    	
 
    

 

ABDC “Special Price Products” including but not limited to [*], will not be priced based upon ABDC’s Cost (as defined above), but will instead be priced on terms set by ABDC from time to time for such Products and Services. Customer may purchase the Special Price Products outside of ABDC, with such purchases excluded from Customer’s Primary Vendor requirement. ABDC Special Price Product purchases count toward total periodic Net Purchases. It is understood that drop shipments will not be Special Price Products, but rather billed in accordance with matrixes above.

 

B.                                    PRxO® Generics. Customer will participate in PRxO® Generics pursuant to requirements as amended from time to time by ABDC and must purchase from ABDC no less than 98% of its purchases of all generic Rx Products, other than generic injectables, from the PRxO® Generics formulary, provided such equivalent generic Rx Product is available from ABDC and is part of the PRxO Generics formulary.

 

C.                                    Additional Value-Added Services. ABDC will provide the additional value-added Services in Exhibit “2” at no additional monthly cost.

 

D.                                    Ordering Hardware/Software. In addition, Customer will pay fees in Exhibit “2” for ordering and reporting software and hardware selected by Customer for each Facility or other location. The parties will coordinate to ensure C-ll 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 45 days before it changes suppliers,

 

CONFIDENTIAL

Customer will delete this Exhibit “1” (or request confidential treatment)

if it discloses this Agreement for any reason, including in any SEC filing.

 

Diplomat PVA December 2011

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

7

 

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 it 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 supplier or (y) not paid within 45 days and, in either case, Customer will look solely to such GPO or supplier for redress.

 

F.                                      Market Competitiveness. In addition to regular business reviews, upon the [*], Customer and ABDC shall meet to discuss the Price of Goods, terms and conditions offered by ABDC to Customer pursuant to this Agreement. [*]

 

2.                                      PAYMENT TERMS

 

A.                                    Payments. Customer agrees to Extended Semi-Monthly (37 DSO) EFT. Payment for purchases are due and payable within 30 days from Semi-Monthly statement date by EFT.

 

B.                                    Terms. All payments must be received for deposit to ABDC’s account by the due date by ACH/EFT with either ABDC initiating the transaction or Customer initiating the transaction (so long as ABDC receives the amount owed in readily available funds on or before the due date). Subject to 2.6 and 2.8 of Exhibit 3 or if Customer is in breach of this Agreement, ABDC may change available payment plans from time to time. Payment term changes may affect Price of Goods. Subject to credit approval, Customer may change payment terms upon 30 days written notice prior to the beginning of a calendar month.

 

3.                                      MINIMUM ORDER VOLUME

 

A.                                    Annual Purchases. Customer’s minimum annual Net Purchase volume (total purchases less returns, credits, rebates, late payment fees and similar items) during Year 1 is $525,000,000. Year 1 is from the Effective Date through January 31, 2013. Subsequent contract Years are the following 12-month periods. Customer’s Net Purchases during the Term are projected to increase at a rate of 15.00% per year during each Year. In addition, Customer’s aggregate Net Purchases over the Term will be at least $3,539,750,156. Calculations are quarterly, with no carryover from one period to the next.

 

B.                                    Small Order Charge. If Customer purchases less than $25,000.00 per month, a delivery charge of $25.00 per delivery will be assessed for each order that is less than $1,250.00. ABDC may adjust the per-delivery charge from time to time to reflect ABDC’s shipping and handling costs.

 

C.                                    Price of Goods Adjustments. Customer acknowledges that Price of Goods and Program fees are based upon Customer’s meeting such minimum annual, aggregate, PRxO® Generics and other Net Purchases and, if Customer fails to do so, in addition to any other remedies, ABDC may reasonably adjust Price of Goods and Program fees on 10 days’ notice to reflect lower than expected Net Purchases.

 

CONFIDENTIAL

Customer will delete this Exhibit “1” (or request confidential treatment)

if it discloses this Agreement for any reason, including in any SEC filing.

 

Diplomat PVA December 2011

 

* Information redacted pursuant to a confidential treatment request by Diplomat Pharmacy, Inc. under 5 U.S.C. §552(b)(4) and Rule 406 under the Securities Act of 1933 and submitted separately with the Securities and Exchange Commission.

 

8

 

EXHIBIT 2 TO

PRIME VENDOR AGREEMENT

ADDITIONAL VALUE-ADDED SERVICES

 

The following Services are offered to Customer by ABDC for monthly fees in Pricing/Payment Terms Paragraph 1(C).

 

·                  Bar-Coded Shelf Labels

·                  DEA Scheduled Rx Products Purchased Report

·                  Monthly Usage and 80/20 Report

·                  Price stickers — Rx and OTC

 

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. Customer has no obligations to accept any new Services or additional fees related such new Services.

 

Ordering & Reporting Software and Hardware

 

·                  Custom Reporting software for no additional charge per month per installation.

·                  Internet ordering software (Catalog and Order Entry (COE), iECHO or similar software, as appropriate) for for no additional charge per month per installation.

·                  iScan PPC hardware technology for a monthly lease fee of $100.00 per unit covering hardware, software and maintenance.

·                  UltraPhase/Telxon handheld electronic order entry terminal (two per pharmacy) for no additional charge per month per installation.

 

Customer is responsible for hardware maintenance and repair. ABDC retains title to all ordering and reporting hardware and software and, pursuant to Provisions Paragraph 5.3, Customer must promptly return them at the end of the Term.

 

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

 

Recalls

 

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

 

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 or otherwise restricted. 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.

 

Diplomat PVA December 2011

 

9

 

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 or after. Customer’s employees may audit such records only pursuant to ABDC’s audit policies, as modified from time to time. Such audits may be conducted only during ordinary business hours and upon reasonable notice and may only cover 90 days prior to the request or any shorter period set by a supplier for chargeback audits. No audit may cover any period previously audited. All costs will be borne by Customer, including costs to produce records. If an audit shows net overcharges or undercharges and ABDC agrees with such findings, ABDC will credit or charge Customer within 30 days of receipt of written notice of the net overcharge (or, if later, within 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 electronic order for all Products. If allowed, non-electronic orders may be subject to additional charges.

 

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. If payment is not received by the due date, 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 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 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

 

Each party and its employees or representatives (“Receiving Party”) will protect all proprietary and confidential information (“Confidential Information”) disclosed by the other (“Disclosing Party”) and not use or disclose it except in connection with the Program or as otherwise agreed. 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 the other party’s:

 

(a)                                 (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 30 days; (v) insolvency within the meaning of UCC Section 1-201 or failing generally to pay its debts as they become due within the meaning of Bankruptcy Code Sec. 303(h)(1) (11 USC Sec. 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 ability to pay its debts as they become due) (collectively, “Bankruptcy”);

 

(b)                                 Failure to pay any amount due and such failure continues five days after written notice; or

 

(c)                                  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 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 30 days, but such cure is not completed within such 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 12-month period, the non-breaching party may terminate this Agreement upon 30 days’ written notice. “For cause” does not include Customer’s receiving a more favorable offer from an ABDC competitor.

 

Diplomat PVA December 2011

 

10

 

5.2                               Change in Control. Either party may terminate this Agreement upon the sale or transfer of the business of the other party, in whole or in part, or a change in control in the other party. As used in this Agreement, “change in control” means, if applicable, sale or other transfer of 25% or more of (i) a party’s assets, or (ii) the voting equity or other voting interest a party.

 

5.3                               Survival Upon Termination. Within five days of expiration or earlier termination of this Agreement for any reason, all amounts owed by Customer will be immediately due and payable and 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 any such items not returned. Obligations in Paragraphs 4, 5.2, 6 and 9 of this Exhibit 3.

 

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, naming ABDC on such policies as an additional insured, and will maintain professional liability insurance with limits of no less than $10,000,000 per incident.

 

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, for 90 days from the Effective Date, (i) Software will perform substantially in accordance with its documentation if operated as directed and (ii) hardware provided by ABDC and media on which 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, HARDWARD 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 90 days of the Effective Date. Such replacement will not extend such 90-day period.

 

9. MISCELLANEOUS

 

9.1                               Force Majeure. If ABDC’s performance is prevented, delayed or otherwise affected by any cause beyond its control, including labor disputes, fire, terrorism, acts of God, unavailability of Product, transportation, materials or fuel, delays by suppliers, loss of facilities or internet, telecommunication or electrical systems, voluntary foregoing a right in order to comply with or accommodate government orders or requests, compliance with any law or otherwise (“Force Majeure”), ABDC may reduce or eliminate Products without liability or obligation during the Force Majeure period.

 

9.2                               Security Interest. In addition to any security interest provided previously or later by Customer to ABDC, to secure all of Customer’s existing and future liabilities to ABDC, Customer now grants to ABDC a lien and security interest, which may be a purchase money security interest, in all of Customer’s Inventory, related Accounts and Proceeds and products thereto and thereof, now owned or hereafter acquired or arising. All capitalized terms used herein and not defined have the meaning in the Uniform Commercial Code as in effect in any jurisdiction in which any of the Collateral may at the time be located (“UCC”). 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, including by merger, change of control, asset sale, operation of law or otherwise, with ABDC’s written consent. In no event will an agreement between a successor to or permitted assign of Customer and any third party negate or diminish in any way such successor’s or assign’s obligations under this Agreement. Notwithstanding anything to the contrary in this Agreement, in the event of such an assignment, delegation or Change-in-Control of Customer, or a sale or transfer of ownership or control of any Facility, Customer shall provide ABDC with prior written notice and shall cause the surviving entity, successor-in-interest or transferee, as the case may be (the “Assignee”), to either (1) agree to be bound by the terms of this Agreement from and after the date of such event or (2) enter into a replacement agreement to this Agreement with ABDC on such terms as are reasonably acceptable to ABDC and the Assignee. Customer 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                               EEO 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 prohibited by law and will meet affirmative action obligations as are imposed by law.

 

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. This Agreement supersedes prior oral or written agreements 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.

 

Diplomat PVA December 2011

 

11

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