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EXHIBIT 10.24
PRIME VENDOR AGREEMENT*
TEL-DRUG, INC,
AND
XXXXXX DRUG CO., INC.
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*Confidential portion omitted and filed separately with the Commission.
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PRIME VENDOR AGREEMENT
This agreement is made as of the 21st day of March 1994, between TEL-DRUG, INC.
also known as CIGNA and XXXXXX DRUG CO., INC. of Aberdeen, South Dakota,
hereinafter known as JDC.
1. PRIME VENDOR
The following describe the terms and conditions under which JDC, as a prime
vendor, will provide pharmaceutical products and services to Tel-Drug.
2. TERMS AND CONDITIONS
A. PRICE STRUCTURE
JDC will supply all products under this agreement to Tel-Drug on the
basis of the "cost" (as that term is defined an following page)
plus [*}
For purchases of non-contract product, "Cost" will be defined as the
manufacturer's published wholesale acquisition cost on the date of
JDC's invoice to Tel-Drug, adjusted to reflect normal and customary
quantity discounts and special promotional allowances, excluding
manufacturer's cash discounts. For purchases of contract product,
"Cost" will be defined as the cost negotiated between the manufacturer
and Tel-Drug; provided that JDC shall have an arrangement with the
manufacturer regarding such contract cost satisfactory to JDC. The
JDC system pricing logic is defined as best price. If a special
promotional price is more favorable than the contract price, product
will be priced at the lower amount.
All orders to be transmitted to qualify for above pricing.
Non-transmitted orders subject to cost plus [*] (excluding schedule
II's, back orders and emergency orders).
B. TAXES
Purchaser will pay any fees and taxes (other than taxes based upon
JDC's net income or imposed upon it's inventory held in it's
warehouses at the rate in effect on the date hereof) imposed or
assessed upon sales by JDC to Purchaser (including any interest or
penalties not arising from the negligence of JDC). For example:
1. Gross Receipts - Prices to Purchaser will include any taxes and
fees
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*Confidential portion omitted and filed separately with the Commission.
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payable by JDC based upon its gross receipts from Purchaser
(except as provided above). Prices will be adjusted from
time-to-time as necessary to include such amounts.
2. Sales Taxes - Purchaser will pay sales taxes imposed upon sales
from JDC to Purchaser as invoiced by JDC, unless Purchaser has
previously delivered to appropriate certificate of exemption.
C. COST VERIFICATION
Upon request, JDC will make available on-site inspection of
manufacturer's invoices to an authorized representative provided that
such invoices are limited to the most recent 12 months.
D. PAYMENT
Any extension of credit and/or the continued extension of credit shall
be at the discretion of JDC. Extension of credit shall be based upon
the receipt of a completed credit application and the review of any
requested financial information.
Weekly Deposit
Tel-Drug will provide JDC a deposit equal to one week's average
purchases. JDC will produce a statement for Tel-Drug on a weekly
basis. Purchases made Friday through Thursday are due the following
Tuesday. Deposit will be adjusted monthly based on most current
purchasing levels.
LATE PAYMENT
A late fee of 12% per year or the highest rate allowed by law,
whichever is less, will be charged on past due balances on subsequent
invoices. JDC will immediately contact Tel-Drug management regarding
late payment issues. A late payment penalty (as described above) will
be assessed in the event of:
1. Payment still not being made within five (5) business days from
the time Tel-Drug management was made aware of the situation.
2. Should Tel-Drug be consistently late with payments, JDC will
immediately assess late penalties. JDC will continue to contact
Tel-Drug management in such instances.
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3. SERVICES AND FEES
A. COMPREHENSIVE SERVICE PACKAGE
REFER TO ATTACHED ADDENDUM
B. PROGRAM OPTIONS
C. DEPOT PROGRAM AND GROUP SUPPORT
JDC understands that commitment to group contracts by the members and
their distributor, is essential to the long term success of a contract
program.
JDC commits to support the contract efforts of Tel-Drug by:
1. Developing contracts file from award information submitted
by CIGNA.
2. Assigning only the CIGNA group contract file to each member.
3. Processing ancillary contracts only at the request of the
facility.
4. Providing the entire group contract file of whether contract
products are stocked locally.
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5. Performing electronic bid check function comparing each
order to the entire CIGNA contract file for maximum contract
utilization.
6. Prioritizing CIGNA contract products in all system
applications.
7. Implementing systems designed to locate, confirm, and ship
first choice contract products ordered by Tel-Drug.
D. CONTRACT LOAD INFORMATION
JDC loads bid files in the following manner in order to ensure initial
and ongoing accuracy. Six weeks lead time is requested in order to
complete this process before the membership begins purchasing.
- JDC loads the file electronically or manually depending on how
the data is provided by CIGNA. JDC loads the file based on data
provided by CIGNA.
- After the file is loaded, JDC will validate the accuracy of the
entire file by comparing the file to hard copy contracts provided
to JDC by the manufacturer.
Approximately 80% of the vendors provide the data in hard copy.
- JDC will identify those manufacturers that do not provide hard
copy verification. JDC will interact with the manufacturers and
CIGNA in an aggressive effort to secure hard copy verification.
- Price discrepancies identified in the above process will be
brought to the attention of the manufacturer and CIGNA in order
to determine the correct price.
- JDC will load contract updates on the same day that the
contract(s) are received from CIGNA.
E. PERFORMANCE AND SERVICE LEVEL
Delivery
1. Daily Delivery: JDC will provide a minimum of one delivery per
day Monday through Friday. A second daily delivery and or
Saturday delivery may be available. Delivery schedules to be
provided by JDC.
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2. Emergency Delivery: JDC provides 24-hour emergency service 7 days
per week. Extraordinary delivery costs, i.e., air freight
shipments and after hours delivery services, may be passed on to
the facility.
3. To maintain the integrity of such products and to reduce any
risks associated with such products to those receiving them, JDC
will ship within a separate package all chemotherapeutic agents
and related hazardous materials and so identify the outside of
the package. JDC will adhere to all applicable OSHA standards of
most recent date relating to this issue.
Service Level
JDC will guarantee a 96% line service level for each facility. Should
the service level for my facility fall below 96% for two consecutive
months, JDC will rebate such facility an amount equal to 0.1% of such
facility's purchases during each subsequent month in which the line
service level remains below 96%.
The following provisions will apply:
1. Purchases must not exceed 120% of the prior month.
2. One month start up for new items. Excluding bid year transition.
3. CIGNA must submit bid awards a minimum of six weeks prior to bid
transaction. If less than six weeks, a one month start up period
will be allowed.
4. Service level calculation as per the computerized recap report
generated by JDC.
5. The service level promise will not apply to new items; provided,
however, that JDC will use commercially reasonable efforts to
have items in stock as soon as possible after orders are placed
by the facility.
6. Manufacturers' back orders, and re-orders of a product that occur
within three (3) days of the initial order of the product
hereunder, will not be counted in the service level calculation.
7. Partial line fills of orders will be counted as a percentage of
the total line item filled. For example, if ten (10) pieces of
one (1) item are ordered and one piece is delivered, the item
will be counted as ten percent (10%) filled.
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8. Subject to the foregoing, line service level is defined as
follows:
IO-INS
LSL = ------ x 100
IO-CS
where LSL = line service level
IO = total number of items ordered
INS = items not shipped (counting partially filled
lines)
CS = out of stocks or shorts due to manufacturer;
ineligible reorders; new items
F. SALES REPRESENTATION
A JDC Sales-Representative will call on each facility at least once
every two weeks or as requested by Tel-Drug with following objectives:
1. Optimization of service.
2. Implementation of true prime vendor service and participation of
the facility within the context of the prime vendor concept.
3. Inventory management training. Inventory control and contract
portfolio management.
4. MANAGEMENT INFORMATION SERVICES - PHARMACY
A. CAPABILITIES
REFER TO ATTACHED ADDENDUM
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B. COMPUTER GENERATED MIN/MAX LABELS QUARTERLY
Based upon a weighted forecasting method and desired product turn
rates, these labels will show order points and order quantity to
enhance inventory performance.
C. PRODUCT STICKERS
Tel-Drug will receive product stickers with each item ordered,
denoting: day, year purchased: invoice cost; third party information
or NDC#; number of units purchased; average wholesale price; order
entry number; retail price.
D. MICROFICHE (INVENTORY LISTING)
Microfiche will be mailed at the beginning of each month denoting; JDC
product listing; O/E number; third party information; average
wholesale price; wholesale cost; NDC#. In addition, facilities will
receive a contract price microfiche to coincide with the manufacturer
bid year.
E. MANAGEMENT REPORTS
JDC will provide monthly to Tel-Drug an Inventory Management Report.
Report denotes: Products purchased; six months actual unit purchase
history; 12 months total dollars purchase history; weighted forecasts;
suggested order quantities; economic order quantities; ABC Product
classification; price change information; overstock information;
dollars purchased by Product and manufacturer.
Options Include:
1. Alphabetically by vendor:
a. brand name
b. generic name
2. Therapeutic classification
a. brand name
b. generic name
3. An "A" Item Ranking Report denoting those products constituting
"A" item purchases utilizing a weighted forecast method based on
previous four (4) months history. The report can be generated in
two formats:
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a. brand name
b. generic name
4. Shelf Labels
JDC will supply to each facility upon request, one set of Mylar
shelf labels (listed by either generic or brand name). A unique
set of color coded contractual labels supplied annually.
5. Controlled Substance Report
JDC provides a monthly report listing all DEA scheduled
pharmaceuticals purchased and delivered during the reporting
month.
6. Electronic Order Confirmation
Verification of all orders transmitted within minutes of order
placement.
F. BID ITEM MICROFICHE
A microfiche listing all Depot bid items to be supplied to each
facility. Items sorted alphabetically by: vendor; product
description; generic description.
G. INVOICES
The invoice format may be customized for Tel-Drug. JDC has the ability
to produce invoices alphabetical, by trade name or generic name.
Invoices denote bid products by printing a "B" in the right hand
margin. Generic manufacturer must be noted if invoiced by generic
name.
JDC provides electronic invoicing on a daily basis utilizing industry
standard formats (ANSIX12). JDC also has the capability of providing a
computerized invoice review to Tel-Drug.
H. PHYSICAL INVENTORY SERVICE
Through special data terminal - provides detailed listing of all
inventory within the pharmacy. Includes capability to enter items not
purchased from JDC.
I. INVENTORY MANAGEMENT WORKSHOP
JDC will provide in inventory control workshop at the request of the
facility. The workshop provides training in the concept of inventory
management and cost containment, detailed explanation of the inventory
management tools
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available, and ideas on the application of an inventory management
program.
5. MANAGEMENT INFORMATION SERVICES
A. REPORTS
JDC has the capability to provide Tel-Drug with facility transaction
data as requested by Tel-Drug. See the following:
1. Facility/Customer identification number
2. Invoice number
3. Invoice date
4. Order date
5. Facility/Customer purchase order number
6. Manufacturer name
7. Manufacturer product code number
8. Distributor product code number
9. Item description
10. Unit of sale
11. Unit price
12. Quantity shipped/billed
6. CUSTOMER SERVICE
JDC will provide customer service support staff to accept phone calls from
facilities and to resolve problems related to a normal business
relationship between JDC and Tel-Drug. JDC will also provide technical
service support to facilitate communications, problem-solving, and the
like.
7. CONFIDENTIALITY
The terms of this Agreement between CIGNA and JDC are confidential and
neither CIGNA nor JDC will disclose the terms of the Agreement to any party
without the written consent of the other.
8. TERMINATION
JDC or CIGNA may cancel this agreement at any time with sixty (60) days
prior written notice. Subject to the foregoing, the term of this Agreement
shall be from 3-21-94 through 3~21-97 with an option for a two year
contract extension based upon mutual agreement of CIGNA and JDC.
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Tel-Drug, Inc. Xxxxxx Drug Co., Inc.
3101 So. Xxxxxxx Avenue 000 X.X. Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000 Xxxxxxxx, Xxxxx Xxxxxx 00000-0000
By: Xxxxx X. Xxxxxx, Pharm.D. By: Xxxxx Xxxxxxxx
Assistant Vice President, President
National Pharmacy
Signature: /s/ Xxxxx X. Xxxxxx Signature: /s/ Xxxxx Xxxxxxxx
------------------------ ---------------------------
Date: 4/26/94 Date: 3/21/94
----------------------------- ---------------------------------
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[XXXXXX DRUG CO., INC. LETTERHEAD]
XXXXXX DRUG COMPANY
ADDENDUM TO CONTRACT
3) Services and Fees
A) Comprehensive Service Package - no fees
Xxxxxx Drug Co. will provide immediately and free of charge the
following services:
1) Hand-held electronic ordering device
2) Toll free number to place orders
3) Invoices, shelf labels and pricing stickers with merchandise
4) Order confirmation by fax
5) Microfiche machine and semi-monthly microfiche catalog
listings
6) Weekly product pricing information on diskette
7) Volume purchases reports listing products purchased, total
units purchased, total dollar amount bought and min/max order
quantities
8) Hard copy multi-source generic and repack catalogs - monthly
9) Product purchased at contract bid prices are indicated with
a "T" on the invoices.
10) Detailed pharmacy inventory listing transmitted by hand-held
terminal on product purchased from Xxxxxx Drug Co.
11) Monthly price increase bulletins
B) Comprehensive Service Packages - Services for a fee
Xxxxxx Drug is prepared to provide additional services which will
become available on approximate implementation dates:
Please note: As each service becomes available, Xxxxxx Drug will
contact Cigna to negotiate a mutually agreeable monthly fee. The
services and their pending implementation dates are as follows:
1) August 1, 1994 - electronic ordering and confirmation
2) January 1, 1995 - electronic receipt of contract bid awards
and pricing
3) March 1, 1995 - daily electronic invoicing
4) After March 1, 1995 - any special reports required by Cigna
will be discussed and agreed upon at that time.
OVER 100 YEARS OF SERVICE
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August 22, 1995
ADDENDUM II to contract dated March 21, 1994 between Tel-Drug, Inc.
also known as CIGNA and Xxxxxx Drug Co., Inc. of Aberdeen, South
Dakota.
Page 4
3. SERVICES AND FEES
A. COMPREHENSIVE SERVICE PACKAGE
12. Xxxxxx Drug Company shall construct a warehouse and
office facilities in Sioux Falls, S.D., within a close
proximity of Tel-Drug, of sufficient size, with
sufficient inventories and man power to act as a back-
up to or eliminate the need for, Tel-Drug's back-room
inventory.
13. Xxxxxx Drug Co. will provide multiple, meaning four or
more, scheduled deliveries to the Tel-Drug facilities
each day and will provide for additional emergency
order deliveries.
14. Xxxxxx Drug Co. will assist Tel-Drug in the
development of a new electronic ordering and receiving
system which will provide for a more rapid product
integration into Tel-Drug's working inventory.
***Note: Completion and implementation of 12, 13, and 14 can be within
five (5) months or a short time thereafter, subsequent to the
completion of this contract extension agreement.
Page 10
8. TERMINATION
Xxxxxx Drug Co. or CIGNA may cancel this agreement at any time
with sixty(60) days prior written notice. Subject to the
foregoing, the term of this agreement shall be from 9-01-1995
thru 9-01-2000 with an option for a two-year contract extension
based upon mutual agreement of CIGNA and Xxxxxx Drug Co.
Tel-Drug, Inc. Xxxxxx Drug Co., Inc.
0000 Xx. 0xx Xxxxxx 000 X.X. Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000 Xxxxxxxx, Xxxxx Xxxxxx 00000-0000
By: /s/ Xxxx Xxxxxx By: Xxxxx Xxxxxxxx
------------------------------- President
-------------------------------
-------------------------------
Signature: /s/ Xxxx Xxxxxx Signature: /s/ Xxxxx Xxxxxxxx
--------------------- -----------------------
Date: 8/31/95 Date: 8/24/95
-------------------------- ----------------------------
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ADDENDUM III to Prime Vendor Agreement (the "Agreement") dated March
21, 1994, between Tel-Drug, Inc. ("Tel-Drug") and Xxxxxx Drug Company,
Inc. ("JDC") of Aberdeen, South Dakota.
Tel-Drug and JDC agree to amend the Agreement as follows:
1. The effective date of this Amendment shall be 6-1-97
--------------------
2. Section 2. of the Agreement is deleted in its entirety and
replaced with the following:
2. TERMS AND CONDITIONS
A. PRICE STRUCTURE
JDC will supply all products under this agreement to
Tel-Drug on the basis of the "cost", which is defined
as follows:
For Non Contracted Products
"Cost" is defined as the manufacturer's published
wholesale acquisition cost on the date of JDC's invoice
to Tel-Drug, plus additional adjustments to reflect
normal and customary quantity discounts and special
promotional allowances, excluding manufacturer's cash
discounts.
For Contract Products
"Cost" is defined as the cost negotiated between the
manufacturer and Tel-Drug; provided that JDC shall have
an arrangement with the manufacturer regarding such
contract cost satisfactory to JDC. The FDC system
pricing logic is defined as best price. If a special
promotional price is more Favorable than the contract
price, the product will be priced at the lower amount.
All orders must be electronically transmitted to
qualify for above pricing. Non-transmitted orders
subject to cost plus* (excluding schedule II's, back
orders and emergency orders).
Additional Volume Discounts
JDC will allow additional credits in the form of volume
discount percentages to Tel-Drug monthly based on
Tel-Drug's monthly net purchase volume with JDC. Such
credit for additional volume shall be in the form of a
check, payable to Tel-Drug (the "Payment") which shall
be delivered to Tel-Drug by the tenth (10th) working
day of each month. The amount of the Payment to Tel-
Drug will be based on the schedule below:
*Confidential portion omitted and filed separately with the Commission.
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[*]
3. The Agreement is amended by adding the following new sections:
9. Warranty
JDC will indemnify and hold harmless Tel-Drug and its
subsidiaries and affiliates from and against those claims,
damages or liabilities (exclusive of any incidental or
consequential claims, damages or liabilities) directly
attributable to the failure of JDC to properly store, handle,
or distribute Products in accordance with the Agreement, it
being understood, however, that JDC is not the Manufacturer
of the Products, that JDC makes no warranty as to the
quality, condition, or performance of the Products, and that
no warranty or indemnification of any type is being provided
other than as specifically stated in this paragraph.
10. General Responsibilities and Status of JDC
a. Insurance
JDC shall at all times during the terms of this Agreement
carry and maintain in full force and effect motor vehicle,
public liability and workers' compensation insurance
protecting Tel-Drug and JDC from claims which may arise
out of or result from JDC's performance under this
Agreement, whether such performance be by JDC or by any
subcontractor or agent or by anyone directly or indirectly
employed by any of them or by anyone for whose acts any of
them may be liable. The minimum amounts of insurance
coverage to be provided by JDC hereunder shall be the
greater of the amounts required by law and the following
minimum amounts:
Comprehensive General Minimum Coverage
Liability Insurance
To include:
Bodily Injury, Property Damage $1,000,000 each person
Products Liability, Completed Combined single limit
Operations and Contractual
Liability
Workers' Compensation Full statutory limit
each accident;
Employers Liability
coverage of $100,000
*Confidential portion omitted and filed separately with the Commission.
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Motor Vehicle $1,000,000 Combined single
limit
Certificates of insurance acceptable to Tel-Drug shall
be delivered to Tel-Drug prior to commencement of the
services. Such certificates shall contain a provision
that the coverages provided under JDC's insurance will
not be canceled until at least thirty (30) days prior
written notice has been given to Tel-Drug.
b. Indemnity
JDC will indemnify, defend with counsel reasonably
acceptable to Tel-Drug, and hold harmless Tel-Drug, its
subsidiaries and affiliates from and against all
liability, demands, claims, suits, losses, damages,
infringement of proprietary rights, causes of action,
fines, or judgments (including costs, attorneys' and
witnesses' fees and expenses incident thereto) for
violations of laws or regulations, injury or death to
persons, including its employees, servants, and agents,
or for damage, destruction, or loss of property arising
out of or in connection with its performance of, or
failure to perform, the duties provided for herein,
unless caused by the gross negligence or willful
misconduct of Tel-Drug.
c. Licenses and Permits
JDC shall secure any licenses and/or permits required
for the proper performance of its duties hereunder,
paying the fees therefor, and shall take all reasonable
precautions to assure the safety of its employees and
agents who are engaged in the performance of the duties
provided for herein.
d. Compliance with Laws
Both parties shall comply in all material respects with
all applicable federal, state, county and municipal
laws, ordinances, rules, regulations and orders.
e. Affirmative Action
JDC shall comply with the requirements set forth in
U.S. Department of Labor regulations dealing with: (1)
equal employment opportunity obligations of government
contractors and subcontractors; (2) employment by
government contractors and subcontractors of
Vietnam-era and disabled veterans; and (3) employment
of the physically handicapped by government contractors
and subcontractors. All of the above referenced
regulations are hereby incorporated herein and
expressly made a part hereof, to the extent required by
law.
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f. Non-use of Company's Name
JDC in the course of performance pursuant to this
Agreement of thereafter, shall not use or permit the
use of Tel-Drug's name, or the name of any of Tel-
Drug's subsidiaries or affiliates, in any advertising
or promotional materials prepared by it or on its
behalf without the prior written consent of Tel-Drug.
g. Company Security Regulations
JDC, JDC's employees and any of JDC's subcontractors
who will be performing services on Tel-Drug's premises,
will abide by Tel-Drug's security regulations, which
have been established for the protection of all
concerned.
h. Sale of Information
Except for data provided to Manufacturers in connection
with chargebacks or other Tel-Drug specific issues as
required by law or court order, JDC will not disclose
sales data specific to Tel-Drug without the approval
of Tel-Drug. "Blinded" sales data compiled by JDC which
includes (but is not specific to) any particular CIGNA
Company will not be subject to the disclosure
restrictions contained in the Agreement.
Except as required by law or court order, JDC will not
publish or otherwise disclose individual patient names,
addresses or telephone numbers.
11. Arbitration
Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment
upon the award rendered by the Arbitrator(s) may be entered
in any court having jurisdiction thereof.
12. Year 2000
JDC represents and warrants that the products and services
are designed to be provided prior to, during, and after the
calendar year 2000 A.D., and that the products and services
will be provided during each time period without error
relating to date data which represents or references
different centuries or more than one century. JDC covenants
to maintain the products and services in such a manner as to
assure continued compliance with the foregoing representation
and warranty, and JDC agrees to make such modifications as
may be necessary or desirable to satisfy any new or modified
requirement, including, but not limited to, a new and
modified interpretation of any prior requirement. JDC agrees
to pay, hold harmless and indemnify Tel-Drug from and against
any and all losses, damages, claims, suits, actions,
judgments and costs (including reasonable attorney's and
witnesses' fees) which may arise from any failure of JDC to
comply with the terms of this section. Any and all costs
(capital
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or otherwise) incurred by JDC in satisfying the terms of this
section shall be solely paid by JDC and not passed on to
Tel-Drug as additional fees or otherwise.
Tel-Drug, Inc. Xxxxxx Drug Company, Inc.
000x Xx. 0xx Xxxxxx 000 X.X. Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000 Xxxxxxxx, Xxxxx Xxxxxx 00000
By: By: Xxxxx Xxxxxxxx
----------------------------- -----------------------------
Its: Its: President
Signature: Signature: /s/ Xxxxx Xxxxxxxx
---------------------- -------------------------
Date: Date: 5-22-97
--------------------------- ------------------------------
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Addendum IV to Prime Vendor Agreement (the "Agreement") dated March 21,
1994, between Tel-Drug, Inc. ("Tel-Drug") and Xxxxxx Drug Company, Inc.
("JDC") of Aberdeen, South Dakota.
Tel-Drug and JDC agree to amend the Agreement as follows:
1. The effective date of this Amendment shall be JUNE 1ST, 1997 .
---------------------
2. The Agreement is amended by changing the following section:
9. Warranty
JDC will indemnify and hold harmless Tel-Drug and its
subsidiaries and affiliates from and against those claims,
damages or liabilities exclusive of any incidental or
consequential claims, damages or liabilities) directly
attributable to the failure of JDC to properly store, handle, or
distribute Contract Products or Non Contracted Products
(Collectively the "Products") in accordance with the Agreement,
it being understood, however, that JDC is not the Manufacturer of
the Products, that JDC makes no warranty as to the quality,
condition, or performance of the Products, and that no warranty
or indemnification of any type is being provided other than as
specifically stated in this paragraph.
Tel-Drug, Inc. Xxxxxx Drug Company, Inc.
0000 Xx. 0xx Xxxxxx 000 X.X. Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000 Xxxxxxxx, Xxxxx Xxxxxx 00000
By: Xxx Xxxxxxx By: Xxxxx Xxxxxxxx
---------------------------- ------------------------------
Its: VP/GM Its: Pres.
Signature: /s/ Xxx Xxxxxxx Signature: /s/ Xxxxx Xxxxxxxx
-------------------- ----------------------
Date: 5-28-97 Date: 5-27-97
-------------------------- ----------------------------
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Addendum V to Prime Vendor Agreement (the "Agreement") dated March
21, 1994, between Tel-Drug, Inc. ("Tel-Drug") and Xxxxxx Drug Company,
Inc. ("JDC") of Aberdeen, South Dakota.
Tel-Drug and JDC agree to amend the Agreement as follows:
1. The effective date of this Amendment shall be 12-1-98.
2. Section 2. of the Agreement is deleted in its entirety and
replaced with the following.
2. TERMS AND CONDITIONS
A. PRICE STRUCTURE
JDC will supply all products under this agreement to Tel-Drug
on the basis of the "cost", which is defined as follows:
For Non Contracted Products
"Cost" is defined as the manufacturer's published wholesale
acquisition cost on the date of JDC's invoice to Tel-Drug,
plus additional adjustments to reflect normal and customary
quantity discounts and special promotional allowances,
excluding manufacturer's cash discounts.
For Contract Products
"Cost" is defined as the cost negotiated between the
manufacturer and Tel-Drug; provided that JDC shall have an
arrangement with the manufacturer regarding such contract
cost satisfactory to JDC. The JDC system pricing logic is
defined as best price. If a special promotional price is more
favorable than the contract price, the product will be priced
at the lower amount.
All orders must be electronically transmitted to qualify for
above pricing. Non-transmitted orders subject to cost plus.
[*] (excluding schedule II's, back orders and
emergency orders).
Additional Volume Discounts
JDC will allow additional credits in the form of volume
discount percentages to Tel-Drug monthly based on Tel-Drug's
monthly net purchase volume with JDC. Such credit for
additional volume shall be in the form of a check, payable to
Tel-Drug (the "Payment") which shall be delivered to Tel-Drug
by the tenth (10th) working day of each month. The amount of
the payment to Tel-Drug will be based on the schedule below:
*Confidential portion omitted and filed separately with the Commission.
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[*]
Tel-Drug, Inc. Xxxxxx Drug Company, Inc.
0000 Xx. 0xx Xxxxxx 000 X.X. Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000 Xxxxxxxx, Xxxxx Xxxxxx 00000
By: Xxx Xxxxxxx By: Xxxxx Xxxxxxxx
----------------------------- ------------------------------
Its: Its: Pres
Signature: /s/ Xxx Xxxxxxx Signature: /s/ Xxxxx Xxxxxxxx
--------------------- ------------------------
Date: 11/20/98 Date: 11-16-98
--------------------------- ----------------------------
*Confidential portion omitted and filed separately with the Commission.
