SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1993
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 [No Fee Required]
For the transition period from to
Commission file Number 0-6430
OWENS & MINOR, INC.
(Exact name of Registrant as specified in its charter)
Virginia
54-1701843
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization)
4800 Cox Road, Glen Allen, Virginia
23060
Address of principal executive offices
(Zip Code)
Registrant's telephone number, including Area Code - (804)
747-9794
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $2 par value New York
Stock Exchange, Inc.
Preferred Stock Purchase Rights New York
Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
(Title of Class)
Indicate by check mark whether the Registrant (l) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes X
No .
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in any definitive proxy or
information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of Common Stock held by
non-affiliates (based upon the closing sales price) was
approximately 448,061,094 as of March 14, 1994. In
determining this figure, the Company has assumed that all of
its officers, directors and persons known to the Company to
be the beneficial owners of more than five percent of the
Company's Common Stock are affiliates. Such assumption shall
not be deemed conclusive for any other purpose.
The number of shares of the Company's Common Stock
outstanding as of March 14, 1994 was 20,396,601 shares.
The purpose of this Form 10-K/A is to replace Exhibit
10(M) to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 of Owens & Minor Medical, Inc.
(formerly, Owens & Minor, Inc.). The Registrant, Owens &
Minor, Inc. (formerly O&M Holding, Inc.), is the successor
registrant to Owens & Minor Medical, Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OWENS & MINOR, INC.
By /s/Glenn J. Dozier
Glenn J. Dozier
Senior Vice President, Finance,
Chief Executive Officer
Date: 6/21/94
Exhibit 10 (m)
ENHANCED AUTHORIZED DISTRIBUTION AGENCY AGREEMENT
This agreement ("Agreement") is made and entered into
this ___ day of _____________, 1993, by and between Voluntary
Hospitals of America, Inc. ("VHA"), a Delaware corporation,
and ________________
_____________________, a ___________________ corporation, an
authorized distribution agent of VHA ("ADA").
This Agreement is entered into based on the following
facts:
A. VHA is a nonexclusive limited Agent for Designated
VHA Members and Affiliates;
B. VHA is, among other things, in the business of
providing (a) products and other property, purchasing and
other opportunities, procurement, distribution and other
services, directly and indirectly, to, for, on behalf of and
as an Agent for certain health providers, and (b) marketing
and other assistance to certain Vendors and certain
wholesalers and distributors, including without limitation,
ADA, in order to make the property, opportunities,
procurement, distribution and related services more
conveniently, efficiently and effectively available to
Designated VHA Members and Affiliates;
C. ADA has a reputation for offering to sell and
selling high quality products and for providing prompt,
efficient and effective distribution services, including, but
not limited to, the services of selling, marketing, ordering,
paying, order receiving, billing/invoicing, product handling,
product storing, product receiving, inventorying, managing
inventory, product transporting, product delivery, collecting
funds, cash application, cash management, receivables
management, payables management, handling customer and other
inquiries, providing customer service, handling product
recalls and market withdrawals, providing for product returns
permitted by law, handling allowances and providing other
distribution services;
D. ADA has computer-based systems which are useful in
connection with managing and conducting its business, which
are flexible and able to produce a wide variety of computer-
based reports and which are capable of establishing computer-
to-computer communications between VHA, on the one hand, and
Designated VHA Members and Affiliates, on the other;
E. VHA desires to engage ADA to assist in providing
distribution services as a distribution agent of VHA to the
Designated VHA Members and Affiliates with respect to
Contract Products, including, without limitation, Contract
Products which display the "VHA+PLUS " trademark, and ADA
desires to perform such services;
F. ADA desires to sell Noncontract Products to the
Designated VHA Members and Affiliates and, in connection
therewith, to provide distribution services, and VHA desires
that the Designated VHA Members and Affiliates have the
opportunity to purchase such Noncontract Products and
distribution services;
THEREFORE, in consideration of the premises, the
representations and warranties of the parties, the mutual
covenants contained herein, and other good and valuable
consideration, the adequacy, receipt and sufficiency of which
are hereby acknowledged, the parties agree, subject to the
conditions, terms and provisions hereof, as follows:
Section 1. Definitions.
(A) As used in this Agreement, each of the following
capitalized terms shall have the following meaning:
(1) "Agent" means any entity authorized to act
on behalf of another entity by the other within the limited
scope of the grant of authority set forth in the document or
documents granting such authority.
(2) "Alternate Distribution Center" refers to
any ADA distribution center other than a Primary Ordering
Location.
(3) "Automatic Product Substitution" has the
meaning set forth in Section 4(E).
(4) "Backorder Relay" has the meaning set forth
in Section 4(B).
(5) "Capital Equipment" means equipment having
an order in a single or multiple unit value of over $1,000.
(6) "Contract Products" refers to those
products with respect to which VHA has executed a contract
("Purchasing Agreement"), other than this Agreement, with a
Vendor thereof, such contract providing for, among other
things, the sale by such Vendor of the products to certain
Designated VHA Members and Affiliates through ADA.
(7) "Cost" refers to the lowest of (a) (in the
case of a Contract Product) the amount provided in the
applicable Purchasing Agreement as the price to be billed to
Designated VHA Members and Affiliates without subtraction for
cash discounts allowed by Vendors for prompt payment and
prior to the addition of the Price Matrix, (b) ADA's [this
confidential information has been omitted and filed
separately with the Commission] in obtaining the product,
including freight charges actually paid by ADA which, in any
event, shall not exceed [this confidential information has
been omitted and filed separately with the Commission] of the
cost of the item, whether or not reflected on invoices from
manufacturers, distributors or others (such [this
confidential information has been omitted and filed
separately with the Commission] shall be reduced to reflect
proportionately: [this confidential information has been
omitted and filed separately with the Commission,] and,
except for (i) [this confidential information has been
omitted and filed separately with the Commission] allowed and
rebates paid or credited by Vendors for prompt payment and
(ii) [this confidential information has been omitted and
filed separately with the Commission]provided by ADA to
Vendors, any and all value received by ADA or from which ADA
derives any direct or indirect benefit related in any way to
the product where ADA's cost is affected), or (c) the net
distributor cost of any product pursuant to any agreement
between the Designated VHA Member or Affiliate and the Vendor
of such product.
(8) "Delivery Schedules" has the meaning set
forth in Section 6(C).
(9) "Delivery Times" has the meaning set forth
in Section 6(C).
(10) "Designated VHA Members and Affiliates"
refers to those VHA Members and Affiliates identified as such
on Schedule 1. Schedule 1 may be amended by VHA to add new
Designated VHA Members and Affiliates or to delete Designated
VHA Members or Affiliates at its sole discretion, at any time
during the term of this Agreement, upon thirty (30) days
notice to ADA.
(11) "Noncontract Products" refers to all
products that are not Contract Products or VHA+PLUS
Products.
(12) "Price" has the meaning set forth in
Section 6.
(13) "Primary Ordering Location" refers to the
ADA distribution center which has service responsibility for
a particular Designated VHA Member or Affiliate. ADA's POLs,
as of the date of this Agreement, are listed in Schedule 2.
(14) "Purchasing Agreement" has the meaning set
forth in Section 1(A)(6).
(15) "Revised Delivery Time" has the meaning set
forth in Section 6(C).
(16) "RHCS" refers to Regional Health Care
Systems, which are listed on Schedule 3. Schedule 3 may be
amended by VHA at its sole discretion at any time during the
life of this Agreement upon thirty (30) days written notice
to ADA.
(17) "Service Level Report" has the meaning set
forth in Section 10.
(18) "Vendors" means the sellers, including
without limitation, manufacturers, of products.
(19) "VHA+PLUS Products" means products bearing
the VHA+PLUS trademark.
(20) "VHA Fee" has the meaning set forth in
Section 8(G).
(21) "Non-traditional Products" are defined as
products that are normally not available through distribution
or whose distribution is limited to a specific hospital and
require the agreement between the Designated VHA Member and
Affiliate and ADA for distribution and inclusion on the
Pricing Matrix. VHA and ADA recognize that products may
start as Non-traditional Products and then become Contract or
Noncontract Products at a later date.
(B) Capitalized terms used in this Agreement but not
specifically defined herein shall have the meanings
customarily ascribed to such terms in the products
distribution industry.
Section 2. Appointment as Agent.
VHA appoints ADA as a distribution Agent, subject to
the provisions of Section 11(B). ADA shall provide
Designated VHA Members and Affiliates with products, services
and value added distribution functions. ADA shall work to
build a mutually successful relationship with each Designated
VHA Member and affiliate and work in a proactive manner to
provide the lowest total delivered cost of products, develop
and implement standardization and utilization processes and
provide logistics, operational and analytical services.
ADA agrees to actively support and supplement the
strategic initiatives of VHA through its role as an ADA under
this Agreement. Section 3. Product Capacity and Handling.
ADA shall provide warehouse facilities at each of its Primary
Ordering Locations to secure and store sufficient product to
meet the service levels to Designated VHA Members and
Affiliates specified in this Agreement.
(A) Contract Products.
(1) ADA's Duties. As VHA's Agent, ADA's duties
shall include the provision of distribution services with
respect to Contract Products to each and every Designated VHA
Member and Affiliate, and ADA shall act at all times in
accordance with the conditions, terms and provisions of the
Purchasing Agreements.
(2) Purchasing Agreements. VHA shall notify
ADA of the existence of all Purchasing Agreements and all
provisions of such Purchasing Agreements which have or may
have any effect on ADA's activities hereunder. VHA shall
provide such notification within 15 days of the date of this
Agreement for Purchasing Agreements executed by VHA on or
before the date of this Agreement and within 30 calendar days
of execution for Purchasing Agreements executed by VHA
hereafter.
(3) ADA Loading of Contract Products. ADA
agrees that all changes in Purchasing Agreements will be
loaded into ADA's computer system not less than 30 days
prior to the effective date of such changes. ADA will supply
each Designated VHA Member and Affiliate with a printout (or
such other format as reasonably requested) setting forth ADA
order numbers for all Products covered by the Purchasing
Agreement at least 30 days prior to the effective start date
of each Purchasing Agreement.
ADA will load into ADA's computer system all Contract
Products. Those items not presently stocked by ADA shall be
identified on the printout.
VHA will supply ADA with the Purchasing Agreement data
not less than forty-five (45) days prior to the effective
date of each Purchasing Agreement. VHA will instruct Vendors
holding Purchasing Agreements to provide to ADA contract
verification based on the foregoing guidelines. ADA shall
advise VHA, at least thirty (30) days prior to the effective
start date of each Purchasing Agreement, of those Vendors who
have not provided contract verification.
Upon request of a Designated VHA Member or Affiliate of
VHA, ADA will provide annually at no charge a Purchasing
Agreement printout listing all Contract Products with ADA
order entry numbers and Prices.
ADA shall load into its mainframe computer, within ten
(10) days after receipt from VHA, all additions,
corrections, price changes, and other modifications to
Purchasing Agreements. VHA will notify ADA of the occurrence
of any of the foregoing modifications to the Purchase
Agreement on a bi-weekly basis.
(B) Noncontract Products. ADA agrees to offer to sell
and, if any such offer is accepted, to sell Noncontract
Products to the Designated VHA Members and Affiliates.
Designated VHA Members and Affiliates may offer to buy and,
if such offer is accepted, may buy Noncontract Products from
ADA. In the event such offers, sales or purchases are made,
such offers, sales or purchases shall be processed by ADA and
the Designated VHA Members and Affiliates in conformity with
the provisions of this Agreement.
(C) Price Increases. VHA and ADA shall work together
to manage increases in the Cost of Noncontract items. The
parties desire to control aggregate Noncontract price
increases for any year to not exceed VHA's average price
increase for Contract Products for the previous twelve month
period, which for 1993 is 1.4%. VHA will provide the average
price increase for Contract Products by October 1 of each
year. VHA and ADA shall jointly develop a process, the
objective of which is to provide notice to Designated VHA
Members and Affiliates by November 1 of each year of any
price changes for the next calendar year. VHA Contract
Products, VHA+PLUS Products, and hospital negotiated
contracts with Vendors are not subject to this paragraph.
(D) Price Lists. At such point in time that ADA and
VHA have achieved annual price increases for a substantial
portion of Noncontract Products, ADA shall provide each
Designated VHA Member and Affiliate no later than November 15
of each year a price list containing the Prices for
Noncontract Products for the next calendar year in whatever
form the Designated VHA Member or Affiliate reasonably
requests (e.g., diskette, microfiche, tape, etc.).
(E) VHA+PLUS Products. ADA agrees to stock such
amount of VHA+PLUS Products as ADA reasonably determines is
necessary to satisfy the anticipated requirements of the
Designated VHA Members and Affiliates. Any individual
Designated VHA Member or Affiliate price change on a
VHA+PLUS product shall follow the Pricing Protocol described
in Schedule 4. All VHA+PLUS Products will be identified in
ADA's inventory as "A items" and, as such, will be subject to
appropriate inventory review by ADA. ADA will use its best
efforts to market and promote VHA+PLUS Products when such
products meet the needs of a Designated VHA Member or
Affiliate.
(F) Stocking Responsibility. ADA shall have the
following stocking responsibilities with respect to both
Contract Products and Noncontract Products:
(1) ADA will maintain sufficient stock of
Contract Products and Noncontract Products to support
Designated VHA Members and Affiliates at the service level
set forth in this Agreement.
(2) Upon request of a Designated VHA Member or
Affiliate to add items to stock, ADA will add the items to
stock. Within thirty (30) days, or industry standard lead
time, of receipt of usage data, ADA will have the items in
stock and advise the requesting Designated VHA Member or
Affiliate that the items are available at the Primary
Ordering Location.
(3) ADA will not remove from stock at the
Primary Ordering Location any product being purchased by a
Designated VHA Member or Affiliate unless ADA no longer
distributes the product. ADA will review its stock on an
appropriate basis to identify those products which have
generated sales of less than $100 during a period of not less
than ninety (90) calendar days. ADA may then contact any
Designated VHA Member or Affiliate who was purchasing these
products within the last 180 calendar days to ascertain
continuing need. If no need is expressed, ADA may give
written notice to all Designated VHA Members and Affiliates
of ADA's intent to remove the items from stock. If a
Designated VHA Member or Affiliate provides ADA within ten
(10) business days after such notice of the Designated VHA
Member or Affiliate usage estimates on these items, ADA will
maintain the items in stock. If ADA does not receive usage
data, ADA may discontinue the items and shall so advise the
Designated VHA Members and Affiliates.
(4) From time-to-time, VHA may advise ADA that
specified Contract Products are to be stocked by ADA
exclusively for Designated VHA Members and Affiliates. ADA
shall use its best efforts to restrict delivery of such
specified Contract Products to Designated VHA Members and
Affiliates, provided ADA shall be free to enter into
agreements with any Vendor for distribution of any products,
including products which may be Contract Products under this
Agreement.
(5) If a Vendor advises ADA that specific
Contract Products or Noncontract Products will be available
in reduced quantities or will be allocated, and that,
therefore, ADA may not be able to honor all requests for such
products, ADA will allocate, based on past purchasing history
of the Designated VHA Members and Affiliates, a portion of
such products to Designated VHA Members and Affiliates and
shall advise VHA and the Designated VHA Members and
Affiliates of the quantity of products so allocated.
ADA agrees that Designated VHA Members and Affiliates shall
receive [this confidential information has been omitted and
filed separately with the Commission] consideration [this
confidential information has been omitted and filed
separately with the Commission] in the event of limited
product availability.
(6) ADA shall provide upon request of
Designated VHA Members and Affiliates regular list price
catalogues either in hard copy or electronic media, at the
election of Designated VHA Members and Affiliates.
(G) Notice of Physical Inventory. ADA will give VHA
and the Designated VHA Members and Affiliates not less than
forty-five (45) days prior written notice of ADA's intent to
perform a physical inventory at the Primary Ordering
Location. ADA will accept saleable returns up to ten (10)
days prior to such inventory and, thereafter, ADA will
continue to authorize returns, except such returns will be
held at the Designated VHA Member or Affiliate until the
first business day after completion of the physical
inventory.
Section 4. Ordering.
(A) Orders. Orders for Contract Products and
Noncontract Products by Designated VHA Members and Affiliates
may be submitted on purchase orders delivered to ADA through
electronic order entry via computer or any other reasonable
means. ADA shall not require a minimum dollar order amount
for Contract Products or Noncontract Products ordered by
Designated VHA Members and Affiliates provided products are
ordered in Vendor's standard packaging units. ADA will,
after having selected from its stock the Contract Products
and Noncontract Products ordered by a Designated VHA Member
or Affiliate, physically check each order to assure that the
products and quantities selected by ADA accurately correspond
to the order received by ADA from the Designated VHA Member
or Affiliate. Upon request, ADA will develop and use a
method of setting predetermined order quantities (standing
orders) based on a Designated VHA Member's or Affiliate's
average weekly or bi-weekly usage of Contract Products and
Noncontract Products. These order quantities may be adjusted
by the Designated VHA Member or Affiliate upon 72 hours
notice to ADA.
(B) Backorder Relay. If ADA fails to have a Contract
Product or Noncontract Product on hand at a Primary Ordering
Location when the Contract Product or Noncontract Product is
available at an Alternate Distribution Center, ADA shall, at
its own expense, be able to deliver the Contract Product or
Noncontract Product directly to the ordering Designated VHA
Member or Affiliate or by way of the Primary Ordering
Location, whichever is fastest, from the Alternate
Distribution Center ("Backorder Relay"). Backorder Relay is
required only for "A" items (see Section 6(E)). ADA shall
use Backorder Relay upon customer request whenever a Contract
Product or Noncontract Product is unavailable at a Primary
Ordering Location, regardless of the cause of such
unavailability (for example, even if such unavailability is
caused by Vendor's backorder). ADA shall use Backorder Relay
whenever one or more line-items is unavailable at the Primary
Ordering Location. ADA will notify Designated VHA Members
and Affiliates by automatic order entry print back, customer
service, sales representative or other reasonable means of a
true backorder at the Primary Ordering Location. Designated
VHA Members and Affiliates, at their option, will select a
desired means of resolution that may include: product
substitution, maintaining backorder or order item
cancellation. Each Designated VHA Member or Affiliate will
also have the option to select a reasonable method of
delivery to meet the individual institution's service
requirements. Designated VHA Members and Affiliates shall
not be responsible for any delivery charges where such
Backorder was the responsibility of ADA.
(C) Electronic Order Entry. All Designated VHA
Members and Affiliates will use Electronic Order Entry for
placement for not less than 90% of all lines ordered unless
otherwise agreed by ADA. ADA shall maintain an 800 number
for electronic order entry and direct contact with the
Primary Ordering Location personnel by Designated VHA Members
and Affiliates and the RHCS.
(D) Confirmation. ADA shall provide to each
Designated VHA Member and Affiliate confirmation of each
order placed by such Designated VHA Member or Affiliate. The
confirmation shall include the following information: (1) a
description of the products, price, quantity to be shipped
and whether Backorder Relay or Automatic Product Substitution
will be used for each item ordered; and (2) the dollar amount
of the total order.
The confirmation shall also include identification
codes such as purchase order numbers and cost center
designations, if the Designated VHA Member or Affiliate by
written notification to ADA elects to be supplied such
information. For electronic orders, the confirmation shall
be received by the Designated VHA Member or Affiliate within
two (2) hours after receipt of the order by ADA. The
confirmation will be provided through print back or computer
if the appropriate technology is available to ADA and the
Designated VHA Member or Affiliate.
(E) Automation. ADA shall, at its own expense, make
available a software system (compatible with VHA-NET) capable
of computer-to-computer on-line transmission with each
Designated VHA Member and Affiliate (the "System"). ADA
shall establish computer-to-computer interface (compatible
with VHA-NET) with VHA. Without limiting the generality of
the foregoing, ADA shall be responsible for establishing and
providing the necessary software interface with each
Designated VHA Member and Affiliate. ADA represents that
Schedule 5 hereof sets forth an accurate description of
ADA's current capabilities and types of installations with
respect to communications with the Designated VHA Members and
Affiliates. ADA shall use the System, or equivalent system
such as EDI, for the term of this Agreement. ADA represents
that it has a computerized Automatic Product Substitution
system and that these systems are accurately described on
Schedule 5 hereof. The use of Automatic Product
Substitution will be done for individual line item products
upon the request of a Designated VHA Member or Affiliate.
Section 5. Uniform Purchase.
The ADA will, in conjunction with the RHCS and with
those Designated VHA Members and Affiliates not part of a
RHCS, identify products and categories of products that are
not under contract through VHA or competing with a Contract
Product which the Designated VHA Members and Affiliates can
uniformly purchase. ADA will use its best efforts to obtain
for Designated VHA Members and Affiliates a reduced cost of
said product for an extended period of time, based on the
anticipated usage and participation of RHCS members or the
combined usage for Designated VHA Members and Affiliates not
part of an RHCS.
Section 6. Base ADA Services.
All services listed in this Section shall be provided
to Designated VHA Members and Affiliates for the cost plus
fee applicable from the Price Matrix in Schedule 6.
(A) Price Matrix. Schedule 6 provides a Price Matrix
which determines a Designated VHA Member or Affiliate's
percentage mark-up on Cost to determine the "Price" of each
product delivered under this Agreement, except for Capital
Equipment (distribution service fees for Capital Equipment
shall be negotiated between ADA and the Designated VHA Member
or Affiliate). "Price" equals the Cost, plus an amount equal
to Cost times the percentage from the applicable slot of the
Price Matrix based on monthly volume and "Utilization",
adjusted to reflect all credits, discounts, rebates, returns,
allowances and other adjustments granted by ADA.
"Utilization" is defined as a Designated VHA Member or
Affiliate's [this confidential information has been omitted
and filed separately with the Commission] from ADA divided by
the Designated VHA Member or Affiliate's [this confidential
information has been omitted and filed separately with the
Commission] to the Designated VHA Member
or Affiliate. VHA and/or ADA may request reasonable
substantiation of purchase figures provided by any Designated
VHA Member or Affiliate. Any Designated VHA Member or
Affiliate which fails or refuses to provide accurate
information in a timely manner as to its total distributed
purchases shall be charged Cost plus [this confidential
information has been omitted and filed separately with the
Commission].
(1) Initial Implementation. Each Designated
VHA Member and Affiliate will be charged Cost plus [this
confidential information has been omitted and filed
separately with the Commission] for the first calendar
quarter of 1994. During the first calendar quarter of 1994,
the Utilization for each Designated VHA Member and Affiliate
will be jointly determined by the Designated VHA Member or
Affiliate, ADA and VHA using as many months of actual 1993
purchase data as is available (the "1993 Utilization").
Commencing on April 1, 1994, and for the balance of 1994,
each Designated VHA Member and Affiliate will be slotted in
the Price Matrix based upon the 1993 Utilization and 1993
average monthly volume through ADA. Any Designated VHA
Member or Affiliate commencing participation under this
Agreement after January 1, 1994, shall be slotted at Cost
plus [this confidential information has been omitted and
filed separately with the Commission] for the first full
calendar quarter under this Agreement and thereafter will be
eligible for Annual Slotting and Quarterly Performance
Bonuses.
(2) Annual Price Matrix Slotting. On or before
January 1 of each year after 1994 during the term of this
Agreement, VHA and each Designated VHA Member or Affiliate
shall recalculate the Utilization and average monthly volume
through the ADA based upon actual purchases from the
preceding twelve months. The Designated VHA Member or
Affiliate's applicable Cost plus slot on the Price Matrix
will be adjusted, if necessary, based upon such actual
purchase performance ("Annual Slotting"). Each Designated
VHA Member and Affiliate shall acknowledge annually on the
form provided in Schedule 7 its Annual Slotting, payment term
election and services desired.
(3) Quarterly Performance Bonus. Commencing
with the calendar quarter ending on June 30, 1994, and for
each calendar quarter thereafter, each Designated VHA Member
or Affiliate whose performance qualifies for a lower Cost
plus in the Price Matrix than its current Annual Slotting
will receive a Quarterly Performance Bonus from ADA within
thirty (30) days after final sales figures are available from
the prior quarter in the form of either a check or a credit
to the account, at the Designated VHA Member or Affiliate's
election. The amount of the Quarterly Performance Bonus
shall be calculated by taking the difference between the Cost
plus percentage of the Designated VHA Member or Affiliate's
current Annual Slotting and the Cost plus percentage
applicable to the Designated VHA Member or Affiliate's actual
performance for the quarter multiplied by the total amount of
purchases through ADA for that quarter. A Quarterly
Performance Bonus will not be available for Designated VHA
Members and Affiliates which are on a fixed fee for stockless
services. In these cases, the Pricing Matrix will be used
only for the purpose of determining the VHA Fee.
(4) Failure to Maintain Slotting. Any
Designated VHA Member or Affiliate which fails to maintain
actual quarterly performance at least equal to its current
Annual Slotting for any quarter shall have its Price Matrix
location adjusted immediately to reflect actual performance
for the most recently completed quarter.
(B) Payment Terms. Each Designated VHA Member and
Affiliate shall designate in writing one of the payment
options listed in Schedule 8. A Designated VHA Member or
Affiliate may change its payment option no more frequently
than once each calendar quarter upon thirty (30) days prior
written notice to ADA.
(C) Delivery. Each Designated VHA Member and
Affiliate shall be entitled to two deliveries per week. ADA
shall deliver Contract Products and Noncontract Products
F.O.B. destination, transportation out prepaid and absorbed,
except for Capital Equipment. ADA shall deliver Contract
Products and Noncontract Products to each Designated VHA
Member or Affiliate in accordance with delivery schedules
mutually agreed upon by ADA and the Designated VHA Member or
Affiliate ("Delivery Schedules"). ADA and each Designated
VHA Member and Affiliate shall agree on facility specific
delivery needs, including but not limited to, backorders,
number of deliveries, time of deliveries, substitutions, etc.
If a conflict arises which cannot be resolved by ADA and the
Designated VHA Member or Affiliate, ADA will contact VHA to
work out an appropriate schedule.
The delivery of backordered items (including items
delivered through Backorder Relay) does not constitute an
additional delivery, however, VHA has no objection to ADA
encouraging hospitals to allow backordered items to be held
and delivered with the next regular delivery.
ADA shall notify the affected Designated VHA Member or
Affiliate at the earliest convenient time after ADA can
reasonably anticipate that a delivery will be made after the
scheduled delivery time ("Delivery Time"). Such notification
shall include the anticipated date and time of delivery of
the late shipment ("Revised Delivery Time") and the reason
for the delay.
In order to minimize the frequency and length of
delays, ADA shall establish a secondary delivery system which
shall be used in the event that the primary delivery method
is unavailable.
(D) Returned Goods. ADA shall service returned
goods, including, without limitation, arranging for credits
due any Designated VHA Member or Affiliate in accordance with
the Returned Goods Policy specified in Schedule 9.
(E) Fill Rate. ADA shall maintain for each Designated
VHA Member and Affiliate an unadjusted Fill Rate of 98% for
all "A" items. "A" items are defined as those items that are
stock items and are purchased on a regular basis by that
Designated VHA Member or Affiliate. Unadjusted Fill Rate
shall be calculated by total number of lines fully delivered,
divided by total number of lines ordered.
(F) Hospital Reports. ADA shall provide each
Designated VHA Member and Affiliate with the monthly reports
listed in Schedule 10 by the tenth day of the following
month. VHA may modify or change Schedule 10 upon sixty (60)
days written notice to ADA.
(G) Customized Packing Slips and Invoices. ADA shall
provide customized packing slips and invoices consistent with
Designated VHA Member and Affiliate requirements.
(H) Customized Pallet Design. ADA shall assist in
pallet design and arrangement and shall deliver goods in
accordance with such pallet design upon request of Designated
VHA Members and Affiliates.
(I) Member Quarterly Business Review. Once each
calendar quarter, ADA shall meet with each Designated VHA
Member and Affiliate to discuss, at a minimum, the issues
listed in Schedule 11, Member Business Review Agenda.
(J) Delivery of Non-traditional Products. ADA shall
discuss with each Designated VHA Member and Affiliate the
appropriateness of delivering Non-traditional products
through ADA to the Designated VHA Member or Affiliate. Such
Non-traditional products may include by way of example: IV
solutions, x-ray film, forms, textiles, office supplies, etc.
The inclusion of Non-traditional Products in a Designated VHA
Member or Affiliate's volume for Annual Slotting shall occur
only upon the mutual agreement of ADA and the Designated VHA
Member or Affiliate; otherwise, charges, if any, for the
delivery of such Non-traditional products shall be negotiated
between ADA and the Designated VHA Member or Affiliate. In
the case of IV solutions, ADA and the Designated VHA Member
or Affiliate shall follow the process specified in Schedule
12 before any decision to deliver IV solutions through the
ADA is made.
(K) ADA Representative. Schedule 13 lists the
responsibilities of ADA's representatives for every
Designated VHA Member and Affiliate.
(L) ADA shall staff the Primary Ordering Location
each business day continuously from at least 8:00 a.m.
through 6:00 p.m., local time. In case of an emergency,
Designated VHA Members and Affiliates can call the Primary
Ordering Location. ADA will provide a list of emergency
telephone numbers at the Primary Ordering Location for after
hours contact.
Section 7. Other Services Available from ADA.
The services listed in this Section shall be available
from ADA at an additional charge to the Designated VHA Member
or Affiliate as negotiated between the ADA and the Designated
VHA Member or Affiliate.
(A) Logistics Services. ADA shall have available the
logistic services listed in Schedule 14.
(B) Patient Charge-Item Labelling. ADA shall provide
patient charge-item labels to Designated VHA Members and
Affiliates for a charge of not more than [this confidential
information has been omitted and filed separately with the
Commission]/label if labels are supplied by customer or not
more than [this confidential information has been omitted and
filed separately with the Commission]/label if ADA supplies
labels.
(C) JIT Program. ADA shall offer Just-in-Time ("JIT")
delivery services upon request. JIT services shall include
frequent deliveries in cases or boxes, whatever is Vendor's
standard unit of packaging. Charges for packing orders by
department shall not exceed [this confidential information
has been omitted and filed separately with the Commission] of
sales.
(D) Stockless/LUM (Lowest Unit of Measure).ADA shall
offer stockless/LUM services upon request. At a minimum,
such services shall include the ability to provide: at least
5 day-a-week deliveries, delivery in lowest unit of measure,
pick and pack by area of use, and delivery to area of use and
put stock away. Stockless/LUM services shall be provided
with an unadjusted Fill Rate of 100% (as calculated in
Section 6(E)) with an approved substitution list as provided
by the Designated VHA Member or Affiliate. Charges for
deliveries to department shall not exceed [this confidential
information has been omitted and filed separately with the
Commission] of affected sales and charges for putting stock
away for the customer shall not exceed [this confidential
information has been omitted and filed separately with the
Commission] of affected sales. Additional stockless services
shall be subject to local negotiation.
(E) Emergency Deliveries. ADA shall have available
emergency delivery services available 24 hours a day, seven
days a week.
(F) Barcoding. ADA shall provide barcoding labels to
Designated VHA Members and Affiliates upon request.
(G) Other Services. Schedule 15 details certain
listed ADA services available and the charge structure, if
any, associated with those services. ADA and each Designated
VHA Member and Affiliate may negotiate additional services as
requested by the Designated VHA Member or Affiliate.
Section 8. ADA Responsibilities.
ADA shall be responsible to perform the following:
(A) Disaster Plan. ADA will assist each Designated
VHA Member and Affiliate and RHCS in developing a plan of
action for delivery of products in the event of a natural
disaster in the geographical area of a Designated VHA Member
or Affiliate. Schedule 16 details ADA's disaster plan. ADA
shall provide VHA, and each RHCS, Designated VHA Member and
Affiliate, upon request a written action plan describing
procedures in the event their Primary Ordering Location
should become unable to provide products under this
Agreement. These action plans will be reviewed yearly by ADA
and VHA and updated as required.
(B) Computer Systems. ADA attests that, in the event
its computer system should fail, it has access to another
computer system which, under normal conditions, will be in
operation in no more than 48 hours. Schedule 17 details
ADA's computer capabilities. ADA will utilize manual
ordering systems during periods in which its computer systems
are not operative in order to provide an uninterrupted flow
of Contract Products and Noncontract Products to the
Designated VHA Members or Affiliates.
(C) EDI Capabilities. Schedule 18 lists the EDI
capabilities required of ADA.
(D) VHA Quarterly Business Review. ADA corporate
staff shall meet no less frequently than once each calendar
quarter with VHA to discuss ADA's performance under this
Agreement. This quarterly business review shall also be used
to establish performance targets and goals and to review
progress toward such targets and goals.
(E) Reports to VHA. ADA shall provide to VHA reports
as specified in Schedule 19. VHA may amend Schedule 19 at
any time upon sixty (60) days written notice to the ADA.
Failure to provide the required tapes, diskettes, or
information by the deadline shall result in the following
payments by ADA to VHA per calendar year:
1st Failure: Written Warning
2nd Failure: $500 Late Fee
3rd Failure: $2,500 Late Fee
4th Failure and
each succeeding
failure per
calendar year: $5,000 Late Fee
(F) TQM/CQI Process. ADAs will support with VHA an
initiative of Quality Improvement that will better serve the
Designated VHA Member and Affiliate. Based on customer
input, the ADAs shall provide a proactive team that services
the Designated VHA Member and Affiliate based on lowering
total delivered cost. (G) VHA Fee. With the
delivery of every monthly sales report listing the sales to
each Designated VHA Member and Affiliate, ADA shall pay to
VHA on the 10th of each month a "VHA Fee" calculated on total
net sales of all Contract and Noncontract Products as
follows:
Designated VHA Member or *
Affiliate Cost
Plus from Price Matrix
Including Payment Terms VHA Fee
Greater than [*] [*] of total net sales
[*] [*] of total net sales
[*] [*] of total net sales
[*] [*] of total net sales
[*] or less [*] of total net sales
Provided however, no VHA Fee shall be due on the sales of any
VHA+PLUS products except those listed in Schedule 20.
In the event any Designated VHA Member or Affiliate
earning a Quarterly Performance Bonus results in an
overpayment of the monthly VHA Fee, ADA shall recalculate the
VHA Fee due for each affected Designated VHA Member or
Affiliate and provide VHA with a detailed calculation and
report of each adjustment. ADA may deduct the net adjustment
for the calendar quarter in the next monthly VHA Fee provided
ADA has delivered the adjustment calculation and report to
VHA. In the event ADA fails to pay the VHA Fee when due, ADA
shall pay VHA, in addition to the VHA Fee, a late charge of
0.75% per month, or the maximum allowed by law, whichever is
less, on all amounts past due.
*[This confidential information has been omitted and filed
separately with the Commission.]
<PAGE>
(H) Support of VHA-NET. In addition to the EDI
capabilities required by Schedule 18, ADA shall cooperate and
support VHA NET as new transaction sets data elements are
added to the VHA-NET system. Specifically, purchase order
acknowledgements should contain the same item pricing as
invoices; ADA shall support the current version of HIBCC
conventions and the four most recent preceding versions; ADA
shall support HIBCC guidelines for asynchronous
communications; ADA shall support increased modem speeds on
VHA-NET; ADA shall include HIN's in its customer data fields;
ADA will support the use of Common Category Database codes in
product transactions; and ADA will refer questions regarding
VHA-NET to the VHA-NET Customer Support Team.
(I) ADA Representative Compensation System. ADA shall
provide VHA a written summary of ADA representative's
compensation plan no later than November 1 of each year. ADA
shall provide VHA with the opportunity to make comments on
such plan or plans.
(J) VHA Access to Facilities and Personnel. ADA shall
permit VHA and its authorized representatives access to ADA's
facilities and personnel at all reasonable times upon
reasonable request. ADA shall provide at no charge VHA with
the necessary software to permit "read only" access to ADA's
computer data (pricing, inventory, accounts receivable, fill
rates, etc.) on an on-line basis.
(K) Fraud and Abuse Disclosure. ADA represents and
warrants that, as a seller, it will provide each Designated
VHA Member and Affiliate with all information necessary to
comply with the Medicare Medicaid fraud and abuse/anti-
kickback statute (42 U.S.C. 1320a-7b) and the regulations
issued thereunder, including, but not limited to, the
appropriate disclosures with each and every Quarterly
Performance Bonus paid.
(L) Manufacturer Reports. ADA agrees to deliver all
manufacturer tracing and rebate reports to each manufacturer
for Contract Products no later than ten (10) days after the
end of the month in which the sales reported took place.
(M) Problem Resolution Policy. ADA shall follow a
problem resolution policy for resolving issues with a
Designated VHA Member or Affiliate. A copy of this policy is
attached as Schedule 21.
Section 9. Drop Shipments.
If a Vendor ships Contract Products or Noncontract
Products directly to a Designated VHA Member or Affiliate (a
"drop shipment") and the Vendor bills through ADA, such
transaction will be subject to the terms of this Agreement.
ADA may pass through to the Designated VHA Member or
Affiliate any service charges levied by Vendor on ADA for
drop shipments. ADA will notify VHA Members and Affiliates
of any such service charges at the time of order.
Section 10. Service Level.
In addition to its other service obligations under this
Agreement, ADA shall provide the minimum level of service
specified in Schedule 22 attached. Schedule 22 may be
amended from time-to-time by the written agreement of the
parties.
Section 11. General.
(A) Risk of Loss and Insurance. As between ADA and
the Designated VHA Members and Affiliates, ADA shall bear all
risk of loss while Contract Products or Noncontract Products
are in ADA's possession, custody, or control. ADA shall
provide evidence to VHA that ADA is maintaining all-risk,
full replacement cost insurance coverage for any such
Contract Product or Noncontract Product. The Designated VHA
Members and Affiliates shall not bear the risk of
loss prior to their receipt of Contract Products or
Noncontract Products. VHA shall never bear any risk of loss.
ADA may satisfy the foregoing insurance requirements through
its self-insurance program. In addition, ADA shall secure
and maintain, at its own expense, commercial general
liability insurance, including blanket contractual liability
and products liability coverages with minimum limits of
$2,000,000 per occurrence and $5,000,000 annual aggregate.
Such insurance shall include VHA and Designated VHA Members
and Affiliates as additional insureds. Within thirty (30)
days from the date hereof, ADA shall submit to VHA a
certificate of insurance attested by a duly authorized
representative of the insurance carrier or carriers,
evidencing that the insurance required by this Section is in
force and in effect and that such insurance will not be
canceled or materially changed without giving VHA at least
thirty (30) days prior written notice. ADA's obligation to
obtain and maintain the required insurance and submit the
required certificate of insurance to VHA shall continue
during the term of this Agreement and for five (5) years
thereafter.
(B) Exclusivity. In consideration that ADA will have
access to confidential price information of VHA and the
assistance of VHA in gaining access to Designated VHA Members
and Affiliates, ADA shall not offer to sell or sell Contract
Products or Noncontract Products or otherwise do business
with any Designated VHA Member or Affiliate unless
contemplated by this Agreement or approved in writing by VHA.
ADA's entire relationship vis-a-vis products with the
Designated VHA Members and Affiliates shall be governed by
this Agreement.
VHA and other persons may sell or distribute Contract
Products, Noncontract Products or both to VHA Members and
Affiliates who are not Designated VHA Members and Affiliates,
and to Designated VHA Members and Affiliates. Nothing in
this Agreement shall prohibit VHA from entering into any
distribution agreement with a manufacturer that distributes
its own products. VHA retains all its rights to manufacture,
sell, market, and otherwise distribute goods and services to
Designated VHA Members and Affiliates and to any other party.
(C) Confidentiality. ADA shall not provide any usage,
sales or purchase data relating to Designated VHA Members and
Affiliates to any third party, except to the extent necessary
to obtain credits, charge backs or meet other Vendor
requirements or as required by applicable law. If ADA
currently has in place a binding contract to supply usage,
sales or purchase data to IMS America, Ltd., Selling Areas
Marketing Inc. of Chicago, or any other data collection
entity, ADA may continue to provide the information required
by such contract until the expiration of such contract if no
one or more of the Designated VHA Members and Affiliates is
identified or identifiable therefrom either separately or as
a group. ADA may renew any such contract, but ADA agrees to
notify VHA in writing at least thirty (30) days before such
renewal.
ADA acknowledges that information supplied to it by VHA
is the property of VHA. ADA agrees to hold confidential the
terms, provisions and conditions of this Agreement and
information which is market confidential and is supplied to
it by VHA pursuant to or in connection with this Agreement or
the Purchasing Agreements and to return any such information
to VHA promptly upon the termination of this Agreement. ADA
agrees to use such confidential information only in
connection with the performance of its obligations under this
Agreement. ADA shall not disclose such information to any
third party except with the consent of VHA.
VHA acknowledges that, as professional business people,
ADA's sales representatives have access to information
necessary to properly manage their territory. The terms of
this Agreement will be provided to the sales and marketing
team to ensure their thorough understanding of the program
and its objectives. VHA agrees to hold in confidence the
terms provisions and consideration of this Agreement.
Notwithstanding any other provision of this Agreement,
the obligations of ADA to maintain the confidentiality of the
confidential information shall not apply to any portion of
the confidential information that: (i) was in the public
domain at the time of its disclosure to ADA or its
affiliates; (ii) enters the public domain through no fault
of ADA or its affiliates; (iii) was communicated to ADA or
its affiliates by a third party free of any obligation of
confidence; (iv) was developed by officers, employees, or
agents of ADA or its affiliates independently of, and without
reference to, the confidential information; (v) is already
known to ADA or its affiliates at the time of receiving the
confidential information.
The obligations of ADA pursuant to this Section 11(C)
shall survive for a period of three (3) years after the
termination of this Agreement.
(D) Warranty. ADA warrants that any product delivered
hereunder shall be new, unopened and in its original
packaging as received from the Vendor, having been stored in
accordance with any Vendor instructions. ADA shall not sell
any products without a reasonable warranty from the Vendor
which is assignable to the Designated VHA Member or
Affiliate.
ADA agrees to take any action necessary, and any action
reasonably requested, to effect the assignment of such
manufacturers' warranty to the purchaser of the warranted
product. ADA MAKES NO IMPLIED WARRANTIES OR OTHER EXPRESS
WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
(E) Relationship. Each party to this Agreement has
only the authority granted by this Agreement. Neither party
shall take any action on behalf of the other party unless
consented to in writing by the other party.
(F) Financial Statements. ADA will supply to VHA upon
request and at least annually copies of ADA's annual audited
financial reports. Such reports shall include, at a minimum,
an income statement, balance sheet, statement of equity,
statement of cash flows, all footnotes and such other
information as VHA may reasonably request.
(G) Federal Access. Until the expiration of four
years after ADA furnishes any service under this Agreement,
ADA will maintain and, upon the request of the Secretary of
the U.S. Department of Health and Human Services, the
Comptroller General of the United States, or a representative
of either of them, ADA will make available to such requesting
person, this Agreement and all books, documents and records
that are necessary to certify the nature and extent of costs
claimed to Medicare by any Designated VHA Member or Affiliate
with respect to any services provided by ADA under this
Agreement. Whether or not ADA is permitted hereunder to do
so, if ADA carries out any of the duties of this Agreement
through a subcontract, with a value or cost of $10,000.00 or
more over a twelve-month period, with a related organization
or person, then ADA agrees to cause such related organization
or person to, and to include in any such subcontract clauses
and provisions to the effect that, such related organization
or person agrees to maintain, and upon the request of the
Secretary of the U.S. Department of Health and Human
Services, the Comptroller General of the United States, or a
representative of either of them, make available to such
requesting person the subcontract and all books, documents
and records that are necessary to certify the nature and
extent of costs claimed to Medicare by any Designated VHA
Member or Affiliate with respect to any services provided
under such subcontract.
(H) Compliance With All Laws. Each party to this
Agreement represents and warrants to the other party that it
does and will comply with all laws in connection with this
Agreement and the performance of its obligations hereunder;
provided, however, without limiting the generality of the
foregoing, ADA shall provide documentation to VHA upon
request to demonstrate compliance with all applicable OSHA
and EEOC requirements.
(I) Indemnification. ADA agrees to indemnify VHA, the
Designated VHA Members and Affiliates and their respective
affiliates, directors, officers, employees, agents, servants,
and representatives, upon demand for and against any claim,
loss, liability, or expense (including attorneys' fees and
other expenses of litigation) incurred by any of them in
connection with or as a result of any act, or failure to act,
by ADA, its affiliates, directors, officers, employees,
agents, servants, or representatives or any breach by ADA of
this Agreement, provided, however, that such indemnity shall
not extend to any claim, loss, liability or expense resulting
from the negligence or willful misconduct of the party to be
indemnified.
(J) Assignment. This Agreement is binding on the
parties hereto and shall inure to the benefit of and be
binding upon the successors and assigns of the parties.
Neither this Agreement nor either party's rights and
obligations under this Agreement may be assigned, pledged, or
encumbered without the prior written consent of the other
party. For purposes of this paragraph, any transfer, sale,
merger or consolidation of ADA, or a substantial portion of
ADA's assets, whether by contract, agreement or operation of
law, shall be deemed an assignment and require the prior
written consent of VHA.
(K) Entire Agreement, Modification, Amendment, Waiver.
This Agreement constitutes the entire agreement between the
parties. No modification, amendment or waiver of any
provision of this Agreement will be effective unless approved
in writing by VHA and ADA. The failure of VHA, any
Designated VHA Member or Affiliate, or ADA at any time to
enforce any provision of this Agreement will not be construed
as a waiver of such provision and will not affect the right
of VHA, the Designated VHA Members and Affiliates or ADA
thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
(L) Choice of Law. In the event of any dispute
between VHA and ADA, this Agreement shall be governed by the
internal laws of the State of Texas. Any dispute between ADA
and a Designated VHA Member or Affiliate shall be construed
in accordance with the local laws of the location of such
Designated VHA Member or Affiliate.
(M) Third-Party Beneficiaries. The Designated VHA
Members and Affiliates are intended third-party beneficiaries
hereunder and may enforce any of the terms of this Agreement
against ADA.
(N) Severability. If this Agreement, or any one or
more of the provisions hereof, shall be held invalid,
illegal, or unenforceable within any governmental
jurisdiction or subdivision thereof, this Agreement or any
such provision or provisions shall not as a consequence
thereof be deemed to be invalid, illegal or unenforceable in
any other governmental jurisdiction or subdivision thereof.
If any provisions in this Agreement shall be held invalid,
illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement; this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been
contained herein, and there shall be deemed substituted such
other provision as will most nearly accomplish the intent of
the parties to the extent permitted by applicable law.
(O) Authority. Each party represents that the
execution, delivery, and performance of this Agreement have
been duly authorized by all required action on such party's
part, that such party has the full power to make and perform
this Agreement and that this Agreement constitutes the legal,
valid, and binding obligation of such party, enforceable in
accordance with its terms.
(P) Force Majeure. ADA shall be excused for failure
to perform hereunder if failure is caused by fire, shortages
of goods caused by national crisis, unavoidable casualties,
Acts of God, or any other matters beyond ADA's control.
(Q) Books and Records, Audit. ADA shall keep,
maintain and preserve complete, current and accurate books,
records and accounts of the transactions contemplated hereby
and such additional books, records and accounts as are
necessary to establish and verify ADA's compliance hereunder.
All such books, records and accounts shall be available for
inspection and audit by VHA and its authorized
representatives at any time during the term of this Agreement
and for two (2) years thereafter, but no more frequently than
twice in any consecutive twelve month period and only during
reasonable business hours and upon reasonable notice. The
exercise by VHA of the right to inspect and audit is without
prejudice to any other or additional rights or remedies of
either party hereto.
(R) Favored Customer Pricing. Notwithstanding
anything to the contrary contained herein, the price for each
product and service under this Agreement to Designated VHA
Members and Affiliates will be no greater than the lowest
price charged by ADA during the term hereof for such product
or service to any other customer of ADA, other than the
federal government. As competitive situations arise during
the term of this Agreement, it will be necessary for VHA and
ADA to mutually agree on meeting specific competitive
situations that are strategically important to VHA and ADA.
Section 12. Term and Termination.
This Agreement will become effective upon execution as
to each Designated VHA Member and Affiliate to which ADA is
distributing products as of the date of this Agreement. This
Agreement will commence on January 1, 1994, and continue in
force until December 31, 1996, unless terminated sooner as
provided in this Section; provided that either party may at
any time terminate this Agreement with or without cause, by
delivering not less than ninety (90) days prior written
notice thereof to the other party; and provided that VHA may
terminate this Agreement, in whole or in part, upon thirty
(30) days written notice in the event of any breach or non-
performance by ADA, provided ADA has not cured the breach
within said 30 days. This Agreement maybe extended for up
to two additional one year terms unless VHA notifies ADA in
writing ninety (90) days prior to the anniversary date of
this Agreement.
Section 13. Notices.
(A) All notices given under any of the provisions of
this Agreement shall be deemed duly given to VHA or the
Designated VHA Members and Affiliates if mailed by registered
or certified mail, return receipt requested, to:
Voluntary Hospitals of America, Inc.
300 Decker Drive
Irving, Texas 75062
or to such other address as VHA may designate in writing by
notice to ADA as provided in this Section 13.
(B) All notices given under any of the provisions of
this Agreement shall be deemed duly given to ADA if mailed by
registered or certified mail to:
____________________________________
____________________________________
____________________________________
____________________________________
____________________________________
or to such other address as ADA may designate in writing by
notice to VHA as provided in this Section 13.<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed
this Agreement as of the date first above written.
Voluntary Hospitals of America, Inc.
("VHA")
By: _______________________________
Dwight Winstead
Executive Vice President
__________________________________
("Authorized Distribution Agent")
By: ________________________________
Title:_______________________________
SCHEDULE 1
DESIGNATED VHA MEMBERS AND AFFILIATES
[List of Members and Affiliates assigned to ADA]
SCHEDULE 1 - MEMBERS & AFFILIATES ASSIGNED TO ADA
Lic. # Hospital
City State
ADA: OWENS & MINOR
P291 Atmore Community Hospital
Atmore AL
P381 Baptist Health Services Corp.
Montgomery AL
H018 Baptist Health Services, Inc.
Gadsden AL
P315 Baptist Medical Center-Cherokee
Centre AL
P344 Baptist Medical Center-Dekalb
Ft. Payne AL
P294 Baptist Medical Center-Montclair
Birmingham AL
P295 Baptist Medical Center-Princeton
Birmingham AL
P346 Baptist Memorial Hospital
Gadsden AL
P309 Boaz-Albertville Medical Center
Boaz AL
P409 Citizens Baptist Medical
Center (BMC)
Talladega AL
DAJU Coosa Valley Medical Center
Sylacauga AL
P320 Cullman Medical Center
Cullman AL
P310 D.W. McMillan Memorial Hospital
Brewton AL
W431 DCH Healthcare Authority
Tuscaloosa AL
P414 DCH Regional Medical Center
Tuscaloosa AL
P415 DCH Rehabilitation Pavilion
Tuscaloosa AL
P323 Decatur General Hospital
Decatur AL
P341 Eliza Coffee Memorial Hospital
Florence AL
P337 Fayette County Hospital
Fayette AL
P357 Guntersville-ARAB Medical Center
Guntersville AL
P363 Huntsville Hospital
Huntsville AL
W133 Infirmary Health System, Inc.
Mobile AL
W425 Jackson County Health Care Authority
Scottsboro AL
P402 Jackson County Hospital
Scottsboro AL
VH65 Marshall County Health Care Authority
Boaz AL
P391 Mizell Memorial Hospital, Inc.
Opp AL
P375 Mobile Infirmary Medical Center
Mobile AL
P292 North Baldwin Hospital
Bay Ninette AL
P311 North Jackson Hospital
Bridgeport AL
P281 Northeast Alabama Regional
Medical Center
Anniston AL
P388 Northport Hospital - DCH
Northport AL
P394 Phenix Medical Park Hospital
Phenix City AL
P136 Regional Health Services, Inc.
Anniston AL
W534 Rotary Rehabilitation Hospital
Mobile AL
P285 Shelby Medical Center
Alabaster AL
P342 South Baldwin Hospital
Foley AL
P070 The Baptist Medical Centers
Birmingham AL
P336 Thomas Hospital
Fairhope AL
P404 Vaughan Regional Medical Center
Selma AL
P318 Vaughan-Chilton Medical Center
Clanton AL
P317 Washington County Infirmary
Chatom AL
VHE1 Medlantic Healthcare Group
Washington DC
VHE4 National Rehabilitation Hospital
Washington DC
S525 Washington Hospital Center
Washington DC
W135 Alachua General Hospital, Inc.
Gainesville FL
VH66 Baptist Health Care Corporation
Pensacola FL
P016 Baptist Hospital, Inc.
Pensacola FL
U900 Bay Medical Center
Panama City FL
U862 Bayfront Medical
Center, Inc.
St. Petersburg FL
V514 Bethesda Memorial Hospital, Inc.
Boynton Beach FL
V516 Boca Raton Community Hospital,
Inc.
Boca Raton FL
U854 Bradford Hospital
Starke FL
V499 Cape Canaveral Hospital
Cocoa Beach FL
V448 Citrus Memorial Hospital
Inverness FL
U826 Good Samaritan Medical Center
West Palm Beach FL
P033 Gulf Breeze Hospital
Gulf Breeze FL
W539 Halifax Health Care Systems, Inc.
Daytona Beach FL
V490 Halifax Medical Center
Daytona Beach FL
W509 Holmes Regional Healthcare
Systems, Inc.
Melbourne FL
V403 Holmes Regional Medical Center
Melbourne FL
V433 Jay Hospital
Jay FL
V425 Lake Shore Hospital, Inc.
Lake City FL
V420 Lakeland Regional Medical Center
Lakeland FL
V471 Lee Memorial Hospital
Fort Myers FL
W502 Martin Memorial Health Systems
Stuart FL
U853 Martin Memorial Medical Center
Stuart FL
VMB6 Mease Health Care
Dunedin FL
V486 Mease Hospital
Dunedin FL
VHDJ Mease Hospital Countryside
Safety Harbor FL
V443 Methodist Medical Center
Jacksonville FL
U915 Munroe Regional Medical Center
Ocala FL
U906 Orlando Regional Healthcare
System
Orlando FL
H040 Sand Lake Hospital
Orlando FL
V467 Santafe Healthcare, Inc.
Gainesville FL
V451 SMK Homestead Hospital
Homestead FL
U867 South Miami Health System, Inc.
South Miami FL
U864 St. Cloud Hospital
St. Cloud FL
V438 St. Luke's Hospital
Jacksonville FL
V411 Suwannee Hospital, Inc.
Live Oak FL
U851 Tallahassee Memorial Regional
Medical Center
Tallahassee FL
U839 University Community Hospital,
Inc.
Tampa FL
W532 Upreach Pavilion
Gainesville FL
U832 Venice Hospital
Venice FL
W537 Vista Pavilion
Gainesville FL
V146 Athens Regional Medical Center
Athens GA
W581 Brooks County Hospital
Quitman GA
W547 Buford Hospital
Buford GA
U998 Candler Health System
Savannah GA
V113 Cobb Hospital & Medical Center
Austell GA
V014 Colquitt Regional Medical Center
Moultrie GA
DEIG Columbus Ambulatory Healthcare
Services, Inc.
Columbus GA
V088 Columbus Regional Healthcare
System, Inc.
Columbus GA
V075 Dekalb Medical Center
Decatur GA
V004 Floyd Medical Center
Rome GA
V102 Grady General Hospital
Cairo GA
V032 Gwinnett Hospital System
Lawrenceville GA
V078 Hamilton Medical Center, Inc.
Dalton GA
W548 Joan Glancy Memorial Hospital
Duluth GA
V390 John D. Archbold Memorial
Hospital
Thomasville GA
V024 Kennestone Hospital
Marietta GA
P266 Kennestone Hospital at Windy Hill
Marietta GA
W521 Kennestone Regional Health Care
System, Inc.
Marietta GA
V033 Louis Smith Memorial Hospital
Lakeland GA
V103 Marion Memorial Hospital and
Nursing Home
Buena Vista GA
V027 Medical Center of Central Georgia
Macon GA
V100 Mitchell County Hospital
Authority
Camilla GA
V011 Newman Hospital
Newman GA
V050 Northeast Georgia Health
Services, Inc.
Gainesville GA
DDGR Northridge Hospital
Columbus GA
V151 Phoebe Putney Memorial Hospital
Albany GA
V126 Piedmont Hospital
Atlanta GA
V099 R.T. Jones Regional Hospital
Canton GA
V124 Scottish Rite Children's Medical
Center
Atlanta GA
V065 South Fulton Medical Center
East Point GA
V385 South Georgia Medical Center
Valdosta GA
DIYT Summitridge
Lawrenceville GA
V149 Sumter Regional Hospital
Americus GA
P264 Burlington Medical Center
Burlington IA
W423 Covenant Medical Center, Inc.
Waterloo IA
U638 Covenant Medical Center-Kimball
Waterloo IA
U637 Covenant Medical Center-W, Ninth
Waterloo IA
U687 Delaware County Memorial Hospital
Manchester IA
U750 Floyd County Memorial Hospital
Charles City IA
U712 Grinnell General Hospital
Grinnell IA
U677 Henry County Health Center
Mt. Pleasant IA
U685 Jackson County Public Hospital
Maquoketa IA
U718 Jefferson County Hospital
Fairfield IA
U656 Merrill Pioneer Community
Hospital
Rock Rapids IA
P024 Ottumwa Regional Health Center
Ottumwa IA
U755 Sartori Memorial Hospital
Cedar Falls IA
U735 St. Luke's Hospital
Davenport IA
U753 St. Luke's Methodist Hospital
Cedar Falls IA
U724 The Finley Hospital
Dubuque IA
U716 Trinity Regional Hospital of
Ft. Dodge
Ft. Dodge IA
H042 Acadia-St. Landry Hospital
Church Point LA
W533 Alton Ochsner Medical Foundation
New Orleans LA
T809 Beauregard Memorial Hospital
Deridder LA
T821 Bunkie General Hospital
Bunkie LA
T771 Lake Charles Memorial Hospital
Lake Charles LA
T747 Natchitoches Parish Hospital
Natchitoches LA
T691 North Caddo Hospital Service
District
Vivian LA
T734 Ochsner Foundation Hospital
New Orleans LA
T774 Our Lady of Lourdes Regional
Medical Center
Lafayette LA
T829 Our Lady of the Lake Regional
Medical Center
Baton Rouge LA
T733 Pendleton Memorial Methodist
Hospital
New Orleans LA
T840 Rapides Regional Medical Center
Alexandria LA
T750 St. Francis Medical Center, Inc.
Monroe LA
T700 Willis-Knighton Medical Center
Shreveport LA
P020 Willis-Knighton South
Shreveport LA
R464 Calvert Memorial Hospital Prince
Frederick MD
R483 Fallston General Hospital
Fallston MD
R475 Harford Memorial Hospital
Havre de Grace MD
R487 The Memorial Hospital at
Easton, Maryland, Inc.
Easton MD
W469 Upper Chesapeake Health
System, Inc.
Fallston MD
U542 Abbott-Northwestern Hospital,
Inc.
Minneapolis MN
U622 Arlington Municipal Hospital
Arlington MN
U484 Bethesda Lutheran Hospital
St. Paul MN
U604 Canby Community Health Services
Canby MN
DHLY Canby Medical Center
Canby MN
U492 Divine Redeemer Memorial Hospital
South St. Paul MN
DHZO Greater Staples Hospital
Staples MN
U567 Harmony Community Hospital, Inc.
Harmony MN
W416 Healtheast of Minnesota
St. Paul MN
U562 Hutchinson Community Hospital
Hutchinson MN
U546 Immanuel-St. Joseph's Hospital
Mankato MN
U558 Karlstad Health Facilities
Karlstad MN
U579 Lake Region Hospital & Nursing
Home
Fergus Falls MN
U556 Lakefield Municipal Hospital&
Colonial NURS. Home
Lakefield MN
W500 Lifespan, Inc.
Minneapolis MN
U549 Madelia Community Hospital
Madelia MN
U605 Memorial Hospital
Cambridge MN
U510 Memorial Hospital and Home
Perham MN
U536 Methodist Hospital St.
Louis Park MN
U485 Midway Hospital St.
Louis MN
U534 Minneapolis Children's Medical
Center
Minneapolis MN
U494 Murray County Memorial Hospital
Slayton MN
U617 North Country Regional Hospital
Bemidji MN
U504 Redwood Falls Municipal Hospital
Redwood Falls MN
V321 Rice Memorial Hospital
Willmar MN
V328 Ridgeview Medical Center
Waconia MN
U499 Roseau Area Hospital District
Roseau MN
P005 Saint Cloud Hospital St.
Cloud MN
U489 Springfield Community Hospital
Springfield MN
W455 St. John's Northeast Hospital
Maplewood MN
U479 St. Joseph's Hospital St.
Paul MN
U590 St. Luke's Hospital of Duluth
Duluth MN
P172 St. Peter Community Hospital St.
Peter MN
U523 Stevens Community Memorial Hospital,
Inc.
Morris MN
U470 Tracy Municipal Hospital
Tracy MN
U491 Tweeten/Lutheran Health Care Center,
Inc.
Spring Grove MN
V325 Waseca Area Memorial Hospital, Inc.
Waseca MN
U486 Watonwan Memorial Hospital St.
James MN
U545 Weiner Memorial Medical Center
Marshall MN
V319 Windom Area Hospital
Windom MN
P017 Baldwyn Hospital
Baldwyn MS
P035 Forrest General Hospital
Hattiesburg MS
V347 Greenwood Leflore Hospital
Greenwood MS
V345 Hardy Wilson Memorial Hospital
Hazlehurst MS
U969 Jeff Anderson Regional Medical
Center
Meridian MS
V356 Magnolia Hospital
Corinth MS
P075 Memorial Hospital at Gulfport
Gulfport MS
U976 Moxubee General Hospital
Macon MS
W176 Ocean Springs Hospital Ocean
Springs MS
U960 Okolona Community Hospital
Okolona MS
U951 Oktibbeha County Hospital
Starksville MS
P007 Singing River Hospital
Pascagoula MS
VHB5 Singing River Hospital System
Pascagoula MS
V370 South Panola Community Hospital
Batesville MS
W267 Southwest Mississippi Regional
Medical Center
McComb MS
V334 St. Dominic-Jackson Memorial
Hospital
Jackson MS
W432 Carolina Medicorp, Inc.
Winston-Salem NC
W035 Carolinas Medical Center
Charlotte NC
VV05 Charlotte Mecklenburg Hospital
Authority
Charlotte NC
W034 Charlotte Rehabilitation Hospital
Charlotte NC
V922 Community General Hospital of
Thomasville, Inc.
Thomasville NC
V968 Davie County Hospital
Mocksville NC
P015 Forsyth Memorial Hospital
Winston-Salem NC
W393 Hawthorne Surgical Center
Winston-Salem NC
V985 Huntersville Oaks Nursing Home
Huntersville NC
V907 Medical Park Hospital
Winston-Salem NC
V945 Nash General Hospital, Inc. Rocky
Mount NC
DSTG Sardis Nursing Home
Charlotte NC
W464 University Hospital
Charlotte NC
W435 Wake County Hospital System, Inc.
Raleigh NC
V950 Wake Medical Center
Raleigh NC
V996 Wesley Long Community Hospital, Inc.
Greensboro NC
DETC Western Wake Medical Center
Cary NC
T409 Cavalier County Memorial Hospital
Langdon ND
T412 Hillsboro Community Hospital
Hillsboro ND
T411 Jamestown Hospital
Jamestown ND
T438 Medcenter One Health Systems
Bismarck ND
P006 St. Luke's Association
Fargo ND
T417 The United Hospital Grand
Forks ND
T402 Trinity Medical Center
Minot ND
T419 Unity Hospital
Grafton ND
Q104 Eastern New Mexico Medical Center
Roswell NM
DDLM Baptist Healthcare of Oklahoma, Inc.
Oklahoma City OK
V588 Baptist Medical Center of Oklahoma
Oklahoma City OK
V601 Baptist Regional Health Center
Miami OK
V631 Bass Memorial Baptist Hospital
Enid OK
V655 Blackwell Regional Hospital
Blackwell OK
V653 Bristow Memorial Hospital
Bristow OK
V586 Deaconess Hospital
Oklahoma City OK
V638 Drumright Memorial Hospital
Drumright OK
V637 Duncan Regional Hospital, Inc.
Duncan OK
V571 Eastern Oklahoma Medical Center
Poteau OK
V570 Grand Valley Hospital
Pryor OK
V622 Grove General Hospital
Grove OK
V544 Hillcrest Medical Center
Tulsa OK
V666 Jackson County Memorial Hospital
Altus OK
V658 Jane Phillips Episcopal Hospital,
Inc.
Bartlesville OK
V621 Logan Hospital & Medical Center
Guthrie OK
V602 McAlester Regional Health Center
McAlester OK
V660 Memorial Hospital of Southern
Oklahoma
Ardmore OK
V599 Midwest City Regional Hospital
Midwest City OK
V596 Muskogee Regional Medical Center
Muskogee OK
V592 Norman Regional Hospital
Norman OK
Q038 Oklahoma Healthcare Corp.
Oklahoma City OK
V574 Pawnee Municipal Hospital
Pawnee OK
DJDL SMC Health Services Corporation
Oklahoma City OK
V581 Southwest Medical Center
Oklahoma City OK
V598 Southwest Medical Center-Moore
Moore OK
V540 St. John Medical Center
Tulsa OK
V556 Stillwater Medical Center
Stillwater OK
V555 Stroud Municipal Hospital
Stroud OK
V668 Valley View Regional Hospital
ADA OK
U321 Tuality Community Hospital, Inc.
Hillsboro OR
U328 Tuality Forest Grove Hospital
Forest Grove OR
U304 Willamette Falls Hospital
Oregon City OR
R549 York Hospital
York PA
V834 Baker Hospital
Charleston SC
V882 Baptist Medical Center at Columbia
Columbia SC
V869 Baptist Medical Center Easley
Easley SC
V889 Roper Hospital
Charleston SC
VWF3 South Carolina Baptist Hospitals,
Inc.
Columbia SC
T457 Sioux Valley Hospital Sioux
Falls SD
DJIG Baptist Healthcare Group
Nashville TN
DJII Baptist Healthcare Group-Miller
Medical Group
Nashville TN
DJIH Baptist Healthcare Group-Nashville
MedicalGroup
Nashville TN
P012 Baptist Hospital, Inc.
Nashville TN
R865 Clarksville Memorial Hospital
Clarksville TN
R864 Cookeville General Hospital
Cookeville TN
R861 Cumberland Medical Center
Crossville TN
R825 East Tennessee Children's Hospital
Knoxville TN
VV16 Fort Sanders Alliance
Knoxville TN
R808 Fort Sanders Loudon Medical Center
Loudon TN
R821 Fort Sanders Parkwest Medical Center
Knoxville TN
R824 Fort Sanders Regional Medical Center
Knoxville TN
P021 Fort Sanders-Sevier Medical Center
Sevierville TN
R859 Goodlark Medical Center, Inc.
Dickson TN
R746 Hardin County General Hospital
Savannah TN
R846 Harriman City Hospital
Harriman TN
R735 Jessee Holman Jones Hospital
Springfield TN
R865 Maury Regional Hospital
Columbia TN
R757 Methodist Medical Center of
Oak Ridge Oak
Ridge TN
R775 Middle Tennessee Medical Center,
Inc.
Murfreesboro TN
R851 Williamson Medical Center
Franklin TN
S865 All Saints Episcopal Hospital Fort
Worth TX
W482 All Saints Hospital * Cityview Fort
Worth TX
T049 Angleton-Danbury General Hospital
Angleton TX
T044 Arlington Memorial Hospital
Arlington TX
T020 Baptist Healthcare System
Beaumont TX
DBZG Baptist Hospital, Orange
Orange TX
T943 Baptist Medical Center San
Antonio TX
W519 Baptist Memorial Hospital System San
Antonio TX
P495 Baylor Center for Restorative Care
Dallas TX
W515 Baylor Health Care System
Dallas TX
S931 Baylor Institute for Rehabilitation
Dallas TX
S873 Baylor Medical Center at Ennis
Ennis TX
S836 Baylor Medical Center at Garland
Garland TX
S817 Baylor Medical Center at Grapevine
Grapevine TX
T863 Baylor Medical Center at Waxahachie
Waxahachie TX
S942 Baylor University Medical Center
Dallas TX
S996 Brownfield Regional Medical Center
Brownfield TX
S939 Children's Medical Center of Dallas
Dallas TX
S943 CDON Memorial Hospital & Home
Dalhart TX
T976 Frio Hospital
Pearsall TX
T056 High Plains Baptist Hospital
Amarillo TX
T867 Hillcrest Baptist Medical Center
Waco TX
U083 Irving Healthcare System
Irving TX
T894 King's Daughters Hospital
Temple TX
U046 Lamb Healthcare Center
Littlefield TX
S815 Limestone Medical Center
Groesbeck TX
VV00 Lubbock Methodist Hospital
System, Inc.
Lubbock TX
U055 Medical Arts Hospital
Lamesa TX
U025 Memorial Hospital
Marshall TX
DAJR Memorial Hospital - The Woodlands The
Woodlands TX
U013 Memorial Hospital and Medical Center
Midland TX
P029 Memorial Hospital Northwest
Houston TX
P028 Memorial Hospital Southeast
Houston TX
P009 Memorial Hospital Southwest
Houston TX
W514 Memorial Hospital System
Houston TX
DGMK Methodist Children's Hospital
Lubbock TX
U035 Methodist Hospital
Lubbock TX
W560 Methodist Hospital Levelland
Levelland TX
VV14 Middleton General Hospital
Irving TX
T875 Mother Frances Hospital
Tyler TX
DAFF Muleshoe Area Medical Center
Muleshoe TX
DFGG North Central Baptist Hospital San
Antonio TX
T938 Northeast Baptist Hospital San
Antonio TX
U087 Northeast Medical Center Hospital
Humble TX
S978 Panola General Hospital
Carthage TX
T050 Permian General Hospital
Andrews TX
S885 Providence Memorial Hospital El
Paso TX
T958 Richardson Medical Center
Richardson TX
T946 Shannon Medical Center San
Angelo TX
T930 Southeast Baptist Hospital San
Antonio TX
T030 St. David's Health Care System
Austin TX
T926 St. Luke's Lutheran Hospital San
Antonio TX
S807 Valley Baptist Medical Center
Harlingen TX
T886 Wadley Regional Medical Center
Texarkana TX
U008 Ward Memorial Hospital
Monahans TX
T850 Wichita General Hospital
Wichita Falls TX
S870 Wilson Memorial Hospital
Floresville TX
T913 Wilson N. Jones Memorial Hospital
Sherman TX
W525 Centra Health, Inc.
Lynchburg VA
S614 Children's Health System, Inc.
Norfolk VA
S625 Lynchburg General Marshall Lodge Hospitals,
Inc. Lynchburg VA
S662 Martha Jefferson Hospital
Charlottesville VA
S646 Mary Washington Hospital
Fredericksburg VA
W504 MWH Medicorp
Fredericksburg VA
S672 National Hospital for Orthopaedics and
Rehabilitation
Arlington VA
S637 Rockingham Memorial Hospital
Harrisonburg VA
S554 Sentara Bayside Hospital
Virginia Beach VA
S640 Sentara Hampton General Hospital
Hampton VA
P004 Sentara Health System, Inc.
Norfolk VA
S609 Sentara Leigh Hospital
Norfolk VA
S607 Sentara Norfolk General Hospital
Norfolk VA
S647 Southampton Memorial Hospital
Franklin VA
S677 The Alexandria Hospital
Alexandria VA
S673 The Arlington Hospital
Arlington VA
S551 The Fauquier Hospital, Inc.
Warrenton VA
S624 Virginia Baptist Hospital
Lynchburg VA
W620 Allenmore Hospital
Tacoma WA
W498 Multicare Medical Center
Tacoma WA
V361 Tacoma General Hospital
Tacoma WA
SCHEDULE 2 - ADA BRANCHES
ADA: OWENS & MINOR
BRANCH
- - - --------------------
ATLANTA
AUGUSTA
BIRMINGHAM
DALLAS
FT.LAUDERDALE
HARLINGEN
HOUSTON
JACKSON
JACKSONVILLE
KNOXVILLE
MEMPHIS
MINNEAPOLIS
NEW ORLEANS
NORFOLK
OKLAHOMA CITY
ORLANDO
PORTLAND
RALEIGH
RICHMOND
SAVAGE
SHREVEPORT
SCHEDULE 3
REGIONAL HEALTH CARE SYSTEMS
VHA ALABAMA, INC.
Two Perimeter Park S., Ste. 404W
Birmingham, AL 35243
(205) 970-2300
FAX: (205) 970-2333
VHA CAROLINAS-TENNESSEE, INC.
Water Oak Bldg.
8720 Red Oak Blvd., Ste. 505
Charlotte, NC 28217
(704) 522-8056
FAX: (704) 522-7912
VHA CENTRAL,INC.
100 Old Wilson Bridge Rd., Ste. 109
Worthington, OH 43085
(614) 436-1165
FAX: (614) 436-4236
VHA EAST, INC.
200 Berwyn Park, Ste. 202
Berwyn, PA 19312
(215) 296-2558
FAX: (215) 296-8850
VHA OF FLORIDA, INC.
3030 N. Rocky Point Dr. W., Ste. 750
Tampa, FL 33607
(813) 281-1080
FAX: (813) 281-1173
VHA GEORGIA, INC.
900 Circle 75 Pkwy., Ste. 1450
Atlanta, GA 30339
(404) 850-7400
FAX: (404) 850-7430
VHA GREAT RIVERS, INC.
235 S. Fifth St.
Springfield, IL 62701
(217) 753-0395
FAX: (217) 753-2078
VHA GULF STATES, INC.
2431 S. Acadian Thruway, Ste. 540
Baton Rouge, LA 70808
(504) 922-4020
FAX: (504) 922-4023
VHA HEALTHFRONT, INC.
600 W. Cummings Park, Ste. 3900
Woburn, MA 01801-6349
(617) 938-9000
FAX: (617) 938-1090
VHA IOWA, INC.
866 First Ave. N.E.
Cedar Rapids, IA 52402
(319) 366-6652
FAX: (319) 366-3050
VHA METRO NEW YORK, INC.
Cedar Plaza
20 Cedar St., Ste. 301
New Rochelle, NY 10801
(914) 633-0064
FAX: (914) 633-0548
VHA MICHIGAN, INC.
3940 Peninsular Dr., SE, Ste. 280
Grand Rapids, MI 49546
(616) 956-6555
FAX: (616) 956-7884
VHA MID-AMERICA, INC.
4400 College Blvd., Ste. 160
Overland Park, KS 66211
(913) 345-2422
FAX: (913) 345-1868
VHA MID-ATLANTIC STATES, INC.
1033 N. Fairfax St., Ste. 400
Alexandria, VA 22314
(703) 549-3031
FAX: (703) 549-3721
VHA MIDLANDS, INC.
7912 Davenport St.
Omaha, NE 68114
(402) 392-2688
FAX: (402) 392-2887
VHA MIDWEST, INC.
O'Hare Corporate Center
1300 W. Higgins Rd., Ste. 210
Park Ridge, IL 60068
(312) 693-7050
FAX: (312) 693-2894
VHA MOUNTAIN STATES, INC.
2060 Broadway, Ste. 300
Boulder, CO 80302
(303) 545-9300
FAX: (303) 444-3704
VHA NEW ENGLAND, INC.
100 Commercial St., Ste. 406
Portland, ME 04101
(207) 761-2905
FAX: (207) 761-2415
VHA OF NEW JERSEY, INC.
68A S. Main St.
Cranbury, NJ 08512
(609) 395-7776
FAX: (609) 395-9050
VHA NORTH CENTRAL, INC.
3600 W. 80th St., Ste. 550
Minneapolis, MN 55431
(612) 896-3424
FAX: (612) 896-3425
VHA OF OKLAHOMA, INC.
Lakepointe Towers West
4013 NW Expwy., Ste. 675
Oklahoma City, OK 73116
(405) 843-1500
FAX: (405) 848-1813
VHA PACIFIC, INC.
Tishman Office Center
2175 N. California Blvd., Ste. 310
Walnut Creek, CA 94596
(510) 933-2121
FAX: (510) 947-1497
VHA PENNSYLVANIA, INC.
Foster Plaza, Bldg. I, 3rd Fl.
415 Holiday Dr.
Pittsburgh, PA 15220
(412) 922-9124
FAX: (412) 922-9345
VHA SOUTHERN NEW ENGLAND, INC.
Winding River Office Park
74 Scott Swamp Rd.
Farmington, CT 06032
(203) 674-1774
FAX: (203) 674-1953
VHA SOUTHWEST, INC.
14901 Quorum Dr., Ste. 200
Dallas, TX 75240
(214) 490-0433
FAX: (214) 490-0204
VHA TRI-STATE, INC.
8900 Keystone Crossing, Ste. 480
Indianapolis, IN 46240
(317) 574-7170
FAX: (317) 574-7173
VHA UPSTATE NEW YORK, INC.
5000 Campuswood Dr., Ste. 102
East Syracuse, NY 13057
(315) 432-1340
FAX: (315) 433-2320
VHA WEST, INC.
12555 W. Jefferson Blvd., Ste. 325
Los Angeles, CA 90066
(310) 578-7654
FAX: (310) 578-7652
VHA WISCONSIN, INC.
Tenney Plaza
3 S. Pinckney St., Ste. 800
Madison, WI 53703
(608) 255-8225
FAX: (608) 255-4435
SCHEDULE 4
VHA+PLUS
PRICING POLICY/PROTOCOL
The objective of this policy/protocol is to achieve the
following;
Ensure accurate VHA+PLUS pricing to VHA
hospitals in a timely manner,
Provide traceability and accountability of
VHA+PLUS pricing,
Centralize VHA+PLUS pricing decisions, and
Effectively communicate all price revisions.
TIERED OR HOSPITAL EXCEPTION LEVEL PRICING
In the event that it becomes necessary to deviate from the
published pricing for any VHA+PLUS medical/surgical product
the following protocol is to be observed.
1) The VHA+PLUS manufacturer, in conjunction with
the appropriate VHA Account Manager will
communicate a request for tier revision or
hospital exception level pricing to VHA MSBU
Product Management on a VHA+PLUS HOSPITAL
EXCEPTION LEVEL PRICING, (HELP) form. (attached)
2) VHA+PLUS Product Manager/Analyst will review
requests.
3) VHA+PLUS Product Manager/Analyst will
approve/disapprove requests.
4) MSBU Distribution & Logistics Services Analyst
will telefax approved VHA+PLUS HELP forms to the
Authorized Distribution Agent (ADA) and revised
pricing will be available to the hospital in 7
working days.
5) The ADA will communicate back to MSBU
Distribution & Logistics Services Analyst in
writing confirming the date entered into the ADA
system.
6) All approved VHA+PLUS HELP requests will be on
file with the Distribution & Logistics Services
Analyst for future reference.
VHA+PLUS
HOSPITAL EXCEPTION LEVEL PRICING
(H.E.L.P. FORM)
VHA Hospital:
VHA LIC #:
Address:
City/State/Zip:
Contract #:
Current Price
Tier:
New Price
Tier:
Effective Date:
Review Date:
(For
Office
Use
CAT NO
DESCRIPTION
ADA
PRICE
HOSP
PRICE
USAGE
CS/YR
USAGE
$/YR
Submitted By:
SIGNATURE DATE
VHA+PLUS Product Management:
SIGNATURE DATE
ADA Contracts Personnel:
SIGNATURE DATE
Return copy to Distribution Analyst-VHA
Fax (214)650-4330
SCHEDULE 5/ SCHEDULE 17
ADA COMPUTER CAPABILITIES AND BACK-UP SYSTEMS
Owens & Minor's hardware configuration is designed for
maximum availability and flexibility,
integrating the technologies of IBM and DEC
to achieve a state-of-the-art physical
environment. The entire Owens & Minor data
processing environment is referred to as OMNI.
EDI data may be received into OMNI through one
of two separate systems: the DEC/VAX, once
receive, that data is passed to the mainframe
and processed. (The DEC/VAX and the IBM
Mainframe is headquarterd in Owens & Minor's
corporate office, Richmond, Virginia).
Regardless of which system actually receives the EDI data,
the processing of that data (orders, etc.) is performed on the
mainframe.
For example, if a VHA Hospital sends several orders electronically
to Owens & Minor via the DEC/VAX; once received, that data is passed
to the mainframe and processed. After order confirmations are
generated, the data is then passed back to the DEC/VAX. A communicat
session takes place to electronically transfer the order confirmations
back to the VHA Hospital.
Data may also be sent directly to the IBM mainframe, processed and sent
back to the originating party (mainframe-to-mainframe). This situation
typically occurs between Owens & Minor and its vendors. Some of the
larger VHA Hospitals also communicate directly with the
IBM mainframe. The DEC/VAX system provides a flexible asynchronous
communications environment, and therefore allows Owens & Minor to
accommodate many other communication
configurations.
Once this data has been received from the VHA Hospital and processed,
the data is directed
to a controller at the local Owens & Minor Distribution Center.
This process takes place
within a matter of seconds from the time
it is received from the VHA Hospital. If back-
orders exist, the customer service representative
will manually direct shipment to be made
from another Owens & Minor Distribution Center,
depending on the urgency of the back-order
by the VHA Hospital. OMNI does not automatically
spin the back-order to another Distribution
center. Due to the fact that Owens & Minor has
a record for high fill-rate percentage the
decision was made to have manual intervention.
We find this to be more efficient and
controllable.
Owens & Minor's EDI Systems support both asynchronous
and synchronous (bisync)
communications. Asynchronous communications
are exchanged between the DEC/VAX system and the
VHA Hospitals. The IBM mainframe accommodates
synchronous communications (bisync/3780 and
3770 protocol). Communications between Owens
& Minor and the VHA Hospitals may be direct or
through a Value Added Network (VAN).
Currently, Owens & Minor processes EDI data received
in the standard ANSI X12 format, Owens
& Minor Proprietary format and other varied
proprietary formats. Although Owens & Minor
encourages the used of ANSI X12 EDI standards,
vendor-specific systems may be developed.
EDI data is received from various Remote Order
Entry and Material Management Systems. Some
of the most commonly used software packages
include: QUIKLINK, ESI, and PCtrend (an Owens
& Minor product). A complete list of Owens &
Minor EDI interfaces is listed on the attached
pages (See Owens & Minor "Electronic Data
Interchange"). The Owens & Minor Corporate Data
Center is backed by an un-interruptable power
supply and an emergency generator which enables
us to continue to operate during local power outages.
Our computer system is state-of-the-art IBM technology
which has been integrated with
redundant systems and components to
prevent loss of access to the system. This design will
switch to backup components in the event of a failure
and will automatically call the IBM
Support Center supplying the failing
component part number and location in the System to
expedited dispatch and repair.
The System also has a multiple component
architecture which allows us to process in a
slightly degraded mode for processors which
operate independently. This design permits Owens
& Minor to process customer data without interruption.
Data is routinely backed-up and stored off-site.
In the event of a major disaster which
destroys the corporate date center, arrangements
have been made with IBM to establish a HOT
SPOT or Data Center within twenty-four (24)
hours. Owens & Minor would be able to recover
to full business processing capacity within
three calendar days of a major disaster to the
corporate data center.
In the event of a power outage to a
local Owens & Minor Distribution Center, orders would be
pulled manually until power can be restored. In the event
of a disaster to a local Owens &
Minor Distribution Center, EDI and manual
orders will be redirected to another Owens & Minor
Distribution Center in the immediate area until service can be restored.
SCHEDULE 6
THE ENHANCED ADA AGREEMENT - COST PLUS MATRIX
Monthly $Volume of Purchases Payment Terms
0 100,001 300,001 500,001 750,001 1,000,001
100,000 300,000 500,000 750,000 1,000,000 and > Pre-pay>=[+] days
< 30% Utilization
[+] [+] [+] [+] [+] [+] Deduct [+]
Pre-pay [+] days
30 - 39% Utilization
[+] [+] [+] [+] [+] [+] Deduct [+]
Net [+] days
40-54% Utilization
[+] [+] [+] [+] [+] [+] Deduct [+]
Net [+] days
55-69% Utilization
[+] [+] [+] [+] [+] [+] [+]
Net [+] days
70-80% Utiliza
[+] [+] [+] [+] [+] [+] Add [+]
Net [+] days
Add [+]
> 80% Utilization
[+] [+] [+] DIST SUPPLY CHAIN CONTAINMENT PROG
Net Over [+] days
Add [+]
**** Per ea [+] days beyond [+] days
* If the organization utilizes Terms
their ADA for more than [+] of All deliveries to the dock
their [+] through their ADA is [+] or EOE Utilization >=[+]
greater, the organization is eligible
for a fixed monthly
distribution service fee (inclusive of product
cost and services rendered)
which is negotiated between the
organization, their ADA and VHA.
** Any VHA Health Care Organization that does not adhere to the [+]
EOE utilization
requirement shall be charged [+] notwithstanding
performance for any other matrix location.
There is a 1 year grace period on the Electronic
Order Entry requirement; that requirement
will be effective January 1, 1995.
*** If the organization and its affiliates
utilitze their ADA for more than [+] of their [+]
AND the organization and its affiliates' [+]
through their ADA is[+] or greater, both the
organization and its affiliates are eligible
for the same cost plus fee on the matrix.
+THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.
SCHEDULE 7
Designated VHA Member or Affiliate Annual Acknowledgement Form
Price Matrix Slotting for calendar year
Payment Term Selection:
Services Desired:
SCHEDULE 8
PAYMENT TERMS OPTIONS
*[This confidential information has been omitted
and filed separately with the Commission].
ADA shall invoice each Designated
VHA Member and Affiliate once each month, unless
more frequent invoices are requested by Designated
VHA Member or Affiliate. Each Designated
VHA Member or Affiliate shall select from
the following payment term options (all deductions
or additions are made to Annual Slotting locations
on the Pricing Matrix for that Designated
VHA Member or Affiliate):
_____ [*] days or greater credit [*]
pre-pay
_____ Net [*] days credit [*]
_____ Net [*] days credit [*]
_____ Net [*] days [*]
([*] Payments/Month)
_____ Net [*] days add [*]
_____ Net [*] days add [*]
_____ Net over [*] days*** add [*] for each 15 days
over 60.
*** Per ea [*] days beyond [*] days
All invoice terms run from the date of invoice.
Taxes, where applicable, will be added to the invoice Price
or products.
ADA shall not bill a Designated VHA Member or Affiliate for:
(1) Contract Products or Noncontract Products which are
damaged, provided the
Designated VHA Member or Affiliate complies
with the provisions of ADA's Return Goods and
Freight Claims Policy, a copy of which is attached as Schedule 9;
(2) Contract Products or Noncontract
Products shipped in error in accordance with
ADA's Returned Goods Policy; and
(3) Contract Products or Noncontract Products
which were never received by the
Designated VHA Member or Affiliate.
VHA Members and Affiliates must notify ADA within five
days of delivery .
Amounts remitted by Designated
VHA Members or Affiliates shall be treated as
paid on the date payment is received by ADA.
ADA shall use all reasonable efforts
to ensure that each invoice to a Member or
Affiliate is accurate. In any calendar month,
the third invoice and any invoice thereafter
to a Designated VHA Member or Affiliate which
is incorrect due to the fault of ADA shall
result in the payment, within 30 days, of an
administrative fee (credit) from ADA to the
Designated VHA Member or Affiliate equal to
one-fourth percent or twenty five dollars, which
ever is less, of the amount of the error, in
addition to correcting the charge and/or
appropriate credit on each item priced incorrectly.
SCHEDULE 9
RETURN GOODS POLICY
I. GENERAL
ADA will accept, for full
credit based on original delivered cost, for Contract
and Noncontract Product(s), originally
purchased from ADA and returned to ADA in
original packaging and in saleable
condition within sixty (60) calendar days of
the date delivered by ADA. ADA may
assess a 25% restocking charge for returned
product(s) which are damaged or stickered.
ADA will accept for return, saleable and
Contract and Noncontract Product(s)
after sixty (60) calendar days,
subject to a 15% restocking charge.
ADA will accept for return,
Contract or Noncontract Product(s) with expired
dating or which have been discontinued
by the Vendor, subject to the Vendor's
policy. ADA will issue credit for
this product, based on the amount credited to
ADA by the Vendor.
ADA shall levy no other restocking or morgue charges.
ADA shall follow Vendor policy for returns in the
event of a product(s) recall.
ADA will provide each Designated VHA
Member and Affiliate a copy of the Vendor's
policy regarding the recall; if requested.
ADA will supply, upon request by Designated
VHA Member or Affiliate, the
following:
a) A current list of Vendor addresses
for the purpose of obtaining return goods
authorization from the Vendor.
b) The names and telephone numbers
of the Vendor representatives having
authority to authorize the return of
product by Designated VHA Member or
Affiliate.
c) A list of Vendors who levy a
restocking charge on returned product(s)
and the amount of that charge.
II. CREDITS
ADA will process Designated VHA Member
and Affiliate credits on a daily basis.
All credits should appear on the
next statement to Designated VHA Members or
Affiliates, except for credits processed
near the end of the statement period,
where because of cutoff dates, the
credit will appear on the following statement.
Designated VHA Member or Affiliate will
receive a copy of the credit memo within
fifteen (15) days after receipt of
the return by ADA's Primary Ordering Location.
ADA will issue credit, within fifteen
(15) days, for outdated or discontinued
product(s) being recalled by the
Vendor. In the case of a Vendor recall(s), the
Vendor must have authorized ADA to issue
credit. ADA will advise Designated VHA
Members and Affiliates, by the
fifteenth (15th) calendar day of each month, of
any credits issued by ADA during the
previous month, which remain open.
III. FREIGHT CHARGE ON RETURNED GOODS
ADA vehicles or other prepaid carriers
will pick up all product returns
authorized by the Primary Ordering
Location to be returned. Any freight charges
incurred by Designated VHA Members or
Affiliates for product returns shipped to
the Vendor will be based on the Vendor's policies.
IV. RETURN OF SHIPPING ERRORS, OVERAGES AND DAMAGED PRODUCT
ADA will authorize, via phone, the return of product(s)
shipped in error. ADA
will pick up the product(s) on ADA's next
scheduled delivery to the Designated
VHA Member or Affiliate. If ADA
utilizes a common carrier to serve Designated
VHA Members and Affiliates, ADA shall
assume the freight charges for the
product(s) to be returned to ADA.
V. ADA WILL NOT ACCEPT RETURNS ON THE FOLLOWING:
a) Any product(s) purchased on a "special order"
basis or contrary to the
Vendor's policy;
b) Any sterile product(s) or refrigerants,
unless properly protected;
c) Product(s), apparatus or
equipment which has been used, or is without
original packaging, labeling, or operating manuals;
d) Product(s) with labeling or packaging
which is missing, damaged, defaced,
or other non-saleable product(s), except
as permitted by the Vendor's
policy;
e) Seasonal product(s), except
according to Vendor's policy
(available on request);
f) Open bottles and partial
packages of product(s) will not be
accepted for return, unless the
Vendor has authorized the ADA to
accept open bottles and partial packages;
g) Any product(s) purchased direct from the Vendor.
VI. RETURN PROCEDURE
ADA will accept Contract and Noncontract
Product(s) returned from Designated VHA
Members and Affiliates based on the procedure outlined herein.
a) To receive authorization for the return
of product, Designated VHA Members
and Affiliates shall contact ADA Primary Ordering
Location.
b) Designated VHA Members and Affiliates provide ADA with the
following information, if appropriate:
1) Designated VHA Member or Affiliate
name and account number as it appears on
ADA's invoice.
2) ADA invoice or order number and date.
3) The quantity, product number, price
paid form/size, description. Add lot
number, serial number,
and expiration date of the product, as appropriate.
NOTE: A copy of ADA's invoice or
packing slip will provide the required
information, as may the price stickers.
4) Purchase order number, if applicable.
5) The reason for return.
c) To assure proper credit and
handling, product returns should be written and
packaged for shipment by the type of product
being returned as follows:
1) Refrigerants.
2) Class II through Class V (items must meet DEA procedures).
3) Saleable product(s).
4) Outdated or discontinued product(s).
5) Damaged product(s).
6) Product(s) recalled by Vendor(s).
VII. NOTIFICATION PROCEDURE
ADA agrees to the following notification procedure.
a) Designated VHA Member and Affiliate claims of
product shortage, damage, overage,
product(s) with an expiration date earlier than six months
and products delivered
in error, will be reported to
ADA in five (5) business days from date of delivery,
scheduled drugs will be reported in
two (2) business days. No restocking charges
apply.
b) In the event of dispute,
regarding a delivery damage claim, or a product return not
received by ADA, a receipt may be required by ADA prior
to issuing credit and to
enable ADA to file a claim with the carrier.
SCHEDULE 10
ADA MONTHLY REPORTS TO DESIGNATED VHA MEMBERS AND AFFILIATES
The following reports shall be delivered to each Designated
VHA Member and Affiliate
by the fifteenth day of the month
following the month's activities reflected in such report.
1. Fill Rate report.
2. Sales report listing the
dollar amount and unit volume of each product purchased.
3. Opportunity Work Sheets (attached as Schedule 10A and 10B).
4. Status report on targets and open issues identified at
the Member Quarterly Business
Review.
SCHEDULE 11
MEMBER QUARTERLY BUSINESS REVIEW TOPICS
Include, but not limited to:
Review prior quarter's action plan accomplishments
Update volume of purchases
Update Utilization (% of total possible dist. business) changes
Review DSO results and potential savings by improvement
Review usage of VHA+PLUS products
Solicit input on current delivery
schedule, customer service, sales service, and
product service support
Develop and agree on action plan for next 90 days
Establish next review date
Discuss future product standardization
and utilization opportunities
SCHEDULE 12
IV SOLUTION DISTRIBUTION EVALUATION PROCESS
Abbott-ADA-VHA I.V. Solution Distribution
Abbott, ADA and VHA have agreed to the process
described below to determine when IV
Solutions should be delivered by ADA:
Abbott will run a supply channel
analysis on all current ADA distributed business.
This will determine the ADA's current level of
compensation by account; Abbott
compensation is activity based
by account. Once this information is available and
no later than November 30, 1993, VHA will notify
each involved ADA. A joint
meeting between Abbott-ADAs-VHA to review
the current compensation by account, and
if there are accounts where the
compensation level is too low based on the activity
required by the ADA, the three parties
will reach agreement on the proper level of
compensation on all existing business.
With respect to new requests for the ADA
distribution of IV Solutions:
Of the three parties Abbott-ADAs-VHA,
whichever is the initial contact by
Designated VHA Members or Affiliates,
needs to contact the other two parties. VHA
Distribution and Logistic Services
has offered to be the conduit for contact.
If Abbott is the initial contact
by Designated VHA Members and Affiliates;
Abbott will contact VHA
Distribution and Logistic Services, then Distribution
and Logistic Services will contact
the ADA and the VHA account manager.
If ADA is initial contact;
ADA will notify VHA Distribution and Logistic
Services, who will in turn
contact Abbott and the VHA account manager.
If VHA account manager or
Distribution and Logistic Services is the initial
contact; VHA will in turn contact Abbott and the ADA.
Once notified, all parties agree to the following process:
Abbott will contact the Designated
VHA Member or Affiliate and gather appropriate
information and perform a supply
channel analysis. This analysis will detail the
costs involved by all parties involved
with the distribution of solutions as well
as hospitals rebates and ADA
compensation. The supply channel analysis will
include a line item for ADA markups.
Prior to dissemination of the supply channel
analysis; the ADA and Abbott will
agree on the % of mark up the ADA will charge for
distribution of I.V. solutions to the
hospital based upon the Designated VHA Member
or Affiliate's election to include
the IV volume in their slotting on the Price
Matrix..
Once Abbott and the ADA agree
on the supply channel analysis, a completed copy will
be faxed to VHA, Distribution and Logistic
Services. Distribution and Logistic
Services will keep a copy on file
as well as provide the VHA account manager with
a copy.
Abbott will provide a completed copy
of the supply channel analysis to the
Designated VHA Member or Affiliate.
Abbott and the ADA will jointly present the
findings of the supply channel analysis.
By presenting the findings jointly to the
Designated VHA Member or Affiliate,
misunderstandings will be avoided and a
stronger partnership provided.
The overall objective is to provide Designated
VHA Member or Affiliate with the correct
information as quickly as possible.
Abbott-ADAs-VHA have agreed to an ongoing review of
this process to insure that Designated
VHA Member and Affiliate needs are met as quickly as
possible.
SCHEDULE 13
ADA REPRESENTATIVE RESPONSIBILITIES
Each ADA will provide, at no cost to the RHCS
(Schedule 3), a "Dedicated Representative"
to the members of each RHCS in which it
has Designated VHA Members and Affiliates. ADA will
make known the name, title, address and phone number
of each Dedicated Representative to the
applicable RHCS no later than December 31, 1993.
The Dedicated Representative will be
responsible for providing the following services:
(A) Coordinating all distribution activity
to the Designated VHA Members and Affiliates
it services within the RHCS with the VHA Account
Manager for said members.
(B) Actively participate with the RHCS staff:
1. President
2. Vice President
3. Account Manager
4. Other
with initial and ongoing strategic
planning to enhance the ongoing Quality Improvement
process of the Dedicated Representative
to Designated VHA Members and Affiliates.
(C) Actively participate with RHCS Materiels Council.
(D) Actively participate with the following programs:
1. Total Delivered Cost
2. SPIP (Service Performance Improvement Program)
3. Taking Stock
4. QBR (Quarterly Business Reviews)
(E) Provide the following information
monthly as is needed by RHCS staff:
1. Hospital fill rates
2. ADA Representative call
reports to Designated VHA Members and Affiliates
3. Matrix management update
4. Monthly Designated VHA Member
and Affiliate complaint update with resolutions
5. Monthly tracking of invoice errors
6. Monthly tracking of percentage of returned goods
7. Monthly VHA+PLUS utilization
8. Monthly reports on backorder
9. Monthly manufacturer fill rate reports
10. Monthly NonContract and Contract reports
(F) Total responsibility to the ADA on the ADA Agreement.
1. Verification and collection ongoing of utilization data.
2. Matrix management
Annual Slotting
Services needed
Payment Terms
EOE Requirements
3. Strategic Planning of initial and
ongoing distribution services at:
RHCS
Designated Member and Affiliate
4. QBR/MUM - ensure rebates and matrix
changes are done quarterly and timely.
5. Communication link between the
Designated VHA Member and Affiliate, RHCS, ADA
branch and ADA corporate headquarters.
(G) Dedicated Representative to each RHCS
will also serve in the same capacity to any
non-aligned Designated VHA Member and Affiliate
serviced in the same geographic area as RHCS.
(H) Based on the Designated VHA
Member's or Affiliate's requirements, ADA
Representatives will plan their schedule
of visits to Designated VHA Members and Affiliates
based upon mutual agreement on frequency of visits.
(I) ADA shall provide a sales representative
to call on each VHA Member and Affiliate.
ADA's sales representatives shall be thoroughly trained
in each Designated VHA Member's and
Affiliate's operations and purchasing characteristics.
(J) If at anytime during the term of this
Agreement the Designated VHA Member or
Affiliate feels that ADA's service is
inadequate or that there is a problem with the ADA
sales representation, the Designated VHA Member or
Affiliate has the following alternatives:
1. The Designated VHA Member or
Affiliate may contact its ADA sales representative
regarding service issues.
2. The Designated VHA Member or
Affiliate will have access to the ADA National
Accounts Representative to register
any concern directly to ADA's corporate office.
3. The Designated VHA Member or Affiliate
may contact its VHA Account Manager or its
VHA Distribution and Logistics Service Manager.
ADA has agreed to respond to any inquiry within one (1)
business day after receipt. A
monthly summary of the inquiries
received will be provided to VHA for review and follow-up
where needed.
SCHEDULE 14
ADA LOGISTIC SERVICES
Operational Analysis
ADA agrees to position
Taking Stock as the most cost effective means for a
hospital to understand, develop and
implement a plan for improved materials
logistic operations.
ADA agrees to provide resources to
learn and understand the Taking Stock
program and position the
program within its own organization.
ADA agrees to provide
local training on Taking Stock to its Dedicated
Resources to VHA, for supporting
Hospital initiatives with VHA.
VHA agrees to provide the initial
marketing and education to the hospital.
ADA agrees that it will only
position its own logistic services to hospitals
after positioning the value of Taking Stock initially.
Asset Management
SUTURE INVENTORY MANAGEMENT:
The ADA agrees, upon
request of the VHA health care organization and in conjunction
with the VHA suture contract manufacturer, to conduct
an initial examination of the
hospital's inventory, including
a physical inventory and purchase and usage history
reviews. The ADA will provide written
analysis that will identify overstocking and
isolate unnecessary expenditures with
buy back arrangements. The ADA will recommend
usage levels for each hospital department,
reorganize storage areas and systems,
provide on-site inventory services,
provide regular reports and reviews and establish
goals and performance measures. The ADA
will assist the hospital in all efforts to
lower overall suture inventory and
improve their cash flow to reduce overall annual
suture expense.
CATH LAB MANAGEMENT:
The ADA agrees, upon request of the
VHA health care organization, to work with the
Director of Materiels Manager, the
physician, the department head and the VHA contract
manufacturer to reduce the number of
purchase orders and over-night deliveries and
consolidate vendors. The ADA will
deliver product to the designated area, manage the
inventory, provide a clean room to store
the product, maintain specialty carts (for
delivery) and sit on the hospital's
evaluation committee for new products.
INVENTORY BUY-DOWN:
The ADA agrees, as an integral part
of asset management, to reduce the hospital's un-
official and official inventory by buying-down
inventory to a manageable level and
removing obsolete inventory. The ADA
will pay the price that the hospital is currently
paying for inventory buy-back.
CONTINUOUS INVENTORY REPLENISHMENT PROGRAM:
The ADA agrees to support the development
of a continuous inventory replenishment
program at the manufacturer level by having
in place the ANSI X.12 867, 852, 855 and
861 transaction sets and proactively
working with VHA and the 80/20 VHA contract
vendors to create a seamless system.
HOSPITAL COST FOR ACCESS TO PROGRAM
Initial consultation and evaluation
- No cost
Utilization of the program
- Fee locally negotiated
Schedule 15
THE ENHANCED ADA AGREEMENT - SERVICE FEE MATRIX
Monthly $ Volume of Purchases
0 100,001 300,001 500,001 750,001 1,000,001
100,000 300,000 500,000 750,000 1,000,000 and >
Customized Invoices
[+] [+] [+] [+] [+] [+]
Customized Packing Slip
[+] [+] [+] [+] [+] [+]
Comb Pkg Slip/Inv,Delvr w/
[+] [+] [+] [+] [+] [+]
Custom Pallet Arrangement
[+] [+] [+] [+] [+] [+]
Affix Patient Charge Label
Locally Negotiated - Hospital Supplies <[+]/lbl, Distributor
Supplies <[+]/lbl
Bar Coded Shelf Labels
Locally Negotiated Locally Negotiated Locally Negotiated
Weekly Deliveries
[+] [+] Locally Negotiated ** Locally Negotiated **
JIT-Ordr Pckd byDpt, Dlvr to Dock
Locally Negotiated - Based upon Growth & Fee, Max<= [+] of Sales
Ordr Pckd by Dpt, Dlvr to Dock***
Locally Negotiated - Based upon Growth & Fee, Max<=[+] of Affected
Sales
Pckd by Dept, Dlvr to Dept***
Locally Negotiated - Based upon Growth & Fee, Max<= [+] of Affected
Sales
Pckd by Dept, Put Stock Away***
Locally Negotiated - Based upon Growth & Fee, Max<=[ +] of Affected
Sales
Suture Inventory Management
Locally Negotiated - Based upon Growth & Product Line Utilized
* Additional deliveries will have a locally negotiated fee.
** Minimum of [+] deliveries, additional deliveries will be
locally negotiated.
*** In lowest units of measure and
considered components of a stockless program. These
three (3) service fees are cumulative.
+ THIS CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
SCHEDULE 16
ADA DISASTER PLAN
If a major natural disaster or other
emergency situation occurs in a service area
affecting a VHA Hospital, the following emergency
procedure will be implemented immediately:
- Within one(1) hour of the occurrence,
Owens & Minor will attempt to establish
communication with the VHA Hospitals in the service area
affected via the following means:
- Phone (standard or cellular)
- EDI
- Two-way radio communications with the hospital's
telecommunications center or a pre-designated coordinator.
- On site, direct contact
- Once communications are established,
hospital product needs will be
determined based upon
current daily order requirements and projected emergency
needs identified by the
hospitals (i.e., shipping seven day of supplies versus
one).
- Depending upon the extent of
emergency situation, communications may be established
with State Police and National Guard.
- Emergency back-up supplies can be drawn
from other Owens & Minor divisions as
needed.
- Depending upon the extent of
emergency situation, the most expedient form of
transporation, (i.e., air or ground)
will be determined and coordianted with the
State Police and National Guard.
- Each Owens & Minor Distribution
Center will meet with the VHA Hospitals by region
and develop a detail disaster plan
to meet the requirements of each VHA Hospital
within that region.
- Once established, the Disaster
Plan will be tested for its effectiveness and to
ensure that it meets the requirements
of the VHA Hospitals in that region.
SCHEDULE 17
ADA COMPUTER CAPABILITIES AND BACK-UP SYSTEMS
See Schedule 5
SCHEDULE 18
ADA EDI CAPABILITIES
ADA shall be fully capable of supporting
the following electronic data interchange (EDI)
transaction sets in the ANSI X 12 format:
832 Price sales catalog
850 Purchase order
820 Payment order/remittance advice
810 Invoice
846 Inventory inquiry/advice
812 Credit/debit
867 Product transfer/sales report
SCHEDULE 19
ADA REPORTS TO VHA
No later than the tenth day of each month,
ADA shall deliver to VHA the two tape reports
reflecting the sales activity for the previous
month and a diskette containing the
information required in Attachment 1.
Such reports shall be in the format described in
Attachment 1 to this Schedule and shall include:
sales of Contract Products and Noncontract
Products by each Designated VHA Member and
Affiliate, fill rate by customer, matrix slotting
and net cost plus by customer, Quarterly
Performance Bonuses earned and paid. The
information required in the diskette shall
also be provided in hard copy format by the tenth
of the month.
ADA shall also provide VHA with
the following reports by the 15th of each month.
List of additional services provided
to Designated VHA Member and Affiliates
pursuant to Section 7 (G).
Summary of monthly inquiries
to ADA's National Account Representative.
List of Vendor backorders for
the month. For each Vendor with backorders, ADA
shall report lines ordered and lines delivered.
All reports to VHA shall be directed to VHA's Director
of Distribution.
SCHEDULE 20
VHA+PLUS PRODUCTS ON WHICH VHA FEE IS DUE
None as of January 1, 1994
SCHEDULE 21
PROBLEM RESOLUTION POLICY
Team Problem-Solving Process.
Date Problem was Identified.
Problem.
Identify Problem/Situation.
Evaluate Consequences.
- Does a problem, in fact, exist?
Cause.
Identify Root Causes.
Evaluate Causes.
- Select which ones to work on.
Solution.
Identify Solutions.
Evaluate Solutions.
- Select which ones to put into action.
- Estimate measure of completion.
Communicate to Customer.
Identify Person Responsible.
Implementation.
Identify Implementation Steps.
Evaluate Steps.
- Select Steps.
- Assign Accountabilities.
Evaluation.
Evaluate Overall Success.
- Was the Problem Solved?
- Verity Measure of Completion.
All problems should be resolved within 30 days.
If not resolved, VP of sales informed of problem on 31st day.
If not resolved, president of company is informed of problem
on 46th day.
SCHEDULE 22
ADA SERVICE LEVELS
(A) Provide reports on Trend Development
(B) Monthly reports for Quality Improvement
1. ADA Representative Visit to Hospitals
Hospitals called on
Dates
Key issues
2. ADA-VHA Meetings
Dates
Attendees
Purpose of meeting
Outcomes
3. ADA-VHA RHCS Meetings
Dates
Attendees
Purpose of meeting
Outcomes
4. ADA-DSVP/DD Meetings
Dates
Attendees
Purpose of meeting
Outcomes
5. Matrix Utilization Meetings (MUM)
Dates
Attendees
Purpose of meeting
Outcomes
6. Monthly Matrix-Rebate Update
Hospital actual matrix performance vs slotting
7. Monthly Complaint Report - ADA
List of complaints
Resolution
8. Monthly Tracking of Invoice Errors by ADA
Number or errors
Resolution
Corrective action to ensure problem will not occur again
9. Monthly Report of Returned Goods - ADA
Hospital
10. Monthly VHA+PLUS Service Levels
11. Monthly Tiered Pricing Exception Report
12. Monthly Report on Backorder
13. Monthly Report on VHA Contract Manufacturer Fill Levels
14. Monthly Report on Service Matrix Performance to Slotting
2616.RDM
