CPG Policies & Procedures

Cardinal Health 200, LLC

6-1-2024

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TABLE OF CONTENTS 
 Applicability ..................................................................................................................................................................... 2 
 Definitions ....................................................................................................................................................................... 2 
 Distributor General Requirements .................................................................................................................................. 3 
 Payment Terms and Credit Requirements ...................................................................................................................... 4 
 Payment Information ...................................................................................................................................................... 4 
 Ordering, Products, and Pricing ...................................................................................................................................... 5 
 Customer Service Contact Information........................................................................................................................... 8 
 Logistical and Freight Procedures ................................................................................................................................... 9 
 Returned Goods Procedures ..................................................................................................................................... 11 
 Damages, Shortages, and Overages Procedures ...................................................................................................... 13 
 Tracings & Bill Back Procedures ................................................................................................................................ 14 
 EDI Requirements and Procedures ........................................................................................................................... 16 
 Product Recall Policies .............................................................................................................................................. 17 
 General Provisions .................................................................................................................................................... 18 
 Miscellaneous ........................................................................................................................................................... 20 
Exhibit A: Cardinal Health Ordering Terms Table ................................................................................................................. 24 
Exhibit B: Returned Goods Restocking Fee Charges ............................................................................................................. 24 
Exhibit C: Cardinal Health’s Principles for E-Business ........................................................................................................... 25 
Exhibit D: Replenishment Center Maps ................................................................................................................................ 26 
 
 
 
 
 
 
 
 
 

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2. APPLICABILITY

A. Cardinal Health 200, LLC (“Cardinal Health”) agrees to sell certain Products to Distributor subject

to the terms of the Distributor Policies and Procedures as set forth herein (“Policies and

Procedures”). Distributor acknowledges and agrees that submission of any purchase order,

electronic order, or other mechanism utilized to order Products from Cardinal Health is subject

to these Policies and Procedures.

B. Cardinal Health objects to all additions, exceptions, or attempted changes to the Policies and

Procedures, whether contained in any Distributor: purchase order, electronic order, proposal,

website, printed form, acceptance, user license agreement, or elsewhere, unless such terms are

expressly approved by Cardinal Health in writing.

C. In the event of a conflict between the terms of these Policies and Procedures and the terms of

any fully signed, active, and executed agreement between Cardinal Health and Distributor

relating to the purchase and sale of Products, the terms and conditions of such agreement shall

control with respect to only such conflicts specifically addressed therein.

D. These Policies and Procedures may not be modified without Cardinal Health’s written consent

and approval.

3. DEFINITIONS

A. “Additional Billing” or “Ad Bill” means any document, such as an invoice, charge-back, or letter,

generated by Cardinal Health notifying a Distributor of funds owed.

B. “Affiliate” means a Cardinal Health, Inc. division, business, or operating company.

C. "Authorized Secondary Distributor” means a Distributor authorized by Cardinal Health to

purchase Products from a Master Distributor.

D. “Bill Back” means a reimbursement that Cardinal Health pays to the Distributor via auto-

deduction by Distributor, as the difference between the Distributor Purchase Price and the

applicable Contract Price for such Product.

E. “Bill Back Claim” means a claim that Distributor makes to Cardinal Health for a Bill Back.

F. “Contract” means a written agreement (excluding a purchase order) submitted by or on behalf

of a Customer and accepted by Cardinal Health, or between Cardinal Health and a Customer,

that establishes the Contract Price for such Products.

G. “Contract Price” means the agreed upon price extended to a Customer by Cardinal Health for

Products under a Contract.

H. “Customer” means an end-user third party that purchases Products from Distributor.

I. “Distributor” means any distributor that has a direct account authorized and approved by

Cardinal Health and resells Cardinal Health Products to Customers pursuant to the terms and

conditions of these Policies and Procedures.

J. “Distributor Purchase Price” means the amount charged to Distributor for Products by Cardinal

Health pursuant to these Policies and Procedures.

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K. “Master Distributor” means only those Distributors who are permitted by Cardinal Health to sell

Products to an Authorized Secondary Distributor. Such list may be amended and modified from

time to time by Cardinal Health in its sole discretion.

L. “Product(s)” means any product(s) sold by Cardinal Health to Distributors in accordance with

these Policies and Procedures. A catalog of then-current Cardinal Health Products is located on

the “Cardinal Health Market” website located at market.cardinalhealth.com.

4. DISTRIBUTOR GENERAL REQUIREMENTS

A. Annual Minimum Purchase Requirement - Distributor must comply with the terms and

conditions of these Policies and Procedures and satisfy the Minimum Annual Purchase

Requirement set forth in Exhibit A to maintain status as an authorized Distributor. The Annual

Minimum Purchase Requirement is subject to change. In the event a Distributor has not or is not

trending to achieve the Annual Minimum Purchase Requirement as measured by Cardinal

Health, then upon notice, Cardinal Health may adjust or remove Distributor’s authorization to

distribute Products, suspend or refuse Distributor’s orders, or transition Distributor to an

Authorized Secondary Distributor for fulfillment from a Master Distributor.

B. Product Sourcing Requirement - Distributor shall purchase all Products directly from Cardinal

Health, and not from secondary or gray markets, or any other source.

C. End-Customer Requirements – Distributor shall sell Cardinal Health Products only to qualified

Customers approved by Cardinal Health to purchase such Products.

i. Distributor shall not substitute Products without Customer and/or Cardinal Health’s prior

written consent.

ii. For all Customers, Distributor shall use reasonable efforts, including without limitation

the discontinuance of sales to a particular Customer, to ensure that the Customers are

purchasing such Products for their own use and not for resale.

iii. Distributor shall not sell, resell, exchange, ship, export, re-export, transship, or otherwise

transfer – directly or indirectly - any Products (including any technology or services

related to the Products) to any entity that is not located within the fifty states of the

United States of America or the District of Columbia (thus excluding any other territories

or possessions of the United States and any foreign country).

D. E-Commerce Policy – Distributor shall not sell Products on or through any third-party website or

eCommerce platform without prior written consent from Cardinal Health. If approved, Cardinal

Health may revoke such approval on notice.

E. Product Storage Inspection - Distributor will permit an authorized Cardinal Health representative

to enter and inspect, during normal business hours and upon a forty- eight (48) hour notice, the

establishments in which any of the Products are held to determine whether said Products are

held in compliance with these Policies and Procedures and provide Cardinal Health with

documents to validate such compliance.

F. Administrative Requirements

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i. Inventory Reporting - If requested, Distributor must provide, at minimum, a monthly

report within (ten) 10 days of the end of each calendar month setting forth Distributor’s

inventory of Cardinal Health Products for the preceding month, detailing at minimum

inventory by SKU on the first and last day of such month, and such other information

requested by Cardinal Health.

ii. Customer Initiated Audits - Distributor must notify Cardinal Health in writing within seven

(7) days of all Customer initiated audits.

iii. Contact Information – Distributor must provide Cardinal Health with a valid email and

physical addresses. Any notices required under these Policies and Procedures may be

made via metered mail delivery, email, or hand-delivery.

5. PAYMENT TERMS AND CREDIT REQUIREMENTS

A. Distributor shall pay Cardinal Health for Products shipped pursuant to Distributor’s orders.

B. Payment Terms - Payment terms are 1% 30, net 31 days from invoice date. Payment discount

must be taken at time of payment (Product invoice payment only – not applicable to late fees,

ad-bills, or any other amounts owed to Distributor). Distributor shall pay to Cardinal Health a

service charge of one and one-half percent (1.5%) per month (or the highest amount allowed by

law, if lower) on all amounts past due.

i. Unauthorized Payment Discounts – In the event that the Distributor claims and receives a

payment discount as a result of a violation of these Policies and Procedures, Cardinal

Health reserves the right to reduce future Bill Back credits, deduct and/or set off from

any incentives, rebates, or discounts earned by the Distributor, or to send an Ad Bill to

the Distributor for direct payment to Cardinal Health.

C. Non-Sufficient Funds Fee – If Distributor’s payment to Cardinal Health is declined, in whole or in

part, due to non-sufficient funds, Cardinal Health will charge Distributor a $25 non-sufficient

fund fee plus any additional costs incurred by Cardinal Health. Any non-sufficient fund fees will

be reflected on Distributor’s statement.

D. Cardinal Health reserves the right to request from Distributor credit applications, financial

statements, and other credit related information and Distributor shall promptly provide such

information as reasonably requested.

E. Distributor will resolve all Cardinal Health Additional Billings for disputed items within 60 days of

Ad Bill date.

F. Distributor will provide a detailed, written deduction explanation or debit memo for all

adjustments to Cardinal Health invoices within 30 days of invoice date.

6. PAYMENT INFORMATION

A. All payments must be received by Cardinal Health on or before the due date in accordance with

the Distributor’s payment terms by wire or ACH (automated clearing house) payment.

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Distributors can send an ACH or wire from their bank or use Cardinal Health’s payment portal

linked to the Cardinal Health Market website at market.cardinalhealth.com.

B. Distributors can email [email protected] to obtain a sign-on or

speak with their Cardinal Health Market administrator. Distributors can add banking information

to the portal and mark invoices for payment. The portal will pull an ACH from the Distributor’s

bank account.

i. Distributors who are existing Cardinal Health Distributors may use their existing Cardinal

Health remittance information for future payments.

ii. If you have any questions, please contact the collections representative listed on your

account statement or call 877.254.2738.

C. Payment Methods

i. Wire Payment

Beneficiary Name: Cardinal Health 200, LLC

Beneficiary Account Number: 5104963

ABA: 021 000 021

SWIFT: CHAS US33

Bank address:

JPMorgan Chase Bank

270 Park Avenue, New York, NY 10017

Please send remittance advice to: remits@cardinalhealth.com

ii. ACH

Beneficiary Name: Cardinal Health 200, LLC

Beneficiary Account Number: 5104963

ABA: 071 000 013

SWIFT: CHAS US33

Bank address:

JPMorgan Chase Bank

270 Park Avenue, New York, NY 10017

Please send remittance advice to: remits@cardinalhealth.com

iii. Paper/Check

Please mail paper checks payable to Cardinal Health 200, LLC to the remittance address

shown on your invoice. This address will vary by region.

Distributors who are existing Cardinal Health Customers may use their existing Cardinal

Health remittance information for future payments.

7. ORDERING, PRODUCTS, AND PRICING

A. Order Placement – Utilize the following to place an order: EDI Ordering, Web Ordering via

Cardinal Health Market, or by calling Customer Service. Orders placed via Customer Service will

result in a Manual Order Fee as set forth below.

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i. EDI Ordering Setup: To implement EDI/electronic ordering, send the following

information to your Cardinal Health contact: First name, Last name, Title, Email, Phone

Number, and Cardinal Health SoldTo and ShipTo Numbers. The Cardinal Health EDI team

will contact you to finalize setup. For EDI troubleshooting, contact technical support at

866-300-4357.

ii. Web Ordering via Cardinal Health Market Setup: – To register for online ordering through

Cardinal Health Market (market.cardinalhealth.com), send the following information to your

Cardinal Health contact with subject line: CARDINAL HEALTH MARKET ACCESS REQUEST: First

and Last name, Email, Phone Number, Administrator or Buyer, Cardinal Health Sold To and/or

Ship To Account Number(s)

Once set up, you will receive a username and temporary password. When logging onto Cardinal

Health Market for the first time, you will be prompted to set up a new password.

If you have any trouble logging on or with your user ID and password, please contact Customer

Technical Support at 800-326-6457, select option 3, then option 1.

For security, Cardinal Health Market passwords are required to be changed every 90 days.

B. Manual Order Placement – Each standard order placed manually (phone, fax and email) will

incur a $200 charge. Decreasing quantities on an order, canceling an order, or canceling a code

on an order due to a backorder, must be handled by phone or email and will not incur any

charges. Non-standard orders must be ordered manually, by phone, fax or email, and will not

incur any charges.

C. Minimum Order Requirements – A minimum order charge of $200 will be assessed to any

purchase order less than $2,500.

D. Drop Shipment Policy - A drop shipment is defined as an order that Cardinal Health invoices to

the Distributor and ships directly to a Customer or a Customer’s designee. A $200 drop-ship

charge will be assessed for this service. In addition to the above “Drop Ship Charge(s)”, all

freight charges associated with such order will be charged to the Distributor. Any additional fees

set forth in this Agreement shall be applicable to drop shipments in addition to the Drop-Ship

Charges. Due to the additional processing and cost required for drop shipments, Distributors are

requested to use the drop-ship alternative as a last alternative to traditional distribution

channels and may be rejected by Cardinal Health.

i. Drop Ship Account Creation – New drop ship accounts require setup within Cardinal

Health systems. Please contact your Cardinal Health sales representative or customer

service to set up a new drop ship account.

E. Rush Order Policy – A rush order is defined as a Product shipment outside of Distributor’s regular

delivery schedule. Rush orders will incur charge of $200. In addition to the above “Rush Order

Charge(s)”, all freight charges associated with order will be charged to the Distributor. Any

additional fees set forth in this Agreement shall be applicable to rush orders in addition to the

Rush Order Charges. Rush orders shall have a maximum of five (5) cases and shall not exceed

one hundred and fifty (150) pounds. Due to the additional processing and cost required for rush

orders, Distributors are requested to use this service as a last alternative to traditional

distribution channels. Cardinal Health reserves the right to refuse a rush order request.

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i. Drop Ship Rush Orders – Refer to Section 7.D. for setup of drop ship accounts. Rush

orders to drop ship accounts will incur a $200 charge and any cost of freight for shipment

will be invoiced to Distributor. Drop ship rush orders shall have a maximum of five (5)

cases and shall not exceed one hundred and fifty (150) pounds. Any additional fees

associated with order such as minimum order fee will continue to apply to drop ship rush

orders as outlined in Exhibit A.

F. Limitations on Ordering

i. Cardinal Health reserves the right, in its sole discretion, to accept or reject any of

Distributor’s Product orders for any reason without penalty or liability. Additionally,

without limitation and liability, Cardinal Health may allocate Product among all

purchasers and Distributors. In the event of a delay or failure of shipment or delivery,

Distributor may cancel a delayed order, without penalty, when required to do so by a

Customer.

ii. Cardinal Health may, in its sole discretion, limit Distributor’s monthly Product purchase

quantities in aggregate or at the Product level, measured in units and/or dollars, equal to

one hundred and ten percent (110%) of one-twelfth of the quantity of Products

purchased by such Distributor during the preceding Cardinal Health fiscal year or based

on a ninety (90) day average.

G. Inventory On Hand – Distributor shall maintain a mutually acceptable inventory of Products;

rotate this inventory on a first-in, first-out, basis; and, at Cardinal Health’s request, advise where

all Product inventory is located. Cardinal Health shall have no liability for Products outdated as

the result of Distributor’s inventory management practices.

H. Changes in Products – If the regulatory status of a Product (e.g., “may be dispensed by

prescription only”) changes, then Cardinal Health may delete that Product from the Product list

by notice to Distributor. Cardinal Health may discontinue or modify any Product at any time.

Cardinal Health may, at its sole and exclusive discretion, restrict the sale of specific Products to

Distributor.

I. Custom Products – Custom Products, defined as those Products made to the specifications and

requirements of an individual Customer and/or bear a Customer’s name or logo, are intended

for sale to the Customer specified on the Product label and may not be sold or rebated to any

other Customer without Cardinal Health’s prior written approval.

J. End Customer Credit and Re-bill Corrections – Distributor is responsible for credit and re-bill

correction to the end Customer for identified price discrepancies. Any credit and re-bill

transactions must be reported in the Distributor sales tracings.

K. Limitations on Pricing – Price list given to Distributor by Cardinal Health is to be leveraged only

within the class of trade Distributor operates in as approved by Cardinal Health. Cardinal Health

reserves the right to change Distributor Purchase Price based off the class of trade of the end

Customer.

L. Drop Ship Only Products - Cardinal Health reserves the right to classify a Product as “drop ship

only”. Such Products will ship to the Distributor outside of the standard consolidated ship day. All

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freight charges associated with such order will be charged to the Distributor. Products that are

drop ship only will be reflected on the Distributor’s price list.

M. Distributor Purchase Price Changes – Cardinal Health will make commercially reasonable efforts

to provide at least 60-days’ prior notice in the event of a Distributor Purchase Price change,

except for pricing for personal protective equipment Products or other Product categories that

Cardinal Health designates from time to time, which may be updated on 30-days’ prior notice.

i. Price Change Bill Back - In the event of a Distributor Purchase Price change, Cardinal

Health will calculate and pay Bill Backs at the new list price for orders shipped by

Distributor starting on the effective date of the change.

ii. Price Decrease - In the event of a Distributor Purchase Price decrease, Cardinal Health

will determine if a market-wide Bill Back adjustment is appropriate to offset the impact of

monetary loss due to inventory devaluation.

iii. Price Increase & Inventory Revelation - In the event of a Distributor Purchase Price

increase, Cardinal Health reserves the right to Ad Bill the Distributor, at any time, for the

increased value of the Distributor’s on-hand inventory and in-transit inventory, reflected

as of the effective date of the price change.

1. If the Distributor does not provide on-hand inventory and in-transit inventory, a

30-day calculation will be used based on Cardinal Health’s records.

2. All purchase orders accepted by Cardinal Health prior to the effective date of the

Distributor Purchase Price Change will be considered in the on-hand calculation to

determine the Ad Bill.

N. Extraordinary Events / Taxes - Notwithstanding anything to the contrary in these Policies and

Procedures, if Cardinal Health’s cost to manufacture or supply Product(s) hereunder increases

due to (i) an increase in the cost of raw materials, inflation, governmental action, a force

majeure event, or any other event beyond Cardinal Health’s reasonable control that causes the

cost of the Product to increase by at least 5% (an, “Extraordinary Event”), or (ii) the imposition of

a tariff, sales, use, excise, value-added, or similar tax to the Product or any transaction under this

Agreement (a “Tax”), then, notwithstanding any price change or notification language to the

contrary herein, Cardinal Health will have the right to (x) increase the price of such Products

hereunder by an amount equal to the cost increase resulting from such Extraordinary Event or

Tax, or (y) pass-through the amount of such Extraordinary Event or Tax on the invoice for the

Product or on a separate statement provided to Distributor.

O. Products shall have no less than sixty (60) days of dating prior to the expiration date of such

Products as of the date of shipment.

8. CUSTOMER SERVICE CONTACT INFORMATION

A. Customer Service – For items listed below, please contact Cardinal Health Customer Support

Call: 800-635-6021

Email: [email protected]

i. Order placement and support

1. Daily order resolution

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2. Product Alternatives

3. Product availability inquiries

4. Rush orders – NOTE: Please call

5. Drop ship orders

6. Order cancelation requests

7. Backorder reports and issues

8. Delivery tracking information

ii. Report a discrepant (shortage, overage, mispick, damaged, wrong product) order

iii. Return authorizations, recalled product returns, and defective product returns

iv. General pricing inquiries

v. Document requests (packing slips, invoices, certificates of sterility, certificates of

compliance etc.)

B. Product Support – Including standard kit components bill of materials, general and technical

product questions, and manufacturing & testing data

Call: 877-227-3462

Email: [email protected]

C. Pricing Information - Contract pricing questions and information including Price List, Local

Contract Price, or GPO Contract Price

Email: [email protected]

D. GPO Information – Information regarding GPO Rosters, Memberships, and LOCs

Email: [email protected]

E. Recall Questions and Support & Equipment Service/Repair Assistance

Call: 877-227-3462, Option 1

Email: [email protected]

9. LOGISTICAL AND FREIGHT PROCEDURES

A. Order Receipt Procedures – All shipments to a Distributor location must be promptly accepted

and unloaded by Distributor upon arrival. No shipments may be rejected from the carrier. To

initiate a return, overage, shortage, or damage claim shipment must be accepted pursuant to

this Section.

B. Consolidated Ship Day – Distributor and Cardinal Health will mutually agree on one consolidated

ship day per week, depending on weekly volume, for its standard orders. All orders placed will

consolidate and ship out to the Distributor each week on the designated ship day. This will

maintain an efficient shipping process and provide a consistent delivery pattern. Cardinal Health

will contact Distributor to arrange for the consolidated ship day.

C. Standard Product Orders – Standard orders will be shipped F.O.B. destination, freight prepaid

using Cardinal Health’ s preferred shipping method including, but not limited to, common

carrier, parcel or air depending on size of order, Distributor U.S. location and Product

requirements.

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D. Alaska & Hawaii Orders – Alaska and Hawaii orders will be shipped Freight Prepaid and add by

the preferred method of Cardinal Health including, but not limited to, common carrier, parcel or

air, depending on size of order, Distributor location and Product requirements.

E. Lift Gate Policy – Orders that require a lift gate for delivery may be assessed a $75 per order lift

gate service charge.

F. Distributor Pick Up Policy – Distributors may not pick up Products at Cardinal Health distribution

centers without prior approval.

G. Unloading Policy – Distributor shall be responsible for unloading Product from the carrier

promptly upon arrival.

i. Cardinal Health will not arrange with carriers to provide Distributors with a “dropped”

trailer to unload for any Product delivery. Should Distributors choose to arrange with a

carrier to drop their delivery (e.g., to leave trailer loaded with Product and not promptly

unload), Cardinal Health will not accept financial responsibility for the service, and

Distributor agrees to pay and be liable for any associated fees and costs with such action.

H. Back Order Policy – Purchase orders with a backorder over 90 days will be systematically

canceled without liability by Cardinal Health. Distributor will need to place a new purchase order

for any backordered Products that have been canceled.

I. Sort and Segregate – Cardinal Health will not arrange with carriers to provide Distributors with

“Sort and Segregate” services. If these services are required, Cardinal Health will provide carrier

“Point of Contact” information and Distributor may arrange for such service. Should Distributor

choose to make such arrangements, Cardinal Health will not accept financial responsibility for

the service.

J. Product Hold/Quarantine – Distributor shall follow Cardinal Health’s instructions regarding a

Product hold/quarantine. Distributor shall hold and/or quarantine Product pursuant to Cardinal

Health’s instructions, including, but not limited to, Product disposition. Such disposition may

include, but is not limited to, releasing Product back into commercial distribution or returning

Product to Cardinal Health.

K. Delivery Appointments

i. Late Cancellations - In the event Distributor cancels a delivery appointment and the

carrier arrives within 20 minutes of the scheduled appointment, Distributor will be

responsible for carrier hold and driver time charges. Cardinal Health will send an

additional invoice with documented charges.

ii. Accessorial Charges - Distributor shall receive delivery within two (2) days of the carrier

suggested delivery date. Fees incurred or assessed to Cardinal Health from the carrier as

result of delivery occurring after the original suggested delivery date, such accessorial

charges, shall be Distributor's responsibility and invoiced to Distributor by Cardinal

Health.

L. Proof of Delivery – Distributor will request all proof of deliveries from Cardinal Health in writing

within 30 days of invoice date.

M. Damages, Shortages, and Overages - Claims for damages, shortages, and overages will be

processed per the guidelines in the “Damage, Shortage & Overage Procedures” Section of these

Policies and Procedures. Distributor will report full pallet overages/shortages and/or damages

within 7 calendar days of delivery. Delivery must be accepted to initiate any return/credit

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process. Signing the Bill of Lading or Delivery Receipt, “Subject to Count,” or similar language will

not be considered valid for purposes of claims raised after the notice period.

N. Shipping Pallet Policies

i. Pallet Consolidation – While preparing orders for shipment, Cardinal Health will structure

pallets to maximize the integrity and shipping efficiency. Accordingly, Distributor will

receive pallets with multiple Products and/or Products from multiple purchase orders.

Whenever possible, Cardinal Health will provide one consolidated packing slip and/or

advanced ship notice (ASN) per consolidated shipment.

ii. Pallet Height - Distributor shall accept deliveries from Cardinal Health on pallets based on

shipping height. Distributor facilities shall accommodate deliveries of double stacked

pallets which may be up to 104 inches in height.

iii. Receipt of Palletized Goods – For goods shipped on pallets, Distributor must sign the Bill

of Lading or Delivery Receipt in pallet count, not case or piece count. Signing the Bill of

Lading or Delivery Receipt, “Subject to Count,” or similar language will not be considered

valid for purposes of claims raised after the notice period. Distributor will report full

pallet overages/shortages and/or damages noticed upon delivery on the applicable

carrier’s documentation.

1. Claims for shortages and damages will be processed per the guidelines in the

“Damage, Shortage & Overage Procedures” Section of these Policies and

Procedures.

iv. Pallet Recovery - If requested, pallets in reusable condition are to be returned to Cardinal

Health’s distribution center(s). Failure to return pallets may result in a pallet charge.

O. New Facility Notification – Distributor must notify Cardinal Health of any new warehouse or

facility location at least 60 days prior to placing any orders for that location. Failure to do so may

result in delays in order shipment or denial of order acceptance for such locations without

liability to Cardinal Health.

10. RETURNED GOODS PROCEDURES

A. Return Policy - All standard saleable Products may be returned for credit subject to Cardinal

Health’s return approval. Credit is issued based upon the reason for the return. Except as set

forth in Exhibit B, returns are subject to a 30% restocking fee (see Exhibit B: Returned Goods

Restocking Fee Charges). Product must be in saleable condition, returned in original packaging

with return label placed in an open area of package to receive credit.

i. Return requests must be initiated within 90 days of invoice date.

ii. Cardinal Health reserves the right to refuse any return.

iii. Credit is based on disposition at a Cardinal Health warehouse/DC.

iv. All Product returns must be sent freight prepaid unless Cardinal Health approves

otherwise.

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B. Returned Goods Authorization - All returns must be authorized by Cardinal Health Customer

Service and assigned a return authorization number. Return requests must be initiated within 90

days of invoice date.

i. Cardinal Health Customer Service will assign a Product returns authorization number

once the following information is provided: a reason for return, item number, quantity of

item, original invoice number, purchase order number, and lot number. Cardinal Health

will respond to return requests within 30 days of request.

1. Large Quantity Returns – Alert your Cardinal Health sales representative of any

returns equal to or in excess of one hundred fifty (150) pounds. Large quantity

returns must be pre-approved by CPG Operations to facilitate shipping and

warehouse operations.

ii. Customer Service will forward a copy of the Product Return Authorization to the

appropriate Distributor contact along with return instructions. The Product Return

Number and return goods packing list must be included with all paperwork.

iii. Returned Goods Authorization numbers not utilized within 30 days shall be cancelled and

null and void. Distributor must contact Cardinal Health Customer Service for a new

Returned Goods Authorization Number after 30 days have lapsed.

C. Returning Product - All authorized returns must be received at the designated Cardinal Health

distribution center, in their original, unopened packaging, and in salable condition within 30 days

of the return authorization date.

Returns must be shipped to the designated Cardinal Health distribution center from the

Distributor’s warehouse. Returns may not originate from Customer or any other third

party.

D. The following Products are not eligible for return: (if Distributor attempts to return such Product,

credit will not be given, such Product will not be returned to the Distributor, and Distributor may

be assessed a destruction fee):

i. Products that were purchased over 90 days before return request

ii. Expired Products

iii. Products within 6 months of expiration date

iv. All Presource, Made-To-Order, Custom-Manufactured Products and Promotional

products

v. Discontinued Products, divested Products, and Products not listed in current price lists

vi. Used Products, Products in unsalable condition, opened Products, or unreported

damaged Products

vii. Products that are not in original packaging - standard selling unit-of-measure (i.e., full,

unopened cases of Product)

viii. Products that were not purchased directly from Cardinal Health

ix. Products that have not received a return authorization by Cardinal Health

x. Regulated hazardous chemicals, reagents or prescription devices, refrigerated, frozen or

temperature-controlled Products

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xi. Products not manufactured by or on behalf of Cardinal Health, including those shipped

directly from the vendor (including In & Outs) are not eligible for returns.

E. Exceptions to Returned Goods Policies - Any Customer reports of defective Product received by

the Distributor must be communicated to Cardinal Health’s Customer Service Department within

24 hours. Cardinal Health will contact the Customer, investigate the problem, and notify the

Distributor of the outcome and any action taken.

The following information must be provided:

i. Name and address of Customer

ii. Customer contact and phone number

iii. Product catalog number and description

iv. Lot number, if applicable

v. Nature of problem and quantity involved

vi. PO Number

11. DAMAGES, SHORTAGES, AND OVERAGES PROCEDURES

A. Damages, Shortages, and Overages - Claims for damages, shortages, and overages will be

processed per the guidelines in this Section.

i. Distributor will report full pallet overages/shortages and/or damages within 7 calendar

days of delivery.

ii. Delivery must be accepted to initiate any return/credit process. Credit will not be issued

for Products that were not accepted by Distributor from carrier.

B. Damages

i. Visible Damage - If Distributor becomes aware upon Product shipment arrival that such

Product was damaged in transit, or from Cardinal Health’s packing and loading,

Distributor may claim a credit by

accepting the Products delivered by the carrier, note the visible damage or

breakage on the carrier’s delivery documents, and have the carrier sign the

document.

ii. Concealed Damage - If Distributor finds concealed damage that occurred during, or

resulting from, Cardinal Health’s packing and loading over-packs or pallets, Distributor

must report the following to Cardinal Health Customer Service within 7 calendar days

after delivery:

1. Over-packs (e.g., multiple SKUs in a master case);

2. Damage concealed within palletized shipments.

C. Shortages

i. To ensure appropriate credit is issued in the event a shortage occurs in transit,

Distributor must accept all Products delivered by carrier, note visible pallet shortages

related to LTL and FTL shipments on the carrier’s delivery documents, have the driver

counter-sign, and send to GMB-CAH-DIST- [email protected] within 7

calendar days after delivery.

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ii. Cardinal Health will arrange for a replacement shipment, if requested by Customer.

Cardinal Health will investigate shortage claims by reviewing carrier Proof of Delivery,

pallet architecture (for pallet shipments) and distribution center product cycle count.

iii. Cardinal Health will issue a credit for shortages if Cardinal Health concludes the shortage

is validated and subject to the following conditions:

1. Shortages in dropped trailers, live unload palletized shipments, small package

shipments, and over-packed corrugates must be reported to Cardinal Health

within 7 calendar days of delivery date. Distributor must sign of number of pallets

received.

2. Shortages within full cases should be reported to Cardinal Health Customer

Service immediately when encountered.

D. Overages

i. To ensure appropriate processing (billing or return authorization) is completed if an

overage occurs in-transit, Distributor should accept all Products delivered by carrier, note

visible overage on the carrier’s delivery document, and report the overage to Cardinal

Health Customer Service.

ii. Overages must be reported to the Cardinal Health Customer Service Department within 7

calendar days of delivery date. This applies to dropped trailers, live unload palletized and

small shipments and includes overages within an over-packed corrugate.

iii. Returning Overages - Cardinal Health will arrange for a carrier to pick up the over-

shipped Product(s) within a reasonable timeframe.

iv. Keeping Overages – If Distributor requests to keep Products in overage, Cardinal Health

will issue an invoice for over-shipped Product(s) at Distributor request.

E. Non-conforming Product - Non-conforming Product, defective Product or out- of- box failures

should be handled as a warranty issue by contacting Cardinal Health Customer Service.

F. Destruction of Product – In the event Product is required to be destroyed, approval must be

acquired from Cardinal Health prior to destruction of Product. Distributor must provide Cardinal

Health with a signed certificate of destruction, or (with prior Cardinal Health approval) a copy of

Distributor’s formal damaged product destruction protocol/procedure. The certificate of

destruction must be received by Cardinal Health within seven (7) calendar days of obtaining

approval for Product destruction. These requirements must be satisfied for credit for destroyed

Products to be issued to Distributor.

12. TRACINGS & BILL BACK PROCEDURES

A. Tracing Submissions - Distributor must provide, at minimum, a monthly sales tracing report

detailing all Distributor sales of Products during the preceding month. This report must be in

Cardinal Health’s standard format, which must include Distributor’s unique customer ID per line.

For the most up to date format, please reach out to GMB-MCG-USD-DMG-Tracing-

[email protected] . The monthly tracing report must be provided within the first ten

(10) days of each month, at no charge to Cardinal Health, to facilitate Bill Back operations.

Page 15 of 29

Tracings submissions must be emailed to GMB-MCG-USD-DMG-Tracing-

[email protected].

i. Corrections to Prior Tracing Submissions – Corrections to prior lines can be included with

Distributor’s next regular trace file if (1) Contract Price is corrected by Distributor issuing

full credit and simultaneously re-invoicing or (2) Distributor is notified by Cardinal Health

of a Contract Price discrepancy.

1. Send re-submissions of same original line(s) with edits to GMB-MCG-USD-DMG-

[email protected] AND GMB-Distributor-

[email protected].

2. Email must be received within 45 days of either the original tracing submission or

of Distributor being notified by Cardinal Health of a discrepancy.

ii. Submissions of Missed Tracings – Distributor may submit missed sales tracings lines up to

45 days after the missed sales tracings date. Tracings that contain Bill Backs submitted

after 45 days may not be eligible for Bill Back rebates.

Example: Tracings for July 2023 are due by August 10, 2023. Resubmissions (corrections

or missed lines) are due by September 14, 2023, unless Distributor has been notified by

Cardinal Health to resubmit the lines at a later date.

B. Cardinal Health and Distributor will mutually cooperate to complete Bill Back operations to

reconcile between the Distributor Purchase Price and the Contract Price.

C. Distributor may calculate and self-deduct its Bill Back. Distributor must reference on its

remittances either the same debit memo number(s) included in a separate detailed submissions

to GMB-MCG[email protected] or (absent specific debit memos)

reference the claim month and note “chargeback” on the remit.

D. Bill Back Requirements

i. All Bill Back claims will be calculated on Distributor-provided sales tracings (not to exceed

Cardinal Health shipments) based on invoice date.

ii. Direct Purchases Only – Only Distributor’s Product purchases directly from Cardinal

Health and sold at a Contract Price to a Customer are eligible to receive a Bill Back. No

secondary, gray-market or overstock purchases are eligible.

iii. If a Customer returns Product to the Distributor, the return must be reported as a

negative sales tracing and a negative Bill Back claim.

iv. Receiving more than one Bill Back for any sale is prohibited.

v. Bill Back Calculation Number Format – Distributor must convert Distributor sales units to

the equivalent Cardinal Health sales units and round to four decimals. Next, calculate the

Bill Back amount based on the equivalent Cardinal Health sales units multiplied by the Bill

Back amount.

vi. Cardinal Health’s Bill Back system does not generate formal credit memos.

vii. Monthly Bill Back periods cannot be considered closed without the written consent of

Cardinal Health.

E. Unauthorized Bill Back Deductions – In the event that the Distributor claims and receives any

unauthorized Bill Back payment as a result of a violation of these Policies and Procedures,

Cardinal Health reserves the right to reduce future Bill Back credits, deduct and/set off any

Page 16 of 29

rebates or discounts earned by the Distributor, or to send an Ad Bill to the Distributor for direct

payment to Cardinal Health. Cardinal Health also reserves the right to deny future Bill Back

claims and to charge the Distributor for reasonable costs associated with audit procedures.

F. Bill Back Disputes and Resubmissions

i. Cardinal Health will send a monthly variance report to Distributor to highlight any

discrepancy in deducted bill backs. Cardinal Health will make commercially reasonable

efforts to provide the monthly variance report in 60 days after final submissions are

received.

ii. All items on the monthly variance report requires payment within payment terms stated

herein.

iii. If Distributor disagrees with items on the variance report, Distributor must resubmit the

Bill Back via the process in this Section.

iv. General Procedures

1. Resubmission must be received within 60 days of Distributor receiving the

variance report or forever waived.

2. All resubmissions must be sent via email to GMB-Distributor-

[email protected].

3. Resubmission must use the monthly variance report received by Distributor with

comments on each line item describing Distributor’s objection with the Bill Back

discrepancy.

4. Cardinal Health will process resubmission within 60 days after receipt and will

return to Distributor for review.

5. Distributor will have 30 days to review processed variances and make final

payment for any remaining variance denials. A second resubmission will not be

accepted.

13. EDI REQUIREMENTS AND PROCEDURES

A. Cardinal Health is committed to the use of electronic automation (E-Business) and is willing to

comply with any of the open E-Business and EDI standards. Distributor’s E- business will be

implemented according to the table located in Exhibit C-A.

i. A full statement of Cardinal Health’s E-Business principles is included as Exhibit C-B.

B. Cardinal Health will not pay third party EDI testing process charges or monthly charges for EDI

document processing.

C. End-User Sales (Transaction Set #867)

i. To improve Product flow through the supply chain, Cardinal Health requires approved E-

Business Distributors to supply rebates and tracings, at no charge to Cardinal Health for

all transactions.

ii. Rebate and tracing reports must contain standard information. Please reach out to GMB-

MCG-USD-DMG-Tracing-Rebate[email protected] for a copy of the most up to date

tracings submission template.

Page 17 of 29

iii. If a Distributor manufactures kits containing Cardinal Health Products, sales must be

reported by Cardinal Health component Product code numbers.

iv. This requirement applies to both Contracted and non-Contracted Products, as follows:

1. End-user sales (including the end-customer invoice for regular and drop- ship

sales)

2. Product returns (from Customer to Distributor/from Distributor to Cardinal

Health)

3. Product transfers

4. Any other changes to inventory

5. Credit re-bills/price adjustments

v. Distributors that do not utilize EDI 867 must report all transactions through the last

calendar day of the month within 10 days following the close of the calendar month. This

report must be in Cardinal Health’s standard format. Please reach out to GMB-MCG-USD-

[email protected] for a copy of the most up to date tracings

submission template.

D. The following EDI transaction sets must be sent by Distributor at least once per calendar month

and no more than once daily:

i. Purchase-Order (Transaction Set #850) - The electronic transmission of purchase order

data using industry standard format: (HIBCC approved version of ANSI x .12).

ii. Purchase-Order Acknowledgement (Transaction Set #855) - The electronic transmission

of purchase-order confirmation data using industry standard format.

iii. Invoicing (Transaction Set #810) - The electronic transmission of invoice information from

Cardinal Health to the Distributor. This data will be provided in industry approved ANSI

x.12 format and will enable the Distributor to automatically match invoices to the original

purchase order and receipt.

iv. Funds Transfer (Transaction Set #820) - Electronic Funds Transfer provides a means for a

Distributor to electronically transfer funds and remittance data from the Distributor to

Cardinal Health. The data would be provided in industry-approved banking standards

(CTX). Cardinal Health can provide support for working through the necessary testing and

communications with the Distributor’s bank to help facilitate the setup of this

transaction.

E. Cardinal Health supports additional E-Business transactions such as: Advance Ship Notice,

Pricing, and Availability. Please contact your Cardinal Health Sales Representative for further

information.

14. PRODUCT RECALL POLICIES

A. Recall Policy – Cardinal Health will notify Distributor of a Product recall. Distributor shall

promptly notify impacted Customers and instruct them to return Product affected by such recall

to Distributor. Distributor will issue a credit to the Customer for the recalled Product and process

a negative sale, and Bill Back, if appropriate, to Cardinal Health. Distributor will send all recalled

Product to Cardinal Health and Cardinal Health will issue credit to Distributor.

Page 18 of 29

B. Distributor shall facilitate a five (5) days response to any Product recall or similar action

including, but not limited to, reports showing Customers that have purchased the impacted

Product, physical inventory count and quarantine areas for recalled Product, at no expense to

Cardinal Health.

C. To facilitate any necessary Product tracing or recall, Distributor shall maintain a written recall

procedure in effect and shall make available, upon request, the lot number (or serial number, if

applicable) with: Customer name, address shipped to, and date of shipment for each Product

sold.

i. If lot numbers or serial numbers are not available, Distributor shall provide a

comprehensive list of all Customers to whom shipments of the affected Product were

made during the timeframe Cardinal Health shall request, including Customer name,

address shipped to, the date of shipment for each Product sold.

D. Distributor Shall immediately notify Cardinal Health of:

i. any event that might require Cardinal Health to file a report or otherwise comply with

any applicable law, rule, or regulation governing medical devices

ii. any Product malfunction which, were it to recur, would be likely to cause serious injury or

death

iii. any serious device effects to a patient and/or operator.

E. Distributor shall report all Product and service complaints for recalled Products to Cardinal

Health, including the following information:

i. Product model number,

ii. Product serial number (if applicable)

iii. Nature of complaint or situation

iv. Any action taken

v. Confirmation by Distributor of stated complaint of situation.

15. GENERAL PROVISIONS

A. Policies and Procedures - Cardinal Health reserves the right to maintain separate policies and

criteria regarding any Distributor or reseller, including suitability of Distributor for certain

Products. Accordingly, not all Distributors may qualify to distribute all Products.

i. Distributor’s non-compliance with these Policies and Procedures may result in forfeiting

access to Cardinal Health Contract Price, Bill Backs, Cardinal Health programs, Cardinal

Health terms and conditions, and/or termination of Distributor status.

ii. Set Off - Without limiting Cardinal Health’s rights under law or in equity, Cardinal Health

and its affiliates, parent or related entities, collectively or individually, may exercise a

right of set-off against any and all amounts due by Distributor. For purposes of this

Section, Cardinal Health, its affiliates, parent or related entities shall be deemed to be a

single creditor.

iii. Notwithstanding to anything to the contrary set forth herein, Cardinal Health may

transition Distributor to an Authorized Secondary Distributor for fulfillment of Product

orders through a Master Distributor.

Page 19 of 29

iv. Notwithstanding to anything to the contrary set forth herein, Cardinal Health reserves

the right to terminate Distributor’s right to purchase Products hereunder for any reason

and without liability upon written notice.

B. Terms and conditions set forth in any other documentation or communication shall not be

binding unless and until the party to be bound acknowledges and agrees to such terms in

writing. Accordingly, Distributor acknowledges and agrees that, except as set forth these Policies

and Procedures, Distributor shall not assess or attempt to collect any fee, charge, expense or

other monetary penalty and any attempt to do so of no force or effect (whether in Distributor’s

purchaser order, website, ordering instructions, acknowledgments or other medium).

C. Modification by Cardinal Health - Cardinal Health may modify the “Availability Status” and “Non-

conformance Charges” in the “E-Business Transactions” (Exhibit C), Payment Terms, Specific

Terms, Returned Goods Policies, and any Exhibit or provision of these Policies and Procedures

upon notice to Distributor. These Policies and Procedures may be modified only by Cardinal

Health.

D. Cardinal Health and Distributor each may audit the books and records of the other party, upon

reasonable advance written notice and during regular business hours, to determine whether

such party is in compliance with these Policies and Procedures. The parties are limited to one

audit per twelve-month period. Each audit is limited to the twelve-month period prior to the

written request to audit and may not audit a previously audited period.

E. Violation of End Customer Requirements - If Distributor sells Products to un-authorized

customers or accounts, (including, but not limited to, other resellers, re-processors or

manufacturers), then, in addition to any other remedy available under these Policies and

Procedures, Cardinal Health reserves the right to reduce and/or setoff future Bill Back credits,

rebates or discounts earned by Distributor under agreements with Cardinal Health, or by direct

payment to Cardinal Health.

F. Requirements For Distributor’s Sale of Distributor’s private label products (if applicable):

i. Cardinal Health recognizes that a Distributor or its affiliates may choose to manufacture,

market, or sell products of their own which, directly, or indirectly, compete with Cardinal

Health’s Products. The following is intended to protect the integrity of the manufacturer-

distributor relationship under these Policies and Procedures where such a situation

exists. It is not intended to preclude or hinder Distributors from carrying competitive

products. Instead, it ensures that such Distributors are properly dedicated to the Cardinal

Health Products and the consumers to which they are ultimately sold.

ii. Distributor shall:

1. Use Cardinal Health Confidential Information, including pricing information, only

for the distribution of Cardinal Health’s Products.

2. Implement adequate procedures to ensure that Cardinal Health Confidential

Information is maintained as confidential and proprietary with no less than the

same degree of care and protection afforded to Distributor’s own Confidential

Information and in no event less than reasonable care.

Page 20 of 29

3. Disseminate Cardinal Health Confidential Information only to Distributor’s

employees who have a “need to know” such information in order for Distributor

to effectively distribute the Products.

4. Use Product contracts, agreements, and information solely for the purpose of the

distribution of Products to Customers.

5. Not substitute any products (whether national branded or Distributor’s own

private label products) for Cardinal Health Products without the express

permission of the Customer.

6. Not communicate or disseminate misleading information to any third-party,

including without limitation, any Customers, concerning Product availability,

quality, attributes and service.

7. Refrain from false or derogatory comments concerning Product quality,

availability, service, attributes or support.

8. Provide, upon request, a written report that certifies to Cardinal Health

compliance with the foregoing and summarizes the steps the Distributor has

taken to comply with the foregoing requirements for distribution of private-label

products.

16. MISCELLANEOUS

A. Term Survival - These Policies and Procedures shall remain in full force and effect until amended

or terminated by Cardinal Health. Cardinal Health may amend or terminate all or part of these

Policies and Procedures upon notice to Distributor. Notwithstanding anything to the contrary set

forth herein, Cardinal Health may terminate Distributor’s status as an authorized Distributor for

any reason and without liability upon notice to Distributor. These General Provisions and any

other terms set forth in these Policies and Procedures, which, by their nature or to be effective

for their stated purpose, must survive amendment or termination of these Policies and

Procedures, shall survive the termination, modification, or expiration of these Policies and

Procedures and/or Distributor’s participation hereunder.

B. Notices - Notice provided pursuant to these Policies and Procedures shall be in writing and

delivered by messenger, by postage-prepaid mail, email, or by facsimile to Distributor, provided

notices or communications shall be effective when received by, or otherwise known to the

recipient or its legal representative. The methods of delivery described above are not intended

to be exclusive, and any written notice received shall be sufficient.

C. Relationship of Parties - The relationship of Distributor to Cardinal Health is that of independent

contractor. These Policies and Procedures do not create a partnership, association, or other

business entity. Neither party has the right to bind the other. Unless specifically provided

elsewhere herein, nothing in these Policies and Procedures is intended to benefit any person or

entity not a party hereto.

D. Publicity - Neither Distributor nor Cardinal Health shall permit or generate any publicity,

advertising, nor promotion concerning these Policies and Procedures without the prior written

consent of the other party, except that Cardinal Health may list Distributor as a customer or as

Page 21 of 29

required under applicable law or by any governmental agency, in which case the party required

to make the press release or public disclosure shall use commercially reasonable efforts to

obtain the approval of the other party as to the form, nature and extent of the press release or

public announcement prior to issuing the press release or making the public announcement.

E. Cardinal Health Warranties / Limitation of Liability - Cardinal Health warrants that it will convey

to Distributor good title to the Products, free and clear of all security interests, liens or other

encumbrances of any kind or character. Cardinal Health further warrants that any product it

manufactures (the term “manufacture”, for purposes of this warranty does not include product

repackaging) shall, as of the date of shipment, be fit for the purposes and indications described

in the product labeling. Cardinal Health does not warrant product that it does not manufacture;

however, to the extent assignable, Cardinal Health will assign to Customer the manufacturer

warranties for those other products. Notwithstanding the foregoing, any warranties provided by

Cardinal Health shall not apply in the event that any product delivered pursuant to these Policies

and Procedures is misused, altered, damaged or used other than in accordance with product

label, inserts, or other instructions provided by Cardinal Health. Cardinal Health has

manufactured, packaged and is selling the Products to Distributor in compliance with all

applicable federal, state and local laws, rules and regulations.

THE FOREGOING WARRANTIES ARE EXCLUSIVE, AND IN LIEU OF ALL OTHER WARRANTIES OF ANY

KIND, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS OR IMPLIED, INCLUDING ANY

WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY. IN NO EVENT,

WHETHER AS A RESULT OF BREACH OF CONTRACT, TORT LIABILITY (INCLUDING NEGLIGENCE),

OR OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,

INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES AND ANY LIABILITY OF CARDINAL HEALTH

TO DISTRIBUTOR SHALL BE LIMITED TO THE PRICE PAID BY DISTRIBUTOR FOR THE PRODUCTS

WHICH ARE THE SUBJECT OF SUCH LIABILITY.

F. Indemnification - Distributor hereby agrees to defend, indemnify and hold harmless Cardinal

Health and its affiliates and their respective directors, officers, and employees from and against

any and all third-party (including any governmental authority) claims, causes of action,

judgments and/or settlement costs, other costs and expenses (including, but not limited to,

reasonable attorney fees and expenses), losses, fines, penalties, or liabilities of any kind

(collectively, “Liabilities”) arising out of the negligent, reckless, or willful misconduct of

Distributor, its agents, employees, or subcontractors related to the representations and

obligations under these Policies, and/or the use of Products provided under these Policies.

Notwithstanding the foregoing, Distributor will not be liable to Cardinal Health under this

indemnity to the extent the Liabilities are caused by the negligent, reckless, or willful acts or

omissions of Cardinal Health or its agents, employees, or subcontractors.

Cardinal Health hereby agrees to defend, indemnify and to hold harmless Distributor, and its

agents, employees and servants, from any and all third-party (including any governmental

authority) Liabilities for physical injury or death, arising out of, in connection with, or as a result

of the purchase or use of any defective products manufactured by Cardinal Health and

Page 22 of 29

purchased under these Policies and Procedures. Notwithstanding the foregoing, Cardinal Health

will not be liable to Distributor under this indemnity to the extent the Liabilities are caused by

the negligent, reckless, or willful misconduct of Distributor or its agents, employees, or

subcontractors.

It shall be a condition to indemnification under this Section that the party seeking to be

indemnified give the indemnifying party prompt notice of the third-party Liability as to which

indemnity is sought, permit the indemnifying party to control the response to and any

settlement or defense of the underlying claim, and cooperate with the indemnifying party with

respect to the claim and any response, defense, or settlement. Notwithstanding the foregoing,

the indemnification obligations required under this Section shall not be voided if a delay in the

notice required hereunder does not materially prejudice the right of the alleged indemnifying

party with regard to the defense of such Liability.

G. Force Majeure - Non-compliance with any obligation under these Policies and Procedures for

reasons of force majeure (such as: acts, regulations, or laws of any government; war or civil

commotion; destruction of production facilities or materials; fire, earthquake or storm; labor

disturbances; failure of public utilities or common carriers; and any other causes beyond the

reasonable control of the party affected) shall not constitute a breach of these Policies and

Procedures.

H. Legal Compliance - Both parties will comply with all applicable Federal, State, and Local laws in

connection with these Policies and Procedures and the sale of any Products hereunder or by

Distributor to Customers. Distributor further represents and warrants that it complies with the

standards set forth in the Cardinal Health Vendor Code of Conduct found at

www.cardinalhealth.com or, in the alternative, has adopted substantially similar policies and

complies with the standards set forth therein. These Policies and Procedures or any contract may

involve a discount or other reduction in price with respect to one or more Products under 42

USC 1320A- 7B§ 1128B(b) (3) (A) of the Social Security Act (42 USC § 1320a-1128B(b)(3)(A), and

regulations issued thereunder. Under such circumstances, Distributor or Customer is responsible

for accurately reporting and/or providing information on any such discounts, including rebates or

reductions in price, to reimbursement agencies (including Medicare and Medicaid) and other

entities in accordance with all applicable laws and regulations, including, without limitation, 42

CFR § 1001.952(h). Distributor agrees that it shall properly disclose and appropriately reflect any

discount or other reduction in price in its cost claimed under Medicare or any State Health

Program and shall advise any Customer of its responsibilities under such laws. If the use of the

Products sold hereunder require the reporting of costs on a cost report, then the benefit of any

discount will be claimed in the fiscal year in which the sale to which such discount relates

occurred and Distributor and/or Customer (as applicable) will fully and accurately report any

such discount in the applicable cost report.

I. Confidentiality, Trademarks and Proprietary Information - The confidentiality obligations in this

Section shall survive for three (3) years from the date of receipt in writing of any trade secrets,

Page 23 of 29

proprietary or other confidential information that is labeled as “Confidential” or would be

treated as such by an objective third party (collectively, “Confidential Information”).

Confidentiality obligations of trade secrets or proprietary information shall survive indefinitely.

Distributor and Cardinal Health shall not disclose any Confidential Information (including sales

data) to third parties without the non-disclosing party’s prior written consent. Notwithstanding

anything to the contrary in these Policies and Procedures, and without Distributor’s consent,

Cardinal Health may disclose to Customers Confidential Information that includes, but is not

limited to, Product sales data, fill rate data, and other Product purchase, order, and delivery

transaction data. Cardinal Health agrees that disclosure of Confidential Information such as sales

data to a group purchasing organization may be made only with respect to Contract sales of

Products with such group purchasing organization.

Each party shall hold in confidence Confidential Information supplied to it by the other party and

shall not divulge the same to any other person or entity without the prior permission of the

disclosing party. The confidentiality obligations in this section shall not apply to Confidential

Information which:

i. becomes public other than through the receiving party

ii. is already known to the receiving party as evidenced by its written records

iii. becomes known by the receiving party in the future from another source which is under

no obligation of confidentiality to disclosing party

iv. is subsequently developed by the receiving party in a manner that it can conclusively

establish was independent of the disclosure hereunder

v. is subject to disclosure by operation of law, legal process, or the reasonable request of a

government agency, in which event receiving party shall notify disclosing party prior to

making such disclosure.

Packaging and labeling of Products shall contain Cardinal Health’s or a Cardinal Health brand’s

trademarks and trade names. Such trademarks and trade names shall remain their exclusive

property, and nothing herein shall be construed as transferring any right, title, or interest of any

kind or nature whatsoever thereto, to Distributor. Except as specifically provided herein,

Distributor shall not use the trademarks or trade names of Cardinal Health or another other

Cardinal Health brand in any way and will not do any act which would in any way infringe upon

or be in derogation of the validity of such trademarks or trade names and will notify Cardinal

Health of any conflicting claims that challenge any such trademarks or trade names of which it is

aware.

Page 24 of 29

EXHIBIT A: CARDINAL HEALTH ORDERING TERMS TABLE

Standard

Manual Order

Fee

Minimum

Purchase Order

Requirement

Minimum

Purchase

Order Fee

Drop Ship

Order

Fee

Rush Order Fee

Drop Ship Rush

Order Fee

Annual

Minimum

Purchase

Requirement**

$200 per order

$2,500

$200 per order

not in

compliance

$200 per

order

plus

freight

costs*

$200 per

order

plus

freight

costs*

$200 per

order

plus

freight

costs*

$500,000

* Minimum purchase order fees apply to any drop ship order, rush order, or drop ship rush order

wherever applicable

**The Annual Minimum Purchase Requirement is subject to change. In the event a Distributor is unable

to/not trending to achieve a current or adjusted minimum threshold, Cardinal Health may transition

Distributor to fulfillment via a Master Distributor.

EXHIBIT B: RETURNED GOODS RESTOCKING FEE CHARGES

REASON FOR RETURN

RETURN CREDIT

Unwanted Product

Invoiced price less 30% Restock charge

Defective Product

Sales Representative must initiate and authorize.

Invoiced price

Damaged Item

claim must be made within 7 days of delivery.

Invoiced price

Affiliate Shipping or Order Error

Invoiced price within 90 days

Distributor Order Error

Invoiced price less 30% Restock charge

Distributor Refused Shipment

No credit

Distributor Stock Reduction/Large Quantity Return

Sales Representative must initiate and authorize return.

Invoiced price less 30% Restock charge

Page 25 of 29

EXHIBIT C: CARDINAL HEALTH’S PRINCIPLES FOR E-BUSINESS

A. Cardinal Health utilizes the EDI standard HIBCC subset of the ANSI X.12 format. See Table below.

E-Business solution is via the EDI X12 standard.

B. Meeting our Distributor and Customer needs is our top priority. We are committed to making

available internet enabled purchasing services at no incremental cost to our Customers. Cardinal

Health believes that supply chain efficiencies derived from E-Business will be reallocated over

time throughout the entire supply chain. We also believe this will make product selection,

purchase and utilization more efficient for all connected parties. To this end, Cardinal Health will

allocate resources to all mutually beneficial initiatives. The following are our guiding principles:

i. Cardinal Health will work with its Customers to create quantifiable savings and

efficiencies in our E-Business efforts.

ii. Cardinal Health is committed to holding down supply chain costs and will not pay

incremental charges that will result in increased supply chain costs.

iii. Cardinal Health will accept transactions from e-commerce companies when our

Customers request it.

iv. Cardinal Health cannot be responsible for keeping information up to date on any third

party or e-commerce company’s websites or portals, as it will only increase the costs and

inefficiencies of doing business.

v. Cardinal Health does not approve, condone, nor authorize transaction or pricing data to

be available to any parties other than the purchaser and Affiliate(s) involved in the

transaction.

vi. Cardinal Health will support industry data standardization efforts if they measurably

benefit all constituents in the supply chain.

Business Transaction

Preferred Format

Acceptable

Format

Availability Status

Non- conformance

Charge

End-user Sales

X.12 Direct

EDI

EDI 867/844

Currently

available

None

Purchase Order

X.12 Direct

EDI

EDI 850

Currently

available

None

Purchase Order

Acknowledgement

X.12 Direct

EDI

EDI 855

Currently

available

None

Invoice

X.12 Direct

EDI

EDI 810

Currently

available

None

Payment

Order/Remittance

Advice

Direct from the

bank

EDI 820

Currently

available

None

Consolidated Advanced

Ship

Notice

X.12 Direct

EDI

EDI 856

Currently

available

None

Page 26 of 29

vii. All e-commerce messages and transactions to Cardinal Health must be X12 Direct EDI.

EXHIBIT D: REPLENISHMENT CENTER MAPS

CRYSTAL LAKE & ELWOOD RC

Page 27 of 29

ATLANTA & JEFFERSON RC

RIVERSIDE CA RC

CHIPOCEE MA RC

Page 28 of 29

CHICOPEE MA RC

EL PASO TX RC

Page 29 of 29

NORTHEAST REPLENISHMENT CENTER (NERC)