FREDS INC - FORM 10-Q - EX-10.29 - EXHIBIT 10.29

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EXCEL - IDEA: XBRL DOCUMENT - FREDS INC	Financial_Report.xls
EX-32 - EXHIBIT 32 - FREDS INC	v388081_ex32.htm
EX-31.2 - EXHIBIT 31.2 - FREDS INC	v388081_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - FREDS INC	v388081_ex31-1.htm
EX-10.30 - EXHIBIT 10.30 - FREDS INC	v388081_ex10-30.htm
10-Q - FORM 10-Q - FREDS INC	v388081_10q.htm

Exhibit 10.29

Cardinal Health 110, LLC,

Cardinal Health 411, Inc.

and

Fred’s Stores of Tennessee, Inc.

Prime Vendor Agreement

(Execution Copy)

August 1, 2014

PRIME VENDOR AGREEMENT

This Prime Vendor Agreement (the “Agreement”) is made by and between Cardinal Health 110, LLC and Cardinal Health 411, Inc. (“Cardinal Health”) and Fred’s Stores of Tennessee, Inc. (“Buyer”) who hereby agree as follows:

1. Designation as Primary Wholesaler.Buyer will designate Cardinal Health as its primary wholesale supplier of pharmaceutical products (“Rx Products”) to all the pharmacy locations owned, managed or operated by Buyer during the term of this Agreement (collectively, the “Pharmacies” and individually, a “Pharmacy”). A current list of the Pharmacies is attached hereto as Exhibit A. Additional pharmacies may be added to Exhibit A from time to time subject to the prior approval of Cardinal Health, which approval will not unreasonably be withheld.

2. Purchase Requirement and Usage.

2.1. Purchase Requirement. Throughout the term of this Agreement, Buyer will purchase from Cardinal Health under this Agreement at least [***] of the branded Rx Products required for each Pharmacy if they are carried by Cardinal Health. During the first Contract Year (as defined below) this Agreement is in effect, the Buyer will purchase from Cardinal Health under this Agreement at least [***] of the generic Rx Products required for each Pharmacy through the Cardinal Health Generic Source generic Rx Product program (the “Generic Source Program”) if they are carried by Cardinal Health. During each Contract Year, or portion thereof, this Agreement remains in effect thereafter, the Buyer will purchase from Cardinal Health under this Agreement at least [***] of the generic Rx Products required for each Pharmacy through the Generic Source Program if they are carried by Cardinal Health. In addition, Buyer may, at its option, purchase certain other inventory carried by Cardinal Health (the “Non-Rx Products”) (Rx Products and Non-Rx Products are collectively referred to as the “Merchandise”). Notwithstanding any other provision in this Agreement, Cardinal Health reserves the absolute right to determine what Merchandise it will carry. The minimum Rx Product purchase requirements set forth in this Section are sometimes referred to herein as the “Primary Requirements.” As used in this Agreement, the phrase “Contract Year” shall mean each consecutive twelve month period commencing on October 1 of a given calendar year and ending on September 30 of the immediately following calendar year that the Agreement remains in effect.

2.2. Usage. In order to facilitate Cardinal Health’s inventory management requirements, for any currently owned and operated Pharmacies, Buyer will provide six (6) months’ usage figures (including NDC numbers) for all items for each Pharmacy in compatible electronic format at least forty five (45) days prior to participation under this Agreement by that Pharmacy. For any Pharmacy acquired by the Buyer after the Effective Date of this Agreement, Buyer agrees to provide six (6) months’ usage figures (including NDC Numbers) for all items, unless such data doesn’t exist, with as much notice as reasonably possible, however, in no event will failure to provide such data excuse Cardinal Health from timely supplying Rx Products to a Pharmacy. In addition, Buyer will provide usage information related to new and/or replacement items on an ongoing basis, as necessary.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

3. Purchase Price.

3.1. In General. Except as otherwise set forth in this Agreement, Buyer will pay a purchase price for all branded Rx Products purchased under this Agreement in an amount equal to Cardinal Health’s Cost for such Merchandise, plus/minus the percentage specified in the pricing matrix attached hereto as Exhibit B (the “Pricing Matrix”), plus all applicable taxes or other assessments on such purchases(“Cost Plus Pricing”). For purposes of this Agreement, (a) the term “Cardinal Health’s Cost” will mean the manufacturer’s published wholesale acquisition cost for the Merchandise at the time the Buyer’s order is submitted to Cardinal Health; and (b) the term “Net Purchases” will mean all purchases made and paid for by Buyer and/or the Pharmacies under the terms of this Agreement, net of all returns, credits, service charges, or other similar items, on an annual, quarterly, or monthly basis, as applicable. The purchase price of Merchandise that is subject to a Manufacturer Contract (as defined below) will equal Buyer’s contract price for the applicable Merchandise as set forth in the Manufacturer Contract.

3.2. Exceptions to Cost Plus Pricing. Notwithstanding the foregoing, the purchase price for certain Merchandise as defined below and referred to herein as “Specially Priced Merchandise” will not be based upon Cardinal Health’s Cost-plus pricing described above. The Specially Priced Merchandise shall include only the following:

Category		Cost Formula
Multisource Pharmaceuticals		[***]
OTC/HBA Products		[***]
Drop Shipped Products		[***]
Designated Specialty Products (as defined in the Pricing Matrix)		[***]
Indirect Manufacturer Contracted Products		[***]
Cardinal Health Private Label Products		[***]
Home Healthcare /durable medical equipment Products		[***]
Medical / Surgical Supplies		[***]
Diabetic Supply Products		[***]
Pharmacy Supply Products		[***]
All Other Non-Pharmaceutical Product Categories		[***]
Merchandise Acquired from Vendors Not Offering Customary Cash Discount or Other Standard Terms		[***]

Except as otherwise set forth in this Agreement, Buyer may, but will have no obligation to, purchase any specified volume or percentage of its requirements of these items.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

4. Payment Terms.

4.1. Standard Payment Terms. Buyer’s initial payment terms shall be [***] payment terms ([***]) as follows: the Buyer will cause Cardinal Health to receive payment in full of the amount due for all Merchandise delivered and services provided and properly invoiced in the normal course of business during a given week (i.e., Monday through Friday) by [***].

4.2. Payment Terms for Purchases Made from [***]. Regardless of the Buyer’s then current standard payment terms under this Agreement, and except as set forth in Section 4.6 below, the Buyer’s payment terms for purchases made under this Agreement from [***] through [***] of each Contract Year this Agreement is in effect shall be as follows: the Buyer will cause Cardinal Health to receive payment in full of the amount due for all Merchandise delivered and services rendered and properly invoiced in the normal course of business from [***]through [***]of a given calendar year by [***]of the same calendar year.

4.3. In General. All payments due from Buyer to Cardinal Health for Merchandise delivered and services rendered by Cardinal Health under this Agreement will be made to the applicable servicing division specified in Cardinal Health’s invoice (or as otherwise specified by Cardinal Health) by electronic funds transfer or other method acceptable to Cardinal Health so as to provide Cardinal Health with good funds by the due date. Deductions for Merchandise returns or shipping discrepancies (quantity and price) may not be taken until a valid credit memo is issued by Cardinal Health. Until Merchandise is paid for in full, Cardinal Health retains, and the Buyer hereby grants Cardinal Health, a security interest in the Merchandise. Buyer may from time to time (but not more often than once per calendar quarter) request that its payment terms be changed as to future Merchandise purchases under this Agreement, subject to Cardinal Health’s prior written consent. In such event, Buyer acknowledges and agrees that Buyer’s purchase price may be adjusted by Cardinal Health to reflect Buyer’s new payment terms and credit considerations deemed relevant to Cardinal Health.

4.4. Late Payments. Cardinal Health may, at its election, either reduce payment terms to a shorter number of days or place the Buyer on C.O.D status under the following circumstances: (i) if Cardinal Health has not received payment in full when due of undisputed amounts for Merchandise delivered or services provided to the Buyer, or (ii) there is a material adverse change in the financial condition of the Buyer. In either instance, the situation would be immediately elevated to an executive team from both the Buyer and Cardinal Health in an effort to rectify the situation and restore the Buyer’s then current payment terms. In the event of such elevation, if the parties are unable to reach a mutually acceptable resolution and any undisputed amounts remain unpaid for more than ten (10) calendar days after the due date, Cardinal Health reserves the right to refuse orders from the Buyer.

4.5. Set- Off. Without limiting either party’s rights under law or in equity, a party and its affiliates, parent or related entities, collectively or individually, may exercise a right of set-off against any and all amounts due the other party. For purposes of this Section, a party, its affiliates, parent or related entities shall be deemed to be a single creditor.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

4.6. New Pharmacy Payment Terms. Cardinal Health will allow the Buyer to order up to [***]of Merchandise as Buyer’s opening store order for either: (a) a “New Pharmacy” (as defined below) within Cardinal Health’s existing service area or (b) an instance in which the Buyer acquires the prescription files of a non-affiliated pharmacy location and begins servicing those files out of an existing Buyer’s Pharmacy. The Buyer will be entitled to special payment terms for each such New Pharmacy’s opening store order as follows: (i) [***]of the purchase price of Merchandise shipped in the New Pharmacy’s opening store order will be paid by Buyer to Cardinal Health not later than [***]following the shipment of the opening store order; (ii) [***]of the purchase price of Merchandise shipped in the New Pharmacy’s opening store order will be paid by Buyer to Cardinal Health not later than [***]following the shipment of the opening store order; and (iii) [***]of the purchase price of Merchandise shipped in the New Pharmacy’s opening store order will be paid by Buyer to Cardinal Health not later than [***]following the shipment of the opening store order. No interest will be charged by Cardinal Health on the amount of the New Pharmacy’s opening store order so long as payments are made at the times described above. No more than[***]opening store orders may be financed in the manner set forth in this Section during a given calendar quarter. Any pharmacy receiving an opening order in the manner described in this Section will be considered a “Pharmacy” under the Agreement. The Buyer’s eligibility to receive the special payment terms for opening store orders is contingent upon and subject to: (A) the Buyer’s ongoing compliance with the terms of the Agreement and all other agreements with Cardinal Health; and (B) Cardinal Health’s approval of the Buyer’s advance request (not less than two weeks to the extent reasonably possible) for such special payment terms, which approval will be based upon Cardinal Health’s analysis of the Buyer’s ongoing credit-worthiness and will be supported by such financial and other information as Cardinal Health may reasonably request from the Buyer in considering such approval. The term “New Pharmacy” means any new retail location owned, acquired, managed or operated by the Buyer (which will not include existing pharmacies that are owned by the Buyer but were closed due to remodeling or relocation).

5. Term. The initial term of this Agreement shall commence on October 1, 2014, (the “Effective Date”) and shall continue in effect thereafter through the longer of: (i) March 31, 2018, or (ii) that certain date upon which the Buyer’s aggregate Net Purchases of generic Rx Products through the Generic Source Program equals [***].

6. Termination.

6.1. Breach. Either party may affect an early termination of this Agreement upon the occurrence of a material breach by the other party. The non-breaching party must give written notice to the breaching party of the nature and occurrence of such breach. If the breach is not cured by the expiration of forty five (45) days from the date of such notice, or if the breaching party has not made reasonable efforts to effect the cure if the breach cannot reasonably be cured within such forty five (45) day period, then the non-breaching party may provide written notice to the breaching party that this Agreement will be terminated in thirty (30) days following the expiration of such forty five (45) day period.

6.2. Termination by Buyer. Notwithstanding any other provision in this Agreement, the Buyer may terminate this Agreement without cause following that certain date upon which the Buyer’s aggregate Net Purchases of generic Rx Products through the Generic Source Program equals at least [***]; provided, however, that the effective date of any such termination under this Section shall not occur before [***]. In such an instance, the Buyer shall provide Cardinal Health with written notice of its intent to terminate at least thirty (30) days prior to the effective date of such termination. Furthermore, once the parties believe in good faith that the Buyer’s aggregate Net Purchases of generic Rx Products through the Generic Source Program will equal[***]prior to the potential effective date of any termination under this Section, the Buyer and Cardinal Health shall enter into a [***]exclusive negotiation period in good faith in an effort to negotiate a new prime vendor agreement(the “Negotiation Period”). During the Negotiation Period, the Buyer shall not directly or indirectly solicit, initiate, encourage or entertain any proposals from, discuss or negotiate with, provide any nonpublic information to, or consider the merits of any inquiries or proposals from any third party seeking to become Buyer’s primary vendor of pharmaceutical products.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

7. Financial Statements. In the event that Fred’s, Inc. fails to remain a publicly traded company, the Buyer hereby acknowledges and agrees that Buyer will provide Cardinal Health with annual audited financial statements and unaudited but reviewed quarterly income statements and balance sheets.

8. Service Charge. Either party will pay a service charge calculated at the rate of [***]per month (or the maximum rate allowed by law, if such rate is less than [***]per month) on any amount not paid by such party when due under the terms of this Agreement from the first day of delinquency until such amount is paid in full, along with reasonable attorney fees associated with any such delinquency. Notwithstanding the foregoing, if a party’s failure to make a payment when due is caused by an event beyond such party’s reasonable control (up to a maximum of four times in a given Contract Year), the service charge set forth in this Section shall be paid from the second business day of delinquency until such amount is paid in full, along with reasonable attorney fees associated with any such delinquency.

9. Guaranty.

9.1. Buyer Guaranty on Purchases by Subsidiaries and Affiliates. As an inducement for Cardinal Health to supply Merchandise and provide services to the subsidiaries and affiliates of Buyer, whether existing now or in the future (collectively, “Borrowers”), Buyer guarantees to Cardinal Health the punctual and full payment (and not merely the ultimate collectability) of all sums now or hereafter due from Borrowers to Cardinal Health and the reasonable cost and expense incurred by Cardinal Health in attempting to enforce any indebtedness, liability, or obligation under this Agreement, including, without limitation, reasonable attorney’s fees. Further, Buyer agrees to indemnify and save harmless Cardinal Health against and from any and all losses, damages, liabilities, and claims now or at any time hereafter arising directly or indirectly out of any failure by Borrowers to promptly and fully perform all of the obligations hereunder.

9.2. Parent Guaranty. As an inducement for Cardinal Health to supply Merchandise to the Buyer under this Agreement, Fred’s Inc. hereby guarantees to Cardinal Health the punctual and full payment (and not merely the ultimate collectability) of all sums now or hereafter due from the Buyer to Cardinal Health under this Agreement and the reasonable cost and expense incurred by Cardinal Health in enforcing any indebtedness, liability, or obligation under this Agreement (including any damages due Cardinal Health as a result of a breach of this Agreement).

10. Ordering.

10.1. In General. Unless otherwise agreed upon by the parties, to qualify for the pricing set forth in the Pricing Matrix, Buyer must electronically transmit all orders (excluding Schedule II and emergency orders) to Cardinal Health via cardinal.com, Order Express, or such other electronic order entry system as Cardinal Health may approve from time to time. Cardinal Health will provide Buyer with access to such electronic ordering system at no additional charge; provided, however, Buyer must supply all hardware required to access such electronic ordering system, all required Internet access and any required interfaces or other network enhancements, at Buyer’s expense. Buyer may not use such electronic ordering system for any purpose unrelated to this Agreement. If electronic order entry is temporarily interrupted for reasons beyond the control of Buyer or Cardinal Health, Buyer may place orders manually and both parties will use reasonable efforts to fix the problem. Orders placed manually due to interruption of the electronic order entry system shall be eligible for pricing according to the Pricing Matrix.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

10.2. Orders for Schedule II Controlled Substances. If available, Buyer may submit orders for Schedule II controlled substances via Cardinal Health’s “Controlled Substance Ordering System” (“CSOS”). If Buyer utilizes CSOS, Schedule II orders will be delivered with Buyer’s next scheduled delivery following Cardinal Health’s receipt of the CSOS order. In the event that Buyer does not utilize CSOS for a given Pharmacy location, all orders for Schedule II controlled substances for such Pharmacy shall be submitted to Cardinal Health on DEA Form 222. In such an instance, DEA Form 222 may be mailed to the applicable Cardinal Health distribution center or given to the delivery driver, and Schedule II orders will be delivered with Buyer’s next scheduled delivery following Cardinal Health’s receipt of the signed original DEA Form 222. Buyer acknowledges that if Buyer gives the DEA Form 222s to the delivery driver, such forms will not be received by Cardinal Health until such time that the delivery driver physically delivers the DEA Form 222 to the applicable Cardinal Health distribution center. Notwithstanding any other terms of this Agreement, no Schedule II orders will be delivered other than in compliance with DEA regulations.

11. Delivery.

11.1. In General. All Merchandise shall be shipped FOB destination in accordance with the general delivery schedules as are established from time to time by the applicable Cardinal Health servicing division (exclusive of holidays, etc.). Excluding Pharmacies located outside of the contiguous United States or other Pharmacies mutually agreed upon by the parties from time to time, each Pharmacy shall be eligible to receive one (1) delivery per day, five (5) days per week (Monday through Friday) at no additional charge; provided, however, all deliveries will be subject to the Fuel Surcharge set forth below. Buyer shall incur a separate per delivery charge for additional scheduled deliveries and non-standard or custom deliveries.

11.2. Fuel Surcharge. Notwithstanding any other provision in this Agreement, Buyer shall pay a fuel surcharge, on a per stop basis, for each delivery made to Buyer or any Pharmacy by Cardinal Health under this Agreement (the “Fuel Surcharge”). The amount of a given Fuel Surcharge shall be calculated in accordance with the following table:

Regular Unleaded Fuel Price is:		Additional
at Least	But Less Than	Surcharge Amount
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]

The fuel prices set forth in the table above represent the national average retail cost per gallon for regular grade gasoline in the U.S. as published by the U.S. Department of Energy (the “Average Price Per Gallon”). The current index may be obtained on the Energy Information Administration’s website at the following address:

http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

In the event that the Average Price Per Gallon exceeds [***], the Fuel Surcharge shall increase in [***] increments for each [***] increase in the Average Price Per Gallon.

By the last day of each calendar month, Cardinal Health shall determine the Average Price Per Gallon for that month. If, pursuant to the table set forth above, the Average Price Per Gallon results in the imposition of a Fuel Surcharge for a given month, then Cardinal Health shall invoice the Buyer’s corporate location for the aggregate amount of the Fuel Surcharge due for the month, and the Buyer shall pay such invoice in accordance with the standard payment terms applicable to the Buyer’s purchases under this Agreement as of the date of the Fuel Surcharge invoice. For the sake of clarity, the parties hereby acknowledge and agree that even if the invoice is generated from August 1 through August 21 of a given calendar year, the Buyer’s then current standard payment terms shall apply, not the Buyer’s special payment terms for Merchandise purchases made from August 1 through August 21.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

12. Generics.

12.1. In General. Each of the Buyer’s pharmacy locations shall purchase its Primary Requirements (as defined above) of generic Rx Products through the Generic Source Program, and the Buyer hereby acknowledges and agrees that Cardinal Health shall implement an automatic substitution program for all applicable Generic Source Program products. Notwithstanding the foregoing, the parties hereby acknowledge and agree that the following Generic Source Program Products may be excluded from the calculation of rebates and other incentives under this Agreement related to the purchases of Generic Source Program products: (i) exclusive generic Rx Products, (ii) biogeneric products, and (iii) branded generic Rx Products (the “Excluded Generic Rx Products”). The current list of Excluded Generic Products is attached hereto as Exhibit C. Additional Excluded Generic Rx Products may be added to the list upon agreement of both parties that they are (i) exclusive generic Rx Products, (ii) biogeneric products, or (iii) branded generic Rx Products.

12.2. [***]

D. Disclosure. Each of the [***]constitutes a “discount or other reduction in price,” as such terms are defined under the Medicare/Medicaid Anti-Kickback Statute, on the applicable generic Rx Products purchased by the Buyer under this Agreement. Cardinal Health and the Buyer agree to use commercially reasonable efforts to comply with any and all requirements imposed on sellers and buyers, respectively, under 42 U.S.C. § 1320a-7b(b)(3)(A) and the “safe harbor” regulations regarding discounts or other reductions in price set forth in 42 C.F.R. § 1001.952(h). In this regard, Buyer may have an obligation to accurately report, under any state or federal program which provides cost or charge based reimbursement for the products or services covered by this Agreement, or as otherwise requested or required by any governmental agency, the net cost actually paid by Buyer and/or each Pharmacy.

12.3. [***]

E. Disclosure. The [***] constitutes a “discount or other reduction in price,” as such terms are defined under the Medicare/Medicaid Anti-Kickback Statute, on the applicable generic Rx Products purchased by the Buyer under this Agreement. Cardinal Health and the Buyer agree to use commercially reasonable efforts to comply with any and all requirements imposed on sellers and buyers, respectively, under 42 U.S.C. § 1320a-7b(b)(3)(A) and the “safe harbor” regulations regarding discounts or other reductions in price set forth in 42 C.F.R. § 1001.952(h). In this regard, Buyer may have an obligation to accurately report, under any state or federal program which provides cost or charge based reimbursement for the products or services covered by this Agreement, or as otherwise requested or required by any governmental agency, the net cost actually paid by Buyer and/or each Pharmacy.

13. Returned Goods Policy. In general, Cardinal Health will accept Merchandise for return from the Buyer in accordance with the Returned Goods Policy attached hereto as Exhibit D. Cardinal Health will work with a third party returned goods processor in accordance with the Third Party Returned Goods Policy for Unmerchantable Product attached hereto as Exhibit E.

14. Manufacturer Contract Administration. Cardinal Health will recognize and administer mutually agreed upon manufacturer pricing contracts between Buyer and a manufacturer (collectively, “Manufacturer Contracts”): (i) subject to their continued validity in accordance with applicable laws, (ii) provided such manufacturer is a vendor in good standing with Cardinal Health, and (iii) subject to such credit considerations concerning the applicable manufacturers as Cardinal Health may consider appropriate. However, if manufacturers’ chargebacks for contract items submitted by Cardinal Health are disallowed, uncollectable, or unreconcilable, then the applicable charge will be billed back to Buyer. Buyer will notify Cardinal Health of all applicable pricing information included in the Manufacturer Contracts, including renewals, replacements or terminations of Manufacturer Contracts, not less than forty-five (45) days prior to the effective date of such Manufacturer Contract, renewal, replacement or termination. Cardinal Health reserves the right to assess a reasonable processing fee to Buyer for any Manufacturer Contract credit and/or rebill activity. As set forth above, the purchase price of Merchandise that is subject to a Manufacturer Contract will equal Buyer’s contract price for the applicable Merchandise as set forth in the Manufacturer Contract.

15. Custom Inventory. If Cardinal Health stocks inventory under this Agreement at Buyer’s request that Cardinal Health would not otherwise stock (“Custom Inventory”), Buyer agrees that, before substituting other inventory in place of such Custom Inventory, and upon the expiration or earlier termination of this Agreement for any reason, Buyer will purchase the remaining Custom Inventory under the terms of this Agreement until it is depleted. Cardinal Health agrees that it will inform Buyer whether any requested inventory would constitute Custom Inventory prior to stocking such inventory. Furthermore, the parties acknowledge and agree that, in such an instance, Cardinal Health shall only stock a mutually agreed upon amount of such Custom Inventory for the Buyer.

16. [***]

17. Own Use. All purchases under this Agreement will be for Buyer’s and/or the Pharmacies’ “own use” as that term is defined in judicial or legislative interpretation and not for resale to anyone other than the end user. Cardinal Health may terminate this Agreement immediately in the event it reasonably determines that Buyer or any Pharmacy is in breach of this paragraph.

18. Licensure. Buyer represents, warrants and certifies to Cardinal Health that it and each of Buyer’s pharmacy locations has all required governmental licenses, permits and approvals required to purchase, use and/or store the Rx Products purchased from Cardinal Health under this Agreement. Prior to purchasing Rx Products from Cardinal Health hereunder, and at all times during the term of this Agreement, Buyer will provide Cardinal Health with copies of all such licenses and any renewals, revocations, changes or notices related thereto.

19. Records and Audit. Cardinal Health will maintain records pertaining to this Agreement and the pharmaceutical products purchased by Buyer hereunder as required by applicable FDA requirements. Not more than once in any Contract Year, and following at least thirty (30) days’ advance written notice to Cardinal Health, the Buyer shall have the right to retain a mutually agreed upon independent third party auditor to review those relevant records applicable to its pharmaceutical purchases for the sole purpose of verifying compliance with this Agreement, including, but not limited to, the pricing terms of this Agreement. Such audit will be conducted during the Contract Year following the Contract Year (or partial Contract Year) to be audited and will be completed before the end of that same Contract Year. Each audit shall be conducted during normal business hours. Cardinal Health agrees to cooperate fully with the third party auditor’s reasonable requests for information needed to conduct the audit. The third party auditor will enter into a confidentiality agreement with Cardinal Health in which it agrees not to disclose to the Buyer, or any other party, any specific dollar results about Cardinal Health’s financial performance, but only such limited information as necessary to report on Cardinal Health’s compliance with the Agreement. Within thirty (30) days of receiving such written statement, Cardinal Health will either reconcile the identified discrepancies, or notify Buyer in writing that it is disputing such audit findings and provide Buyer with supporting documentation. The cost of the audit shall be borne by Buyer, unless there is a discrepancy identified in the audit and reconciled by Cardinal Health which exceeds the cost of the audit, in which case Cardinal Health shall pay for the cost of such audit.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

20. Service Level. Cardinal Health will exercise commercially reasonable efforts to provide the Buyer with an adjusted monthly service level on DSD Rx Products (excluding the bullet point items below) of at least [***] The service level for a given month will be calculated by [***]. Notwithstanding any other provision in this Section, the following items of Merchandise shall be excluded from the monthly service level calculation:

Manufacturer back orders/manufacturer temporary outs;

Non-stock and/or discontinued items;

Same item ordered more than once within three (3) days.

Items where Buyer has failed to provide accurate start up usage figures in the event that the Buyer has acquired a new pharmacy location; and

Items where the Pharmacies’ historical demand is exceeded by 125% over the monthly average for the preceding two months.

If Cardinal Health does not meet the service level commitment set forth above for three consecutive months, Cardinal Health will pay the Buyer a service penalty in the amount of [***].

21. Compliance with Laws. Each of Buyer and Cardinal Health shall comply with all federal and state laws, rules and regulations applicable to its obligations under this Agreement.

22. Compliance Agreement. Buyer agrees to execute and abide by the terms set forth in the Compliance Representations and Warranties for Customers attached hereto as Exhibit F. As set forth in the Compliance Representations and Warranties for Customers, Buyer hereby acknowledges and agrees that, notwithstanding any other provision in this Agreement, or any provision in any other agreement between Cardinal Health and the Buyer, Cardinal Health may, in its sole discretion, immediately suspend, terminate, or limit the distribution of controlled substances, listed chemicals, and other products monitored by Cardinal Health to the Buyer at any time if Cardinal Health reasonably believes that the continued distribution of such products to the Buyer may pose an unreasonable risk of the diversion of such products based on the totality of the circumstances and such other considerations as may be deemed relevant by Cardinal Health. In the event such action(s) occur,or when requested by Buyer, Cardinal Health shall discuss with Buyer (and, if commercially reasonable to do so, prior to taking such action) Cardinal Health’s reasons for suspending, terminating or otherwise limiting the distribution of controlled substances, listed chemicals or other products in an attempt to determine whether such restrictions may be mitigated.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

23. Discount and Rebates. If and to the extent any discount, credit, rebate or other purchase incentive is paid or applied by Cardinal Health with respect to the Merchandise purchased under this Agreement, such discount, credit, rebate or other purchase incentive shall constitute a “discount or other reduction in price,” as such terms are defined under the Medicare/Medicaid Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)(3)(A) and the “safe harbor” regulations regarding discounts or other reductions in price set forth in 42 C.F.R. § 1001.952(h)) on the applicable Merchandise purchased by Buyer under the terms of this Agreement. Buyer may have an obligation to accurately report, under any state or federal program which provides cost or charge based reimbursement for the products or services covered by this Agreement, or as otherwise requested or required by any governmental agency, the net cost actually paid by Buyer.

24. Merchandise Warranty Disclaimer and Limitation of Liability. THERE ARE NO EXPRESSED OR IMPLIED WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER PARTY SHALL BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES EXCPET TO THE EXTENT THAT SUCH DAMAGES WERE CAUSED BY SUCH PARTY’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

25. Title. Cardinal Health warrants that it has good and marketable title to the Merchandise sold to the Buyer under this Agreement.

26. Indemnification.

26.1. Indemnification by Cardinal Health. Cardinal Health agrees to indemnify, defend and hold harmless the Buyer and its affiliates, officers, trustees, directors, shareholders, employees and agents from and against those third-party losses and liabilities (including, without limitation, reasonable attorneys’ fees) that are directly attributable to Cardinal Health’s negligence or wrongdoing. Cardinal Health further agrees to indemnify, defend and hold harmless the Buyer its affiliates, officers, trustees, directors, shareholders, employees and agents from and against those third-party losses and liabilities (including, without limitation, reasonable attorneys' fees) that are directly attributable to Cardinal Health’s failure to properly store, handle or distribute Merchandise in accordance with the Agreement. It is expressly understood and agreed by Buyer that Cardinal Health is not the manufacturer of any of the Merchandise and that no indemnification of any type is being provided hereunder by Cardinal Health other than as specifically stated in this Section.

26.2. Indemnification by the Buyer. The Buyer agrees to indemnify, defend and hold harmless Cardinal Health and its affiliates, officers, trustees, directors, shareholders, employees and agents from and against those third-party losses and liabilities (including, without limitation, reasonable attorneys' fees) that are directly attributable to the Buyer’s negligence or wrongdoing.

27. Pass Through & Assistance in Tendering Claims.Cardinal Health shall use commercially reasonable efforts to obtain from the manufacturers of the Merchandise sold to the Buyer under this Agreement indemnification by the manufacturer to Cardinal Health’s customers with respect to the Merchandise. Further, Cardinal Health shall assign and transfer to the Buyer, on a non-exclusive basis, any representations, warranties, rights and claims to defense and indemnity made by the manufacturers of the Merchandise purchased by the Buyer under this Agreement (including, but not limited to, representations, warranties and rights and claims to defense and indemnity, relating to intellectual property, product liability or negligence) to the extent that: (i) such representations, warranties and rights and claims to defense and indemnity are assignable by Cardinal Health, and (ii) such representations, warranties and rights and claims to defense and indemnity arise out of or relate to the Merchandise from such manufacturer which is subsequently sold to Buyer under this Agreement, and (iii) that Cardinal Health is not prejudiced by such assignment. Furthermore, Cardinal Health will cooperate with all reasonable requests made by the Buyer to enforce such representations, warranties and rights and claims to defense and indemnity against such manufacturers and in connection with pursuing consents from the manufacturers in providing or assigning to Buyer such representations, warranties, and rights to defense and indemnification.

28. Rx Product Dating.Cardinal Health shall use commercially reasonable efforts to ensure that the Rx Products delivered by Cardinal Health to the Buyer under this Agreement have at least [***] months dating, unless the only product available from the manufacturer contains less than [***] months dating.

29. Force Majeure. Either party’s obligations under this Agreement will be excused if and to the extent that any delay or failure to perform such obligations is due to fire or other casualty, product or material shortages, strikes or labor disputes, transportation delays, change in business conditions (other than insignificant changes), manufacturer out-of-stock or delivery disruptions, acts of God, seasonal supply disruptions, or other causes beyond the reasonable control of such Party. During the period of any such delay or failure by Cardinal Health, Buyer may purchase the Primary Requirements for the affected Pharmacies from others, but will recommence purchasing from Cardinal Health upon cessation of such delay or failure.

30. Notices. Any notice or other communication required or desired to be given to either party under this Agreement shall be in writing and shall be deemed given when: (a) received by the recipient, after being sent via certified mail, return receipt requested, and addressed to that party at the address for such party set forth at the end of this Agreement; (b) received by the recipient after being sent via Federal Express, Airborne, or any other similar overnight delivery service for delivery to that party at that address; or (c) received by facsimile transmission, as evidenced by electronic confirmation, to that party at its facsimile number set forth at the end of this Agreement. Either party may change its address or facsimile number for notices under this Agreement by giving the other party notice of such change.

31. Confidentiality. Neither party may disclose the terms and conditions of this Agreement to a third party without prior written consent of the other party, except as required by SEC regulation, law or as necessary to perform its obligations under this Agreement. Neither party will make any press release or other public announcement regarding this Agreement or the other party or its affiliates without the other party's express prior written consent, except as 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.

32. Miscellaneous. This Agreement and its exhibits constitute the entire agreement and understanding of the parties with respect to the subject matter hereof, and this Agreement may not be amended except by a writing signed by each party. No party may assign its rights or obligations under this Agreement without the written consent of the others; provided, however, that Cardinal Health may delegate its rights and obligations to any entity that is controlled by or under common control with Cardinal Health, Inc. This Agreement does not create any employment, agency, franchise, joint venture, partnership or other similar legal relationship between Buyer and Cardinal Health.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

Fred’s Stores of Tennessee, Inc.		Cardinal Health 110, LLC
4300 New Getwell Rd.		7000 Cardinal Place
Memphis, TN 38118		Dublin, Ohio 43017
Telecopy:	901-531-8076	Telecopy: (614) 757-6000

By	/s/ Rick Chambers	By	/s/ Jon Giacomin
Title	VP	Title	Pres. US Pharmaceutical Distribution
Date	08/06/2014	Date	8/6/14

		Cardinal Health 411, Inc.
		7000 Cardinal Place
		Dublin, Ohio 43017
		Telecopy: (614) 757-6000

	By	/s/ Jon Giacomin
	Title	Pres. US Pharmaceutical Distribution
	Date	8/6/14

As to the Guaranty in Section 9.2 Only:

Fred’s Inc.
4300 New Getwell Rd.
Memphis, TN 38118
Telecopy:	901-531-8076

By	/s/ Rick Chambers
Title	EVP
Date	08/06/2014

EXHIBIT A

Pharmacies

Store #

Store Name

Address

Address Line 2

City

State

Zip
Code

1010

Fred's Pharmacy

107 N Meridian Street

Aberdeen

39730

1020

Fred's Pharmacy

905 Highway 278 East

Amory

38821

1025

Fred's Pharmacy

1001 N. Slappey Blvd

Albany

31701

1027

Fred's Pharmacy

763 Hwy 28 Bypass

Abbeville

29620

1035

Fred’s Pharmacy

1311 North Hazel

Arcadia

71001

1045

Fred's Pharmacy

2750 Pine Street Unit #1

Arkadelphia

71923

1060

Fred's Pharmacy

222 Mabus Street

Ackerman

39735

1070

Fred's Pharmacy

11888 Highway 70

P.O. Box 508

Arlington

38002

1085

Fred's Pharmacy

901 Dewitt Henry Blvd

Beebe

72012

1088

Fred's Pharmacy

215 Bailey Lane

Benton

62812

1090

Fred's Pharmacy

5760 Highway 80 E

Pearl

39208

1095

Fred's Pharmacy

170 Hwy 167

Bald Knob

72010

1100

Fred's Pharmacy

6064 Stage Road

Bartlett

38134

1108

Fred's Pharmacy

3606 Main Street

Bamberg

29003

1110

Fred's Pharmacy

2017 East Madison

Bastrop

71220

1113

Fred's Pharmacy

311 East Main Street

Andrews

29510

1125

Fred's Pharmacy

2675 Highway 15

P.O. Box 1200

Bay Springs

39422

1135

Fred's Pharmacy

475 Hwy 6 East

Batesville

38606

1145

Fred's Pharmacy

403 W. Calhoun Street

P.O. Box 310

Bruce

38915

1155

Fred's Pharmacy

502 North Second Street

Booneville

38829

1158

Fred's Pharmacy

13210 North Wintzell Ave.

Bayou La Batre

36509

1160

Fred's Pharmacy

520 N. Hayden Street

Belzoni

39038

1165

Fred's Pharmacy

105 Tennessee Street

Bolivar

38008

1198

Fred's Pharmacy

214 GA Hwy 49 S.

Byron

31008

1205

Fred's Pharmacy

3395 Hwy 5 North

Benton

72019

1210

Fred's Pharmacy

229 N. Union Street

Canton

39046

1215

Fred's Pharmacy

207 South 2nd Street

Cabot

72023

1220

Fred's Pharmacy

300 South Pearl Street

Carthage

39051

1235

Fred's Pharmacy

456 Highway 24

Centreville

39631

1240

Fred's Pharmacy

1797 Hwy 100 East

Centerville

37033

1255

Fred's Pharmacy

200 Clinton Plaza

Clinton

39056

1263

Fred's Pharmacy

5485 New Jesup Hwy

Brunswick

31523

1278

Fred's Pharmacy

1211 S. Fir Ave.

P.O. Box 2542

Collins

39428

1290

Fred's Pharmacy

245 East Oak Street

Conway

72032

1295

Fred's Pharmacy

8155 US Hwy 165

Columbia

71418

1300

Fred's Pharmacy

236 Desoto

Clarksdale

38614

1305

Fred's Pharmacy

599 W. Veterans Blvd.

P.O. Box 1228

Calhoun City

38916

1310

Fred's Pharmacy

1125 Morningside Drive

Conway

72034

1320

Fred's Pharmacy

195 North 641

Camden

38320

1323

Fred's Pharmacy

109 Chevy Lane Suite B

Bunkie

71322

1340

Fred's Pharmacy

1110 Hwy 13 N. Ste #5

Columbia

39429

1355

Fred's Pharmacy

24 Camden Bypass

Camden

36726

1358

Fred's Pharmacy

101 North Webster Street

Cuthbert

39840

1360

Fred's Pharmacy

450 Highway 72 West

Collierville

38017

1363

Fred's Pharmacy

21665 Hwy 25

Columbiana

35051

1380

Fred's Pharmacy

425 West 7th Street

Columbia Plaza S/C

Columbia

38401

1385

Fred's Pharmacy

409 W. Main Street

Clarksville

72830

1393

Fred's Pharmacy

15 Colbert Business Pkwy. W

Colbert

30628

1400

Fred's Pharmacy

9810 Highway 57 South

Counce

38326

1405

Fred's Pharmacy

5316 US Hwy 17 North

P.O. Box 1038

Darien

31305

1420

Fred's Pharmacy

808 West Collin RayeDr

Dequeen

71832

1430

Fred's Pharmacy

340 Virginia Avenue

Daleville

36322

1440

Fred's Pharmacy

1560 Donelson Parkway

Dover

37058

1460

Fred's Pharmacy

409 West 3rd Street

Donalsonville

39845

1470

Fred's Pharmacy

33674 Highway 12

Durant

39063

1478

Fred's Pharmacy

122 Hillcrest Parkway

Dublin

31021

1488

Fred's Pharmacy

25096 Hwy 51

Crystal Springs

39059

1490

Fred's Pharmacy

8487 Highway 22

Dresden

38225

1495

Fred's Pharmacy

93 Bushrod Johnson Ave.

Chickamauga

30707

1503

Fred's Pharmacy

1200 West Church Street

Alamo

38001

1510

Fred's Pharmacy

5011 Fourth Ave.

Eastman

31023

1515

Fred's Pharmacy

1021 US Hwy 45 North

Eldorado

62930

1518

Fred's Pharmacy

156 Wilford Ash Pkwy

Cleveland

30528

1520

Fred's Pharmacy

1960 Veterans Memorial Blvd.

Eupora

39744

1525

Fred's Pharmacy

2200 West Laurel Ave

Eunice

70535

1533

Fred's Pharmacy

5604 Hwy 3

Benton

71006

1535

Fred's Pharmacy

802 Forrest Ave

East Brewton

36426

1538

Fred's Pharmacy

705 Central Drive

East Dublin

31027

1540

Fred's Pharmacy

996 Hwy 203

Elba

36323

1550

Fred's Pharmacy

5897 East Main Street

Erin

37061

1560

Fred's Pharmacy

450 West Front Street

Evergreen

36401

1570

Fred's Pharmacy

2415 Fairview Blvd.

Fairview

37062

1588

Fred's Pharmacy

441 N. Fourth Street

Baldwyn

38824

1605

Fred's Pharmacy

1521 Jefferson Davis Hwy

Camden

29020

1608

Fred's Pharmacy

611 US Hwy 65 South, Suite A

Dumas

71639

1620

Fred's Pharmacy

2227 North Washington

Forrest City

72335

1628

Fred's Pharmacy

733 Lawrence Street

Etowah

37331

1630

Fred's Pharmacy

237 Woodland Drive

Forest

39074

1638

Fred's Pharmacy

505 US Hwy 80 West Ste. A

Demopolis

36732

1640

Fred's Pharmacy

1409 Adams Street, Suite 1A

Fulton

38843

1660

Fred's Pharmacy

1311 North Charlyne

Brinkley

72021

1663

Fred's Pharmacy

800 North Cross Street

Albany

42602

1665

Fred's Pharmacy

708 Washington Street

Franklinton

70438

1675

Fred's Pharmacy

4150 Florence Blvd.

Florence

35634

1683

Fred's Pharmacy

821 South Main Street

Church Point

70525

1700

Fred's Pharmacy

101 Mansker Drive

Flora

39071

1710

Fred’s Pharmacy

228 West Hwy 30

Gonzales

70737

1713

Fred’s Pharmacy

685 Hwy 106 West

P.O. Box 130

Georgiana

36033

1718

Fred’s Pharmacy

57 South Broadview

P.O. Box 1102

Greenbrier

72058

1723

Fred's Pharmacy

1207 South Meridian Street

Greenfield

38230

1735

Fred's Pharmacy

813 W. Park Ave.

Greenwood

38930

1740

Fred's Pharmacy

420 West Main St

Gallatin

37066

1745

Fred's Pharmacy

2616 Hwy 82 E.

Greenville

38703

1753

Fred's Pharmacy

2616 Highway 82 E.

Greenwood

38930

1760

Fred's Pharmacy

9720 Hwy 79

Haynesville

71038

1765

Fred's Pharmacy

535 West Main

Henderson

38340

1773

Fred's Pharmacy

6027 US Hwy 67

Haskell

72015

1783

Fred's Pharmacy

106 Jimmy Martin Circle

Gaston

29053

1790

Fred's Pharmacy

06 East Commerce St

Hernando

38632

1800

Fred's Pharmacy

226 Broadway

Hartsville

37074

1805

Fred's Pharmacy

308 South 7th Street

Heber Springs

72543

1810

Fred's Pharmacy

398 Hwy 149

Clarksville

37040

1823

Fred's Pharmacy

5266 Old Hwy 11 Suite 160

Hattiesburg

39402

1825

Fred's Pharmacy

1075 Highway 80 East

Haughton

71037

1830

Fred's Pharmacy

534 Bell Creek Road

Hiawassee

30546

1838

Fred's Pharmacy

80 Oak Street

Hampton

30228

1840

Fred's Pharmacy

3317 Lorna Road

Hoover

35216

1845

Fred's Pharmacy

615 Highway 62/65 N.

Harrison

72601

1860

Fred's Pharmacy

535 High Street

Huntingdon

38344

1865

Fred's Pharmacy

1301 North Illinois Avenue

Harrisburg

72432

1870

Fred's Pharmacy

2549 North Central

Humboldt

38343

1880

Fred's Pharmacy

#2 Forest Park Ave

Holiday Island

72631

1893

Fred's Pharmacy

905 N. Pontotoc Street

Houston

38851

1905

Fred's Pharmacy

1000 Broadway DrSte 50

Hattiesburg

39401

1907

Fred's Pharmacy

700 N. Main Street

Hamburg

71646

1910

Fred's Pharmacy

615 Hwy 25 South

Iuka

38852

1913

Fred's Pharmacy

518 E. Greer Street

Honea Path

29654

1920

Fred's Pharmacy

210 Highway 82 West

Indianola

38751

1928

Fred's Pharmacy

14916 Hwy 16 West

DeKalb

39328

1935

Fred's Pharmacy

2094 NE E Wallace Blvd

Ferriday

71334

1958

Fred's Pharmacy

7657 Hwy 70

Bartlett

38133

1963

Fred's Pharmacy

502 East Happy Valley St.

Cave City

42127

1965

Fred's Pharmacy

1181 Main Street

Munfordville

42765

1968

Fred's Pharmacy

1600 South Colorado Street

Greenville

38703

1990

Fred's Pharmacy

225 Meadowbrook Road

Jackson

39206

1995

Fred's Pharmacy

540 Raymond Road

Jackson

39204

1998

Fred's Pharmacy

902 West Main Street

Homer

71040

2003

Fred's Pharmacy

812 Veterans Drive

Carencro

70520

2013

Fred's Pharmacy

1898 Spillway Rd.

Brandon

39047

2015

Fred's Pharmacy

2308 South Caraway Rd

Jonesboro

72401

2018

Fred's Pharmacy

265 Industrial RD.

Greensburg

42743

2020

Fred's Pharmacy

4212 East Johnson Street

Jonesboro

72401

2028

Fred's Pharmacy

1693 Hwy 90

Gautier

39553

2040

Fred's Pharmacy

428 S James Street

Jacksonville

72076

2055

Fred's Pharmacy

650 West Cherry Street

Jesup

31545

2058

Fred's Pharmacy

500 US Hwy 19 South

Camilla

31730

2073

Fred's Pharmacy

400 W. McKinley Ave.

Haughton

71037

2083

Fred's Pharmacy

200 Hospital Drive

Cherokee Village

72542

2085

Fred's Pharmacy

1102 South Main Street

Hartford

42347

2088

Fred's Pharmacy

1200 N. McKenzie Street

Foley

36535

2090

Fred's Pharmacy

5590 Barksdale Blvd.

Bossier City

71112

2098

Fred's Pharmacy

15 East Stonewall Rd.

Byhalia

38611

2105

Fred's Pharmacy

480 Nelson Blvd.

Kingstree

29556

2110

Fred's Pharmacy

340 Hwy 12 West

Kosciusko

39090

2123

Fred's Pharmacy

715 First Avenue

Kinder

70648

2128

Fred's Pharmacy

718 Athens Road

Lexington

30648

2133

Fred's Pharmacy

1705 Philema Road South

Albany

31701

2145

Fred's Pharmacy

15700 Arch Street

Little Rock

72206

2150

Fred's Pharmacy

534 N. Military Street

Loretto

38469

2155

Fred's Pharmacy

1109 Scottsville Road

LaFayette

37083

2165

Fred's Pharmacy

313 Patton Ave

LaFayette

30728

2175

Fred's Pharmacy

301 Yazoo Street

Lexington

39095

2185

Fred's Pharmacy

890 Overton Plaza

Livingston

38570

2208

Fred's Pharmacy

200 Spartanburg Hwy

Lyman

29365

2210

Fred's Pharmacy

502 South Church Street

Louisville

39339

2213

Fred's Pharmacy

119 Highway 1 Bypass

Louisville

30434

2215

Fred's Pharmacy

308 North Squirrel Hollow Drive

P.O. Box 368

Linden

37096

2220

Fred's Pharmacy

230 East Gay Street

Lebanon

37087

2228

Fred's Pharmacy

11299 Hwy 63 South

Lucedale

39452

2230

Fred's Pharmacy

1700 Simpson Hwy 49 Suite 1

Magee

39111

2243

Fred's Pharmacy

59 Frontage Road

P.O. Box 730

Macon

39341

2245

Fred's Pharmacy

5028 South First Street

Milan

38358

2255

Fred's Pharmacy

829 W. Main Street

P.O. Box 643

Monteagle

37356

2260

Fred's Pharmacy

601 N St Joseph Hwy 9

Morrilton

72110

2270

Fred's Pharmacy

110 North Main Street

Malvern

72104

2280

Fred's Pharmacy

438 South Alabama St

Marianna

72360

2283

Fred's Pharmacy

1208 Homer Rd.

Minden

71055

2285

Fred's Pharmacy

4280 Getwell Road

Memphis

38118

2295

Fred's Pharmacy

2695 Hwy 77

Marion

72364

2305

Fred's Pharmacy

5016 Summer Ave

Memphis

38122

2325

Fred's Pharmacy

1042 Highland Circle

Mountain Home

72653

2333

Fred's Pharmacy

899 Hwy 171 North

Lake Charles

70611

2335

Fred's Pharmacy

522 Lincoln Road

East Monroe

71203

2348

Fred's Pharmacy

213 West Randolph Street

P.O. Box 28

McLeansboro

62859

2350

Fred's Pharmacy

165 Bessemer Super Hwy

Midfield

35228

2355

Fred's Pharmacy

1701 North 18th Street

Monroe

71203

2360

Fred's Pharmacy

87 South Main Street

Mckenzie

38201

2365

Fred's Pharmacy

1509 Hwy 84 West

P.O. Box 2009

Monticello

39654

2370

Fred's Pharmacy

406 Hwy 425 South

Monticello

71655

2375

Fred's Pharmacy

912 North Chancery Street

McMinnville

37110

2385

Fred's Pharmacy

156 8th Street

Helena

31037

2395

Fred's Pharmacy

3050 Simpson Highway 13

Mendenhall

39114

2405

Fred's Pharmacy

5186 Hwy 80

Morton

39117

2408

Fred's Pharmacy

1318 S. Hwy 21 Bypass

Monroeville

36460

2410

Fred's Pharmacy

126 West Main Street

New Albany

38652

2430

Fred's Pharmacy

304 Northside Drive

Newton

39345

2438

Fred's Pharmacy

47950 US Hwy 78

Lincoln

35096

2440

Fred's Pharmacy

614 South Main Street

Nashville

71852

2445

Fred's Pharmacy

31 Sgt. Prentiss Drive #4

Natchez

39120

2460

Fred's Pharmacy

1164 Highway 133 North

North Crossett

71635

2468

Fred's Pharmacy

7122 Will Robbins Hwy

P.O. Box 45

Nettleton

38858

2473

Fred's Pharmacy

67 Watson Dr.

Mantachie

38855

2483

Fred's Pharmacy

905 West Main Street

Marion

62959

2485

Fred's Pharmacy

951 Main Street

Leakesville

39451

2490

Fred's Pharmacy

601 S. Mason Street

Mount Vernon

30445

2498

Fred's Pharmacy

739 Highway 165 S.

Oakdale

71463

2500

Fred's Pharmacy

7105 Cockrum Street

Olive Branch

38654

2508

Fred's Pharmacy

3176 Bienville Blvd.

Ocean Springs

39564

2520

Fred's Pharmacy

1930 University

Oxford

38655

2523

Fred's Pharmacy

2601 South Main Street

Moultrie

31768

2528

Fred's Pharmacy

652 Hwy 365

Mayflower

72106

2533

Fred's Pharmacy

511 West Monroe Avenue

Okolona

38860

2538

Fred's Pharmacy

2932 Hwy 49 S.

Florence

39073

2543

Fred's Pharmacy

118 Robert B Lee Drive

Leesburg

31763

2548

Fred's Pharmacy

700 North Main Street

Mt. Pleasant

38474

2550

Fred's Pharmacy

1310 West Morton

Oakland City

47660

2553

Fred's Pharmacy

224 E. 4th Street

Ocilla

31774

2555

Fred's Pharmacy

850 Volunteer Drive

Paris

38242

2558

Fred's Pharmacy

7965 E. Shelby Drive

Memphis

38125

2560

Fred's Pharmacy

7143 Winchester Road

Memphis

38125

2563

Fred's Pharmacy

6500 Quince Road

Memphis

38119

2565

Fred's Pharmacy

10710 Greenwell Springs Road

Baton Rouge

70814

2568

Fred's Pharmacy

6311 Hwy 1 S.

Brusly

70719

2570

Fred's Pharmacy

3857 St. Marys Rd

Columbus

31906

2575

Fred's Pharmacy

1388 South Main Street

Poplarville

39470

2578

Fred's Pharmacy

2511 Ingalls Ave.

Pascagoula

39567

2590

Fred's Pharmacy

3499 Main Street

P.O. Box 742

Pikeville

37367

2595

Fred's Pharmacy

198 North Curtis

Pea Ridge

72751

2598

Fred's Pharmacy

1290 Lamar Ave.

Memphis

38104

2613

Fred's Pharmacy

404 Second Street

Pelahatchie

39145

2615

Fred's Pharmacy

303 East Main Street

Piggott

72454

2620

Fred's Pharmacy

235 George Wallace Drive

Pearl

39208

2630

Fred's Pharmacy

714 Pecan Ave. Ste # 1

Philadelphia

39350

2640

Fred's Pharmacy

170 Hwy 15 North P. O. Box 824

Pontotoc

38863

2643

Fred's Pharmacy

4628 Hwy 28 East

Pineville

71360

2645

Fred's Pharmacy

114 West Knight Street

Portland

37148

2650

Fred's Pharmacy

2809 S. Camden Rd.

Pine Bluff

71603

2653

Fred's Pharmacy

5751 Shed Rd.

Bossier City

71111

2658

Fred's Pharmacy

312 Main Street

Baker

70714

2660

Fred's Pharmacy

1670 West College Street

Pulaski

38478

2670

Fred's Pharmacy

1635 Columbia Ave. P. O. Box 1106

Prentiss

39474

2678

Fred's Pharmacy

5907 Old Mooringsport Road

Shreveport

71107

2695

Fred's Pharmacy

509 Hwy 589

Purvis

39475

2748

Fred's Pharmacy

403 Front Street

Richton

39476

2750

Fred's Pharmacy

525 4th Avenue S.E.

P.O. Box 2004

Red Bay

35582

2753

Fred's Pharmacy

134 7th Street NW

Reform

35481

2758

Fred's Pharmacy

16100 Hwy 72

Rogersville

35652

2780

Fred's Pharmacy

20917 Hwy 61 N

Rolling Fork

39159

2783

Fred's Pharmacy

1876 E. Blackstock Rd.

Roebuck

29376

2788

Fred's Pharmacy

2866 Bienville Hwy

Ringgold

71068

2798

Fred's Pharmacy

2019 Farmerville Hwy

Ruston

71270

2805

Fred's Pharmacy

3303 W Main Place Skyline S/C Hwy 64

Russellville

72801

2845

Fred's Pharmacy

290 South Washington

Ripley

38063

2850

Fred's Pharmacy

706 City Avenue North

Ripley

38663

2870

Fred's Pharmacy

111 Willowbrook Drive

P.O. Box 1469

Saltillo

38866

2883

Fred's Pharmacy

159 West Turntable Drive

Sparta

38583

2890

Fred's Pharmacy

801 South Arkansas Bldg #2

Springhill

71075

2895

Fred's Pharmacy

4233 Rocky Branch Rd

P.O. Box 707

Sumrall

39482

2900

Fred's Pharmacy

401 East Lee Street

Sardis

38666

2915

Fred's Pharmacy

2706 East Race Street

Searcy

72143

2925

Fred's Pharmacy

624 South Rock Street

Sheridan

72150

2935

Fred's Pharmacy

102 Norfleet Drive

Senatobia

38668

2945

Fred's Pharmacy

8912 Office Park Plaza Dr

Southaven

38671

2953

Fred's Pharmacy

710 Church Road

Southaven

38671

2955

Fred's Pharmacy

399 Mulberry Ave

Selmer

38375

2958

Fred's Pharmacy

1567 N. Cherokee Road

Social Circle

30025

2960

Fred's Pharmacy

605 S Jackson

Starkville

39759

2970

Fred's Pharmacy

Highway 64 West

P.O. Box 7

Somerville

38068

2980

Fred's Pharmacy

1309 North Lincoln Hwy 425 North

Star City

71667

2990

Fred's Pharmacy

7130 U.S. Hwy 61

P.O. Box 2668

St. Francisville

70775

3005

Fred's Pharmacy

4828 Shreveport Hwy

Pineville

71360

3010

Fred's Pharmacy

730 Everett Street

Tiptonville

38079

3045

Fred's Pharmacy

809 Varsity Drive

Tupelo

38801

3048

Fred's Pharmacy

1776 McCullough Blvd.

Tupelo

38801

3050

Fred's Pharmacy

2045 S. Highway 45

Trenton

38382

3053

Fred's Pharmacy

402 Pine Street

Taylorsville

39168

3055

Fred's Pharmacy

1401 Woodmont Drive

Tuscumbia

35674

3063

Fred's Pharmacy

1317 East Main Street

Tupelo

38804

3070

Fred's Pharmacy

3000 Plaza Drive

Tylertown

39667

3073

Fred's Pharmacy

604 Northside Drive

Statesboro

30458

3083

Fred's Pharmacy

2110 Goodman Road East

Southaven

38671

3108

Fred's Pharmacy

422 W. Cunningham Ave.

Terry

39170

3145

Fred's Pharmacy

12101 Hwy 57

Vancleave

39565

3170

Fred's Pharmacy

181 W. Carolina Ave.

P.O. Box 1326

Varnville

29944

3175

Fred's Pharmacy

9574 Hwy 18

Vernon

35592

3178

Fred's Pharmacy

10 Eagle Street

Vilonia

72173

3185

Fred's Pharmacy

1514 Sampson Street

Westlake

70669

3210

Fred's Pharmacy

409 Duncan Street

Water Valley

38965

3220

Fred's Pharmacy

4928 Highway 70

White Bluff

37187

3225

Fred's Pharmacy

307 Highway 64 East

Waynesboro

38485

3230

Fred's Pharmacy

2001 West Court Street

Winnfield

71483

3235

Fred's Pharmacy

116 2nd Street South

Wiggins

39577

3240

Fred's Pharmacy

603 Middleton Road

Winona

38967

3245

Fred's Pharmacy

826 N Sebastian Street

West Helena

72390

3250

Fred's Pharmacy

5305 New Hwy 31 E. P. O. Box 367

Westmoreland

37186

3255

Fred's Pharmacy

2615 N. 7th St Westgate S/C

West Monroe

71291

3270

Fred's Pharmacy

207 Washington Street

West Monroe

71292

3275

Fred's Pharmacy

515 West Main Street Ste. A

Waverly

37185

3280

Fred's Pharmacy

297 South Hwy 20

Pelzer

29669

3300

Fred's Pharmacy

1755 Decherd Blvd

Decherd

37324

3310

Fred's Pharmacy

507 W. Pine Street

Warren

71671

3340

Fred's Pharmacy

8515 Dollar Way Road

WhiteHall

71602

3350

Fred's Pharmacy

505 Laurens Rd.

Woodruff

29388

3365

Fred's Pharmacy

1130 South McCrary

Woodbury

37190

3368

Fred's Pharmacy

211 U.S. Hwy 61 South

Woodville

39669

3370

Fred's Pharmacy

605 North Main Street

Wrens

30833

3410

Fred's Pharmacy

320 Highway 14 South

P.O. Box 530

Yellville

72687

3415

Fred's Pharmacy

9215 Hwy 19

Zebulon

30295

3517

Fred's Pharmacy

1015 Delaware Avenue Suite A

McComb

39648

3533

Fred's Pharmacy

622 W. Market Street Suite 200

Bolivar

38008

3543

Fred's Pharmacy

2012 E. Shiloh Rd.

Corinth

38834

3553

Fred's Pharmacy

224 S. Three Notch Street

Andalusia

36420

3563

Fred's Pharmacy

132 South Main Street

Brundidge

36010

3568

Fred's Pharmacy

1128 Second Ave. NE

Fayette

35555

3578

Hudson Drug Store

600 Nuckolls Rd.

Bolivar

38008

3580

Burden Drug Center

418A West Central Avenue

Jamestown

38556

3582

Fred's Pharmacy

1524 Hospital Avenue

Franklin

70538

3584

Fred's Pharmacy

129 N. Pine Street

DeQuincy

70633

3586

Family Pharmacy

200 Marion Ave.

McComb

39648

3588

Fred's Pharmacy

808 NC Hwy 69

Hayesville

28904

3607

Fred's Pharmacy

101 W. Main Street

Easley

29640

3633

Fred's Xpress

40474 Hwy 45 S.

P.O. Box 60

Hamilton

39746

3637

Fred's Xpress

814 20th Street

Haleyville

35565

3643

Fred's Pharmacy

202 E. Starling St.

Greenville

38701

3647

Fred's Pharmacy

1221 East Union

Greenville

38703

3650

Fred's Xpress

2005 North Pine Ave. P. O. Box 605

Heidelberg

39439

3653

Fred's Pharmacy

1427 South Main Street

Greenville

38701

3657

Fred's Pharmacy

1467 Hwy 1 South

Greenville

38701

3665

Fred's Xpress

118 Humphrey

P.O. Box 346

IttaBena

38941

3700

Fred's Xpress Pharmacy

1261 Military Street S.

Hamilton

35570

3709

Fred's Pharmacy

415 Mott Street

New Madrid

63869

3713

Fred's Pharmacy

1301 N. Roan Street

Johnson City

37601

3715

Fred's Pharmacy

115 Alabama Street

Columbus

39702

3737

Fred's Pharmacy

8525 US Hwy 60 West

Lewisport

42351

3763

Fred's Pharmacy

7818 Highway 613

Moss Point

39563

3773

Fred's Pharmacy

21361 Whyte Hardee Boulevard

P.O. Box 613

Hardeeville

29927

3783

Fred's Pharmacy

40 West Main Street

P.O. Box 910

Old Fort

28762

3793

Fred's Pharmacy

7072 Hwy 64

Oakland

38060

3860

Fred's Xpress

705 Plank Road Hwy 128 P. O. Box 5

St. Joseph

71366

3863

Fred's Pharmacy

405 North Main Street

Opp

36467

3867

Lovelace Drugs

801 Washington Avenue

Ocean Springs

39564

3870

Fred's Xpress

201 Lake View Drive Ste C

P. O. Box 189

Somerville

38068

3873

Fred's Pharmacy

205 N. Main Street

Sweetwater

37874

3877

Fred's Pharmacy

541 Jackson Blvd

Tarrant

35217

3885

Fred's Pharmacy

251 S. Washington

Ripley

38063

3887

Fred's Xpress

2173 S. Lamar Blvd

Oxford

38655

3900

C & G Pharmacy

9311 Jefferson Hwy

River Ridge

70123

3903

Fred's Pharmacy

103 Hwy 48

Summerville

30747

3905

Fred's Pharmacy

4097 West Main St.

Soperton

30457

3910

Fred's Pharmacy

300 N. Congress Blvd.

Smithville

37166

3915

Fred's Pharmacy

101 West Commercial Ave.

Monterey

38574

3917

Fred's Pharmacy

640 Hwy 114 South

Scotts Hill

38374

3920

Fred's Xpress

801 East Jackson Street

P.O. Box 301

Union

39365

3923

Fred's Pharmacy

6216 Highway 10

P.O. Box 70

Greensburg

70441

3925

Fred's Xpress

101 West Sweet Potato Ave.

P.O. Box 398

Vardaman

38878

3935

Fred's Xpress

502 West St. Louis Street

West Frankfort

62896

3937

Fred's Pharmacy

734 N. Greenwood Ave.

Ware Shoals

29692

3947

Fred's Pharmacy

717 Avenue G

Kentwood

70444

3957

Fred's Pharmacy

303 N. Hood Street

Lake Providence

71254

3959

Fred's Pharmacy

420 N. Main Street

Franklin

42134

3989

Big D's Discount Drugs

38 Oak Street

Jackson

30233

3991

Fred's Pharmacy

1850 Redmond Circle NW Ste. 200

Rome

30165

3993

Fred's Pharmacy

11997 S. Main Street

Trenton

30752

6015

Getwell Drug & Dollar

700 S. Main Street

Middleton

38052

6017

Getwell Drug & Dollar

6 East Second Ave.

Glenwood

30428

6019

Getwell Drug & Dollar

302 N. Main Street

Leland

38756

6021

Getwell Drug & Dollar

5705 Hwy 278

Sulligent

35586

6025

Getwell Drug & Dollar

206 Greensboro Ave.

Eutaw

35462

6027

Getwell Drug & Dollar

509 N. Main Street

Tompkinsville

42167

7600

Fred's Pharmacy

1039 Martin Luther King Drive

Marks

38646

7680

Fred's Pharmacy

626 22nd Avenue South

Meridian

39301

7780

Fred's Pharmacy

501 Tennessee Ave North

Parsons

38363

7840

Fred's Pharmacy

125 Main Street

Quitman

39355

8075

Fred's Pharmacy

2431 Clay Street

Vicksburg

39183

EXHIBIT B

[***]

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

EXHIBIT C

[***]

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

EXHIBIT D

Cardinal Health Pharmaceutical Distribution

Returned Goods Policy

Products in “merchantable condition” (as defined below) and originally purchased from Cardinal Health may generally be returned to the customer’s servicing Cardinal Health distribution center in accordance with, and subject to, the terms and conditions of this policy.

Return Made Within:	Normal Credit Amount:

[***]	[***]

Returns made greater than 12 months from the invoice date will not be accepted. No credit will be issued, and the product will be returned to customer.

“Merchantable condition” will be determined by Cardinal Health based upon its ability to return the product to its inventory for resale in the normal course of its business, without special preparation, testing, handling, or expense and will exclude the following:

A. Any product purchased from any supplier other than Cardinal Health.

B. Any product which has been used or opened; is a partial dispensing unit or unit of sale; is without all original packaging, labeling, inserts, or operating manuals; or that is stickered, marked, damaged, defaced, or otherwise cannot readily be resold by Cardinal Health for any reason.

C. Short-dated (less than seven (7) months expiration dating), outdated, or seasonal products and products purchased on a “special order” basis, including non-stock and drop-shipped products.

D. Any product not intended for return to a wholesaler in accordance with the return policies of the applicable manufacturer.

E. Any product listed by any state or federal regulatory agency as a high-risk pedigree item that is returned without a valid invoice number that cannot otherwise be verified by Cardinal Health.

Unmerchantable Products

Any product not eligible for return in accordance with this policy (i.e., the product is not in “merchantable condition” as set forth above) will require return directly to the manufacturer. If any such products are returned to Cardinal Health, they will be returned to customer and no credit will be issued. Stickered products will be handled as follows: Cardinal Health will remove the sticker, retain the product and credit the customer (as applicable pursuant to this policy). If the product is damaged during the removal of the sticker, no credit will be issued to customer and the product will be returned to customer.

Notwithstanding the foregoing, in any case where Cardinal Health accepts the return of such products and agrees to return such products to the applicable manufacturer on behalf of customer (provided the manufacturer allows the return of such products), any credit issued to customer will be determined by Cardinal Health.

Required Return Documentation

Prior to returning any product to Cardinal Health, customer must execute and deliver to Cardinal Health a Cardinal Health Returned Goods Authorization Ongoing Assurance verifying that all returned products have been kept under proper conditions for storage, handling, and shipping.

All requests for credit must be submitted via EOE, Cardinal.com, CardinalCHOICE®, or approved EDI interface.

A fully completed and signed Merchandise Return Authorization Form (the “MRA Form”)must accompany all products to be returned. Note: An MRA Form cannot be fully completed without a valid invoice number. The request for an MRA Form will be rejected if a valid invoice number is not provided.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

Third Party Return Processors

At the request of customer, Cardinal Health will work with third party return processors for returns of unmerchantable products. Such arrangement will be subject to mutually agreed upon terms and conditions, to include administrative fees payable to Cardinal Health.

Controlled Substances

Credit for the return of controlled substances requires a separate MRA Form and such returns must comply with all applicable laws, rules and regulations in addition to the terms and conditions of this policy.

Refrigerated, Chemotherapy and Hazardous Products

Refrigerated, chemotherapy and hazardous products must be returned in packaging that complies with applicable regulatory requirements. All such products that are not returned in packaging that complies with applicable regulatory requirements will be considered damaged and unsaleable. This product will be destroyed and no credit will be issued to customer.

Shorts and Damaged Products

Claims of order shortages (e.g., products invoiced but not received), filling errors and damage must be reported within two (2) business days from the applicable invoice date, or no credit will be issued. Returns of damaged products or products shipped in error must be received by the Cardinal Health servicing distribution center within ten (10) business days from the applicable invoice date, or no credit will be issued. Controlled substance shortage claims must be reported immediately per DEA requirements. In all instances, credit will not be issued until verification of the claim by Cardinal Health.

No deductions may be taken by customer until a valid credit memo is issued by Cardinal Health.

Shipping of Return Products

Products to be returned must be placed in a proper shipping container and signed for by the driver when picked up.

Signed MRA Forms shall be included in totes with the returned products. Only one (1) MRA Form shall be included in each tote.

If the MRA Form is not signed, no credit will be issued, and the products will be returned to the customer.

If the MRA Form is not inside the tote with the returned products, Cardinal Health will attempt to identify the customer that returned the products. The tote will then be returned to the customer with a request for a completed MRA Form(s).

No credit will be issued for products returned but not listed on the accompanying MRA Form. Such products will be returned to the customer.

All MRA Forms will be reviewed by Cardinal Health for compliance with this policy. The acceptability and valuation of any return is at the reasonable discretion of Cardinal Health.

Products must be returned to the customer’s servicing Cardinal Health distribution center within thirty (30) days from the date of customer’s request for an MRA Form, or no credit will be issued.

In addition to the requirements set forth in this policy, Customer shall comply with all return procedures required by the Cardinal Health servicing distribution center.

Other Restrictions

If the Buyer’s returns during a calendar quarter exceed 8.00% of the Buyer’s aggregate Net Purchases under the Agreement during the calendar quarter, Cardinal Health may reasonably increase the restocking fees under this policy until such time as the Buyer’s returns decrease to levels.

This policy is subject to change without notice by Cardinal Healthas maybe deemed reasonably necessary or appropriate to comply with applicable federal and/or state regulations, FDA guidelines, state law, and other restrictions applicable to returned products.

EXHIBIT E

Returned Goods Policy for Unmerchantable Product

General Policy

Cardinal Health and Buyer have agreed to pursue a return process whereby Cardinal Health will assist Buyer in receiving value for certain unmerchantable Product. Product which may not be returned pursuant to Cardinal Health's Standard Returned Goods Policy may be returned to an authorized manufacturer through Inmar (the “Third Party”) pursuant to this policy. Products which are “unmerchantable” include, but are not limited to, those items which Cardinal Health determines are not in “merchantable condition” (as defined in Cardinal Health’s Returned Goods Policy), and the following:

A. Any item which has been used or opened, is a partial dispensing unit or unit of sale, is without all original packaging, labeling, inserts or operating manuals, or that is stickered, marked, damaged, defaced or otherwise cannot readily be resold by Cardinal Health for any reason.

B. Short-dated (less than seven (7) months expiration dating), outdated, or seasonal product and items purchased on a “special order” basis, including non-stock and drop ship items.

C. Any sterile or refrigerated Merchandise, unless Cardinal Health is specially assured that such Merchandise was properly stored and protected at all times and such Merchandise is returned separately in a package marked as such and accompanied by a separate credit request form.

D. Any low stability product, including Epogen™, Eminase™, or other products which are usually sensitive to temperature and handling conditions.

E. Any product not intended for return to a wholesaler in accordance with the return policies of the applicable manufacturer.

Product in “unmerchantable condition” may generally be returned to vendors (a) with which Cardinal Health has a current relationship, (b) are not either insolvent or subject to a petition in bankruptcy, or (c) which do not have an outstanding balance due Cardinal Health at the date on which such Product is submitted for return (each such vendor, an “Active Manufacturer”). Unmerchantable Product may only be returned through the Third Party in accordance with the terms and conditions described in this policy. Cardinal Health will provide the Third Party with a current list of all Active Manufacturers. The Third Party must enter into a Confidentiality Agreement, in a form acceptable to Cardinal Health, prior to accepting any returns from Buyer.

Procedures for Returns

Buyer and Cardinal Health will notify each Active Manufacturer of their relationship as buyer/wholesaler. Buyer will send all returns of unmerchantable Product to the Third Party. The amount identified by the Third Party as the amount to which Buyer is entitled in exchange for the return will be determined in accordance with the return policy of the applicable Active Manufacturer as described in the Third Party’s database. Buyer will instruct the Third Party to provide Cardinal Health with documentation (either in paper or electronic format) to substantiate each debit memo submitted to Active Manufacturers on behalf of Buyer.

Buyer will instruct each Active Manufacturer to issue any and all credits to Cardinal Health for Merchandise that was purchased by Buyer from Cardinal Health and is returned through the Third Party in unmerchantable condition, and to reference the debit memo number corresponding to the debit memo prepared by the Third Party. Buyer and Cardinal Health acknowledge that Buyer will handle, without Cardinal Health’s involvement, all matters relating to returns to manufacturers with which Buyer has a direct contracting relationship (whether or not such manufacturer is an Active Manufacturer).

Within thirty (30) days after Cardinal Health’s receipt of a report from the Third Party that details the debit memoranda submitted by the Third Party to Active Manufacturers during the applicable period, Cardinal Health shall pay to Buyer an amount equal to[***] of the returnable value of each debit memo submitted by the Third Party to an Active Manufacturer on behalf of Buyer during the applicable period. Each such payment shall be made to Buyer by Cardinal Health in the form of credit memo. The parties hereby expressly acknowledge and agree that, following such payment by Cardinal Health to Buyer for a given debit memo: (i) Buyer shall not be entitled to receive any credits that Cardinal Health receives from the Active Manufacturers with respect to such returns and (ii) that Buyer shall not be liable in the event that Cardinal Health does not receive credit (or adequate credit) from a given Active Manufacturer with respect to a given debit memo.

If Buyer directly receives any value from a manufacturer for Merchandise for which Buyer has received value from Cardinal Health under this Policy, Buyer shall provide written notice of such value to Cardinal Health within five (5) business days after receipt. Any such written notice shall identify: (i) the products for which value was received, (ii) the value received by Buyer for each such product, and (iii) the debit memo number corresponding to the original debit memo prepared by the Third Party that contained the products for which value was received. In such an instance, the amount of the value directly received by Buyer shall be deducted from the amount of the immediately following Third Party returns credit provided to Buyer by Cardinal Health under this Policy.

Cardinal Health will pay the Third Party directly for the Third Party’s fees associated with returns made by Buyer under this Returned Goods Policy for Unmerchantable Product. Buyer will promptly notify Cardinal Health of any material revisions to the agreement between Buyer and the Third Party.

To the extent that Buyer desires to return Product to a supplier which is not an approved Active Manufacturer, Cardinal Health will credit Buyer’s account only after Cardinal Health receives payment either through check, money order or wire transfer. If check, wire transfer or any other payment method is employed which does not guarantee Cardinal Health immediately available funds, Cardinal Health will credit Buyer’s account only upon receiving such funds in Cardinal Health’s account.

Buyer may not offset payments due from Buyer to Cardinal Health for Product purchases against any amounts Buyer deems are due and owing pursuant to this Third Party Returned Goods Policy.

Cardinal Health may modify this Third Party Returned Goods Policy in its reasonable discretion from time to time.

[***] Indicates portions of this exhibit that have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

EXHIBIT F

Compliance Representations and Warranties for Customers

______________________________ [Insert full, legal name of Customer] (“Customer”) represents and warrants that it:

1. will abide by all applicable laws, rules, regulations, ordinances and guidance of the federal Drug Enforcement Administration (“DEA”), the states into which it dispenses or sells controlled substances and/or listed chemicals, and the states in which it is licensed, including, without limitation, all of the foregoing concerning the purchase, sale, dispensation, and distribution of controlled substances; and

2. will not dispense or sell controlled substances and/or listed chemicals if it suspects that a prescription or drug order is not issued for a legitimate medical purpose or the actions conducted on the part of the prescriber or Customer and its employees are not performed in the normal course of professional practice.

In addition, Customer warrants that it understands that Cardinal Health is required by DEA regulations to report to the DEA suspicious orders of controlled substances and listed chemicals, and Customer agrees to act in good faith in assisting Cardinal Health to fulfill its obligations. To that end, Customer agrees that it will be alert for red flags of suspicious orders and listed chemicals, including, but not limited to:

1. Numerous controlled substance prescriptions written for the same drugs, in the same quantities for the same time period by the same or different prescribers or group of prescribers for the same patient;

2. Numerous controlled substance prescriptions written for the same person or several persons by the same prescriber or group of prescribers; and

3. Numerous prescriptions written for the same patient by prescribers located in different states than the patient.

Customer agrees that if any of the above-noted or other red flags exist, it is prudent to contact the prescriber to validate the legitimacy of the prescription and/or to discontinue filling prescriptions from the prescriber, group of prescribers, or customer in question. In addition, the pharmacist should contact the State Board of Pharmacy or local DEA Diversion Field Office (see Appendix N, DEA Pharmacist’s Manual, 2010 Edition).

Customer acknowledges that Cardinal Health may provide a copy of this document to the DEA or any other state or federal regulatory agency or licensing board.

Customer hereby acknowledges and agrees that, notwithstanding any other provision herein, or any provision in any other agreement between Cardinal Health and the Customer, Cardinal Health may, in its sole discretion, immediately suspend, terminate or limit the distribution of controlled substances, listed chemicals, and other products monitored by Cardinal Health to the Customer at any time if Cardinal Health reasonably believes that the continued distribution of such products to the Customer may pose an unreasonable risk of the diversion of such products based on the totality of the circumstances and such other considerations as may be deemed relevant by Cardinal Health. In the event such action(s) occur and when requested by Buyer, Cardinal Health shall discuss with Buyer Cardinal Health’s reasons for suspending, terminating or otherwise limiting the distribution of controlled substances, listed chemicals or other products in an attempt to determine whether such restrictions may be mitigated.

The Customer further acknowledges and agrees that it will not file any claims against Cardinal Health, or any related entity, including legal and equitable claims, regarding any decision by Cardinal Health to suspend, limit or terminate its distribution of controlled substances, listed chemicals, and other products monitored by Cardinal Health to the Customer.

Agreed to by a duly authorized officer, partner, or principal of Customer:

Signature:

_________________________________________

Full Name (print):

_________________________________________

Title:

_________________________________________

Date:

__________________________________________

Please sign and return to: Cardinal Health; Attn: Anti-Diversion Group, Corporate QRA; 7000 Cardinal Place; Dublin; OH 43017 or Fax (614) 652-9631

Attached files

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