In ERDAS IMAGINE, it is easy to create vector contours, even from very dense point clouds.
On the Terrain tab, open the Terrain Prep Tool. Load in all of the LAS files (or DEMS, or ASCII files, or 3D Shapefiles) from which you want to generate contours. No need to Mosaic them together beforehand!
Next, select Process -> Surface. On the Contouring tab, check Output Contours, give the output file a base name, and click OK. The software starts by tiling out the data into manageable-sized pieces, and then creates the contours at the intervals you specified.
And you’re done!