Exhibit 10.1

AGREEMENT FOR LOGISTICS SERVICES

This Agreement for Logistics Services (this “Agreement”), executed as of this
1st day of December, 2006, is made by and between MWI Veterinary Supply Co.,
located at 651 S. Stratford Drive, Suite 100, Meridian, ID 83642 (“MWI”), and
Medical Management International, Inc., dba Banfield, The Pet Hospital, located
at 8000 NE Tillamook Street, Portland, OR 97213 (“Banfield”).  The parties agree
to the following:

1.                                       Logistics Fees.  Banfield and MWI have
agreed upon the following logistics fees to be paid by Banfield for services
performed by MWI in accordance with this Agreement (the “Logistics Fees” and
each, a “Logistics Fee”).  The respective Logistics Fees will be payable in the
circumstances described for each fee below.  The amount of each Logistics Fee as
stated below is per **.  No more than one Logistics Fee will be payable on any
**.

Order Type

 

Logistics
Fee

 

Functions Performed by MWI

 

 

 

 

 

MWI Inventory

 

$**

 

Order processing; warehouse;

(order fulfilled from MWI-owned general inventory at MWI warehouse)

 

 

 

collection

 

 

 

 

 

Toll Warehouse

 

$**

 

Order processing; warehouse;

(order fulfilled from MWI-owned inventory stocked exclusively for Banfield at
MWI warehouse)

 

 

 

collection

 

 

 

 

 

Consignment (**)

 

$**

 

Order processing; warehouse

(order fulfilled from inventory owned by Banfield or a third party, and held by
MWI at an MWI warehouse)

 

 

 

 

 

 

 

 

 

Drop Shipments

 

$**

 

Order processing; collection

(order fulfilled by direct shipment from manufacturer or supplier to Banfield,
with payment to MWI)

 

 

 

 

 

 

 

 

 

Pass-Through

 

$**

 

Order processing

(order fulfilled directly by manufacturer or supplier who bills and collects
directly from Banfield)

 

 

 

 

 

 

 

 

 

Credits

 

$**

 

Order processing; warehouse;

(applies when Banfield returns products for reasons other than MWI mis-shipment)

 

 

 

collection

 

The Logistics Fees will be invoiced and paid in accordance with Section 3
below.  The Logistics Fees will not be subject to adjustment without the mutual
written agreement of Banfield and MWI.  The above Logistic Fee pricing assumes
that MWI will provide the applicable logistics functions, as set forth in the
above schedule, for all existing Banfield practice-owned hospitals and any new
practice-owned hospitals that will be opened during the term of this Agreement. 
Such pricing also assumes that Banfield will make reasonable efforts to have
Charter Practices utilize MWI for all such functions.  Orders by Banfield
practice-owned and Charter Practice hospitals will be entered via
BanfieldDirect.com, Oracle I Procurement, or some other electronic

--------------------------------------------------------------------------------

means.  For purposes of this Agreement, “practice-owned” means those hospitals
owned and operated directly by MMI or owned and operated by A Caring Doctor,
P.C.; A Caring Doctor (Minnesota), P.A.; A Caring Doctor (New Jersey), P.C.; A
Caring Doctor (North Carolina), P.C.; or A Caring Doctor (Texas), P.C.

2.                                       Opening Order Fees and Hospital Reset
Fees.  There will be a $** fee for the special service requirements related to
the initial order for the opening of a full-service hospital, and a $**fee for
an order for a hospital reset or refurbishment with no additional Logistics Fees
(other than those stated in this agreement) in either case.  However, when
Banfield team members enter orders into BanfieldDirect.com or Oracle I
Procurement and the orders do not require special staging in an MWI warehouse,
then these special fees shall not apply to opening orders, resets and
refurbishments and the regular Logistics Fees will apply.

3.                                       Payment Terms.  MWI will extend payment
terms to Banfield of ** days from invoice date.  When using the consolidated
invoice download, the invoice date will be considered to be the date of the
consolidated invoice weekly report.  Banfield may prepay for purchases by
issuing a payment to MWI for approximately ** days of Banfield’s estimated
purchases.  **.  **.  Banfield and MWI will review and true up Banfield’s
account once each month by an additional payment from Banfield if the prepayment
was less than the actual invoice total and by a refund to Banfield if the
prepayment exceeded the actual invoice total.  Banfield agrees to make all
payments via electronic funds transfer.

4.                                       On-Site Training.  MWI will, at no cost
to Banfield, provide ongoing training at the direction of Banfield’s Senior
Director of Purchasing to Banfield team members regarding systems and procedures
for hospital ordering and inventory management.

5.                                       Ordering.  MWI, to Banfield’s
specifications, has developed and will continue to maintain, at MWI’s expense,
the Internet based order entry system BanfieldDirect.com.  Banfield may use this
system or Oracle I-procurement as its primary method of entering ** supply
orders for its hospitals.  ** orders will be placed, at the direction of
Banfield’s Purchasing team, ** each week for processing ** and shipment **,
except in cases of holidays, when shipments can be ** of the week.

6.                                       Shipping Errors.  In the event that MWI
makes a shipping error, i.e., shipping a product not ordered or shipping a
quantity of product not as ordered, MWI will not charge Banfield for the
logistics fee and applicable freight related to the incorrect shipment.  When a
call is received from a hospital and it is determined that there has been a
shipping error, MWI’s Banfield support team will re-enter an order to ship the
correct product, and at that time will issue a credit to the hospital for the
logistics fee and freight relating to the incorrect shipment, and will also
issue a credit for the logistics fee and freight that will be assessed when the
incorrect product is returned.

7.                                       Supply.  MWI realizes that Banfield
relies upon MWI as Banfield’s sole-source distributor for most products and will
therefore program its inventory system to stock the highest service level
available for all products on the Banfield formulary.  Unless MWI and Banfield
otherwise agree in writing, the “highest service level available” means, for
each product listed in Exhibit A attached hereto (as such exhibit may be amended
from time to time by mutual written agreement of MWI and Banfield) at each of
MWI’s regional warehouses, a **-day supply based on Banfield’s estimated rolling
average requirements for such product in such region over the coming ** months. 
Banfield will be provided prompt notification whenever any product listed in
Exhibit A falls below a ** day supply at any warehouse and such deficiency is
not cured within ** calendar days.  In addition MWI will stock a **-day supply
of all ** products at all times, barring delivery problems from **.  Banfield
branded items and other inventory items unique to Banfield will be segregated
and maintained in a special Banfield “virtual warehouse” at each of MWI’s
regional facilities where justified by usage and economics and be made available
only to Banfield.

2

--------------------------------------------------------------------------------

8.                                       Charter Hospitals.  MWI will offer its
services and products to each Banfield Charter Practice hospital on the terms
described in this Agreement and the Agreement for Product Purchases.  Banfield
will use all reasonable efforts to encourage Charter hospitals to (1) order all
of their products through MWI and (2) maintain confidentiality regarding terms
on which MWI’s services are provided.  MWI will use all reasonable efforts to
encourage Charter hospitals to utilize the BanfieldDirect.com ordering system or
Oracle I–procurement rather than the MWIVET.com ordering system.  MWI will
provide to Banfield each month a report listing products purchased from MWI by
Charter Hospitals that were purchased outside the Banfield purchasing system.

9.                                       Internet Reliability Report.  MWI will
provide to Banfield, each month, an Internet reliability report showing total
up-time and down-time as percentages on the days Banfield places orders (**),
and listing of any problems that have occurred during the month which may have
resulted in customer inconvenience.

10.                                 Term.  This Agreement shall be effective for
an initial term of December 1, 2006 through November 30, 2009 (the “Initial
Term”).  During the final 90 days of the Initial Term, MWI and Banfield will
analyze the fiscal results of the prior three years and agree upon any revisions
to the Logistics Fee pricing or other aspects of this Agreement (the “Review
Period”).  During this time Banfield and MWI will discuss and assess options to
reduce costs to Banfield.  If the parties reach agreement in writing upon any
adjustments to pricing or other provision of this Agreement during the Review
Period, then the term of this Agreement will continue for an additional 12
months from the end of the Initial Term.  If, before or during the first 30 days
of the Review Period either party communicates a concern or required revision in
writing and a resolution is not achieved to the mutual satisfaction of both
parties during the Review Period, this Agreement shall terminate at the end of
the Initial Term.  If no such communications are set forth in writing before or
during the first 30 days of the Review Period, this Agreement will automatically
renew for an additional 12 months from the end of the Initial Term.  This
process will continue year after year, unless MWI and Banfield cannot reach
agreement during any Review Period.

11.                                 Termination.  Notwithstanding anything in
Section 10 hereof, either party may terminate this Agreement at any time,
whether during or after the Initial Term, with or without cause, provided that
Banfield will give MWI at least one hundred fifty (150) days prior written
notice if Banfield elects to terminate and MWI will give Banfield at least one
hundred fifty (150) days prior written notice if MWI elects to terminate.  Upon
termination of this Agreement, any and all rights and obligations of the parties
under this Agreement will terminate, provided that all rights, obligations or
liabilities accrued hereunder prior to termination, and all rights or
obligations which by their nature or express duration extend beyond the
termination of this Agreement, will survive termination and continue in effect
indefinitely or for that express duration.

12.                                 Confidential Information.  Except for any
disclosure required by law, each party agrees to retain all confidential
information received from the other party in confidence, not to disclose any
such information to any other person, and not to use any such information for
its own benefit, to the other party’s detriment or for any purpose other than in
furtherance of this Agreement.  All information which either party and any of
its agents receives at any time from the other party or any of its agents shall
be deemed confidential and subject to the provisions of this Section 12, whether
the information shall be received orally, in writing, visually, by inspection of
documents, products or processes, by electronic transmission, or in any other
form or manner, excepting only information which the recipient establishes was
generally available to the public at the time of disclosure or subsequently
became generally available to the public other than as a result, directly or
indirectly, of disclosure by the recipient or its agents.  Information shall be
confidential and shall be subject to this Section 12 whether or not it is marked
or designated “confidential” at the time of disclosure.  Notwithstanding the
provisions above, the recipient may disclose confidential information to its
agents only to the limited extent necessary to carry out this Agreement and
maintain the business relationship.  The recipient shall be fully

3

--------------------------------------------------------------------------------

responsible for any use or disclosure of confidential information by any of its
agents in violation of this Section 12.

13.                                 Force Majeure.  In the event MWI shall be
unable or fail at any time to supply, or Banfield shall be unable or fail at any
time to take and purchase, any product to be sold and purchased hereunder in
consequence of fire, explosion, accident, earthquake, flood, drought, embargo,
war (whether or not declared), riot, terrorist attack, governmental act, delay
or failure of carriers, Acts of God, or any other contingency or delay or
failure or cause beyond the control of the party affected, excluding economic
conditions affecting either party, MWI shall not be liable to Banfield for
failure to supply the product, nor shall Banfield be liable to MWI for failure
to take or purchase the product, during the period of such disability or
failure.

14.                                 Notices.  Any notice or demand given by
either party to the other shall be in writing and shall be sent by courier,
certified mail, postage prepaid, return receipt requested, or fax, addressed as
follows:

If to MWI:

 

651 S. Stratford Drive,

 

If to Banfield:

 

 

 

 

 

 

 

 

8000 NE Tillamook Street

 

 

Suite 100

 

 

 

Portland, OR 97213

 

 

Meridian, ID 83642

 

 

 

Attn: Senior Director of

 

 

Attn: Director, Banfield
Accounts

 

 

 

Purchasing
Fax: 503-922-6147

 

 

Fax: 208-955-8999

 

 

 

 

 

 

 

 

 

 

 

With a copy to:

 

651 S. Stratford Drive

 

With a copy to:

 

Banfield, The Pet Hospital

 

 

Suite 100

 

 

 

 

 

 

 

 

 

 

8000 NE Tillamook Street

 

 

Meridian, ID 83642

 

 

 

Portland, OR 97213

 

 

Attn: President

 

 

 

Attn: Legal Counsel

 

 

Fax: 208-955-8999

 

 

 

Fax: 503-922-6112

 

Notice sent by courier shall be deemed effective upon delivery.  Notice sent by
certified mail shall be deemed effective on the third business day after its
deposit in the U.S. mail.  Notice sent by fax shall be deemed effective upon
machine confirmation of receipt.  Either party may by written notice change its
address for purposes of this Agreement.

15.                                 Entire Agreement, Modifications and Waiver. 
This Agreement constitutes the entire agreement and understanding of the parties
and supersedes any prior agreements and understandings between the parties with
respect to the specific subject matter hereof.  This Agreement cannot be
modified except in writing signed by both parties.  No waiver of any term or
condition of this Agreement shall be deemed to be a waiver of any other
provision hereof, nor shall such waiver constitute a continuing waiver, and no
waiver shall be binding unless executed in writing by the party making the
waiver.

16.                                 Governing Law.  This Agreement shall be
governed by, interpreted, construed, and the respective rights of the parties
hereto determined and all claims and disputes, whether in tort, contract or
otherwise, resolved according to the laws of the State of Oregon notwithstanding
any conflict of law principles to the contrary.  Any proceeding initiated by MWI
arising out of or in connection with this Agreement will be determined solely by
a state or federal court in Multnomah County, Oregon, and any proceeding
initiated by Banfield arising out of or in connection with this Agreement will
be determined solely by a state or federal court located in Ada County, Idaho,
and the parties consent to the jurisdiction and venue of those courts.

4

--------------------------------------------------------------------------------

17.                                 Successors and Assignment.  All of the terms
and provisions of this Agreement will be binding on and inure to the benefit of
the parties and their respective successors and assigns.  Neither party may
assign, delegate or transfer to third parties its rights or obligations
hereunder without the prior written consent of the other party.

18.                                 Attorney Fees.  In the event of any legal
proceeding arising out of or in connection with this Agreement or the services
provided for herein, or arising with respect to one of the parties, including
but not limited to arbitrations, bankruptcy and reorganization proceedings and
appeals, the prevailing party will be entitled to recover from the other party
its costs, disbursements and reasonable attorney fees as determined by the
court, arbitrator or other presiding official.

19.                                 Counterpart Signatures.  This Agreement may
be executed in counterparts, each of which will be deemed an original but all of
which will constitute one and the same instrument.

In Witness Whereof, the parties have executed this Agreement as of the date
first written above.

MEDICAL MANAGEMENT

MWI VETERINARY SUPPLY CO.

INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

By:

/s/ John Payne

 

 

By:

/s/ Jim Cleary

 

 

John Payne

 

 

Jim Cleary

 

Sr. Vice President

 

 

President & CEO

 

Practice Development

 

 

 

 

 

 

 

 

 

By:

/s/ Bob Rusunen

 

 

By:

/s/ Jim Ross

 

 

Bob Rusunen

 

 

Jim Ross

 

Sr. Director, Purchasing

 

 

Director

 

 

 

 

Business Development, Banfield

 

5

--------------------------------------------------------------------------------