**Exhibit 10.1**

 

*** * –CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITHTHE COMMISSION.  CONFIDENTIAL TREATMENTHAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.**

 

**2009 PFIZER EQUINE PRODUCTSMARKETING AGREEMENT**

 

This Agreement dated and effective as of January 1,2009 is made by and between **Pfizer Inc.****,** 235 East 42nd Street, New York, New York 10017 (hereinafter, “PFIZER”)and **MWI Veterinary Supply********Co.,** 651 South Stratford Drive, Suite 100,Meridian, ID 83642 (hereinafter, “MWI”).

 

1.                                       PFIZER hereby appoints MWI, and MWI hereby accepts appointment, as acontract distributor for PFIZER Products set forth on Exhibit A (the “Products”),to purchase from PFIZER and to resell for MWI’s own account as a distributor,subject to the following terms and conditions.

 

2.                                       MWI recognizes and agrees to the following:

(a)                                  PFIZER has elected to work with a select group of distributors that arecommitted to maximizing the sale of the Products and to working closely withPFIZER to identify market opportunities for both companies. The intent of thisAgreement is to attain that goal;

(b)                                 PFIZER intends to utilize this group of distributors to sell theProducts to customers below them in the distribution chain and that PFIZER has,and may in the future, run promotions and other activities that would beseriously prejudiced if MWI resells the Products to other PFIZER contractdistributors, non-employee agents or through brokers.

 

3.                                       Accordingly, MWI shall:

(a)                                  use its reasonable best efforts to sell the Products by focusing itsprimary effort at reselling to veterinarians, OTC retailers, and horse owners;

(b)                                 maintain a full-time outside and inside sales force that will personallyand actively solicit sales of the Products and pay such sales representativesreasonable commission as MWI deems appropriate in its sole discretion;

(c)                                  store and handle its inventory of Products under conditions that willensure that such Products retain their potency, purity, quality, and identity;

(d)                                 MWI will provide PDA/EDIwith sales out data on each PFIZER sku MWI sells. MWI will provide to Covansysits Health Industry Number, Customer Health Industry Number, PFIZER productnumber, transaction date, ship to zip code, number of units and price withrespect to each sale of product, and unit inventories on each PFIZER sku thatMWI sells. This information should be sent to Covansys. Sales out data shall beprovided to Covansys within /**/ ofthe date of each invoice. MWI will use its best efforts to insure sales outdata integrity and timeliness;

(e)                                  set its resale prices for the Products independently and at its solediscretion;

(f)                                    cooperate fully with PFIZER by actively participating in such strategysessions as PFIZER reasonably may require, for the purpose of developing programsto increase use of the Products; and to cooperate fully with PFIZER inimplementing all promotions and sales campaigns for theProducts;

(g)                                 allow PFIZER’s representatives to attend and actively participate inmeetings of MWI’s sales representatives;

(h)                                 MWI agrees that credit limits established by PFIZER shall be subject tochange by PFIZER in its sole discretion and that no shipments will be made toMWI in excess of the established credit limits;

(i)                                     take no action, whether or not identified above, that would harm thegoodwill 

 

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or name of PFIZER, or damage the interests of PFIZERor the Products, other than where supported by sound factual evidence. Forpurposes of this Agreement “Goodwill” shall mean the marketplace advantage ofcustomer patronage and loyalty developed with continuous business under thesame name over a period of time.

(j)                                     MWI shall immediately notify PFIZER in the event MWI obtains informationindicating that any of the Products may have to be recalled either by virtue ofapplicable law or regulation or good business judgment. PFIZER shall controlall efforts necessary to conduct any such recall. MWI shall cooperate withPFIZER and MWI agrees to maintain adequate records to conduct such recall,including the name, address and Product purchases of all purchasers of PFIZERProducts.

(k)                                  MWI may make use of the custom marketing program funding provided for inExhibit E hereto.

(l)                                     Make payment to PFIZER /**/; and

(m)                               Provide to PFIZER by the close of business on the last business day ofeach PFIZER Accounting Period (as set forth in Exhibit G hereto) aninventory report covering all inventory purchased from PFIZER and setting forthin dollars at MWI’s acquisition cost from PFIZER the amount of inventory byspecies. MWI agrees that PFIZER shall have the right to audit inventory in thepossession of MWI to confirm compliance with this paragraph 3 (m) and toconfirm the accuracy of the data contained in the report.

 

4.                                       PFIZER shall:

(a)                                  sell the Products to MWI at the prices in effect in the then currentpublished PFIZER Animal Health Products Distributor Price List (hereinafter, “PriceList”). PFIZER also shall permit MWI to participatein the distributor incentive programs offered by PFIZER, in accordance with theterms of such programs. PFIZER shall have the unrestricted right to revise theprices, terms and conditions of the Price List, and to add or delete Productsor package sizes, without advance notice to MWI, and the revisions shall beeffective on all orders submitted after the effective date of the pricerevisions. In all cases of orders received for other than immediate shipment,the price for the Products shall be that in effect at the time of shipment.PFIZER agrees to give MWI /**/advance notice of price increases;

(b)                                 compensate MWI in accordance with Exhibits B, D and E hereto. In theevent that one Agreement holder acquires or combines with another Agreementholder, the purchase objectives will be adjusted accordingly for the purpose ofdetermining incentives earned; and

(c)                                  allow MWI credit on prepaid returns in accordance with PFIZER’s OutdatedProducts Policy which is in effect at the time;

(d)                                 Agreement holders with more than one location must combine purchases ofall locations to determine attainment level for incentives. In the event thatone Agreement holder acquires or combines with another Agreement holder, thepurchase objectives will be adjusted accordingly for the purpose of determiningincentives earned.

(e)                                  Direct purchase from PFIZER will be used to determine the level ofpurchases achieved. Any discrepancies must be documented by the MarketingAgreement holder using copies of PFIZER invoices.

 

5.                                       All purchases by MWI pursuant to this Agreement shall be in accordancewith the terms of PFIZER’s Pricing and Shipping Policies, as may be amended byPFIZER from time to time. Unless the parties agree otherwise, shipments shallbe made to either MWI’s central warehouse point or to branch offices at MWI’sdirection.

 

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6.                                       MWI shall not be provided with any rebate, discount or othercompensation for Products handled under this Agreement unless specifically setforth herein. MWI will NOT be eligible to collect an RSA or Performance Paymenton any lateral sales to other PFIZER contract distributors or to anunauthorized Pfizer distributor. (It is MWI’s obligation to confirm withPfizer, prior to making a sale, as to whether a distributor is a PFIZERcontract distributor or an unauthorized distributor.) Nor shall MWI be eligibleto collect an RSA or Performance Payment on sales made through brokers ornon-employeeagents.

 

7.                                       The following standard conditions shall apply to all sales under thisAgreement:

(a)                                  MWI shall cooperate fully with PFIZER in participating fully in theAnimal Health Institute Electronic Data Interchange (“AHI EDI”) for thereporting of sales and inventory data on a daily basis. The data to be reportedshall be as described in the AHI EDI Transaction sets.

(b)                                 all orders are subject to acceptance by PFIZER’s New York Headquarters.Title to the goods shall pass to MWI once they have been properly delivered tothe address designated by MWI. Products requiring temperature control will beshipped F.O.B. destination;

(c)                                  any tax or other charge upon the sale and/or shipment of the goods nowor hereafter imposed by federal, state or municipal authorities shall be paidby MWI. In the event that the price of any article includes transportationcharges, any increase or decrease in transportation charges shall be for MWI’saccount;

(d)                                 EXCEPT AS SET FORTH IN THIS AGREEMENT, OR IN THE LABELING OF THEPRODUCTS SOLD HEREUNDER, PFIZER MAKES NO EXPRESS OR IMPLIED WARRANTIES WITHRESPECT TO THE PRODUCTS;

(e)                                  PFIZER shall defend and indemnify MWI from all claims resulting from anybreach by PFIZER of the warranties set forth in this paragraph 6, andspecifically any claim that theProducts,as sold by PFIZER, were defective. In the event PFIZER is found by any court ofcompetent jurisdiction to be liable for any claim based in products liability,then PFIZER shall reimburse MWI’s reasonable legal fees incurred in the courseof cooperating with PFIZER’s defense. To be covered by this defense andindemnity, MWI must: promptly notify PFIZER of any such claim; allow PFIZER tofully control the defense and/or resolution of the claim; and cooperate fullywith PFIZER in the matter. This defense, indemnity and payment for legal feesshall not apply to claims alleging: MWI alteration, negligent handling orimproper storage of the Products; sale of outdated Products; sale orrecommendation of the Products for uses orin a manner not set forth in the labeling supplied by PFIZER; or sale of theProducts after receipt of notice from PFIZER that such sales should be halted;

(f)                                    in no event shall PFIZER be liable to MWI for special, collateral,incidental, or consequential damages in connection with or arising out of thepurchase, resale, or use of the Products. Except as provided under subparagraph6(e), above, total damages recoverable against PFIZER by MWI shall beexclusively limited to the purchase price of the Products with respect to whichdamages are claimed;

(g)                                 failure of PFIZER to make or of MWI to take, when due, any delivery (orportion thereof) pursuant to an order hereunder, if occasioned by anycircumstance or condition beyond the control of the party so failing, shall notsubject the failing party to any liability to the other and, at the option ofeither party, that order or portion thereof not delivered may be canceled;

(h)                                 acceptance of MWI’s order by PFIZER is expressly made conditional uponMWI’s acceptance of the conditions of sale as set forth herein, and the prices,terms and conditions of the Price List then in effect, notwithstandingacknowledgment or receipt of MWI’s purchase order containing additional ordifferent provisions, or conflicting oral representations by any agent ofPFIZER.

 

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8.                                       MWI and PFIZER agree that, under the specific circumstances delineatedherein,PFIZER, at PFIZER’s sole discretion may recoupthe sums outstanding to it from MWI against those sumswhich may become due from PFIZER to MWI, in that the obligations arisefrom mutual transactions. Thespecificcircumstances which will enable PFIZER to initiate recoupment are:

(a)                                  MWI becomes insolvent which shall be defined as:

(i)    the sum of MWI’s debts is greater than all of MWI’s property(“Balance Sheet Test”); or

(ii)   MWI is generally not paying its debts as they come due; or

(iii)  MWI has failed to act in good faith for a period in excess of sixmonths to resolve any outstanding invoice or purchase order issuesor reconciliations.

(b)                                 MWI commences a liquidation of its operations by means of a sale of itsassets in their entirety or piecemeal; or

(c)                                  MWI ceases its business operations whether or not such cessation isvoluntary or involuntary; or

(d)                                 MWI files a proceeding pursuant to the U.S. Bankruptcy Code or any statecourt proceeding, including an Assignment for the Benefit of Creditors.

 

9.                                       MWI shall distribute PFIZER products only under the labeling provided byPFIZER; prescribe, recommend, suggest, and advertise each product for use onlyunder the conditions stated in the labeling provided by PFIZER; and observe allfederal, state, and local laws governing the distribution of animal drugs. Inthe case of Products bearing the legend, “CAUTION: FEDERAL LAW RESTRICTS THISDRUG TO USE BY OR ON THE ORDER OF A LICENSED VETERINARIAN,” or any similarlegend, sell such Products only to or on the order of a licensed veterinarianfor use in the course of his or her professional practice or to another personor entity regularly and lawfully engaged in the use, distribution or dispensingof such legend drugs.

 

10.                                 Nothing in this Agreement shall be deemed to limit PFIZER’s ability tosell any product at any time to any other customer any other party.

 

11.                                 MWI and PFIZER acknowledge that in the performance of their dutieshereunder MWI and PFIZER may obtain access to “Confidential Information” (asdefined below) of each other. MWI and PFIZER agree that during the term of thisAgreement and for a period of three (3) years after the termination ofthis Agreement, unless specifically permitted in writing by the other party,which permission shall not be unreasonably withheld, especially with the saleof all or a substantial portion of MWI’s business, to (a) retain inconfidence and not disclose to any third party and (b) use only for thepurpose of carrying out their duties hereunder, any such Confidential Information.As used herein the term “Confidential Information” means any information, ordata, whether of a business or scientific nature and whether in written, oralor tangible form, relating to PFIZER’s and MWI’s business or potential businessorits research and development activities, notgenerally available to or known to the public, and not otherwise known to thereceiving party, that is disclosed to or learned by the other party pursuanthereto. “Confidential Information” does not mean or include any information: (a) whichis, at the time of disclosure, available to the general public; or (b) whichfollowing disclosure becomes available to the general public through no faultof the recipient; or (c) which recipient can demonstrate was in itspossession before receipt; or (d) which is disclosed to recipient withoutrestriction on disclosure. Upon completion of the work provided for hereunderor other termination of this Agreement 

 

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each party will return to the other party anydocuments, or copies thereof, or any product samples, containing orconstituting Confidential Information disclosed to or generated by either partyin connection with this Agreement.

 

12.                                 This Agreement shall be effective as of the date first written above andshall continue in force until December 31, 2009. Either party mayterminate this Agreement prior to the expiration date (i) with or withoutcause, upon thirty (30) days written notice to the other party, or (ii) immediatelyupon written notice, in the event of a material breach by the other party.

 

13.                                 This Agreement shall be governed by the laws of the State of New Yorkapplicable to contracts to be fully performed therein. This Agreement is notassignable without the express written consent of PFIZER, and may be modifiedor amended only in writing signed by the party to be bound.

 

14.                                 This Agreement and documents referred to herein embody the entireunderstanding between the parties hereto, will supersede prior agreementsrelating to the Products, and may be modified only in writing and signed by theparties to be bound. No activities conducted pursuant to this Agreement orrelated thereto, including but not limited to the future planning activities ofthe parties, shall be deemed to give rise to any obligations on the part ofeither party other than as expressly provided for herein.

 

IN WITNESS WHEREOF, intending to be legally bound, theparties have executed this Agreement.

 

 
| MWI Veterinary Supply Co. |                | Pfizer  Inc |
|---------------------------|---------------------|-------------|
|                      |                |        |
| BY:                       | /s/  Jim Cleary     |        | BY: | /s/  Clinton A. Lewis, Jr. |
|                      |                |        |   | Clinton A. Lewis, Jr. |
| Print  Name:              | Jim  Cleary         |        |   | President, U.S. Operations |
|                      |                |        |   | Pfizer Animal Health |
| Title:                    | President           |        |   |
|                      |                |        |   |
| Date:                     | Dec. 31,  2008 |        | Date: | 1/09/09 |

 

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