**Exhibit10.9**

 

**** — CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILEDSEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTEDPORTIONS.**

** **

***Intervet***

***Schering-Plough Animal Health***

 

Distributor Agreement

 

ThisAgreement made this 1st day of December, 2009, by and between INTERVETINC., d/b/a as Intervet/Schering Plough Animal Health with offices at56 Livingston Avenue, Roseland, New Jersey, 07068 (hereinafter referred toas the “Intervet”) and MWI Veterinary Supply Co. (hereinafter referred to asthe “Distributor”).

 

WITNESSETH

 

WHEREAS,Intervet is in the business of developing, manufacturing, marketing anddistributing in the United States various animal health products of Intervetand its affiliates; and

 

WHEREAS,the Distributor is in the business of marketing and distributing animal healthproducts; and

 

WHEREAS,the Distributor wishes to obtain from Intervet, and Intervet is willing toprovide, distribution rights for certain of Intervet’s (and its affiliates’)animal health Products (as hereinafter defined) in the Continental UnitedStates;

 

NOW,THEREFORE, in consideration of the premises and mutual covenants as set forthherein, it is agreed between the parties hereto as follows:

 

1.             Appointment of Distributor

 

Intervethereby appoints Distributor as its non-exclusive distributor for Intervet’sanimal health product(s) as further set forth on Appendix A attachedhereto and incorporated herein by reference (hereinafter referred to as “Products”)for the animal health market in the United States of America (“Territory”).  For the sake of clarity, the definition ofProducts specifically includes animal health products manufactured by Intervet’saffiliates and distributed under this Agreement.

 

Distributoraccepts this appointment. The Distribution rights granted under this Agreementextend only to the Products and for the promotion and distribution thereofthrough and in the animal health market. Distributor shall not market, sell orotherwise promote Intervet’s Products through any non-animal healthdistribution channel or other animal health distributor and outside theTerritory.

 

2.             Duration of Appointment

 

ThisAgreement shall remain in full force and effect for a period of twelve (12)months from the date of execution hereof. It shall be automatically renewed forfurther periods of twelve (12) months each, unless either party notifies theother party of its desire not to renew this Agreement, by giving at Ieastthirty (30) days written notice prior to the original expiration date or theexpiration date of any renewal period.

 

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Inaddition, Intervet shall have the right to terminate this Agreement, withoutcause and at any time, by giving thirty (30) days written notice to theDistributor.

 

3.             Supply of Intervet’s Products—Term andConditions of Purchase by Distributor

 

Distributorshall purchase Intervet’s products in accordance with the prices set forth inAppendix A and under terms and conditions set forth in Appendix B andother such remuneration as set forth in Appendix C.  Appendix B shall contain suchtransportation terms and conditions, return goods policy and other terms ofsale as may be now or hereafter specified by Intervet and provided in writingby Intervet to Distributor. Appendix C shall contain the terms and conditions of any additionalincentives due Distributor from Intervet. All terms and conditions set forth inAppendices A, B & C are subject to change without notice andall calculations and determinations made by Intervet are final.

 

4.             Distributor’s Obligations

 

Distributor shall:

 

4.1           Useits best efforts to actively promote, sell, and distribute Products in theanimal health market and shall follow all programs and promotions as specifiedby Intervet.

 

4.2           Maintainan adequate inventory of Intervet’s Products in order to assure at all timesprompt delivery and continued availability of the Products to customers.

 

4.3           Maintainproper storage facilities, suitable for the storage of Intervet’s Products inaccordance with such storage requirements as indicated on the Products’ labels,packages and/or as recommended by Intervet. Furthermore, the Distributor shall practice stock rotation and inventorycontrol to insure minimum product out-dating and replacement.  Intervet’s authorized representatives shall,during reasonable business hours, accompanied by the appropriate Distributoremployee, have access to Distributor’s warehouses and depots in order toascertain Distributor’s compliance with its obligations under Sections 4.2and 4.3, with regard to Intervet’s products.

 

4.4           Prominentlydisplay and actively promote Intervet’s Products at all such trade shows andveterinary meetings which Distributor attends.

 

4.5           Scheduleperiodic discussions, or as Intervet may request, between Intervet’srepresentatives and Distributor’s personnel in order to facilitate thedissemination of information about Intervet’s Products and the promotionalcampaigns related to said Products.

 

4.6           Notobliterate, modify or alter in any way, without the express written consent ofIntervet, Intervet’s trademarks, logos, labels, packaging and, generally, notto misrepresent Products. Distributor shall accurately and properly identifyIntervet’s trademarks and Intervet’s ownership thereof in all communicationscontaining such trademarks.

 

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4.7           ProvideIntervet with an agreed upon periodic detailed report of out the door salesactivities using the AHI/EDI sales reporting project. If the distributor doesnot participate in the AHI/EDI sales reporting project, the Distributor mustprovide periodic reports of out the door sales in a format approved byIntervet, to allow Intervet to determine the market performance of its Productsin Distributor’s Territory, in accordance with Appendix C.

 

4.8           Promptly,within 30 days provide Intervet with a written report of any adversereactions, side effects or unusual product experiences related to the Products.Distributor shall not make any representation regarding any of the Products’properties, efficacy and safety other than specified on the approved labelwithout prior consultation including written approval of same from Intervet.

 

4.9           TheDistributor agrees to abide by all Federal, State and local regulationsregarding the sale of these products and maintain records required to ensurecompliance by these regulatory agencies. At Intervet’s reasonable request,Distributor will confirm to Intervet its compliance wit this Section 4.9.

 

5.             Intervet’s Obligations

 

Intervet shall:

 

5.1           Makereasonable efforts to supply its Products to Distributor in quantitiessufficient to satisfy Distributors orders;

 

5.2           Inits sole discretion provide Distributor with reasonable quantities of suchinformation, data, and promotional literature available to Intervet as mayassist Distributor in maximizing sales of the Products.

 

6.             Warranties of Intervet

 

6.1           Intervetwarrants that each Product shall conform with the specifications set forth inthe Product’s labeling and package inset. Intervet further warrants that it hasgood title to the Products and that the Products are free and clear from allliens and encumbrances. SUCH WARRANTIES CONSTITUTE THE SOLE AND EXCLUSIVEWARRANTIES BY INTERVET WITH RESPECT TO THE PRODUCTS. INTERVET EXPRESSLYDISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, AS TO THE PRODUCTS SUPPLIEDTO DISTRIBUTOR INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES OF MERCHANTABILITYAND/OR FITNESS FOR A PARTICULAR PURPOSE.

 

6.2           Limitationof Liability/Indemnity

 

#### a)             Liability for defective ornon-conforming Product shall be limited to Intervet’s replacement of theProduct or a refund of the purchase price.

####  

#### b)            Intervet shall not be liablefor any injury, damage or expense resulting from any Product that has not beenused or stored in accordance with all instructions 

 

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####  

#### and guidelines contained in the labeling and/or package insert or anyother instructions, guidelines or requirements provided by Intervet, for suchProduct. The Distributor shall indemnify, defend and hold harmless Intervet,and its agents, employees, officers, directors, and assigns in connection withany and all claims, actions, lawsuits, damages, injuries, and expenses arisingfrom any such improper use or storage of Products and/or arising from thenegligence or willful misconduct by Distributor, or otherwise arising inconnection with Products, including failure to provide notice to its customersof a recall, stop sale or similar product information; provided however that Distributorshall have no liability in connection with matters arising solely from thenegligence or willful misconduct of Intervet. Intervet agrees to indemnifyDistributor against any and all claims, actions, lawsuits, damages, injuriesand expenses (including reasonable attorney fees) (“claims”), arising out ofthird party claims of damage to property, personal injury or death caused bythe negligent act or omission of Intervet with respect to the Products.

####  

#### c)             Notwithstanding anything inthe Agreement to the contrary, Intervet shall defend, indemnify and holdharmless Distributor against any and all suits, claims and expenses (includingreasonable attorney’s fees) arising out of the use or sale of any Producthereunder being in violation of any rights under patent, trademark or copyrightlaws.

####  

#### d)            In no event shall Intervetbe liable for any indirect, special, incidental, punitive, or consequentialdamages in connection with any Products or otherwise arising out of thisAgreement, under any theory of recovery, including, but not limited to, breachof warranty, breach of contract, product liability, negligence or strictliability.

####  

7.             Warranties of Distributor

 

TheDistributor agrees to save and hold Intervet, its agents, employees, officers,Directors, and anyone else acting on behalf of the Intervet, harmless from andagainst all liability, damage, loss, claims, demands, and actions which ariseout of or are connected with, or are claimed to arise out of or to be connectedwith, the Distributor’s promotion, sale or distribution of Intervet’s Products,including, but not limited to, all liability, damage, loss, claims, demands oractions on account of breach of contract, unlawful contracts, or illegal ordeceptive or fraudulent marketing and/or promotion and/or distributionpractices whether based upon, or claimed to be based upon, statutory,contractual, tort or other liability of Intervet, or any other person.

 

TheDistributor agrees to secure from its insurance carrier risk insurance,insuring and covering all risks assumed under the terms of Sections 6 and7 of this agreement and furnish Intervet with evidence of such coverage asIntervet may require.

 

8.             Product Recall

 

IfIntervet, in its sole discretion, should determine to effect a recall (of oneor more of its Products) or if any Governmental agency, including any agency ofany State or subdivision thereof, having or claiming jurisdiction over any ofthe transactions contemplated under this Agreement, should request Intervet toeffect a recall, then the Distributor shall promptly be 

 

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notified by Intervet and Distributor shall promptlyreturn to Intervet, following Intervet’s instructions, all the unused or unsoldstock of the Product in question. In the event of such recall, Intervet shallreimburse Distributor in the amount of Distributor’s net purchase price for allProduct returned to Intervet; provided, however, that Distributor shall not beentitled to reimbursement by Intervet of Distributor’s purchase price if anyProduct found to be defective or which has become defective as the result ofany act of commission or omission or negligence on Distributor’s part.

 

Distributor,furthermore, shall promptly notify its customers of any recall effected and shallpromptly and jointly with the Intervet review what steps need to be taken tocarry out any recall.

 

9.             Assignability

 

ThisAgreement shall not be assignable and the performance of the obligationshereunder shall not be delegable by the Distributor without the Intervet’sprior written consent.

 

Intervetmay assign and delegate this Agreement to any affiliate and/or any person,firm, corporation, or other entity that purchases or otherwise succeeds ininterest to that portion of Intervet’s business to which this agreementrelates.

 

10.           Governing Law and Jurisdiction

 

Thisagreement shall be governed by and construed according to the laws of the Stateof Delaware without regard to any conflict of law provisions.

 

Thecourts of the State of Delaware shall resolve any such claims or disputes andthe laws of the State of Delaware shall apply in any such proceedings.

 

11.           Notices

 

Allnotices to be given hereunder shall be in writing and shall be deemed to havebeen duly given if delivered or mailed by registered mail, first class postageprepaid, if to the Intervet to:

 

Intervet Schering-Plough Animal Health

ATTN:  MichaelC. Biggins

56 Livingston Ave.

Roseland, NJ 07068

 

and if to the Distributor to:

 

Jim Cleary

MWI Veterinary Supply Co.

651 S. Stratford Drive, Suite 100

Meridian, ID 83680

 

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12.           Headings

 

Theheadings in this Agreement are included for convenience and reference only anddo not form part of this Agreement.  Theyshall not in any way affect the interpretation hereof.

 

13.           Integration & Modification

 

TheAgreement, including the schedules, appendices and attachments hereto,constitutes the entire agreement between Distributor and Intervet with respectto Products and supersedes all prior agreements and communications between theparties with respect thereto. This Agreement may only be changed or modified bya written document, signed by duly authorized representatives of the partieswhich expressly states its intent to change or modify this Agreement, and shallnot be modified or changed by any contrary or additional term in any subsequentdocument, purchase order or correspondence between the parties.

 

14.           Severability

 

In theevent that any provisions of this Agreement should for any reason be held invalidineffective, unenforceable or contrary to public policy, the remainder of thisAgreement shall remain in full force and effect notwithstanding.

 

15.           Non-Waiver

 

Waiverof or failure to enforce any term or condition of this Agreement by Intervet ina particular situation shall not be deemed a modification of this Agreement,nor shall Intervet be prevented from enforcing such term or condition withrespect to other situations.

 

16.           Alternative Dispute Resolution

 

Theparties shall attempt in good faith to resolve promptly any dispute arising outof or relating to this Agreement by negotiation. If the matter cannot beresolved in the normal course of business, either party shall give the otherparty written notice of any such dispute not resolved, after which the disputeshall be referred to senior executives of both parties, who shall likewiseattempt to resolve the dispute.

 

If thedispute has not been resolved by negotiation within forty-five (45) days of thedisputing party’s written notice or if the parties fail to meet within twenty(20) days from such notice, the parties shall endeavor to settle the dispute bymediation under the supervision of and in accordance with the Center for PublicResources (CPR) Model Mediation Procedure for Business Disputes. Unlessotherwise agreed, both parties and either individual party may request the CPRto appoint an independent mediator. The location of the mediation shall beagreed upon by both parties and, in the event parties do not timely agree, thelocation will be determined by the Mediator.

 

Anydispute not settled by the mediation referenced above within sixty (60) daysafter appointment of a mediator may, upon the request of either party, besubmitted to arbitration in 

 

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accordance with the CPR Arbitration Rules andCommentary. A single, impartial arbitrator mutually acceptable to the partiesshall conduct the arbitration. In the event the parties cannot agree on anarbitrator within twenty-one (21) days after the end of the aforesaid sixty(60) days, either party may have an arbitrator appointed by the CPR. Thelocation of the arbitration will be in New York, New York, unless the partiesagree otherwise. As a condition of appointment of the arbitrator, said arbitratorshall agree to use her/his best efforts to conclude the proceeding within sixty(60) days. Said arbitrator shall further have the authority to limit the volumeof evidence and documents to be submitted by the parties. Any court havingjurisdiction thereof may enter judgment upon the award rendered by thearbitrator.

 

Thissection shall, however, not be construed to limit or to preclude either partyfrom bringing any action in any court of competent jurisdiction for injunctiveor other provisional relief as necessary or appropriate.

 

17.           Taxes

 

Distributorshall pay all federal, state and local taxes which may be imposed upon the use,possession, ownership, purchase or resale of any and all Products.

 

INWITNESS WHEREOF, the Intervet and the Distributor have executed this Agreementin duplicate on the day and year first hereinabove written.

 
| INTERVET INC.                                 |                   |
|-----------------------------------------------|------------------------|
| d/b/a Intervet/Schering  Plough Animal Health |                   |
|                                          |                   |
|                                          |                   |
| By:                                           | /s/ Michael C. Biggins |   | By: | /s/ Jim Cleary |
| Michael C. Biggins                            |                   | Jim Cleary |
| Director, Commercial  Services                |                   | MWI Veterinary Supply  Co. |

 

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** **

**Distribution Agreement**

**Appendix B**

**Effective December 1,2009**

 

**ORDER PROCEDURE:**

 

1.             There are four ways to place an order.

 
| · | Phone orders:        | 1-800-521-5767. |
|--------|----------------------|-----------------|
| · | Fax orders:          | 1-800-462-3720. |
| · | General information: | 1-800-521-5767. |
| · | EDI                  |            |

 

2.             Mail orders to:

 

Intervet/ScheringPlough Animal Health

10488 S 136 St

Omaha NE 68138

 

3.             When ordering by mail or phone, please list:

 

·              Account number

·              Product code number

·              Product name

·              Product size

·              Quantity

 

4.             Orders for products offered on a promotion or specialmust be received by 12:00 noon central time on the last day of the program toqualify for the program or special.

 

**TERMS:**

 

1.             Intervet reserves the right to limit product quantity.

 

2.             Invoices are issued for every shipment.

 

3.             Invoices are due in full /**/ from the date ofinvoice.

 

4.             Distributor purchases are not eligible for payment viacredit cards.

 

5.             All shipments will be FOB Point of Shipment. Any damagecaused by Intervet or Intervet’s designated shipper shall be the responsibilityof Intervet. In the case of damage caused by Intervet’s designated shipper,Distributor authorizes Intervet 

 

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to pursue a damageclaim against the shipper and will assist Intervet as necessary.

 

6.             Intervet reserves the right to assess a /**/ per monthinterest charge on balances more than 30 days past due.

 

**TRANSPORTATION CHARGES:**

 

1.             Transportation costs on orders totaling $5,000.00 ormore to one destination are prepaid.

 

2.             Orders totaling less than $5,000 are charged a minimumorder charge of $50.00.

 

3.             Intervet determines the method of shipment. If thecustomer requests special shipping arrangements, the additional freight chargesare added to the invoice.

 

4.             A Pick-up Allowance of $40 per pallet is applicable toorders for Safe-Guard Blocks (Sweetlix & En-Pro-AI) picked up byDistributor at the manufacturing site.

 

**TRANSPORTATION CLAIMS FOR DAMAGES AND/ORSHORTAGES:**

 

1.             In the event of damage or incomplete shipments, notifyCustomer Service immediately at 1-800-521-5767.

 

2.             If the damage or shortage is observed at the time ofproduct delivery, Distributor should sign the Bill of Lading (BOL) and note theshortage or damage.

 

3.             If the damage or shortage is observed after signingthe receipt, please phone the carrier and request they make an inspection orprovide written waiver of inspection. Damage or shortage must be reportedwithin 10 business days of delivery to be eligible for credit orreplacement.

 

4.             One copy of the carrier’s delivery receipt noting thedamage or shortage or a copy of the carrier’s inspection report, together withinstructions for credit or replacement, must be submitted within 15 daysof delivery date to:

 

Intervet/ScheringPlough Animal Health

10488 S 136 St

Omaha NE 68138

 

5.             Errors in shipping or order processing by Intervetwill be accepted for full credit provided notification of the discrepancy ismade to Intervet within 10 business days from date of receipt and productis returned in a saleable condition. Returns made after 10 business dayswill be handled under the Intervet returned goods policy in effect on the dayof the proposed return. Distributor shall promptly notify

 

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Intervet of anylatent errors. Intervet shall, in its sole discretion, provide appropriatecompensation, if any.

 

6.                                       Intervet reserves the right to reject anyclaim not made within the specific period.

 

**RETURNED GOODS POLICY:**

 

1.                                       Products purchased may be returned forcredit provided they meet the following provisions.

 

2.                                       Product returns **must**be approved by Intervet prior to return. Returns made without approval becomethe property of Intervet and Intervet will dispose of this merchandise anddeclare no replacement value or return to Distributor/Customer at theirexpense.

 

3.                                       Samples or “free goods” are notreturnable for credit. This will include “free goods” received as part of anypromotional offer.

 

a.                                       In the case of returns involving productpurchased as part of promotional offers, Intervet will allow credit up to thequantity of product that was actually purchased. No credit will be issued for “freegoods” received.

 

b.                                      Returns will be reviewed by Intervet for “freegoods”, based upon serial or lot numbers shipped.

 

4.                                       Returns will be accepted only fromoriginal purchasers.

 

5.                                       Products carrying an expired date andreturned within 90 days after expiration in **unopened andunmarked selling units*** will be issued credit at the originalpurchase price less a 20% handling charge. **Freight charges for returnof expired product are the responsibility of the customer**. Productsreturned after 90 days of expiration will not be eligible for credit.)

 

6.                                       If products are approved for return priorto product expiration date, they must be returned freight prepaid and will becredited at the original purchase price less a 20% handling charge. Returnedproducts must be in **unopened and unmarkedselling units*** and in saleable condition, or no credit will beissued.

 

7.                                       Intervet must receive authorized returnsno later than 15 days after the Return Authorization Number is provided.Product received after this time period will be destroyed and no credit will beissued.

 

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* A selling unit is thesmallest unit or “put-up” that Intervet ships excluding Equine Vaccines.Intervet will accept individual syringes of Equine Vaccines for return andcredit.

 

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**SHORT DATED PRODUCT IN DISTRIBUTOR INVENTORY:**

 

1.                                       Occasionally, Intervet has situationswhereby product in inventory is “short dated”. In these situations, thisproduct may be offered to Distributor as part of a “short dated product special”.

 

2.                                       Intervet will search to identify ifDistributor has purchased any of the “short dated” lots / serials.

 

3.                                       Distributor will be contacted by Intervetto determine how much of the product is still in inventory.

 

4.                                       In cases where Distributor has product ofthe same lot or serial number as being offered by Intervet on the “short datedproduct special”, and Distributor elects on its own accord to sell the productto their customers with the following qualifications:

 

a.                                             The product must be offered at the samespecial that Intervet is offering.

 

b.                                            The product must be sold asnon-returnable and this must be noted on the invoice.

 

c.                                             Distributor must provide Intervet amonthly computer report detailing the amount of product moved on the specialand the customers that it went to.

 

d.                                            Then, based upon this information,Intervet will reimburse free-goods monthly based upon computer run submissions.Reimbursement will be with better dated product of the same product type.

 

e.                                             Requests for reimbursement should be sentmonthly to:

 

Ag Data

2100 Rexford Road,Suite 300

Charlotte, NC28211

 

f.                                               Distributor is under no obligation totake part in short dated product specials.

 

**FLOOR STOCK ADJUSTMENTS:**

 

1.                                       Because market prices go both up anddown, Intervet, Inc. will not offer, nor expect, floor stock adjustmentson any price changes.

 

2.                                       Intervet reserves the right to collectany amounts owed because of an unauthorized floor stock adjustment, includingbut not limited to the right to set off the amount of any unauthorized floorstock adjustment against Quarterly 

 

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ReportingIncentives, Total Company Purchase Goal Incentive, Product Category GoalIncentive, Cash Management Incentive and Market Support Funds.

 

The terms and conditions of this Appendix B aresubject to change without notice at Intervet’s sole discretion.

 

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** **

**APPENDIXC**

** **

**MWI VETERINARY SUPPLY***(EffectiveDecember 1, 2009)*

** **

**MARKETSUPPORT FUNDS**

 

Intervet willaccrue /**/ of Distributor purchases up to a maximum of /**/ in market supportfunds to support Intervet approved Distributor marketing activities in supportof Intervet Products, under the following conditions:

 

a.                                       Any use of market support funds proposedby the Distributor must be approved by Intervet, through Intervet’s approvalprocess including approval of the Director, Distributor Relations at least30 days before the program’s start date.

 

b.                                      Market support funds shall be solelyprovided for the purpose of actively promoting Intervet Products.

 

c.                                       Market support funds accrued fromDecember, 2009 — November 2010 (Contract Period) must be committed for anapproved promotion by October 31 of that contract period. All uncommittedfunds in the accrual account as of October 31 will be reversed out of theaccrual account.

 

d.                                      Market support funds committed by October 31of the Contract Period must be utilized prior to January 15 of thefollowing Contract Period.

 

e.                                       Accrued market support funds shall bedisbursed to Distributor upon submission by Distributor to Intervet of aninvoice for a promotional program that has met the above terms.

 

**INTERVETPERFORMANCE PAYMENTS**

 

1.                                       Intervet will reward Distributor based onDistributor’s achievement of Intervet established Performance Goals(Semi-Annual Product Category Move-out Goals, Annual Product Category Move-outGoals and Annual Species Category Stretch Move-out Goals, where appropriate).

 

2.                                       For purposes of this Appendix C,Semi-Annual shall mean the periods of December, 2009 — May, 2010 and June, 2010— November, 2010.  Annual shall meanDecember, 2009 — November, 2010).

 

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3.                                       Intervet defines timely payment ofIntervet Invoices as /**/ or less. Payment within /**/ is a pre-requisite for eligibility for anyperformance goal payments.

 

4.                                       Intervet will establish Semi-Annual andAnnual Move-out Goals for product categories at the beginning of ContractPeriod.  The performance goals andincentive schedule for the Contract Period are as follows:

 
| ** **                          | ** ** | **Distributor Incentive****(4),(5),(6),(7),(8),(9),(10),(11)** | ** ** |
|-------------------------------------|------------|----------------------------------------------------------------|------------|
| **Move-Out  Goal Product Category** | ** ** | **Up-Front  Margin**                                           | ** ** | **Move-Out** | ** ** | **2008  Move-Out** | ** ** | **Annual  Move-Out** | ** ** | **Total** | ** ** |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Cattle Anti-parasitics              |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Cattle Mastitis                     |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Cattle Nutritionals/Banamine        |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Cattle Vaccines —  Other(2)    |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Small Animal Vaccines               |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Small Animal Mometamax              |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Small Animal  Anti-parasitics       |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Small Animal Other                  |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Equine Vaccines                     |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Equine/OTC  Anti-parasitics         |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
|                                |       |                                                           |       |   |   |   |   |   |   |   |   |
| Swine Pharmaceuticals               |       | /**/                                                           |       | /**/ |   | /**/ |   | /**/ |   | /**/ |   |

 

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(1)          Revalor-X5 Volume Builder Only.

(2)          All 5-ml clostridal products are Volume Builders only.

(3)          Piliguard, Trivalent are Volume Builders Only.

(4)          The Annual Move-out goal will be paid in full only ifDistributor achieves /**/ of annual sales out goal.

 

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(5)          An Account Agreement between Intervet and an end userserviced by a Distributor takes precedent over the suggested retail price list,the suggested Distributor margin and may alter the amount of the margin in acategory for those sales. If not specified in the Account Agreement thefollowing methodology is used to calculate the reimbursement to the  Distributor. /**/

(6)          Distributor must be current (/**/) at the end of May andNovember to be eligible for corresponding Semi-Annual Move-out goalrebate.

(7)          Semi-Annual Move-out Goals and their correspondingrebates not achieved in the first half of the Contract Period will roll aheadto the second half of the Contract Period, AS LONG AS the Distributor iscurrent (/**/) at the end of the first Semi-Annual goad period. Therefore, ifDistributor misses the move-out goal in the first half of the Contract Period,but its combined total reported sales at the end of the Contract Period meetsor exceeds the combined annual move-out goal, Distributor will be paid theapplicable rebate on the total amount. If the goal is missed in the second halfof the contract period, the potential rebate for the first half of the contractperiod is lost.

(8)          December — May Semi-Annual reported salesthat exceed the December — May Semi-Annual Move-out Goal will beallowed to roll ahead to the June — November Semi-Annual Goal Period.Therefore, if Distributor exceeds the December — May Goal but missesthe June — November Goal they will still earn a rebate on their June-November salesif (a) their total reported sales at the end of the December — November Periodmeets or exceeds the December — November Goal, and (b) AS LONGAS the Distributor is current (/**/) at the end of the Goal Period.

(9)          These performance incentives and goals apply only tothose products listed on the Intervet Inc. price list (Appendix A) as of December 1,2009. Intrevet, at its sole discretion, may modify goals to include newproducts approved after December 1, 2009.

(10)    Incentive payments will be calculated based upon unitssold at Distributor’s acquisition price.

(11)    Specific accounts identified by the ISP business teamswould be excluded from the rebate calculation, see list of excluded accountswithin Appendix C.

 

5.                                       2010 Move-out Goals. The performancegoals and incentive schedule for the Contract Period are as follows:

 
| ** **                  | ** **                          | ** **             | ** ** | **Semi-Annual Goals**     | ** ** | **Annual Goals**           | ** ** |
|-----------------------------|-------------------------------------|------------------------|------------|---------------------------|------------|----------------------------|------------|
| **Species  Category**       | ** **                          | **Product Category**   | ** ** | **Dec –  May  Goal** | ** ** | **June –  Nov  Goal** | ** ** | **Incentive  %** | ** ** | **Dec –  Nov Goal** | ** ** | **Incentive  %** | ** ** |
| Cattle**(Move-out)**        |                                | Cattle Anti-parasitics |       | /**/                      |       | /**/                       |       | /**/ |   | /**/ |   | /**/ |   |
|                        | Cattle Implants                     |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Cattle Mastitis                     |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Cattle Nuflor                       |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Cattle Nutritionals/  Banamine      |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Cattle Reproduction  Products       |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Cattle Vaccines - Other             |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Cattle Vaccines -  Enterics         |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
| Small  Animal**(Move-out)** |                                | Small Animal Vaccines  |       | /**/                      |       | /**/                       |       | /**/ |   | /**/ |   | /**/ |   |
|                        | Small Animal Other  Pharmaceuticals |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Mometamax                           |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Otomax                              |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Small Animal  Anti-parasitics       |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                        | Small Animal Tri-Heart  Plus        |                   | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |

 

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| ** **            | ** **                | ** **            | ** ** | **Semi-Annual Goals**     | ** ** | **Annual Goals**           | ** ** |
|-----------------------|---------------------------|-----------------------|------------|---------------------------|------------|----------------------------|------------|
| **Species  Category** | ** **                | **Product Category**  | ** ** | **Dec –  May  Goal** | ** ** | **June –  Nov  Goal** | ** ** | **Incentive  %** | ** ** | **Dec –  Nov Goal** | ** ** | **Incentive  %** | ** ** |
| Equine**(Move-out)**  |                      | Equine Vaccines       |       | /**/                      |       | /**/                       |       | /**/ |   | /**/ |   | /**/ |   |
|                  | Equine Pain Management    |                  | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                  | Equine Anti-parasitics    |                  | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
|                  | Equine Regu-Mate -  Other |                  | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |
| Swine**(Purchases)**  |                      | Swine Pharmaceuticals |       | /**/                      |       | /**/                       |       | /**/ |   | /**/ |   | /**/ |   |
|                  | Swine Biologicals         |                  | /**/       |                      | /**/       |                       | /**/       |   | /**/ |   | /**/ |   |

 

6.                                       Annual Move-out Stretch Goals for SpeciesCategories are as follows:

 
| **Annual Move-out “Stretch” Incentives (December,  2009 — November, 2010) (1),(4),(5),(6)** |
|------------------------------------------------------------------------------------------------------------|
| **Level  (as % of Goal)**                                                                                  | ** ** | **Rebate %** | ** ** | **Cattle  Products** | ** ** | **Small Animal  Products** | ** ** | **Equine  Products** | ** ** | **Swine  Products** | ** ** |
| /**/                                                                                                       |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
| /**/                                                                                                       |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
| /**/                                                                                                       |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   |
| /**/                                                                                                       |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   | /**/ |   |

 

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(1)           The trigger for payment of StretchGoals is attainment of /**/ of all Species Purchase Goals individually.

 

(2)           Rebate payment on achievement of /**/is on the total $ volume, less any products classified as volume builders.

 

(3)           Rebate payment on achievement /**/ ison the incremental $ volume, less any products classified as volume builders.

 

Rebatepayment on achievement /**/ is on the incremental $ volume, less any productsclassified as volume builders.

 

Rebatepayment on achievement /**/ is on the incremental $ volume, less any productsclassified as volume builders.

 

(4)                                  Opportunity toearn Stretch Rebate is capped at /**/ of Species Stretch Goal. Sales above /**/will be eligible for Semi-Annual and Annual Move-out Incentives.

 

(5)                                  Specificaccounts identified by the ISP business teams would be excluded from the rebatecalculation, see list of excluded accounts within Appendix C.

 

(6)                                  “Stretch” goals and performanceincentives include all products listed on the Intervet Inc. price list(Appendix A) as of December 1, 2009 as well as all new productslaunched during the incentive period (December, 2009 — November, 2010). For purposesof the “stretch” incentives, product categories that are eligible for move outincentives, as listed in paragraph 5 above, shall be grouped into speciesas shown above.

 

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(7)                                  These performance incentives and goalsapply only to those products listed on the Intervet Inc. price list(Appendix A) as of December 1, 2009, unless specifically excludedabove. Intervet, at its sole discretion, may modify goals to include newproducts approved after December 1, 2009.

 

(8)                                  Intervet, at its sole discretion mayallow up to a /**/ reduction of any goal affected by backordered products.Incentives will only be paid on product that is shipped and invoiced.

 

(9)                                  For this agreement, Intervet reserves theright, in its sole discretion to limit Distributor to purchasing a /**/ supplyof Products in November. Intervet / Schering Plough’s determination of areasonable /**/ supply will be binding and conclusive.

 

(10)                            Payment of performance incentives andrebates by Intervet to the Distributor shall be made within /**/ after the endof the performance period. The Distributor reserves the right to assess a /**/per month interest charge on balances more than /**/ past due.

 

(11)                            The terms and conditions of thisAppendix C are subject to change without notice at Intervet’s solediscretion. All calculations and determinations made by Intervet are final.

 

**ACCOUNTSEXCLUDED FROM REBATE CALCULATION**

 

Sales to thefollowing list of accounts, affiliates or individuals affiliated with theseaccounts are excluded from any rebate calculation covered in this appendix.Additionally, sales to any account enrolled in the Intervet/Schering-Plough “Mega-vet”Program are excluded from rebate calculations.

 
| **Name** | ** ** | **City** | ** ** | **State** | ** ** |
|----------|------------|----------|------------|-----------|------------|
| /**/     |       | /**/     |       | /**/      |       |

 

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