**Exhibit 10.1**

 

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

 

**FIRST AMENDMENT TO**

**2007-2008 MERIAL LIMITED INDEPENDENT SALESAGENT AGREEMENT**

 

This FirstAmendment to 2007-2008 Merial Limited Independent Sales Agent Agreement (“Amendment”),effective as of the 1st day of January, 2008, by and between Merial Limited, acompany limited by shares registered in England and Wales (registered number3332751) with a registered office at PO Box 327, Sandringham House, SandringhamAvenue, Harlow Business Park, Harlow, Essex CM19 5QA, England, and domesticatedin Delaware, USA, as Merial LLC, with a place of business at 3239 Satellite Blvd.,Duluth, GA 30096-4640, USA (“MERIAL”), and **MWI Veterinary Supply, Inc.,**with a place of business at **651 South Stratford Drive,Meridian, ID 83642** (“Independent Sales Agent”).

 

WHEREAS,MERIAL and Independent Sales Agent entered into the 2007-2008 MERIAL LimitedIndependent Sales Agent Agreement, dated January 1, 2007 (the “Agreement”);

 

WHEREAS, the parties wish to amend the Agreement;

 

NOW,THEREFORE, the parties to the Agreement do hereby agree to amend the Agreementas follows:

 

1.                                       **Schedules.** Schedules A, B and D tothe Agreement shall be deleted and replaced in their entirety by Schedules A, Band D for 2008-2009, attached hereto.

 

2.                                       **Section 2.1(a).** Section 2.1(a) ofthe Agreement is hereby amended by deleting everything after the secondsentence thereof.

 

3.                                       **Section 2.2(a).** Section 2.2(a) ofthe Agreement is hereby amended by deleting the second sentence thereof in itsentirety and replacing it with the following:

 

“MERIAL shall pay commissions on the NetSales of orders for Other Products from new and established AMAs within theTerritory, which are transmitted to MERIAL via EDI, according to the scheduleand terms outlined in Schedule B.”

 

4.                                       **Section 2.2(b).** Section 2.2(b) ofthe Agreement is hereby amended by deleting the second sentence thereof in itsentirety and replacing it with the following:

 

“MERIAL shall pay commissions on the NetSales of orders for Other Products from NHOs within the Territory, which aretransmitted to MERIAL via EDI, according to the schedule and terms outlined inSchedule B.

 

5.                                       **Section 3.1.** The term of theAgreement shall be extended by deleting “31 December 2008” and replacingit with “31 December 2009.”

 

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6.                                       **Section 7.1(c).** Section 7.1(c) ofthe Agreement is hereby amended by deleting the first sentence thereof in itsentirety and replacing it with the following:

 

“Pay Independent Sales Agent, as full andtotal compensation for all services rendered under this Agreement, certaincommissions for the sales of Products and Other Products as outlined inSchedule B.”

 

7.                                       **Deletion.** The term “transactionfees” shall be deleted wherever it appears in the Agreement.

 

8.                                       **Section 14.6.** Section 14.6of the Agreement is hereby amended by adding the following to the end thereof:

 

“The terms of this Agreement shall remainstrictly confidential. The parties to this Agreement shall not disclose any ofthe terms of this Agreement, whether generally or specifically, to any thirdparty, except as may be required by a party’s accountants or insurers, or byorder of a court of competent jurisdiction. To the extent that either party isobligated to file this Agreement with the Securities and Exchange Commission (“SEC”)party shall seek confidential treatment of the trade secret, commercial and/orfinancial information contained herein; the filing party shall seek the inputand approval of the non-filing party in determining what portions of thisAgreement must be identified for such confidential treatment.”

 

9.                                       **No Other Amendment.**

 

Except as amended, modified or supplementedby this Amendment, the Agreement is confirmed and remains in full force andeffect.

 

10.                                 **Counterparts.** This Amendment may beexecuted in one or more counterparts, each of which shall for all purposes bedeemed an original and all of which shall constitute one and the sameagreement.

 

**[Signatures on following page(s)]**

 

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IN WITNESSWHEREOF, the parties hereto have duly executed this Amendment to the Agreement.

 

 
| MERIAL LIMITED             |   | MWI Veterinary Supply, Inc. |
|----------------------------|--------|----------------------------------|
|                       |   |                             |
|                       |   |                             |
| By:                        |   | /s/ Thomas Zerzan                |   | By: | /s/ Jim Cleary |
| Name: Thomas Zerzan        |   | Name: Jim Cleary                 |
| Title: Head of Merial U.S. |   | Title: President and CEO         |
|                            |        |                                  |  |  |  |

 

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**Schedule A**

 

**2008 MERIAL Independent Sales Agent Agreement- Companion Animal Products**

 

**Flea andTick Control Products**

 

FRONTLINE®Plus for Dogs and Puppies 6 and 3 dose (up to 22 lbs., 23-44 lbs., 45-88 lbs.,89-132 lbs.)

FRONTLINE®Plus for Cats and Kittens 6 and 3 dose (All Weights)

FRONTLINE®TOP SPOT®for Dogs & Puppies 6 and 3 dose (up to 22 lbs.,23-44 lbs., 45-88 lbs., 89-132 lbs.)

FRONTLINE®TOP SPOT®for Cats and Kittens 6 and 3 dose (All Weights)

FRONTLINE®Spray 250 mL and 500 mL (All Weights)

 

**HeartwormPreventives**

 

HEARTGARD®Plus Chewables 12 and 6 doses/pack (68 mcg, 136 mcg, 272 mcg)

HEARTGARD®Chewables 6 doses/pack (68 mcg, 136 mcg, 272 mcg)

HEARTGARD®Tablets 6 doses/pack (68 mcg, 136 mcg, 272 mcg)

HEARTGARD®Chewables For Cats 6 doses/pack (55 mcg, 165 mcg)

 

**Pet Vaccines**

 

PUREVAX® Feline Respiratory 2 (RC) (25 x1 doses)

PUREVAX® Feline Respiratory 3 (RCC) (25x 1 doses)

PURE VAX® Feline 3 (25X1 doses)

PURE VAX® Feline 3 /Rabies (25X1 doses)

PUREVAX® Feline 4 (25X1 doses)

PURE VAX® Feline 4 /Rabies (25X1 doses)

PUREVAX® Recombinant Feline LeukemiaPUREVAX® Ferret (rDistemper) (10X1 ds)

 

**Canine Vaccines**

 

RECOMBITEK® Lyme (20X1 doses, 50X1doses)

RECOMBITEK®C3 (25 x 1 doses)

RECOMBITEK®C4 (25X1 doses)

RECOMBITEK®C4/CV (25X1 doses)

RECOMBITEK® C6 (25X1 doses)

RECOMBITEK® C6/CV (25X1 doses)

RECOMBITEK® CANINE PARVO (50X1 doses)

RECOMBITEK® CANINE CORONA-MLV (25X1doses)

RECOMBITEK® CANINE PARVO + CORONA-MLV(25X1 doses)

RECOMBITEK®KC2 (20 x 1 doses and 1 x 5 doses)

 

**Rabies Vaccines**

 

PUREVAX® Feline Rabies (25X1 doses)

IMRAB® 3 (5X10doses)

IMRAB® 3TF (50X1 doses)

IMRAB® 1 (5X10 doses)

IMRAB® 1 TF (50 x 1 doses)

 

**PAINMANAGEMENT**

 

PREVICOX®(57mg 6 x 30) PREVICOX® (227mg 6 x 30) PREVICOX® (57mgbottle 60 tablets) PREVICOX® (227mg bottle 60 tablets) PREVICOX®(57mg 10 x 10) PREVICOX® (227mg 10x10)

 

**DENTAL:**

 

ORAVETTMProfessional Kit

ORAVETTMBarrier Sealant Cartridges

ORAVETTMPlaque Prevention Gel Home Care Kits

 

®Registered trademarks and TM trademarks of MERIAL.

 

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**Schedule B**

**MWI, Veterinary Supply, Inc. IndependentSales Agent Earnings**

**Commission Rates - Net Sales of Products toAMAs**

 
| **Independent Sales Agent  Monthly Commission  Rate** | ** ** | **Independent Sales Agent  Representative Monthly  Commission Rate** | ** ** | **Goal Attainment  Commission Rate** | ** ** | **Total Independent Sales  Agent Commission Rate** | ** ** |
|----------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|------------------------------------------------------------------------|------------|
| **                                                                   | %          | **                                                                                       | %          | **                                             | %          | **                                                                     | %          |

 

**Added-value Elements for Sales of Products**

 
| **Promotional  Allowance  Funds Rate** | ** ** |
|----------------------------------------|------------|
| **                                     | %          |

 

**I.****                                         CommissionsEarned for Sales of Products to AMAs**

 

Independent Sales Agent earns commissions on the Net Sales of Productsto AMAs in the Territory when the order is placed with MERIAL by theIndependent Sales Agent or by an AMA which indicates a Named Sales Agent.

 

No commissions are paid for products not listed on Schedule A or forsales outside of Independent Sales Agent’s Territory.

 

For Named Sales Agent Sales, Independent Sales Agent Monthly Commissionand Independent Sales Agent Representative Commission will be paid toIndependent Sales Agent within thirty (30) days of the last business day ofeach month in which MERIAL receives a qualifying order. HEARTGARD and FRONTLINEand PREVICOX, Vaccine and ORAVET Goal Attainment Commissions shall be paidwithin thirty (30) days of the last business day of each quarter.

 

Independent Sales Agent agrees to commit **% (**) of commissioned salesto a business development plan (“Business Development Funds”) to fundactivities designed to expand Merial and Sales Agent business withinhigh-growth potential clinics and/or high-growth regions of the Territory assubmitted in writing and agreed upon by both parties by January 31, 2008.Thereafter, a recap of business development activities performed will beprovided to Merial quarterly. Merial will notify Independent Sales Agent of itsapproval, or lack thereof, regarding these activities, in writing, no laterthan the 10th of the subsequent month following the quarter’s end. Provided,however, that approval shall not be deemed given in the event that Merial doesnot respond within such period.

 

Promotional Allowance Funds, which are based on the Independent SalesAgent’s Net Sales of the Products, (see Added-value Elements for Sales ofProducts table above), shall be made available to reimburse Independent SalesAgent for expenses incurred in connection with

 

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certain growth initiatives, e.g., advertising initiatives, executivetraining, sales personnel incentives, and the like. Proposed uses for suchfunds shall be submitted to MERIAL in writing utilizing the appropriatePromotional Allowance Funds request forms. Any such proposals shall be approvedin advance by MERIAL, in accordance with its sole discretion. At least fortypercent (40%) of projected Promotional Allowance Fund accruals must be used tosupport business building initiatives for strategic Products or business growthwithin clinics identified as high­growth potential customers. Earned PromotionalAllowance Funds shall not rollover; Promotional Allowance Funds accrued during2008 must be used by Independent Sales Agent, for approved activities, by nolater than March 31, 2009, unless otherwise approved in writing by MERIAL.Promotional Allowance Funds accrued in 2009 must be used by Independent SalesAgent by no later than December 31, 2009 unless otherwise approved byMerial. Such funds shall be remitted by MERIAL to reimburse Independent SalesAgent for approved activities within thirty (30) days after MERIAL’s receipt ofa detailed invoice of the expenses incurred by Independent Sales Agent inconnection with such activities.

 

Independent Sales Agent Representative is an individual who, working asan agent or employee of the Independent Sales Agent, solicited and placed thequalifying order. The Independent Sales Agent will provide MERIAL a list of itsSales Agent Representatives with address, telephone number, and SAR code(number) within fourteen (14) days of the Commencement Date and within fourteen(14) days of any change in the Independent Sales Agent’s sales force. TheIndependent Sales Agent must not make any deductions from amounts due SalesAgent Representatives.

 

1                                          MERIAL Monthly Commission Rate indicates thecommission rate paid to Independent Sales Agent for EDI and Named Sales AgentNet Sales dollars generated in the Territory.

2                                          The (1) HEARTGARD and FRONTLINE and (2) PREVICOX,Companion Animal Vaccine and ORAVET Goal Attainment Commissions indicate thebonus commission rates paid to Independent Sales Agent for EDI and Named SalesAgent Net Sales dollars generated in the Territory if both Independent SalesAgent and MERIAL achieve their respective year-to-date Sales Goals for boththese product categories, as specified in Schedule D, with such payments beingcalculated at the end of each calendar quarter.

 

**II.****                                     Commissionspaid for Sales of Other Products**

 

Independent Sales Agent earns full commission on the Net Sales of OtherProducts to AMAs in the Territory when the order is placed with MERIAL by theIndependent Sales Agent via EDI.

 

No commissions are paid for products not listed on Schedule E or forsales outside of Independent Sales Agent’s Territory. The commissions will onlybe paid in connection with those orders which are transmitted to MERIAL viaEDI.

 

The Transaction Fee will be paid to Independent Sales Agent withinthirty (30) days of the last business day of the month in which MERIAL receivesa qualifying order.

 

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**III.****                                 ****

 

**BONUS POOL OPPORTUNITY**

 

In addition to the total commission payment described above, MERIALwill create a Bonus Pool. This pool will start at not less than $500,000 andmay be increased at the discretion of MERIAL before December 31St of thecurrent contract year. This Bonus will be distributed among MERIAL independentsales agents that achieve their respective Sales Goals for the given contractyear, providing MERIAL achieves its Sales Goal for the given contract year, asspecified in Schedule D. Distribution of the Bonus Pool will be made proportionalto the business share of MERIAL independent sales agents that achieved theirrespective Sales Goals for the given contract year.

 

For illustration purposes only, in 2008, three (3) independentsales agents achieve their respective sales objectives with sales of $100M,$50M and $50M respectively. The independent sales agent with $100M in saleswould be entitled to $250K (50% of the $500,000 Bonus Pool).

 

**CALCULATIONS**

 

The Commission payments, Goal Attainment Commissions, and Bonus Poolearnings will be calculated by MERIAL, and shall not be subject to review byIndependent Sales Agent.

 

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**MERIAL SAR SALES ACHIEVEMENT TRIP**

 

MERIAL shall maintain a MERIAL territory based SAR Sales AchievementTrip program. A SAR Sales Achievement Trip will be awarded to a MERIALindependent sales agent for each MERIAL Sales Representative that qualifies forthe Circle of Excellence Honor and Recognition Award. MERIAL is expected toname 55 MERIAL Sales Representatives as Circle of Excellence award winners (245representatives x 22.5% = 55 honorees). It is therefore expected that a totalof 55 trips will be awarded to Merial independent sales agents. In addition toearned trips, an independent sales agent will be awarded one Bonus Trip foreach 6 trips won by such independent sales agent. These trips are to be awardedon a discretionary basis to sales and sales management personnel that madesignificant contributions to the success of that independent sales agentselling Products in the program year.

 

Trips will be awarded to Independent Sales Agent and not to itsindividual Sales Agent Representatives. Qualification will be based upon totalsales performance within the MERIAL COE territories, calculated as follows: Netsales dollars for FRONTLINE and HEARTGARD, plus 4x the net dollar sales forPREVICOX, Companion Animal Vaccines and ORAVET. The greatest dollar-volumecontribution to a qualifying COE territory as calculated using this formula,will win the SAR Sales Achievement Trip. The 4x factor will be applied tohorizon products to elevate focus and to recognize performance associated withmeeting sales objectives in multiple product categories.

 

For illustration purposes only, in 2008 a Merial Sales Representativeis awarded Circle of Excellence honor and recognition. Sales within thatterritory were comprised of $1,000,000 in FRONTLINE brand product sales,$500,000 in HEARTGARD brand product sales and $400,000 in combined sales ofPREVICOX, Companion Animal Vaccines and ORAVET. Sales Agent A contributed salesof $500,000 FRONTLINE, $200,000 HEARTGARD and $100,000 PREVICOX, CompanionAnimal Vaccines and ORAVET. Qualified sales would be determined as follows:$500,000 + $200,000 + ($100,000 x 4) = $1,100,000. Sales Agent B contributedsales of $500,000 FRONTLINE, $200,000 HEARTGARD and 110,000 PREVICOX, CompanionAnimal Vaccines and ORAVET. Qualified sales would be determined as follows:$500,000 + $200,000 + ($110,000 x 4 = $1,140,000. Sales Agent B. Finalselection of Sales Agent Representatives will be the responsibility of SalesAgent Management.

 

In addition, for each SAR Sales Achievement Trip earned by theIndependent Sales Agent, a four thousand dollar ($4,000) cash payment will beawarded to Independent Sales Agent. Cash payments will be awarded for earnedtrips only. Bonus Trips will not qualify for this payment.

 

The aggregate value of any such Trip (the “Trip Award Amount”) shallnot exceed ten thousand dollars ($10,000). The Trip Award Amount for each Tripshall be allocated as follows: (i) approximately four thousand ninehundred dollars ($4,900) in trip value to the chosen Sales AgentRepresentative, (ii) approximately four thousand nine hundred dollars($4,900) in trip value for each Bonus Trip, and (iii) a four thousanddollar ($4,000) cash payment to Independent Sales Agent’s headquarters. Thevalue, duration, and location of any such trip shall be left to the solediscretion of MERIAL.

 

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**Schedule D**

 

**MWI Veterinary Supply, Inc.**

 

**MERIAL Independent Sales Agent PERFORMANCEGOALS**

 

MWI, Inc. and MERIAL agree to the Performance Goals listed below.These Performance Goals shall be calculated by MERIAL and shall not be subjectto review by MWI.

 

**1.0****                               MERIAL2008 Sales Goal:**

 

MERIAL 2008 Sales Goal shall be: $**. This goal is calculated as thesum of the Net Sales of MERIAL less Distributor purchases plus reportedDistributor sales.

 

**2.0****                               MWI, Inc.2008 Sales Goal:**

 

MWI Sales Goal for 2008 shall be: $**.

 

**YTD Goals ($MM)**

 
| ** **                          | ** ** | **Q1**     | ** ** | **YTD Q2** | ** ** | **YTD Q3** | ** ** | **YTD Q4** | ** ** |
|-------------------------------------|------------|------------|------------|------------|------------|------------|------------|------------|------------|
| **FRONTLINE**                       | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** |
| **HEARTGARD**                       | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** | ******     |       |
| **PREVICOX,  ORAVET,  PETVACCINES** | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** |
| ** **                          | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Other Products**                  | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** |
| **Total YTD**                       | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** | ******     | ** ** |

 

**3.0****                               MERIAL2009 Sales Goal:**

 

MERIAL 2009Sales Goal shall be calculated as the sum of the Net Sales of MERIAL for 2008less Distributor purchases plus reported Distributor sales for 2008. Such goalshall be calculated by MERIAL by no later than March 1, 2009.

 

**4.0****                               MWI2009 Sales Goal:**

 

MWI Sales Goalfor 2009 shall be established by MERIAL by no later than March 1, 2009.

 

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**SCHEDULE E**

 

**Other Products**

 

**PHARMACEUTICALS**

 

IMMITICIDE®

ENACARD® (1.0 mg, 2.5 mg, 5.0 mg, 10.0 mg, 20.0 mg)TRESADERM®(7.5 ml, 15.0 ml)

TRESADERM® (7.5 ml, 15.0 ml)

 

®Registered trademarks and TM trademarks of MERIAL.

 

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