Exhibit 10.14


 


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


 


LICENSE AGREEMENT


 


THIS AGREEMENT dated and effective July 1,
2008, is between the AMERICAN ANIMAL HOSPITAL ASSOCIATION (“AAHA”), with its
principal offices located at 12575 W. Bayaud Ave., Lakewood, CO 80228 and MWI
Veterinary Supply Co. (“MWI”) with its principal offices located at 651 S.
Stratford, Suite 100,  Meridian,
Idaho 83680.


 


WHEREAS,  AAHA is an organization exempt from federal
income tax under Section 501(c)(6) of the Internal Revenue Code;


 


WHEREAS,  MWI is an Idaho for profit corporation
engaged in distributing animal health products to veterinarians including
members of AAHA;


 


WHEREAS,  AAHA and MWI desire to enter into an
agreement whereby MWI shall be granted an exclusive license to use the
registered trademark “AAHA MarketLink” and such other Proprietary Materials as
defined in this Agreement solely in connection with the AAHA Marketlink Program
(“Program”) whereby MWI shall market and sell veterinary products to AAHA
members; and


 


WHEREAS,  MWI shall market its products to AAHA members
in connection with the Program and under the name AAHA Marketlink;


 


NOW, THEREFORE, in consideration of
the mutual promises set forth in this Agreement and other good and valuable
consideration, the parties agree as follows:


 


1.             Statement
of Purposes and Objectives.  MWI
shall be recognized as the sole AAHA
endorsed distributor of veterinary products to AAHA members in connection with
the Program.  The overall objective of
AAHA in granting a license to MWI is to provide a key economic benefit to AAHA
members, generate revenue that can be used by AAHA for its existing programs
and services and develop new programs and services that meet the needs of AAHA
and its membership.


 


2.             Relationship
of the Parties.  Neither party shall
represent or hold itself out to be a legal representative, joint venturer, or
partner of the other party.  MWI and AAHA
are independent contractors and are not authorized to make any contract,
agreement, warranty or representation on behalf of the other party or to create
any obligations, express or implied, on behalf of the other party without the
prior written consent of that party.


 

















 


3.             Licensing
Royalty and Payments.  In exchange
for an exclusive license to use the federally registered mark  “AAHA Marketlink” as well as a non-exclusive
license to use the AAHA name (collectively the “Marks”) and the AAHA membership
and mailing lists  (all such intellectual
property is collectively referred to as “Proprietary Materials”) only in
conjunction with the Program,  MWI agrees
to:


 


3.1.          Minimum
License Payment.  During the term of
this Agreement, and any renewal terms, pay AAHA a minimum license royalty of
$25,000 per year. (“Minimum License Payment”) The first installment shall be payable upon execution
of this Agreement and subsequent installments shall be payable on July 15th
of each year.


 


3.2.          Yearly
Royalty Payment.  For a period no
longer then ten (10) years,
MWI shall pay an amount equal to 0.10%
of the Gross Sales to AAHA members  from July 1 to June 30
(whether purchasing through the Program or MWI) which exceeds the Sales Base,
less the Minimum License Payment (“Yearly
Payment”).   For purposes of this
Agreement, “Gross Sales” shall be defined as MWI’s invoiced sales
plus agency orders transmitted by MWI to Merial.  The Yearly
Payment shall be payable by MWI to AAHA by July 15th of each
year.


 


3.3.          Sales
Base.  The “Sales Base” shall be defined as AAHA Services Corporation’s and MWI’s
total revenues and Merial agency
sales to AAHA members (whether purchasing through the Program or MWI) for the
period from May 1, 2007, through April 30, 2008, equal to /**/.  For a period of sixty (60) days
from the effective date of this Agreement, the parties may revise the Sales
Base, as applicable, to accurately reflect the total revenues and Merial agency sales to AAHA members
(whether purchasing through the Program or MWI) for the period from May 1,
2007, through April 30, 2008.


 


3.4           Example.  If
Gross Sales to AAHA members in year 2009 equaled /**/, the Yearly Royalty
Payment due and payble to AAHA would equal /**/ calculated as follows: ((/**/
- /**/) * 0.10%) - $25,000 = /**/.


 


4.             Usage of License.  This license
is solely for use in connection with the Program and may not be used for
purposes of suggesting AAHA’s approval or endorsement of any other products or
services of MWI.  In the event of
termination of this Agreement as provided for in this Agreement, this license
will be forfeited immediately by MWI to AAHA.


 


5.             Usage
of Proprietary Materials.  MWI agrees that it will comply with AAHA’s
written guidelines with respect to the use of the Marks, as set forth on Exhibit A. 
MWI acknowledges and agrees that: 
(i) it shall not use the AAHA Marks in a manner likely to diminish
the AAHA Marks’ commercial value; (ii) it shall not knowingly permit any
third party to use the AAHA Marks unless authorized to do so in writing by
AAHA; (iii) it shall not knowingly use or permit the use of any mark,
name, or image likely to cause confusion with the AAHA Marks; (iv) it
shall not use or permit the use the AAHA Marks in such a manner as to create
the impression that AAHA has endorsed, directly or indirectly, any of the goods
and services of MWI; (v) all goodwill associated with the Marks and the
Program shall inure to 


 

















 


AAHA and all goodwill associated
with MWI shall inure to MWI; (vi) the AAHA Marks and the Proprietary
Materials are and shall remain the sole property of AAHA; and (vi) nothing
in this Agreement shall confer in MWI any right of ownership in the AAHA Marks
and the Proprietary Materials and MWI shall not make any representation to that effect, or use
the Marks or Proprietary Materials in a manner that suggests that such rights of ownership have been conferred.


 


6.             Control
of AAHA Proprietary Materials.  MWI
acknowledges and agrees that AAHA has invested substantial time, money and
other resources in the development of its Proprietary Materials.  MWI acknowledges and agrees that the
Proprietary Materials and all right, title and interest therein, is and shall
remain the exclusive property of AAHA. 
AAHA shall have the right to obtain and to hold in its trademarks, servicemarks, copyrights,
registrations or such other protection as may be appropriate to protect the
Proprietary Materials  and MWI shall do nothing to
invalidate them.   Nothing contained in this Agreement shall give
MWI any right, title or interest in the Proprietary Materials except as
specifically provided for in this Agreement.  
MWI shall not assign, transfer or otherwise convey its license to use
the Proprietary Materials nor grant a sublicense to use the Proprietary
Materials to any person, firm or entity, including but not limited to, any
parent, subsidiary, associated, affiliated or related company without written approval from AAHA;
provided, however, that MWI may license the right to use any of its marks which
incorporate the AAHA logo upon prior written approval from AAHA.  Upon
MWI becoming aware of the unauthorized use of the Proprietary Materials,
MWI agrees to notify AAHA of any unauthorized use of the Proprietary Materials
within five (5) days after such unauthorized use comes to the attention of
MWI.


 


7.             Database
Services. On a quarterly basis, AAHA shall
provide MWI with certain data concerning the current membership of AAHA for the
purpose of marketing the Program to AAHA members.  Upon request, AAHA shall provide data in the
appropriate format (e.g., electronic medium or mailing labels) to MWI.   Nothing
herein shall be construed to grant MWI any ownership rights in or to the data
base owned by AAHA.


 


8.             Participation
and Reporting Requirements.   Only current AAHA members, in
good standing with AAHA, shall
be permitted to participate in the Program. 
Except as otherwise required by
applicable federal, state, provincial or local laws, rules or regulations,
MWI shall distribute and ship
products only to the address of the AAHA
member as it appears in AAHA’s membership data base and MWI shall take reasonable steps necessary to insure that participating AAHA members do not re-sell products
to other veterinarians, other practices (without regard to membership or
entity) or to the public through catalogs or other distribution outlets.  On at
least a quarterly basis, MWI shall provide AAHA with a list of all AAHA
members enrolled in the Program as set forth in this Agreement.   Upon
receipt of such list, AAHA will verify that all such AAHA members are in good standing with AAHA, with applicable dues current and paid.   Any persons who are no longer current AAHA members will be
identified to MWI and MWI shall advise
such persons that they are no longer eligible to participate in the Program.


 


9.             Inspection
and Review.  Upon reasonable notice, AAHA shall
have the right, at its own expense and without unduly disrupting the business
of MWI, to conduct periodic onsite reviews or audits of MWI’s Program files and
information with respect to the
computation of the 


 

















 


Yearly
Royalty Payment, as described in Section 3.2, and MWI’s use of the Proprietary Materials.


 


10.           Obligations
of MWI.  In addition to its other
duties and obligations under this Agreement, MWI represents and warrants to
AAHA that it shall:


 


A.                                   Use its reasonable best efforts
to market the Program to AAHA member customers.


 


B.                                     Meet periodically with AAHA representatives to review
the Program, and develop recommendations for consideration by AAHA. MWI and AAHA shall attend such meetings at
their own expense.


 


C.                                     Seek to advise and keep AAHA informed of the relative desirability
of the structure of the Program, potential new programs and general trends and
changes in the market.


 


D.                                    With respect to this Agreement and
the terms and conditions set forth herein, materially comply with any and all practices and procedures required by
the laws or regulations of any state or other jurisdiction.


 


E.                                      Become aware of other AAHA programs and services to
assist MWI in marketing the Program to AAHA members


 


11.           Obligations
of AAHA.  AAHA agrees that it shall
provide the following to MWI:


 


A.                                   Provide access to AAHA membership information,
including use of AAHA membership and mailing
lists, as set forth in this Agreement.


 


B.                                     Provide MWI the opportunity to participate as an
exhibitor, advertiser, or sponsor in all AAHA programs, publications, and
services under the same terms and conditions offered to all commercial
companies, and at the same fees as charged to others.


 


C.                                     At such events that AAHA maintains a special exhibit
area to promote AAHA membership and other member benefit programs (such as
insurance and retirement programs), AAHA agrees to provide exhibit space within
this area to MWI, at a cost equal to that charged to other exhibitors for comparable
space.


 


D.                                    Pay its own costs and expenses necessary in order to
carry out its obligations under this Agreement, except as otherwise provided in
this Agreement.


 

















 


E.                                      Provide to MWI verification of the AAHA membership of
all AAHA member customers as may be reasonably requested by MWI.


 


F.                                      Respond to correspondence and inquiries received
directly from AAHA members relating to the Program and supply to such members,
upon request, MWI brochures and sales materials and refer such persons to MWI.


 


G.                                     With respect to this Agreement and
the terms and conditions set forth herein, materially comply with any and all
practices and procedures required by the laws or regulations of any state or
other jurisdiction.


 


13.           Additional Program Development by
MWI or AAHA.  MWI
and AAHA acknowledge that the Program described in this Agreement is
limited to the matters described herein.  Except as otherwise set forth herein or
that certain “Asset Purchase Agreement”
entered by and between MWI, AAHA and AAHA Services Corporation effective as of July 1,
2008, or the Sponsorship Agreement between MWI and AAHA effecive July 1,
2008, the parties agree that (i) AAHA may in the future develop
other programs which are not related to the Program in which AAHA has a
proprietary interest in all such additional programs and that MWI will do
nothing to interfere with AAHA’s
development or marketing of such additional
programs, and (ii) this
Agreement will not impact or restrict MWI or their affiliates from
participation in transactions with other groups of veterinary practices.


 


14.           Term.  This Agreement shall commence effective July 1,
2008, and shall continue for a period
of ten (10) years, and shall automatically renew thereafter for successive one
year periods, unless either
party shall provide one hundred eighty (180) days written notice, to the other
party, electing to not renew the Agreement. 
In the event of a renewal of this Agreement, all terms and conditions of this
Agreement shall apply to such renewal
period.  Notwithstanding the forgoing, in
the event of a renewal of this Agreement, Section 3.2 and 3.3 shall
terminate in their entirety, and thereafter, the only fees payable under this
Agreement, for any renewal term, shall be the Minimum License Payment.


 


15.           Termination.  Except as
otherwise provided herein, this Agreement may be terminated at any time by either party for a
breach of any of their respective obligations as set forth in this Agreement
upon ninety (90) days written
notice to the breaching party.    Breaching party shall have thirty (30)
calendar days from the receipt of notice to cure the breach.  If the breaching party fails to cure within
the thirty days from the receipt of notice, this Agreement may be immediately
terminated by the non-breaching party. Upon termination, MWI shall be obligated to surrender
all Proprietary Materials to AAHA as soon
as commercially reasonable but no later than thirty (30) days afer termination.
 Additionally, upon termination,
MWI shall surrender any and all right, title or interest in the Program.


 


This Agreement may also be
terminated upon fifteen (15) days notice by AAHA  or MWI, subject to the
right of cure as set forth above,
upon the occurrence of any of the following events:


 

















 


A.                                   MWI’s failure to make any payment of royalty to AAHA
when due (provided however that all minimum royalties shall become immediately
due and payable as well as the amount for additional royalties based upon a
good faith estimate);


 


B.                                     MWI ceases or threatens to cease to function as a
going concern, becomes insolvent, makes an assignment for the benefit of
creditors, files a petition in bankruptcy, permits a petition in bankruptcy to
be filed against it, admits in writing its inability to pay its debts as they
become due, or has a receiver appointed for a substantial part of its assets;


 


C.                                     The sale, dissolution or liquidation of MWI or the
sale of substantially all of MWI’s assets to a non-affiliate provided that AAHA shall consider whether or not to
approve any such transfer to a non-affiliate; and


 


D.                                    A breach by MWI of any of the provisions of this
Agreement relating to the use of the Proprietary Materials;.


 


16.           Proprietary Materials Protection.    AAHA
has all rights in and to the Proprietary Materials.  The Proprietary Materials do not infringe
upon or violate any copyright, trade secret, trade name, trademark, servicemark
or any other proprietary right of any third party.  If any written claim of infringement is made
by any third party against MWI with respect to the Proprietary Materials, MWI
shall promptly notify AAHA, and AAHA shall defend and indemnify MWI against
such claim.  Should any part of the
Proprietary Materials, or in AAHA’s opinion is likely to become the
subject  of any claim of infringement,
AAHA shall seek to (i) procure the right for MWI to continue to use the
Proprietary Materials, or (ii) replace or modify the Proprietary Materials
to make them non-infringing; or (iii) terminate this Agreement.


 


17.           Indemnification.  Each party (“Indemnifying Party”) agrees to
indemnify and hold the other party (“Indemnified Party”) and the Indemnified
Party’s officers, members, directors, employees or agents harmless from and
against any lawsuits, claims, action or causes of action, arising out of, or in
connection with, any errors or omissions of the Indemnifying Party, its agents,
representatives or employees, with respect to the Indemnifying Party’s duties
and obligations set forth in this Agreement. 
This obligation includes, but is not limited to, the cost of defense,
payment of any judgments and payment of any expenses for attorneys’ fees and
other costs which may be incurred.


 


18.           Disputes.  If a dispute arises between the parties
regarding their rights or obligations under this Agreement, the parties shall
first attempt to settle the dispute by direct discussions within thirty (30)
days.  If the dispute cannot be settled
by the parties by direct discussions, then the parties agree to endeavor to
settle the dispute in an amicable manner by mediation administered by the
American Arbitration Association under its Commercial Mediation Rules within
thirty (30) days.  Thereafter, any
unresolved dispute arising from or relating to this Agreement or a breach of
this Agreement shall be resolved as provided by this Agreement and by law;
provided, however,in the event of any action relating to the use or misuse 


 

















 


of the Proprietary Materials, AAHA
may seek injunctive relief in any court of competent jurisdiction


 


19.           Assignment.  Neither
party may assign this Agreement or any of the rights granted hereunder
without the prior written approval of the
other party.  Any assignment
without  both parties prior written approval
shall be void.


 


20.           Entire
Agreement.  This Agreement contains
the entire agreement between the parties with respect to this Agreement and any
related transactions, and supersedes all prior arrangements, understandings,
agreements and covenants among the parties.


 


21.           Severability.  Should any term of this Agreement be declared
by any court of competent jurisdiction to be invalid for any reason, then the
remainder of this Agreement shall remain in full force and effect and that
portion which is determined to be invalid shall be severed.


 


22.           Waiver
and Amendment.  Any term or condition
of this Agreement may be waived at any time by a party entitled to the benefit
thereof if such waiver is in writing and signed by the waiving party.  A waiver of any term or provision shall not
be construed as a waiver of any other term or provision of this Agreement.  This Agreement may be amended at any time if
such amendment is in writing and signed by each of the parties hereto.


 


23.           Governing
Law.  This Agreement shall be
governed by Colorado law.  Any proceeding initiated by MWI arising out
of or in connection with this Agreement will be determined solely by the
federal court sitting in the  City and
County of Denver, Colorado (or, if the federal court denies jurisdiction, the
state court sitting in the City and County of Denver, Colorado), and any
proceeding initiated by AAHA arising out of or in connection with this
Agreement will be determined solely by the federal court sitting in Ada County,
Idaho (or, if the federal court denies jurisdiction, the state court sitting in
Ada County, Idaho), and the parties consent to the jurisdiction and venue of
those courts.


 


24.           Notice.  Any notice required or permitted to be given
to the parties pursuant to the terms of this Agreement shall be sent certified
mail, return receipt requested, or by facsimile transmission to the parties at
the address stated below.  All notices
shall be deemed given when deposited in the mails, postage prepaid.


 


	
  AAHA:

  	
   

  	
  12575 W. Bayaud Ave.

  	
   

  	
   

  
	
   

  	
   

  	
  Lakewood, CO 80228

  	
   

  	
   

  
	
   

  	
   

  	
  ATTN: 

  	
  John W. Albers, DVM

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Executive Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MWI:

  	
   

  	
  651 S. Stratford, Suite 100

  	
   

  	
   

  
	
   

  	
   

  	
  Meridian, Idaho 83680

  	
   

  	
   

  
	
   

  	
   

  	
  ATTN: 

  	
  Jim Cleary,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  	
   

  	
   

  



 


 

















 


Either party may change the address
at which it is to receive notice by notifying the other party in writing of the
change.


 


25.           Representation
of Authority.  Both parties represent
and warrant that they each have the authority to enter into and carry out all
of its obligations set forth in this Agreement.


 


26.           Amendment
to Preserve Exempt Status. 
Notwithstanding any other provision in this Agreement to the contrary,
this Agreement shall be amended to the extent necessary to preserve the
continued qualification of AAHA as an exempt organization under Section 501(c)(6) of
the Internal Revenue Code.  In the event
that it becomes necessary to amend this Agreement for such purpose, then either
party may, in lieu of such amendment, terminate this Agreement by giving thirty (30) days’ notice to the other party. 
Notwithstanding the forgoing, in the event this Agreement is terminated
pursuant to this Section 26, the parties will attempt, in good faith, to
enter a similar agreement consistent with all rules, regulations and laws
regarding AAHA’s exempt organization status.


 


IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed as of the date first written above.


 


	
   

  	
  AMERICAN ANIMAL HOSPITAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John Albers, DVM

  
	
   

  	
  Its

  	
  Executive Director

  
	
   

  	
  Date

  	
  7/01/08

  
	
   

  	
   

  
	
   

  	
  MWI VETERINARY SUPPLY CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jim Cleary

  
	
   

  	
  Its

  	
  Chief Executive Officer

  
	
   

  	
  Date

  	
  7/1/2008