Exhibit 10.16


 


* * – 
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.


 


COMPANION ANIMAL AAHA MARKETLINK MANAGEMENT AGREEMENT


 


This Agreement
dated and effective as of July 1, 2008 is made by and between Pfizer Inc., 235 East 42nd Street, New York, New York 10017
(hereinafter, “PFIZER”) and MWI Veterinary Supply Co.,
651 S. Stratford Drive, Ste 100, Meridian, ID 83642 (“MWI”).


 


1.             PFIZER hereby agrees to supply MWI
as a designated product supplier for the PFIZER companion animal Products set
forth on Exhibit A (the “Products”), to purchase from PFIZER and to resell
to certain selected Veterinary Hospitals serviced by MWI who are members of the
AAHA/MarketLink arrangement and listed in Exhibit E hereto, subject to the
following terms and conditions.


 


2.             MWI recognizes and agrees to the
following:


 


(a) PFIZER
has elected to work with MWI as a designated supplier to MWI serviced hospitals
at the request of MWI. MWI agrees to work closely with PFIZER to coordinate
logistics for the supply of Products to such hospitals;


 


(b)           PFIZER intends to sell to MWI as the
logistics supplier for the hospitals. MWI understands and agrees that PFIZER
has, and may in the future, run promotions and other activities that would be
seriously prejudiced if MWI resells the Products to distributors or
veterinarians who will resell the Products as a distributor. Incentive payments
under Exhibit D hereto will only be paid by PFIZER to MWI for sales to the
hospitals listed on Exhibit B below or such customers who are added to Exhibit B
by mutual agreement of Pfizer and MWI.


 


3.             MWI agrees to:


 


(a)           use its reasonable best efforts to
sell the Products by focusing its primary effort at reselling to veterinary
hospitals associated with MWI and to pet owner pharmaceutical customers of MWI
serviced hospitals.


 


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


 


(c)           accept shipments from Pfizer of
Product at MWI 12 warehouse locations and provide all appropriate shipment and
delivery options to the accounts serviced by MWI under this Agreement;


 


(d)           not sell the Products to distributors,
manufacturers or to veterinarians who will resell any PFIZER Companion Animal
Products outside an established veterinary/client/patient relationship, nor
shall MWI sell the Products through brokers or non-employee agents;


 


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


 


(f)            provide PFIZER a projected monthly
purchase schedule by the end of the second week of each month;


 


(g)           cooperate fully with PFIZER by actively participating in such strategy
sessions as PFIZER reasonably may require, for the purpose of developing
programs to increase use of the Products; and to cooperate fully with PFIZER in
implementing all promotions and sales campaigns for the Products;


 


(h)           distribute the Products only under
the labeling provided by PFIZER; prescribe, recommend, suggest, and advertise
each Product for use only under the conditions stated in the labeling provided
by PFIZER; and observe all federal, state, and local laws governing the
distribution of animal drugs. In the case of Products bearing the legend, “CAUTION:
FEDERAL LAW RESTRICTS THIS DRUG TO USE BY OR ON THE 


 

















 


ORDER OF A LICENSED VETERINARIAN,” or any
similar legend, sell such Products only to or on the order of a licensed
veterinarian for use in the course of his or her  professional practice or to another person or
entity regularly and lawfully engaged in the use, distribution or dispensing of
such legend drugs;


 


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


 


(j)            take no action, whether or not
identified above, that would harm the goodwill or name of PFIZER, or damage the
interests of PFIZER or the Products;


 


(k)           MWI shall immediately notify PFIZER
in the event MWI obtains information indicating that any of the Products may
have to be recalled either by virtue of applicable law or regulation or good
business judgment. PFIZER shall control all efforts necessary to conduct any
such recall. MWl shall cooperate with PFIZER, at PFIZER’s expense, and MWI
agrees to maintain adequate records to conduct such recall, including the name,
address and Product purchases of all purchasers of PFIZER Products;


 


(l)            Make payment to PFIZER for all
product purchased from PFIZER /**/;


 


(m)          Provide to PFIZER by the close of business on the last business day of
each PFIZER Accounting Period (as set forth in Exhibit F hereto) an
inventory report covering all inventory purchased from PFIZER.


 


(n)           Provide Pfizer with a monthly
accounting of sales via EDI for purposes of allowing Pfizer proper credit to
its sale professionals and provide to Covansys by the close of business on the
last day of each Pfizer Accounting Period an inventory report covering all
Product inventory purchased from Pfizer and setting forth in dollars at MWI’s
acquisition cost from Pfizer the amount of inventory by Product. MWI agrees
that Pfizer shall have the right,
upon reasonable advance notice and during business hours to audit inventory in
the possession of MWI to confirm compliance with this paragraph 4(n) and
to confirm the accuracy of the data contained in the report.


 


(o)           Provide to Covansys its Health Industry Number, Customer Health Industry
Number, Pfizer Product number, transaction date, ship to zip code, number of
units and price with respect to each sale of Product, and unit inventories on each Pfizer Product sku
that MWI sells.


 


(p)           MWI will also provide to Pfizer the information, services and opportunities
set forth in Exhibit B hereto. MWI represents and warrants to Pfizer that
it will only provide data to Pfizer, including specific patient and animal
owner information that is allowable by law.


 


4.             PFIZER shall:


 


(a)           sell the Products to MWI at the prices
provided for in Exhibit A. PFIZER shall have the unrestricted right to
revise the prices, terms and conditions of the Price List, and to add or delete
Products or package sizes, at anytime, and the revisions shall be effective on
all orders submitted after the effective date of the price revisions. 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. Nothing herein shall
prohibit PFIZER from raising or amending prices for Products. PFIZER agrees to
provide MWI /**/
notice of any price increases. PFIZER shall be free to limit sales of Products
to MWI in advance of any price increases;


 


(b)           Compensate MWI in accordance with Exhibit D
hereto;


 


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


 


5.             Nothing in this Agreement shall be
deemed to limit PFIZER’s ability to sell Products to any other party.


 


6.             All purchases by MWI pursuant to
this Agreement shall be in accordance with the terms of PFIZER’s Pricing and
Shipping Policies, as may be amended by PFIZER from time to time.


 


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


 

















 


(a)           all orders are subject to acceptance by PFIZER’s Home Office. Title to
the goods shall pass to MWI once they have been property delivered to the
address designated by MWI. Products requiring temperature control will be
shipped F.O.B. destination;


 


(b)           any tax or other charge upon the sale
and/or shipment of the goods now or hereafter imposed by federal, state or
municipal authorities (other than PFIZER’S income taxes) shall be paid by MWI.
In the event that the price of any article includes transportation charges, any
increase or decrease in transportation charges shall be for MWI’s account;


 


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


 


(d)           Pfizer shall defend, indemnify, and
hold MWI harmless from all liabilities, claims, demands, damages, costs and
expenses, or money judgments incurred by MWI or rendered against it resulting
from (a) any breach by Pfizer of this Agreement, (b) third party
claims or actions for personal injury or property damage  which arise out of the distribution or sale of
Pfizer products or the failure to warn, except to the extent that such personal
injury or property damage arises out of the negligence or willful misconduct of
MWI, and (c) any claim that the
Products, as sold by Pfizer, were defective, or (d) any claim that a
Product or its associated labeling or advertising prepared by Pfizer infringes
any patent, trademark, trademark, copyright or other
intellectual property right of any third party. Pfizer shall assume the defense of each such
claim promptly after written notice from MWI. In the event Pfizer is found by any court of
competent jurisdiction to be liable for any claim based in products liability,
then Pfizer shall reimburse MWI’s
reasonable legal fees incurred in the course of cooperating with Pfizer’s
defense. To be covered by this defense and indemnity, MWI must: promptly notify
Pfizer of any such claim; allow Pfizer to fully control the defense and/or resolution of the claim; and cooperate fully
with Pfizer in the matter. This defense, indemnity and payment for legal fees shall not apply to claims alleging:
MWI alteration, negligent handling or improper storage of the Products; sale of
outdated Products; sale or recommendation of the Products for uses or in a
manner not set forth in either the labeling supplied by Pfizer or as otherwise
specified by Pfizer in writing; or sale of the Products after receipt of
written notice from Pfizer that such sales should be halted;


 


(e)           in no event shall either party be
liable to the other for special, collateral, incidental, or consequential
damages in connection with or arising out of the purchase, resale, or use of
the Products. Except as provided under subparagraph 7(d), above, total damages
recoverable against PFIZER by MWI shall be exclusively limited to the purchase
price of the Products with respect to which damages are claimed;


 


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


 


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


 


(h)           All orders to MWI will receive free
shipping regardless of order size.


 


(i)            Payment Due Date: /**/. Payment Discount: None.


 


8.             This Agreement shall not be binding
upon PFIZER until it is approved by PFIZER at its New York, New York
headquarters.


 


9.             This Agreement shall be effective
as of the date first written above and shall continue in force until December 31,
2008. Either party may terminate this agreement prior to the expiration date (i) with
or without cause, 


 

















 


upon thirty (30) days written notice to the
other party, or (ii) immediately upon written notice, in the event of a
material breach by the other party. In addition, PFIZER may terminate this
Agreement at any time on 15 days written notice to MWI in the event that PFIZER
determines, in its sole discretion, that MWI has failed to comply with the
terms and conditions set forth in paragraph 3 above.


 


10.           MWI and PFIZER acknowledge that in
the performance of their duties hereunder MWI and PFIZER may obtain access to “Confidential
Information” (as defined below) of each other. MWI and PFIZER agree that during
the term of this Agreement and for a period of three (3) years after the
termination of this Agreement, unless specifically permitted in writing by the
other party, to (a) retain in confidence and not disclose to any third
party and (b) use only for the purpose of carrying out their duties hereunder,
any such Confidential Information. As used herein the term “Confidential
Information” means any information, or data, whether of a business or
scientific nature and whether in written, oral or tangible form, relating to
PFIZER’s and MWI’s business or potential business or its research and
development activities, not generally available to or known to the public, and
not otherwise known to the receiving party, that is disclosed to or learned by
the other party pursuant hereto. Upon completion of the work provided for
hereunder or other termination of this Agreement each party will return to the
other party any documents, or copies thereof, or any product samples,
containing or constituting Confidential Information disclosed to or generated
by either party in connection with this Agreement.


 


11.           This Agreement shall be governed by
the laws of the State of New York applicable to contracts to be fully performed
therein. This Agreement is not assignable without the express written consent
of PFIZER, and may be modified or amended only in writing signed by the party
to be bound.


 


12.           This Agreement and documents referred
to herein embody the entire understanding between the parties hereto, will
supersede prior agreements relating to the Products, and may be modified only
in writing and signed by the parties to be bound. No activities conducted
pursuant to this Agreement or related thereto, including but not limited to the
future planning activities of the parties, shall be deemed to give rise to any
obligations on the part of either party other than as expressly provided for
herein.


 


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


 


	
  MWI VETERINARY SUPPLY CO. 

  	
  PFIZER INC.

  
	
   

  	
   

  
	
  BY:

  	
  /s/ James F. Cleary Jr. 

  	
   

  	
  BY:

  	
  /s/ Clinton A. Lewis

  
	
   

  	
   

  	
   

  	
  Clinton A. Lewis

  
	
  Print Name: James
  F. Cleary Jr. 

  	
   

  	
  President

  
	
   

  	
   

  	
  U.S. Operations, Pfizer Animal Health

  
	
   

  	
   

  
	
  Title: President
  and CEO

  	
   

  
	
  Date: July 30,
  2008 

  	
  Date: 8/4/08