exv10w2






EXHIBIT 10.2




*** Certain information in this Exhibit has been omitted and filed

separately with the SEC. Confidential treatment has been requested with

respect to the omitted portions.




2009 LIVESTOCK PRODUCTS DISTRIBUTION AGREEMENT




     This Livestock Products Agreement (“Agreement”) effective as of January 1, 2009 (“Effective
Date”) is made by and between Pfizer Inc., 812 Springdale Drive, Exton, PA 19341 (“Pfizer”) and,
Professional Veterinary Products, Ltd., 10077 South 134th Street, Omaha, Nebraska 68138
(“PVPL”).


WHEREAS, PVPL is in the business of buying and selling animal health products and servicing
customers for those products, and



WHEREAS, PVPL and Pfizer wish to set forth the terms of their relationship related to the purchase
and supply of such products,



NOW, THEREFORE, in consideration of the promises and covenants contained herein, the parties hereby
agree as follows:





Definitions:




“PARTICIPATING CUSTOMERS” shall mean customers from the list of customers approved by Pfizer
who have entered into a Leaders Edge Agreement with Pfizer.




“Products” shall mean the Pfizer cattle and swine products sold to PVPL by Pfizer pursuant
to this Agreement (and referenced in Schedule A to this Agreement).




“Sales Out” shall mean the reported sales by PVPL to Covansys and accepted by Pfizer.




“Strategic Accounts” shall mean all those PARTICIPATING CUSTOMERS listed in Schedule B
hereto,




1. (a) Pfizer shall continue to promote its Products to certain select customers in the
livestock field. The parties agree that each time a PARTICIPATING CUSTOMER selects PVPL as
their supplier and to service that customer’s account, Pfizer shall send to PVPL a Pfizer
Suggested Resale Price List which shall specify the Pfizer Products and the Pfizer suggested
resale prices quoted to such PARTICIPATING CUSTOMER (hereafter “SUGGESTED RESALE PRICE
LIST”). Each such SUGGESTED RESALE PRICE LIST shall be incorporated into and become part of
this Agreement. Please find the current SUGGESTED RESALE PRICE LIST listed on Schedule C
hereto. Also included



 









 







on Schedule C is the current Pfizer Livestock Distributor Pricing. The Products and
suggested resale prices are subject to change at any time in Pfizer’s sole discretion upon
[***] prior written notice.




     (b) Pfizer reserves the right to add or delete PARTICIPATING CUSTOMERS or Strategic
Accounts at any time at Pfizer’s sole discretion. Pfizer will provide written notice to
PVPL of any changes. Pfizer will notify PVPL of any (i) additions to the Strategic Accounts
list within twenty-four (24) hours of Pfizer’s receipt of the customer contract and (ii)
removals from the Strategic Accounts list within four (4) business days prior to the removal
effective date.




2. (a) PVPL represents and warrants that for the purposes of this Agreement, it is in the
business of purchasing Products from Pfizer for the sole purpose of resale and distribution,
is registered within the state(s) with which it does business, is compliant with all
pharmacy and distribution licensing requirements within the state(s) with which it does
business, and is compliant with and capable of participating in Electronic Data Interchange
(EDI).




     (b) PVPL agrees to purchase from Pfizer, at credit terms agreed to between the parties
and as may be further set forth on Pfizer’s invoices, Products sufficient to fulfill demand
from all customers to whom PVPL will sell Products in the quantities desired by the
customers.




     (c) PVPL agrees to maintain an inventory of Products equal to [***] Demand but
excluding all Products indicated on Schedule A as ineligible for RSA payments. For purposes
of this Agreement “Demand” shall mean [***].




     All Products shall count towards the amount held in inventory by PVPL. PVPL and Pfizer
agree to act in good faith to resolve any material differences in the on hand inventory
calculations.




     (d) Pfizer reserves the right to allocate purchases such that PVPL may not purchase
more than [***]. Exceptions must be approved by Pfizer’s New York headquarters.




     (e) PVPL agrees that all sales of Pfizer Products from PVPL to a PARTICIPATING CUSTOMER
shall reflect the specific prices for each Product provided for in that PARTICIPATING
CUSTOMER’S most recent SUGGESTED RESALE PRICE LIST. In the event that the price listed on a
PARTICIPATING CUSTOMER’S most recent SUGGESTED RESALE PRICE LIST for any particular Product
is lower (at the time of consummation of a sale of such particular Products between PVPL and
that PARTICIPATING CUSTOMER) than the price paid by PVPL to Pfizer for such Product, Pfizer
agrees to credit PVPL’s account for the amount of such difference.



2









 





     3. Nothing herein contained shall create or be deemed to create any relationship between the
parties other than as specifically provided for herein. No employment, partnership, specific or
general agency relationship shall exist unless specifically provided for in writing between the
parties. PVPL shall not represent, directly or indirectly, expressly or by implication, that any
such relationships exist and/or that PVPL has any authority except as set forth in this Agreement.



     4. PVPL shall use commercially reasonable efforts to provide appropriate service to the
customers to whom PVPL will sell hereunder. For customers serviced pursuant to this Agreement,
PVPL shall:




     (a) Store its inventory of Pfizer Products under conditions (including refrigeration
where appropriate) in accordance with package labeling or other written instructions from
Pfizer to ensure that such Products retain their potency, purity, quality, and identity;




     (b) Provide to Covansys by the close of business on Friday of each week an inventory
report covering all Product inventory purchased from Pfizer and setting forth in dollars at
PVPL’s acquisition cost from Pfizer the amount of inventory by species. PVPL agrees that
Pfizer shall have the right, upon reasonable advance notice and during business hours to
audit inventory in the possession of PVPL to confirm compliance with this paragraph 4(b) and
to confirm the accuracy of the data contained in the report;




     (c) 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 PVPL
sells;




     (d) Provide Sales Out data, which shall include Leaders Edge and Non-Leaders Edge
sales, to Covansys within ten (10) working days of the date of each invoice. PVPL will use
its best efforts to ensure Sales Out data integrity and timeliness:




     (e) Submit all orders to Pfizer via EDI. EDI report 867 is the acceptable format:




     (f) Establish any service fee or other charge or discount to any customer including
PARTICIPATING CUSTOMERS for Pfizer Products independently and at its sole discretion;




     (g) Provide regularly scheduled delivery service to its customers and use commercially
reasonable efforts to anticipate its customers’ requirements for Pfizer Products. In the
event Pfizer delivers any product order to PARTICIPATING CUSTOMERS (drop ship), no
consideration shall be payable to PVPL for that order under paragraph 5 below, provided that
Pfizer will pay PVPL



3









 







for any drop ship if such shipment is made necessary by the unavailability of Pfizer
Products;




     (h) PVPL agrees that credit limits established by Pfizer shall be subject to change
upon written notice by Pfizer in its sole discretion and that no Product shipments will be
made to PVPL in excess of the established credit limits;




     (i) Invoice customers in an accurate and timely manner;




     (j) Refer to that PARTICIPATING CUSTOMERS SUGGESTED RESALE PRICE LIST on each invoice
for Pfizer Products:




     (k) 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, other than where
supported by sound factual evidence, including, but not limited to, the diversion of
Products and statements of false information. For purposes of this Agreement “Goodwill”
shall mean the marketplace advantage of customer patronage and loyalty developed with
continuous business under the same name over a period of time; and




     (l) Make payment to Pfizer for all Products purchased from Pfizer net [***]. In the
event PVPL fails to maintain the inventory levels specified in paragraph 2(c) above Pfizer
shall have the right, upon [***] written notice to PVPL, to receive payment from PVPL net
[***].



     5. In consideration of PVPL undertaking the obligations set forth herein Pfizer shall make
payments to PVPL in accordance with Schedule D hereto.



     6. All sales of Products to PARTICIPATING CUSTOMER or Strategic Accounts for whom a SUGGESTED
RESALE PRICE LIST has been incorporated into this Agreement are covered by this Agreement with
regard to compensation payable to PVPL hereunder. Any transaction involving Products with any
customer including a PARTICIPATING CUSTOMER for which PVPL has not been selected by that
PARTICIPATING CUSTOMER as the distributor are not covered by this Agreement with regard to
compensation payable hereunder.



     7. (a) PVPL shall not be provided with any rebate, discount or other compensation for Products
handled under this Agreement unless specifically set forth herein. PVPL will NOT be eligible to
collect an RSA on any lateral sales to an unauthorized Pfizer distributor. (It is PVPL’s
obligation to confirm with Pfizer, prior to making a sale, as to whether a distributor is an
authorized distributor.) All sales by Pfizer to PVPL shall be at the then current Pfizer list
price but subject to appropriate credits in accordance with paragraph 2(e). Pfizer shall have the
right to raise or change the price of any or all Products to PVPL on [***] prior written notice,
Pfizer shall be free to limit sales of any or all Products to PVPL in advance of any price
increase.




4












 





          (b) The parties agree that Pfizer shall not be obligated to issue credits for any returns that
exceed the current average of returns of distributors as specified below unless such returns are
the subject of a recall or made at the request of Pfizer. The current average of returns of
distributors for the calendar year of the contract timeline January 1, 2009 to December 31, 2009
shall be:




     Distributor
Average Returns (credits and exchanges) as a % of sales: [***] %



     8. The payments described in Schedule D hereto constitute full and complete compensation for
PVPL.



     9. All returns shall be approved by Pfizer and subject to Pfizer’s Returned Goods Policy,
attached hereto as Schedule F. PVPL may not offset payment to Pfizer of invoice amounts as credit
for any compensation payable hereunder. Pfizer shall make bi-monthly payments of appropriate fees
to PVPL.



     10. PVPL and Pfizer agree that, under the specific circumstances delineated in this Section
10, Pfizer, at Pfizer’s sole discretion, may recoup the sums outstanding to it from PVPL against
those sums which may become due from Pfizer to PVPL, in that the obligations arise from mutual
transactions. The specific circumstances which will enable Pfizer to initiate recoupment are:



          (a) PVPL becomes insolvent, which shall be defined as:





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




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




               (iii) PVPL has failed to act in good faith for a period in excess of six
(6) months to resolve
any outstanding invoice or purchase order issues or reconciliations.




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




          (c) PVPL ceases its business operations whether or not such cessation is voluntary or
involuntary; or;




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



     11. Nothing in this Agreement shall be deemed to preclude PVPL from negotiating a service fee
or any other consideration from, or providing any discount or rebate to, any customer, including
PARTICIPATING CUSTOMERS for any services provided by PVPL.



5









 





     12. PVPL shall distribute Pfizer Products only under the labeling provided by Pfizer or as
otherwise approved in writing 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 the Products.



     13. Nothing in this Agreement shall be deemed to limit Pfizer’s ability to sell any Product at
any time to any customer including PARTICIPATING CUSTOMERS or any other party. Transactions
consummated directly between Pfizer and any such customer or other party shall not qualify for any
of the compensation payable to PVPL hereunder. Nothing in this Agreement shall be deemed to limit
PVPL’s ability to sell non-Pfizer products at any time to any customer including PARTICIPATING
CUSTOMERS or any other party. PVPL’s active promotion or sale of products not made by Pfizer will
not be considered harmful to the Goodwill or name of Pfizer, or the Products, provided that the
Pfizer Products are not maligned in any way as prohibited under Section 4(k) of this Agreement



     14. EXCEPT AS SET FORTH IN THIS AGREEMENT, IN THE LABELING OF THE PRODUCTS SOLD HEREUNDER, OR
AS OTHERWISE SPECIFIED IN WRITING BY PFIZER, PFIZER MAKES NO EXPRESS OR IMPLIED WARRANTIES WITH
RESPECT TO THE PRODUCTS.




          (a) Pfizer shall defend, indemnify, and hold PVPL harmless from all liabilities,
claims, demands, damages, costs and expenses, or money judgments incurred by PVPL 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 PVPL, and (c) any claim that the Products, as sold by Pfizer, were defective. 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 PVPL’s reasonable legal fees
incurred in the course of cooperating with Pfizer’s defense. To be covered by this defense
and indemnity, PVPL 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: PVPL 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,




          (b) In no event shall either party be liable to the other party for special,
collateral, incidental, punitive or consequential damages in connection with or arising out
of this Agreement. Except as provided under subparagraph 14(a), above, total damages
recoverable against Pfizer by PVPL shall be exclusively



6









 






limited to the purchase price of the Products with respect to which damages are claimed.



     15. PVPL and Pfizer acknowledge that in the performance of their duties hereunder each may
obtain access to “Confidential Information” (as defined below) of the other. PVPL 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, which permission shall
not be unreasonably withheld, especially in connection with a sale of all or a substantial portion
of PVPL’s business, 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 PVPL’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. “Confidential information” does not
mean or include any information: (a) which is, at the time of disclosure, available to the general
public; or (b) which following disclosure becomes available to the general public through no fault
of the recipient; or (c) which recipient can demonstrate was in its possession before receipt; or
(d) which is disclosed to recipient without restriction on disclosure. Upon written request from
either party after 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.



     16. All notices or communications given hereunder by one party to the other shall be sent by
hand or by first class prepaid registered or recorded delivery post or by facsimile addressed to
such party as follows:



     If to Pfizer:


Pfizer, Inc.

Attention: President, Animal Health

235 East 42nd Street

New York, NY 10017




     If to PVPL:


Professional Veterinary Products, Ltd.

Attention: President

10077 South 134th Street

Omaha, NE 68138



Either party may change its address by giving written notice to the other party.




7









 








     17. This Agreement shall be effective as of January 1, 2009 and shall continue in force until
December 31, 2010. This Agreement may be terminated by either party upon thirty (30) days prior
written notice. Such termination may be without cause. This Agreement may be terminated immediately
by either party upon written notice in the event of a material breach by the other. In the event
PVPL takes any action that harms or damages the interests of Pfizer or the Products, other than
where supported by sound factual evidence, including, but not limited to, the diversion of Products
and statements of false information, Pfizer may terminate this Agreement immediately upon written
notice.



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



     19. This Agreement and documents referred to herein embody the entire understanding between
the parties hereto, will supersede prior agreements relating to the Products. 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 Agreement.



	 	 	 	 	 	 	 	 	 	 	 
	PVPL	 	 	 	Pfizer Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Steve Price
 

Steve Price
	 	 	 	By
	 	/s/ Clinton A. Lewis, Jr.
 

Clinton A. Lewis, Jr.
	 	 
	 

	 	President
	 	 	 	 	 	President, U. S. Operations	 	 
	 

	 	 	 	 	 	 	 	Pfizer Animal Health	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date

	 	12/10/08
 

	 	 	 	Date
	 	 12/11/08
 

	 	 







8