Document:

Exhibit 10.1

 

* * – 
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.

 

FIRST AMENDMENT TO

2007-2008 MERIAL LIMITED INDEPENDENT SALES
AGENT AGREEMENT

 

This First
Amendment to 2007-2008 Merial Limited Independent Sales Agent Agreement (“Amendment”),
effective as of the 1st day of January, 2008, by and between Merial Limited, a
company limited by shares registered in England and Wales (registered number
3332751) with a registered office at PO Box 327, Sandringham House, Sandringham
Avenue, Harlow Business Park, Harlow, Essex CM19 5QA, England, and domesticated
in 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 Limited
Independent 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 Agreement
as follows:

 

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

 

2.                                       Section 2.1(a). Section 2.1(a) of
the Agreement is hereby amended by deleting everything after the second
sentence thereof.

 

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

 

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

 

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

 

“MERIAL shall pay commissions on the Net
Sales of orders for Other Products from NHOs within the Territory, which are
transmitted to MERIAL via EDI, according to the schedule and terms outlined in
Schedule B.

 

5.                                       Section 3.1. The term of the
Agreement shall be extended by deleting “31 December 2008” and replacing
it with “31 December 2009.”

 

1

 

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

 

“Pay Independent Sales Agent, as full and
total compensation for all services rendered under this Agreement, certain
commissions for the sales of Products and Other Products as outlined in
Schedule B.”

 

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

 

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

 

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

 

9.                                       No Other Amendment.

 

Except as amended, modified or supplemented
by this Amendment, the Agreement is confirmed and remains in full force and
effect.

 

10.                                 Counterparts. This Amendment may be
executed in one or more counterparts, each of which shall for all purposes be
deemed an original and all of which shall constitute one and the same
agreement.

 

[Signatures on following page(s)]

 

2

 

IN WITNESS
WHEREOF, 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

  
						

 

3

 

Schedule A

 

2008 MERIAL Independent Sales Agent Agreement
- Companion Animal Products

 

Flea and
Tick 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)

 

Heartworm
Preventives

 

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 x
1 doses)

PUREVAX® Feline Respiratory 3 (RCC) (25
x 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 Leukemia
PUREVAX® Ferret (rDistemper) (10X1 ds)

 

Canine Vaccines

 

RECOMBITEK® Lyme (20X1 doses, 50X1
doses)

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 (25X1
doses)

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)

 

PAIN
MANAGEMENT

 

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

 

DENTAL:

 

ORAVETTM
Professional Kit

ORAVETTM
Barrier Sealant Cartridges

ORAVETTM
Plaque Prevention Gel Home Care Kits

 

®Registered trademarks and TM trademarks of MERIAL.

 

 

Schedule B

MWI, Veterinary Supply, Inc. Independent
Sales Agent Earnings

Commission Rates - Net Sales of Products to
AMAs

 

	
  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.                                         Commissions
Earned for Sales of Products to AMAs

 

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

 

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

 

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

 

Independent Sales Agent agrees to commit **% (**) of commissioned sales
to a business development plan (“Business Development Funds”) to fund
activities designed to expand Merial and Sales Agent business within
high-growth potential clinics and/or high-growth regions of the Territory as
submitted in writing and agreed upon by both parties by January 31, 2008.
Thereafter, a recap of business development activities performed will be
provided to Merial quarterly. Merial will notify Independent Sales Agent of its
approval, or lack thereof, regarding these activities, in writing, no later
than 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 does
not respond within such period.

 

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

 

 

certain growth initiatives, e.g., advertising initiatives, executive
training, sales personnel incentives, and the like. Proposed uses for such
funds shall be submitted to MERIAL in writing utilizing the appropriate
Promotional Allowance Funds request forms. Any such proposals shall be approved
in advance by MERIAL, in accordance with its sole discretion. At least forty
percent (40%) of projected Promotional Allowance Fund accruals must be used to
support business building initiatives for strategic Products or business growth
within clinics identified as high­growth potential customers. Earned Promotional
Allowance Funds shall not rollover; Promotional Allowance Funds accrued during
2008 must be used by Independent Sales Agent, for approved activities, by no
later than March 31, 2009, unless otherwise approved in writing by MERIAL.
Promotional Allowance Funds accrued in 2009 must be used by Independent Sales
Agent by no later than December 31, 2009 unless otherwise approved by
Merial. Such funds shall be remitted by MERIAL to reimburse Independent Sales
Agent for approved activities within thirty (30) days after MERIAL’s receipt of
a detailed invoice of the expenses incurred by Independent Sales Agent in
connection with such activities.

 

Independent Sales Agent Representative is an individual who, working as
an agent or employee of the Independent Sales Agent, solicited and placed the
qualifying order. The Independent Sales Agent will provide MERIAL a list of its
Sales 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. The
Independent Sales Agent must not make any deductions from amounts due Sales
Agent Representatives.

 

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

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

 

II.                                     Commissions
paid for Sales of Other Products

 

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

 

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

 

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

 

 

III.                                 **

 

BONUS POOL OPPORTUNITY

 

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

 

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

 

CALCULATIONS

 

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

 

 

MERIAL SAR SALES ACHIEVEMENT TRIP

 

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

 

Trips will be awarded to Independent Sales Agent and not to its
individual Sales Agent Representatives. Qualification will be based upon total
sales performance within the MERIAL COE territories, calculated as follows: Net
sales dollars for FRONTLINE and HEARTGARD, plus 4x the net dollar sales for
PREVICOX, Companion Animal Vaccines and ORAVET. The greatest dollar-volume
contribution to a qualifying COE territory as calculated using this formula,
will win the SAR Sales Achievement Trip. The 4x factor will be applied to
horizon products to elevate focus and to recognize performance associated with
meeting sales objectives in multiple product categories.

 

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

 

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

 

The aggregate value of any such Trip (the “Trip Award Amount”) shall
not exceed ten thousand dollars ($10,000). The Trip Award Amount for each Trip
shall be allocated as follows: (i) approximately four thousand nine
hundred dollars ($4,900) in trip value to the chosen Sales Agent
Representative, (ii) approximately four thousand nine hundred dollars
($4,900) in trip value for each Bonus Trip, and (iii) a four thousand
dollar ($4,000) cash payment to Independent Sales Agent’s headquarters. The
value, duration, and location of any such trip shall be left to the sole
discretion of MERIAL.

 

 

Schedule D

 

MWI Veterinary Supply, Inc.

 

MERIAL Independent Sales Agent PERFORMANCE
GOALS

 

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

 

1.0                               MERIAL
2008 Sales Goal:

 

MERIAL 2008 Sales Goal shall be: $**. This goal is calculated as the
sum of the Net Sales of MERIAL less Distributor purchases plus reported
Distributor 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                               MERIAL
2009 Sales Goal:

 

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

 

4.0                               MWI
2009 Sales Goal:

 

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

 

 

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.Exhibit 10.2

 

* * – 
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.

 

LIVESTOCK PRODUCTS AGREEMENT -
2008

 

This Livestock Products Agreement (“Agreement”)
effective as of December 22, 2007 is made by and between Pfizer Inc., 812 Springdale Drive, Exton, PA 19341 (“Pfizer”) and MWI Veterinary Supply Co.,
651 S. Stratford Drive, Ste 100, Meridian, ID 83642 (“MWI”).

 

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

 

WHEREAS MWI 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 MWI by Pfizer pursuant to this Agreement.

 

“Strategic Accounts” shall mean all those
PARTICIPATING CUSTOMERS listed in Schedule C 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 MWI as
their supplier and to service that customers account, Pfizer shall send to MWI
a Pfizer Suggested Price List which shall specify the Pfizer Products (listed
on Schedule D hereto) and the
Pfizer suggested resale prices quoted to such PARTICIPATING CUSTOMER (hereafter
a “SUGGESTED PRICE LIST”). Each such SUGGESTED PRICE LIST shall be incorporated
into and become part of this Agreement.

 

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

 

2.                                       (a) MWI 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 MWI will sell Products in the quantities
desired by the customers. MWI agrees to make purchases from Pfizer in accordance
with the timing set forth in Schedule E hereto.

 

(b) MWI agrees to maintain an inventory pf
Products equal to /**/ Demand. For purposes of this Agreement “Demand” shall
mean /**/. All Products shall count towards the amount held in inventory by MWI.
MWI and Pfizer agree to act in good faith to resolve any material differences
in the on hand inventory calculations.

 

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

 

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. MWI shall not represent,
directly or indirectly, expressly or by implication, that any such
relationships exist and/or that MWI has any authority except as set forth in
this Agreement.

 

4.                                       MWI shall use its best
efforts to provide appropriate service to the customers to whom MWI will sell
hereunder. For customers serviced pursuant to this Agreement, MWI 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 MWI’s acquisition cost from Pfizer the amount of inventory by
species. 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(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 MWI sells.

 

(d) Provide sales
out data to Covansys within ten (10) working days of the date of each
invoice. MWI will use its best efforts to ensure sales out data integrity and
timeliness. Annual sales forecasts shall be updated on a quarterly basis. The
MWI/Pfizer Account Team will review each quarterly forecast update and
determine relative actions required if any.

 

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

 

(f) Provide
regularly scheduled delivery service to its customers, use its best efforts to
anticipate its customers’ requirements for Pfizer Products. In the event Pfizer
delivers any product order to a PARTICIPATING CUSTOMERS (drop ships) no
consideration shall be payable to MWI for that order under paragraph 5 below,
provided that Pfizer will pay MWI for any drop ship if such shipment is made
necessary by the unavailability of Pfizer Products;

 

(g) MWI 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 MWI in excess of the established credit limits;

 

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

 

(i) Refer to that
PARTICIPATING CUSTOMERS SUGGESTED PRICE LIST on each invoice for Pfizer
Products;

 

(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. 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.

 

(k) Make payment
to Pfizer for all Products purchased from Pfizer /**/. In the event MWI fails
to maintain the inventory levels specified in paragraph 2(b) above Pfizer
shall have the right, upon /**/ written notice to MWI, to receive payment from
MWI /**/.

 

(l) MWI and
PFIZER agree that MWI shall not be entitled to any payment or performance
payments under Schedule G for sales to customers at the close of Periods 1, 2
and 3 as defined in Schedule G hereto or at the end of any fiscal or calendar
year that do not comply with Pfizer’s Guidelines
for Backend Rebate Calculations contained in Schedule G for reporting of sales
and income in appropriate fiscal periods. All determinations of the
appropriateness of sales by MWI shall be in Pfizer’s reasonable discretion.

 

(m) MWI agrees to
participate in and undertake the following activities with, and on behalf of,
Pfizer:

 

Planning:

 

(i) Pfizer and MWI shall conduct at least
two full joint planning meetings per year. These sessions will include
representatives from sales, marketing, technical services and management from
both Pfizer and MWI (hereafter referred to as the MWI/Pfizer Account Team).

 

 

(ii) MWI and Pfizer shall prepare jointly,
a written detailed sales plan which addresses key products, programs and
customers to be focused on during the coming year. Plans shall include the
identification of specific support materials and training requirements,
detailed communication plans including specific MWI sales representatives and
managers and the customers to be contacted and the sequence, timing and
communication vehicle to be used. Annual sales plans will be divided into
quarterly segments. Upon completion of a quarterly program, the Account Team
will conduct a review outlining the strengths and weaknesses of the program.

 

(iii) MWI will provide Pfizer with an
annual sales forecast as well as MWI’s interpretation and insight of the basis
and meaning of such forecasts. The forecast shall include all Pfizer Product
sku’s which MWI sells. Both parties agree that forecasts are not to be
considered binding orders for delivery.

 

(iv) During the term of this Agreement MWI
shall participate with Pfizer outside of the annual plans necessary for
performance under this Agreement. Active cooperation and participation by key
managers of MWI in Pfizer’s strategic planning for the future is highly
desirable to Pfizer.

 

Product Support:

 

(i) MWI will staff all appropriate sales
meetings as planned in advance with Pfizer. Such sales meetings shall be
charged to Pfizer and include but not be limited to; a) all appropriate sales
representatives, and managers as determined by MWI, b) key management
participation and support, c) MWI preparation on the material to be covered,
and d) meeting summary and feedback mechanism.

 

(ii) MWI will participate in and assist in
conducting product, program, production practices, sales training and customer
knowledge training sessions.

 

(iii) MWI will guarantee to Pfizer that
Pfizer products will be presented to customers
on each and every appropriate sales call.

 

(iv) MWI will monitor customer meetings and
provide feedback to Pfizer.

 

(v) MWI will provide reasonable percentage
sales commissions to its sales force employees.

 

(vi) MWI will provide Pfizer Territory Manager
access to account’s management and representatives.

 

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

 

6.                                       Sales of Products to
any party other than a PARTICIPATING CUSTOMER or Strategic Account for whom a
SUGGESTED PRICE LIST has been incorporated into this Agreement are not covered
by this Agreement. Any transaction involving Products with any customer
including a PARTICIPATING CUSTOMER for which MWI
has not been selected by that PARTICIPATING CUSTOMER as the distributor are not
covered by this Agreement.

 

7.                                       (a) MWI shall not
be provided with any rebate, discount or other compensation for Products
handled under this Agreement unless specifically set forth herein. All sales by
Pfizer to MWI shall be at the then current Pfizer list price but subject to
appropriate credits in accordance with paragraph 2(c). Pfizer shall have the
right to raise or change the price of any or all Products to MWI on /**/ prior
written notice. Pfizer shall be free to limit sales of any or all Products to
MWI in advance of any price increase.

 

(b) The parties agree that Pfizer will no
longer automatically credit MWI for returns of Products not sold in the
calendar year in which they are returned. Prior to issuing any appropriate
credit Pfizer shall be entitled to conduct a detailed manual review of sales
data.

 

(c) The parties agree that Pfizer shall not
be obligated to issue credits for any returns that exceed the current average
of select distributors as specified below unless such returns are the subject
of a recall or made at the request of Pfizer. The current average of select
distributors for 2008 shall be:

 

-Distributor Average Returns (credits) as a % of sales
- 1.63%

 

 

8.                                       The payments described
in Schedule G hereto constitute full and complete compensation for MWI.

 

9.                                       Pfizer may terminate
this Agreement at any time on fifteen (15) days prior written notice in the event MWI takes any action that harms the Goodwill
of Pfizer. All returns shall be approved by Pfizer and subject to Pfizer’s
Returned Goods Policy. MWI may not offset payment to Pfizer of invoice amounts
as credit for any compensation payable hereunder. Pfizer shall make monthly
payments of appropriate fees to MWI.

 

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

 

(a) MWI becomes insolvent which shall be defined
as:

 

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

 

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

 

(iii) MWI 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) MWI commences a liquidation of its operations
by means of a sale of its assets in their entirety or piecemeal.

 

(c) MWI ceases its business operations whether or
not such cessation is voluntary or involuntary.

 

(d) MWI 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 MWI from negotiating a service fee or any
other consideration from, or providing any discount or rebate to, any customer,
including PARTICIPATING CUSTOMERS for the services (including those services
specified hereunder or any other services provided by MWI to any customer)
provided by MWI.

 

12.                                 MWI 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 MWI hereunder.

 

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 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 advertisinq 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.

 

(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 MWI shall be exclusively limited to the purchase price of the
Products with respect to which damages are claimed.

 

15.                                 MWI and Pfizer
acknowledge that in the performance of their duties hereunder each may obtain
access to “Confidential Information” (as defined below) of the 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 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.

  
	
   

  	
  812 Springdale Drive

  
	
   

  	
  Exton, PA 19341

  
	
   

  	
  Attention: President, Animal Health

  
	
   

  	
   

  
	
   

  	
  If to MWI:

  	
  MWI Veterinary Supply Co.

  
	
   

  	
  651 S. Stratford Drive, Ste 100

  
	
   

  	
  Meridian, ID 83642

  
	
   

  	
  Attn: Mary Pat Thompson, CFO

  

 

	
   

  	
  With a copy to:

  
	
   

  
	
   

  	
  MWI Veterinary Supply Co.

  
	
   

  	
  651 S. Stratford Drive, Ste 100

  
	
   

  	
  Meridian, ID 83642

  
	
   

  	
  Attn: Jim Cleary, President

  
			

 

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

 

17.                                 This Agreement shall
be effective as of the date first written above and shall continue in force
until December 31, 2008. 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.

 

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 the party to be bound.

 

19.                                 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/ Jim Cleary

  	
   

  	
  By

  	
  /s/ Clinton A. Lewis, Jr.

  
	
   

  	
  Jim Cleary

  	
   

  	
   

  	
  Clinton A. Lewis, Jr.

  
	
   

  	
  President

  	
   

  	
   

  	
  President, U.S. Operations

  
	
   

  	
   

  	
   

  	
  Pfizer Animal Health

  
	
   

  	
   

  	
   

  
	
  Date

  	
  April 8, 2008

  	
   

  	
  Date

  	
  April 16, 2008

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