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) &
