Exhibit 10.3
* * – 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.
2009 STRATEGIC BRANDS
DISTRIBUTION AGREEMENT
This Agreement dated and effective
as of January 1, 2009 is made by and between Pfizer
Inc, 235 East 42nd Street, New York, NY 10017 (hereinafter,
“PFIZER”) and MWI Veterinary Supply, 651 South
Stratford Drive, Suite 100, Meridian, Idaho 83642
(hereinafter, “MWI”).
Definitions:
“Products”: Rimadyl,
Clavamox, and Simplicef
1.
PFIZER hereby appoints MWI, and MWI
hereby accepts appointment, as a contract distributor for
PFIZER’s Products, to purchase from PFIZER and to resell for
MWI’s own account as a distributor, subject to the following
terms and conditions.
2.
MWI recognizes and agrees to the
following:
(a)
PFIZER has elected to work with a
select group of distributors that are committed to maximizing the
sale of the Products and to working closely with PFIZER to identify
market opportunities for both companies. The intent of this
Agreement is to attain that goal;
(b)
PFIZER intends to utilize this group
of distributors to sell the Products to veterinarians who have and
maintain a veterinary/dient/patient relationship and who prescribe
products for dogs or cats within that relationship, and that PFIZER
has, and may in the future, run promotions and other activities
that would be seriously prejudiced if MWI resells the Products to
non-veterinarians, other distributors, intemet pharmacies, human
pharmacies or non-employee agents or through brokers.
3.
Accordingly, MWI shall:
(a)
use its reasonable best efforts to
sell the Products by focusing its efforts at reselling to
veterinarians only. During the term of this Agreement MWI will not
sell any other product or formulation containing carprofen,
amoxicillin/clavulanic acid, or cefpodoxime proxetil other than
those Products purchased by MWI from PFIZER including but not
limited to any capsule, tablet, chewable tablet, drops or
injectible carprofen, amoxicillin/clavulanic acid, or cefpodoxime
proxetil product. In the event that this Agreement is terminated
for any reason by MWI prior to December 31, 2010, MWI agrees
not to sell any other product or formulation containing carprofen,
amoxicillin/clavulanic acid, or cefpodoxime proxetil until after
December 31, 2010. In the event that this Agreement is
terminated for any reason by PFIZER prior to December 31,
2010, MWI may sell any other product or formulation containing
carprofen, amoxicillin/clavulanic acid, or cefpodoxime proxetil
after such termination. Notwithstanding the foregoing, nothing in
this Agreement forecloses MWI from selling any cefpodoxime proxetil
product that
MWI was selling on the effective
date of this Agreement;
(b)
maintain a full-time outside and
inside sales force that will personally and actively solicit sales
of the Products and to pay such sales representatives reasonable
commission;
(c)
store and handle its inventory of
Products under conditions that will ensure that the Product retains
its potency, purity, quality, and identity;
(d)
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;
(e)
allow PFIZER’s representatives
to attend and actively participate in meetings of MWI’s sales
representatives;
(f)
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. MWI will make payment to PFIZER
for all Products shipped /**/;
(g)
take no action, whether or not
identified above, that would harm the goodwill of the
Products;
(h)
MWI shall immediately notify PFIZER
in the event MWI obtains information indicating that 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. MWI shall cooperate
with PFIZER and MWI agrees to maintain adequate records to conduct
such recall, including the name, address and Product purchases of
all purchasers of PFIZER Products;
(i)
MWI shall not, under any
circumstances, be liable for special, collateral, incidental or
consequential damages, and PFIZER’s sole remedy for any such
damages shall be in accordance with Paragraph 7(e).
4.
PFIZER shall:
(a)
sell the Products to MWI at the
prices in effect in the then current published PFIZER Animal Health
Ethical Distribution Price Memo (hereinafter, “Price List).
PFIZER also shall permit MWI to participate in the distributor
incentive programs offered by PFIZER, in accordance with the terms
of such programs. 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, without advance notice to
MWI, 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;
(b)
retain sole responsibility for the
advertising and promotion of the Products and collaborate with MWI
in the development of activities appropriate for ethical
distribution regarding the Products;
(c)
compensate MWI in accordance with
Exhibits A and B attached hereto. PFIZER shall have the right to
audit MWI sales data to confirm appropriate payment in accordance
with Exhibits A
2
and B;
(d)
allow MWI credit on prepaid returns
in accordance with PFIZER’s Outdated Products Policy which is
in effect at the time;
(e)
If MWI has more than one location
then MWI must combine purchases of all locations to determine
attainment level for incentives. In the event that MWI acquires or
combines with another PFIZER agreement holder, the purchase
objectives will be adjusted accordingly for the purpose of
determining incentives earned;
(f)
Direct purchase from PFIZER will be
used to determine the level of p
