Exhibit 10.14
* *
– 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.
LICENSE AGREEMENT
THIS AGREEMENT dated and effective
July 1, 2008, is between the AMERICAN ANIMAL HOSPITAL
ASSOCIATION (“AAHA”), with its principal offices
located at 12575 W. Bayaud Ave., Lakewood, CO 80228 and MWI
Veterinary Supply Co. (“MWI”) with its principal
offices located at 651 S. Stratford, Suite 100,
Meridian, Idaho 83680.
WHEREAS, AAHA is an
organization exempt from federal income tax under
Section 501(c)(6) of the Internal Revenue
Code;
WHEREAS, MWI is an Idaho for
profit corporation engaged in distributing animal health products
to veterinarians including members of AAHA;
WHEREAS, AAHA and MWI desire
to enter into an agreement whereby MWI shall be granted an
exclusive license to use the registered trademark “AAHA
MarketLink” and such other Proprietary Materials as defined
in this Agreement solely in connection with the AAHA Marketlink
Program (“Program”) whereby MWI shall market and sell
veterinary products to AAHA members; and
WHEREAS, MWI shall market its
products to AAHA members in connection with the Program and under
the name AAHA Marketlink;
NOW, THEREFORE, in consideration of
the mutual promises set forth in this Agreement and other good and
valuable consideration, the parties agree as follows:
1.
Statement of Purposes and Objectives . MWI shall be
recognized as the sole AAHA endorsed distributor of veterinary
products to AAHA members in connection with the Program. The
overall objective of AAHA in granting a license to MWI is to
provide a key economic benefit to AAHA members, generate revenue
that can be used by AAHA for its existing programs and services and
develop new programs and services that meet the needs of AAHA and
its membership.
2.
Relationship of the Parties. Neither party shall
represent or hold itself out to be a legal representative, joint
venturer, or partner of the other party. MWI and AAHA are
independent contractors and are not authorized to make any
contract, agreement, warranty or representation on behalf of the
other party or to create any obligations, express or implied, on
behalf of the other party without the prior written consent of that
party.
3.
Licensing Royalty and Payments . In exchange for an
exclusive license to use the federally registered mark
“AAHA Marketlink” as well as a non-exclusive license to
use the AAHA name (collectively the “Marks”) and the
AAHA membership and mailing lists (all such intellectual
property is collectively referred to as “Proprietary
Materials”) only in conjunction with the Program, MWI
agrees to:
3.1.
Minimum License Payment . During the term of this
Agreement, and any renewal terms, pay AAHA a minimum license
royalty of $25,000 per year. (“Minimum License
Payment”) The first installment shall be payable upon
execution of this Agreement and subsequent installments shall be
payable on July 15 th of each year.
3.2.
Yearly Royalty Payment . For a period no longer then
ten (10) years, MWI shall pay an amount equal to 0.10% of the
Gross Sales to AAHA members from July 1 to June 30
(whether purchasing through the Program or MWI) which exceeds the
Sales Base, less the Minimum License Payment (“Yearly
Payment”). For purposes of this Agreement,
“Gross Sales” shall be defined as MWI’s invoiced
sales plus agency orders transmitted by MWI to
Merial. The Yearly Payment shall be payable by MWI to AAHA by
July 15 th of each year.
3.3.
Sales Base . The “Sales Base” shall be
defined as AAHA Services Corporation’s and MWI’s total
revenues and Merial agency sales to AAHA members (whether
purchasing through the Program or MWI) for the period from
May 1, 2007, through April 30, 2008, equal to /**/.
For a period of sixty (60) days from the effective date of this
Agreement, the parties may revise the Sales Base, as applicable, to
accurately reflect the total revenues and Merial agency sales to
AAHA members (whether purchasing through the Program or MWI) for
the period from May 1, 2007, through April 30,
2008.
3.4
Example . If Gross Sales to AAHA members in year 2009
equaled /**/, the Yearly Royalty Payment due and payble to AAHA
would equal /**/ calculated as follows: ((/**/ - /**/) *
0.10%) - $25,000 = /**/.
4.
Usage of License . This license is solely for use in
connection with the Program and may not be used for purposes of
suggesting AAHA’s approval or endorsement of any other
products or services of MWI. In the event of termination of
this Agreement as provided for in this Agreement, this license will
be forfeited immediately by MWI to AAHA.
5.
Usage of Proprietary
Materials . MWI
agrees that it will comply with AAHA’s written guidelines
with respect to the use of the Marks, as set forth on
Exhibit A. MWI acknowledges and agrees that:
(i) it shall not use the AAHA Marks in a manner likely to
diminish the AAHA Marks’ commercial value; (ii) it shall
not knowingly permit any third party to use the AAHA Marks unless
authorized to do so in writing by AAHA; (iii) it shall not
knowingly use or permit the use of any mark, name, or image likely
to cause confusion with the AAHA Marks; (iv) it shall not use
or permit the use the AAHA Marks in such a manner as to create the
impression that AAHA has endorsed, directly or indirectly, any of
the goods and services of MWI; (v) all goodwill associated
with the Marks and the Program shall inure to
AAHA and all goodwill associated with MWI shall
inure to MWI; (vi) the AAHA Marks and the Proprietary
Materials are and shall remain the sole property of AAHA; and
(vi) nothing in this Agreement shall confer in MWI any right
of ownership in the AAHA Marks and the Proprietary Materials and
MWI shall not make any representation to that effect, or use the
Marks or Proprietary Materials in a manner that suggests that such
rights of ownership have been conferred.
6.
Control of AAHA Proprietary Materials . MWI
acknowledges and agrees that AAHA has invested substantial time,
money and other resources in the development of its Proprietary
Materials. MWI acknowledges and agrees that the Proprietary
Materials and all right, title and interest therein, is and shall
remain the exclusive property of AAHA. AAHA shall have the
right to obtain and to hold in its trademarks, servicemarks,
copyrights, registrations or such other protection as may be
appropriate to protect the Proprietary Materials and MWI shall do
nothing to invalidate them. Nothing contained in this
Agreement shall give MWI any right, title or interest in the
Proprietary Materials except as specifically provided for in this
Agreement. MWI shall not assign, transfer or otherwise
convey its license to use the Proprietary Materials nor grant a
sublicense to use the Proprietary Materials to any person, firm or
entity, including but not limited to, any parent, subsidiary,
associated, affiliated or related company without written approval
from AAHA; provided, however, that MWI may license the right to use
any of its marks which incorporate the AAHA logo upon prior written
approval from AAHA. Upon MWI becoming aware of the
unauthorized use of the Proprietary Materials, MWI agrees to notify
AAHA of any unauthorized use of the Proprietary Materials within
five (5) days after such unauthorized use comes to the
attention of MWI.
7.
Database Services
. On a quarterly basis, AAHA shall
provide MWI with certain data concerning the current membership of
AAHA for the purpose of marketing the Program to AAHA
members. Upon request, AAHA shall provide data in the
appropriate format (e.g., electronic medium or mailing labels) to
MWI. Nothing herein shall be construed to grant MWI any
ownership rights in or to the data base owned by AAHA.
8.
Participation and Reporting
Requirements . Only current AAHA members, in good
standing with AAHA, shall be permitted to participate in the
Program. Except as otherwise required by applicable federal,
state, provincial or local laws, rules or regulations, MWI
shall distribute and ship products only to the address of the AAHA
member as it appears in AAHA’s membership data base and MWI
shall take reasonable steps necessary to insure that participating
AAHA members do not re-sell products to other veterinarians, other
practices (without regard to membership or entity) or to the public
through catalogs or other distribution outlets. On at
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