CONFIDENTIAL TREATMENT REQUESTED] /*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406...
Exhibit 1.1
[CONFIDENTIAL
TREATMENT REQUESTED] /*/ INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
This Livestock Products Agreement
(“Agreement”) effective as of January 1, 2009 (“Effective Date”) is made by and
between Pfizer Inc., 000
Xxxxxxxxxx Xxxxx, Xxxxx, XX 00000 (“Pfizer”) and Walco International, Inc., 0 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000 (“WALCO”).
WHEREAS,
WALCO is in the business of buying and selling animal health products and
servicing customers for those products, and
WHEREAS,
WALCO 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 WALCO by Pfizer
pursuant to this Agreement (and referenced in Schedule A to this
Agreement).
“Sales
Out” shall mean the reported sales by WALCO 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 WALCO as their supplier and to service that customer’s account,
Pfizer shall send to WALCO 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 thirty (30) days prior
written notice.
1
(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 WALCO of any changes. Pfizer will notify WALCO 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) WALCO
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) WALCO
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 WALCO will sell Products in the
quantities desired by the customers.
(c) WALCO
agrees to maintain an inventory of Products equal to /*/ Demand, but excluding
all Products indicated on Schedule A as ineligible for RSA
payments. /*/
All
Products shall count towards the amount held in inventory by WALCO. WALCO 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 WALCO may not purchase more
than two (2) months WALCO’s average of the most current Moving Annual Total
sales purchases. Exceptions must be approved by Pfizer’s New York
headquarters.
(e) WALCO
agrees that all sales of Pfizer Products from WALCO 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 WALCO and that
PARTICIPATING CUSTOMER) than the price paid by WALCO to Pfizer for such Product,
Pfizer agrees to credit WALCO'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. WALCO shall not represent, directly or indirectly, expressly
or by implication, that any such relationships exist and/or that WALCO has any
authority except as set forth in this Agreement.
2
4. WALCO
shall use commercially reasonable efforts to provide appropriate service to the
customers to whom WALCO will sell hereunder. For customers serviced
pursuant to this Agreement, WALCO 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 WALCO’s acquisition cost from Pfizer the amount of inventory by
species. WALCO agrees that Pfizer shall have the right, upon
reasonable advance notice and during business hours to audit inventory in the
possession of WALCO 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 WALCO 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. WALCO 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 WALCO
for that order under paragraph 5 below, provided that Pfizer will pay WALCO for
any drop ship if such shipment is made necessary by the unavailability of Pfizer
Products;
(h) WALCO
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 WALCO 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) /*/
3
5. In
consideration of WALCO undertaking the obligations set forth herein Pfizer shall
make payments to WALCO 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 WALCO
hereunder. Any transaction involving Products with any customer
including a PARTICIPATING CUSTOMER for which WALCO 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)
WALCO shall not be provided with any rebate, discount or other compensation for
Products handled under this Agreement unless specifically set forth
herein. WALCO will NOT be eligible to collect an RSA on any lateral
sales to an unauthorized Pfizer distributor. (It is WALCO’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
WALCO 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 WALCO on /*/ prior
written notice. Pfizer shall be free to limit sales of any or all
Products to WALCO in advance of any price increase.
(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: /*/
8. The
payments described in Schedule D hereto constitute full and complete
compensation for WALCO.
9. All
returns shall be approved by Pfizer and subject to Pfizer’s Returned Goods
Policy, attached hereto as Schedule F. WALCO 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 WALCO.
10. WALCO
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 WALCO against those sums which may become due from Pfizer to WALCO,
in that the obligations arise from mutual transactions. The specific
circumstances which will enable Pfizer to initiate recoupment are:
(a) WALCO
becomes insolvent, which shall be defined as:
(i) the
sum of WALCO’s debts is greater than all of WALCO’s property (“Balance Sheet
Test”); or
(ii)
WALCO is generally not paying its debts as they come due; or
(iii)
WALCO 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) WALCO
commences a liquidation of its operations by means of a sale of its assets in
their entirety or piecemeal; or
(c) WALCO
ceases its business operations whether or not such cessation is voluntary or
involuntary; or;
(d) WALCO
files a proceeding pursuant to the U.S. Bankruptcy Code or any state court
proceeding, including an Assignment for the Benefit of Creditors.
4
11. Nothing
in this Agreement shall be deemed to preclude WALCO 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
WALCO.
12. WALCO
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
WALCO hereunder. Nothing in this Agreement shall be deemed to limit
WALCO’s ability to sell non-Pfizer products at any time to any customer
including PARTICIPATING CUSTOMERS or any other party. WALCO’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 WALCO harmless from all liabilities, claims,
demands, damages, costs and expenses, or money judgments incurred by WALCO 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 WALCO, 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 WALCO’s reasonable legal fees
incurred in the course of cooperating with Pfizer’s defense. To be
covered by this defense and indemnity, WALCO 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: WALCO 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 WALCO shall be exclusively
limited to the purchase price of the Products with respect to which damages are
claimed.
15. WALCO
and Pfizer acknowledge that in the performance of their duties hereunder each
may obtain access to "Confidential Information" (as defined below) of the
other. WALCO 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 WALCO’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 WALCO'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.
5
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
000 Xxxx 00xx
Xxxxxx
Xxx Xxxx, XX
00000
If to
WALCO: Walco International,
Inc.
Attention: Vice
President-Marketing
0 Xxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxxx, XX
00000
With a
copy to:
Walco International,
Inc.
Attention: Legal
Department
0 Xxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxxx, XX
00000
Either
party may change its address by giving written notice to the other
party.
17. This
Agreement shall be effective as of January 1, 2009 and shall continue in force
until December 31, 2009. 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 WALCO takes any action that xxxxx 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 this Agreement.
|
Walco
International, Inc.
|
Pfizer
Inc.
|
|
By /s/
Xxxxx Xxxxxxx
|
By /s/
Xxxxxxx X. Xxxxx, Xx.
|
|
Xxxxx
Xxxxxxx
|
Xxxxxxx X. Xxxxx,
Xx.
|
|
President
& C.E.O.
|
President, U.S.
Operations
|
|
Pfizer Animal
Health
|
|
|
Date
December 8, 2008
|
Date
December 11, 2008
|
