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EXHIBIT 10.9
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the
9th day of December, 2000, (the "Effective Date"), by and between
XXXXXXXXXXXXXX.XXX, INC., a Florida corporation, ("PVY") and VETERINARY
PRODUCTS, INC., a Georgia corporation, ("VPI").
WITNESSETH:
WHEREAS, PVY is a corporation whose shareholders are comprised
primarily of practicing veterinarians and other veterinary and pet care
professionals; and
WHEREAS, PVY provides and intends to provide a number of products and
services to its veterinary shareholders and other veterinary professionals as
part of its business, including buying group services; and
WHEREAS, VPI is a national co-operative buying group, engaging in the
business of purchasing, warehousing, distributing, and selling to its veterinary
shareholders various veterinary products and supplies, including
pharmaceuticals, vaccines, supplies, equipment and other items, as well as
certain services related to the practice of veterinary medicine (the "Veterinary
Products and Services"); and
WHEREAS, PVY desires to contract with VPI so that PVY shareholders will
have the ability to purchase Veterinary Products and Services from VPI; and
WHEREAS, VPI desires to sell Veterinary Products and Services to PVY
shareholders; and
WHEREAS, VPI and PVY have agreed that it is mutually beneficial for VPI
and PVY to enter into an agreement to facilitate the purposes of the parties as
set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises set forth herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. SALES OF PRODUCTS. VPI hereby agrees to sell Veterinary
Products and Services to PVY shareholders, subject to the terms and conditions
specifically set forth herein. VPI agrees not to discriminate in any manner
against PVY shareholders as to the purchase price, availability, quality or
quantity in its offerings of Veterinary Products and Services to PVY
shareholders, and further agrees that the terms and conditions of its sales of
Veterinary Products and Services to PVY shareholders who become VPI shareholders
will be the same as the terms and conditions of sales of Veterinary Products and
Services to VPI shareholders who are not PVY shareholders.
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2. REQUIREMENTS TO BECOME SHAREHOLDER OF VPI.
(a) As a condition to becoming a member of the VPI buying
group and being eligible to purchase Veterinary Products and Services from VPI,
a PVY shareholder must meet the requirements (including being a duly licensed
veterinarian and veterinary practice owner) and become a shareholder of VPI, and
purchase 100 shares of voting common stock in VPI (the "VPI Stock"). The
purchase price for the VPI Stock shall be Twelve Dollars ($12.00) per share, for
an aggregate purchase price of One Thousand Two Hundred and No/100 Dollars
($1,200.00) (the "Purchase Price"). VPI agrees that PVY shareholders may pay the
Purchase Price for the VPI Stock to VPI in installments through the application
of their respective Shareholder Rebates (as described and defined in Section 4
below) to such Purchase Price. VPI may require in its stock purchase agreement
(or similar agreement) with PVY shareholders that if the PVY shareholder has not
fully paid for his or her VPI Stock within four years from the date of purchase,
such shareholder must either pay the balance in full within 30 days of the end
of such 4 year period or forfeit his or her VPI Stock.
(b) A PVY shareholder shall become a VPI shareholder and
one or more certificates evidencing such VPI Stock shall be issued at the time
of execution of a stock purchase agreement (or similar agreement) by such
shareholder and VPI relating to the purchase, and the purchasing PVY shareholder
shall have all legal rights attaching to such VPI stock, including, but not
limited to, voting rights, liquidation rights, and the right to received
dividends and other payments; provided, however, that the purchased shares shall
be held in escrow until such time as the Purchase Price is paid in full. Except
as otherwise provided in this Section 2, VPI shall not place any obligations,
contingencies, restrictions or other provisions on shares of VPI Stock or the
PVY shareholders purchasing such shares that are not imposed uniformly on all
VPI Stock, VPI shareholders or other purchasers of VPI Stock.
(c) VPI shall pay PVY an amount of Two Hundred and No/100
Dollars ($200.00) (the "PVY Rebate Portion") for each PVY shareholder that
purchases VPI Stock, such $200.00 to be paid periodically to PVY by VPI on a
proportional basis as VPI receives Purchase Price payments from PVY shareholders
(whether directly from the shareholder or as withheld Shareholder Rebates being
credited to the Purchase Price).
(d) Upon the execution of this Agreement, VPI will
immediately begin taking all necessary and appropriate steps to obtain "no
action" or similar rulings, or such other form of qualification as may be
necessary or appropriate, from all state securities agencies of states in which
PVY has shareholders to permit VPI to sell its stock to PVY shareholders
residing in such states. PVY agrees to assist VPI, upon reasonable request and
at no cost to PVY, in its efforts to obtain such permissions or qualifications.
The parties agree that if, after the exercise of its diligent and best efforts,
VPI is unable to obtain a letter of "no action" (or similar ruling or favorable
qualification) from any particular state agency, they will cooperate in good
faith to reach some remedy or resolution that provides the parties and their
shareholders, to the extent possible, the benefits contemplated by this
Agreement, including, but not limited to, potential remedies such as private
placements of VPI Stock in accordance with applicable federal and state law.
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(e) With respect to any PVY shareholder that lives in a
state in which the necessary "no action" ruling or similar ruling or other
qualification to sell VPI Stock has not yet been obtained, if such PVY
shareholder subscribes for or desires to purchase VPI Stock, VPI will permit
such PVY shareholder to purchase Veterinary Products and Services under the same
terms and condition as VPI shareholders; provided, however, that any Shareholder
Rebates on purchases shall be credited by VPI to such purchaser and will be
applied to the Purchase Price and payment of the PVY Rebate Portion at such time
as VPI becomes permitted to sell to such PVY shareholder. If VPI is unable to
obtain a "no action" ruling or similar ruling or qualification permitting it to
sell VPI stock to the PVY shareholder, the credited Shareholder Rebate amounts
will be distributed to PVY and VPI. PVY will receive the PVY Rebate Portion in
accordance Section 2(c) above and VPI will retain the balance. PVY will continue
to receive PVY Rebate Portion payments based on purchases by such PVY
shareholder until the PVY Rebate Portion is paid in full. The PVY Shareholder
will not be entitled to any of the credited Shareholder Rebate amounts. The PVY
shareholder shall be entitled to continue as a member of the VPI buying group
but will not be entitled to receive any rebates. The foregoing provisions of
this Section 2(e) may be modified upon mutual agreement of the parties if
appropriate to be consistent with any resolution that may be agreed to by the
parties under Section 2(d) above.
(f) This Agreement shall not require PVY shareholders to
become VPI shareholders other than as a condition to buying group eligibility.
There shall be no minimum stock purchase or other enrollment quotas or minimum
requirements for the purchase of Veterinary Products and Services imposed on PVY
or its shareholders as a condition to the continuation of this Agreement or the
performance by VPI of its obligations under this Agreement.
3. PVY COMMISSION PAYMENTS.
(a) PVY shall be entitled to receive from VPI and VPI
shall pay to PVY a commission on all sales made to PVY shareholders equal to one
percent (1.0%) of the gross sales for all Veterinary Products and Services
purchased by PVY shareholders from VPI (the "PVY Commission"), which commission
payments shall be made to PVY, without reduction or set off, on a monthly basis,
on or before the 15th day of the month following the month in which such sales
were made. PVY shall be entitled to receive the PVY Commission in perpetuity,
including the period beyond the termination or expiration of this Agreement.
(b) If at any time following one (1) year from the
Effective Date VPI's sales of Veterinary Products and Services to VPI
shareholders that are also PVY shareholders equal or exceed, for two (2)
consecutive quarters, fifty percent (50%) of VPI's total sales of Veterinary
Products and Services to all other VPI shareholders (that is, sales to PVY
shareholders equal or exceed 33-1/3% of total VPI sales), then the PVY
Commission shall be based on one percent (1%) of all VPI Veterinary Products and
Services sales, regardless of whether the purchaser is a shareholder of PVY.
4. REBATES. VPI shall pay each PVY shareholder that becomes a VPI
shareholder a cash or credit rebate based on its purchase of Veterinary Products
and Services from VPI, such rebates to be in accordance and consistent with the
rebate policies of VPI as they may exist from
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time to time (the "Shareholder Rebates"); provided, however, that PVY
shareholders who become VPI shareholders shall be entitled to a rebate structure
at least as favorable as the current rebate structure for at least two (2) years
following the date on which such shareholder becomes a VPI shareholder.
5. NEW DISTRIBUTORS AND MANUFACTURERS. VPI encourages PVY to
enlist new distributors, wholesalers, manufacturers and service providers to
contract with VPI to make their products available through VPI to the VPI
shareholders. As incentive to PVY to perform such function, VPI agrees that PVY
shall be entitled to receive one hundred percent (100%) of any rebates,
commissions and similar incentives and payments that may be made by new
distributors, manufacturers or wholesalers that PVY recruits in connection with
such parties' sales of Veterinary Products and Services to VPI or its
shareholders (the "PVY Distributor Commissions"). If any such PVY Distributor
Commissions are received by VPI, VPI shall pay to PVY such PVY Distributor
Commissions as they are received from such parties. VPI shall permit PVY to
negotiate with such parties and shall not interfere with such negotiations with
respect to such commissions.
6. PRIVACY AND CONFIDENTIALITY OF SHAREHOLDER INFORMATION. Each
of the parties acknowledges the importance to the other parties and the
shareholders of the other parties of maintaining, to the extent possible, the
privacy and confidentiality of information regarding such shareholders. Each of
the parties agrees that any and all information obtained by such party (the
"Recipient"), either directly or indirectly as a result of the relationship
created by this Agreement, regarding the shareholders of the other parties
(including those that becoming shareholders of the Recipient) shall be kept
strictly confidential and shall be used by such Recipient party only in
connection with this Agreement, and that the Recipient party shall not sell,
lease or otherwise disclose, or make available such information to any third
party for any purpose whatsoever, without the written consent of the other
parties.
7. NO EXCLUSIVITY. Notwithstanding any provision of this
Agreement, this Agreement does not and shall not be construed to create any
exclusive relationship between the parties with regard to the subject matter
hereof, and neither VPI or PVY shall be restricted in any manner, except as
otherwise specifically provided for herein, from entering into any agreements or
arrangements with any other third party regarding any aspect of their respective
businesses.
8. TERM. The term of this Agreement shall commence as of the
Effective Date and, subject to the termination provisions herein, shall continue
for a period of five (5) years; provided, however, that this Agreement shall
automatically renew for up to three (3) additional five-year terms, unless PVY
gives notice to VPI no less than ninety (90) days prior to the end of the
then-current term that PVY elects not to have the Agreement renewed.
9. RELATIONSHIP OF THE PARTIES. It is understood and agreed by
the parties hereto that this Agreement does not create a fiduciary relationship
between PVY on the one hand and VPI on the other, that the parties shall be
deemed independent contractors as between each other, and that nothing in this
Agreement is intended to constitute PVY as an agent, principal, legal
representative, subsidiary, fiduciary, joint venturer, partner, employee or
servant of VPI for any purpose whatsoever, or vice versa. Nothing in this
Agreement authorizes VPI to make any
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contract, agreement, warranty or representation on the behalf of PVY or
authorizes PVY to make any contract, agreement, warranty or representation on
the behalf of VPI, or authorizes VPI to incur any debt or other obligation in
PVY's name or authorizes PVY to incur any debt or other obligation in the name
of VPI. Further, PVY shall not in any event assume liability for, or be deemed
liable hereunder as a result of, any such action, or by reason of any act or
omission of VPI in the conduct of its business or any claim or judgment arising
therefrom against VPI, and VPI shall not in any event assume liability for, or
be deemed liable hereunder as a result of, any such action, or by reason of any
act or omission of PVY in the conduct of its business or any claim or judgment
arising therefrom against PVY.
10. INDEMNIFICATION.
(a) PVY. PVY shall indemnify and hold VPI and its
affiliates and its officers, directors, employees and agents harmless from and
against any and all liabilities, claims, actions, fines, charges, damages,
losses, costs and expenses of any nature whatsoever (including, but not limited
to, reasonable attorneys' fees and expenses) arising out of, related to or
connected with, directly or indirectly, the performance or nonperformance by PVY
of its obligations hereunder, the breach or default by PVY under any provision
of this Agreement, or the gross negligence or willful misconduct of PVY.
(b) VPI. VPI shall indemnify and hold PVY and its
affiliates and its officers, directors, employees and agents harmless from and
against any and all liabilities, claims, actions, fines, charges, damages,
losses, costs and expenses of any nature whatsoever (including, but not limited
to, reasonable attorneys' fees and expenses) arising out of, related to or
connected with, directly or indirectly, the performance or nonperformance by VPI
of its obligations hereunder, the breach or default by VPI under any provision
of this Agreement, or the gross negligence or willful misconduct of VPI.
(c) NOTICE. In claiming any indemnification hereunder,
the indemnified party shall promptly provide the indemnifying party with written
notice of any claim which the indemnified party believes falls within the scope
of the foregoing paragraphs; provided that failure to provide such notice within
any specific time period shall not relieve the indemnifying party of its
obligations hereunder unless the delay in notice creates undue burden or
substantially damages or prejudices the ability of the indemnifying party to
provide for adequate defense of the claim. The indemnified party may, at its own
expense, assist in the defense if it so chooses, provided that the indemnifying
party shall control such defense and all negotiations relative to the settlement
of any such claim and further provided that any settlement intended to bind the
indemnified party shall not be final without the indemnified party's written
consent, which shall not be unreasonably withheld.
13. NOTICES. Any notice or demand that must or may be given or
made in connection with this Agreement must be in writing and, unless receipt is
expressly required, will be deemed given, delivered, or made, as the case may
be, when delivered by personal delivery, or when received by fax (with
confirmation by mail or overnight delivery service, e.g. Fed Ex), or one day
after deposit with Fed Ex or comparable overnight courier service which provides
tracking and receipt signatures on delivery, or two (2) days after deposit in
First Class U.S. Mail, or three
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(3) days after deposit in U.S. Certified or Registered Mail, Return Receipt
Requested, in any event with sufficient postage affixed and addressed to the
parties at the following addresses:
To PVY: XxxxXxxxxxxXxx.xxx, Inc.
00000 Xxxxx Xxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, President
Fax: (000) 000-0000
To VPI: Veterinary Products, Inc.
000 Xxxx Xxxxxxx, Xxxxx X-0
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxx, D.V.M., President
Fax:_______________
Such addresses may be changed by notice pursuant to this Section; but notice of
change of address is effective only upon receipt.
11. MISCELLANEOUS.
(a) WAIVERS. No course of dealing or any delay or failure
on the part of any party hereto in exercising any right, power, privilege or
remedy hereunder or under any other instrument given in connection with or
pursuant to this Agreement shall impair any such right, power, privilege or
remedy or be construed as a waiver of any breach, default or acquiescence
relating hereto. No single or partial exercise of any such right, power,
privilege or remedy shall be construed as a waiver, or preclude the further
exercise, of any such right, power, privilege or remedy or the exercise of any
other right, power, privilege or remedy. No waiver shall be valid against any
party hereto unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent expressly
specified therein.
(b) ENTIRE AGREEMENT. This Agreement, including all
exhibits and schedules referenced herein and attached hereto, constitutes the
entire agreement between the parties hereto pertaining to the subject matters
hereof, and supersedes all negotiations, preliminary agreements, and all prior
and contemporaneous discussions and understandings of the parties in connection
with the subject matters hereof.
(c) AMENDMENTS. No change, modification or termination of
any of the terms, provisions or conditions of this Agreement shall be effective
unless made in writing and signed or initialed by all parties hereto, their
successors and assigns.
(d) GOVERNING LAW. This Agreement shall be construed and
enforced under and in accordance with the laws of the State of Florida.
(e) SEPARABILITY. If any paragraph, subparagraph or other
provision of this Agreement, or the application of such paragraph, subparagraph
or provision, is held invalid, then the remainder of the Agreement, and the
application of such paragraph, subparagraph or
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provision to person or circumstances other than those with respect to which it
is held invalid, shall not be affected thereby.
(f) HEADINGS AND CAPTIONS. The titles or captions of
paragraphs and subparagraphs contained in this Agreement are provided for
convenience of reference only, and shall not be considered a party hereof for
purposes of interpreting or applying this Agreement, and, therefore, such titles
or captions do not define, limit, extend, explain, or describe the scope or
extent of this Agreement or any of its items, provisions, representations,
warranties, conditions, etc., in any manner or way whatsoever.
(g) BINDING EFFECT ON SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon inure to the benefit of the parties hereto and
their respective successors, personal representatives, heirs or assigns.
(h) CONTINUANCE OF AGREEMENT. The rights,
responsibilities, duties, representations and warranties of the parties hereto,
and the covenants and agreements herein contained, shall survive any closing and
the execution hereof, and shall continue to bind the parties hereto, and shall
continue in full force and effect until each and every obligation of the parties
hereto pursuant to this Agreement and any document or agreement incorporated
herein by reference shall have been fully performed.
(i) ATTORNEYS' FEES AND COSTS. In the event that
attorneys' fees or other costs are incurred to secure performance of any of the
obligations herein provided for, or to establish damages for the breach thereof
or to obtain any other appropriate relief, whether by way of prosecution or
defense, the prevailing party, whether at trial, on appeal, or in bankruptcy
proceedings, shall be entitled to recover reasonable attorneys' fees and costs
incurred therein, including paralegal costs from the other party.
(j) COUNTERPARTS. This Agreement may be executed
simultaneously or in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
VETERINARY PRODUCTS, INC. XXXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxx, D.V.M. By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxxxx Xxxx, D.V.M., President Xxxxx X. Xxxxxxxxx, President
("VPI") ("PVY")
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