Redacted portions have been marked with asterisks (***). Confidential
treatment has been requested for the redacted portions. The confidential
redacted portions have been filed separately with the Securities and Exchange
Commission.
EXHIBIT 10.8
SUPPLY AND DISTRIBUTION AGREEMENT
---------------------------------
THIS AGREEMENT ("Agreement"), made as of this 1st day of
January, 1998, by and between SCHERING-PLOUGH ANIMAL HEALTH CORPORATION, a
Delaware corporation, having its principal office located at 0000 Xxxxxx
Xxxxxx, Xxxxx, Xxx Xxxxxx 00000 (hereinafter, referred to as "Schering"), and
PROFESSIONAL VETERINARY PRODUCTS LIMITED, a Missouri corporation, having its
principal office located at 00000 X Xxxxxx, Xxxxx, Xxxxxxxx 00000
(hereinafter, referred to as "Distributor").
RECITALS
--------
WHEREAS, Schering is engaged in the business of developing,
manufacturing, marketing, and selling certain Products (as hereinafter
defined);
WHEREAS, Schering owns and/or utilizes the rights to the Trademarks
(as hereinafter defined);
WHEREAS, Distributor desires the non-exclusive right to sell
the Products under the Trademarks within the Territory (as hereinafter
defined); and
WHEREAS, Distributor has the authority and requisite
experience and resources to distribute the Products within the Territory.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants set forth in this Agreement, Schering and
Distributor hereby agree as follows:
ARTICLE I. DEFINITIONS
-----------
For purposes of this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
1.01 "Adverse Drug Event" shall mean:
(a) any expected or unexpected experience which is adverse,
including what are commonly described as adverse or undesirable experiences,
adverse events, adverse reactions, side effects, or death due to any cause
associated
with, or observed in conjunction with, the use of any Products, whether or
not (i) considered related to the use of any Products, (ii) occurring in the
course of the use of any Products, or (iii) associated with, or observed in
conjunction with, an accidental or intentional overdose from any Products,
abuse of any Products, or dependency on or withdrawal from any Products; or
(b) any failure of expected pharmacological action of any Products,
including, without limitation, deterioration or contamination of any Products
or any mistake in the labeling of any Products.
1.02 "Affiliate" shall mean any entity, directly or
indirectly, controlling, controlled by, or under common control with a Party.
For purposes of this definition, "control" shall mean: (a) ownership of more
than fifty percent (50%) of the equity capital or other ownership interest in
or of such Affiliate; (b) the power to control or otherwise direct the
affairs of such Affiliate; or (c) in the case of non-stock organization, the
power to control the distribution of profits.
1.03 "Confidential Information" shall mean any technical,
financial and business information relating to a Party's research,
development, inventions, products, production, manufacturing, finances,
marketing, customers, or business plans, including, without limitation, trade
secrets, know-how, data, formulae, processes, other intellectual property, or
confidential communications, that (i) is or has been disclosed to or
otherwise received or obtained by a Receiving Party, whether or not in
connection with or pursuant to this Agreement and (ii) has been marked by the
Disclosing Party as Confidential Information or, if disclosed orally, has
been confirmed in writing by the Disclosing Party as Confidential Information
within thirty (30) days of such disclosure.
1.04 "Disclosing Party" shall mean the Party (a) who
discloses, and owns or otherwise possesses the rights or interests to or in,
Confidential Information or (b) whose Confidential Information is the subject
of any process, subpoena, or demand.
1.05 "Good Manufacturing Practices" shall mean the laws,
regulations, and orders of any governmental authority, including, without
limitation, the United States Food and Drug Administration, the United States
Department of Agriculture, and the United States Environmental Protection
Agency, that may be applicable to the Products at any time during the term of
this Agreement.
1.06 "Parties" shall mean Schering and Distributor, and
"Party" shall mean Schering or Distributor.
1.07 "Price List" shall mean the various prices set forth on
Exhibit A, which is attached hereto and made a part hereof.
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1.08 "Products" shall mean the finished, packaged products set
forth on Exhibit A hereto and any amendment thereof or supplement thereto,
which are manufactured by Schering, any Affiliate of Schering, or any
designee of Schering or such Affiliate in accordance with the standards,
specifications, and formulae established by Schering or such Affiliate.
Schering shall have the right, in its sole discretion and from time to time
by written notice, delete or otherwise exclude any of the Products from this
Agreement.
1.09 "Professional Service Representative" shall mean any
sales representatives, administrative personnel, and agents of Distributor
used or otherwise retained by Distributor for the marketing, distribution,
promotion, or sale of the Products.
1.10 "Receiving Party" shall mean the Party who (a) receives
or otherwise obtains Confidential Information of the Disclosing Party or (b)
is served with any process, subpoena, or demand.
1.11 "Territory" shall mean the fifty states of the United
States but shall not include any of the territories or possessions of the
United States.
1.12 Trademarks shall mean the trademarks and trade names of
Schering or any Affiliate of Schering as set forth on Exhibit A hereto.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
------------------------------
Distributor hereby represents and warrants to Schering that,
as of the date of this Agreement, the following statements are and shall be
true and correct in all material respects:
(a) ORGANIZATION AND GOOD STANDING. Distributor: (i) is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of _________; and (ii) has the corporate power and
authority to conduct the business in which it presently is engaged, to enter
into this Agreement, and to perform its obligations hereunder.
(b) AUTHORIZATION AND BINDING EFFECT. All corporate action on the
part of Distributor and its officers and directors necessary for the
authorization, execution, and delivery of this Agreement and for the
performance of all of Distributor's obligations hereunder has been taken, and
that Agreement, when executed and delivered, shall constitute a valid and
legally binding obligation of Distributor enforceable against Distributor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, and other laws affecting creditors' rights generally
or by general equitable principles.
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(c) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery,
and performance by Distributor of this Agreement do not: (i) violate or
breach the certificate of incorporation or bylaws of Distributor; (ii)
violate or conflict with any applicable laws; (iii) violate, breach, cause a
default under, or otherwise give rise to a right of termination, cancellation
or acceleration with respect to (presently, with the giving of notice or the
passage of time), any agreement, contract or instrument to which Distributor
is a party or by which any of its assets are bound; or (iv) result in
creation or imposition of any lien, pledge, mortgage, claim, charge, or
encumbrance upon any assets of Distributor.
(d) GOVERNMENTAL AND OTHER CONSENTS. No consent, authorization,
license, permit, registration or approval of, or exemption or other action
by, any governmental authority or any other person is required in connection
with Distributor's execution and delivery of this Agreement or with the
performance by Distributor of its obligations hereunder.
ARTICLE III. SCOPE OF AGREEMENT
------------------
3.01 APPOINTMENT. Schering hereby appoints Distributor, and
Distributor hereby accepts the appointment, as a distributor of the Products
in the Territory only under the Trademarks, with the non-exclusive right to
distribute the Products in the Territory.
3.02 NO DELEGATION. Distributor shall not, without the prior
written approval of Schering, appoint any other distributor, representative,
dealer, or agent to sell the Products in the Territory.
3.03 ADDITIONAL DISTRIBUTORS. Notwithstanding anything in this
Agreement to the contrary, Schering shall have the right to (a) distribute
the Products itself in the Territory and (b) appoint, from time to time, such
other distributors as it, in its sole discretion, deems appropriate.
ARTICLE IV. SALE OF PRODUCTS TO DISTRIBUTOR
-------------------------------
4.01 PRICING AND PRICING REVISIONS. Schering shall sell (or
cause to be sold) the Products to Distributor at the prices specified on the
Price List. Schering shall have the right to revise the Price List or any
portion thereof at any time, which revision shall be effective upon written
notice to Distributor. Any revision to the Price List shall apply to all
Products shipped after the date of such notice. Payment by Distributor for
the Products shall be made within thirty (30) days from the date of
Schering's invoice. Due and punctual payment by Distributor of any and all
indebtedness incurred by Distributor hereunder constitutes an essential
condition of this Agreement.
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4.02 DELIVERY. Delivery shall be F.O.B. Omaha, Nebraska,
freight and insurance prepaid. Title to and risk of loss of the Products
shall pass to Distributor at the time of the delivery to Distributor at the
shipping point of Schering or its designee.
4.03 DELAY IN SHIPMENT. Except for delays resulting from force
majeure as provided in Section 12.02 hereof and subject to Section 4.09
hereof, Schering shall ensure prompt delivery to Distributor of all Products
ordered by Distributor under this Agreement.
4.04 PURCHASE REQUIREMENTS. Distributor shall purchase the
Products exclusively from Schering or its designee. Each purchase order of
Distributor shall be for an amount of Products not less than One Thousand
Dollars ($1,000) or such other amount that Schering may, at its sole
discretion, reasonably establish from time to time.
4.05 FORECASTS. Within fifteen (15) days of (a) the effective
date of this Agreement and (b) the commencement of each calendar quarter
thereafter, Distributor shall furnish to Schering a good-faith forecast of
its requirements for all Products in each of the succeeding twelve (12)
calendar months after the date of such forecast.
4.06 PURCHASE ORDERS. Distributor shall to the extent
practicable deliver to Schering or its designee a purchase order of Product
not less than ten (10) days prior to the last day of each calendar month, and
Schering shall have the right to reject, and shall have no liability for such
rejection of, any purchase order of Distributor. Subject to Section 4.03
hereof, Schering shall diligently complete and ship (or cause to be completed
and shipped) all purchase orders to the extent such purchase orders are in
accordance with this Section 4.06. The only function of Distributor's
purchase order shall be to set forth the quantities of the Products ordered
and the date by which such Products are to be delivered, and no term or
condition of Distributor's purchase order shall have, or be deemed to have,
any force or effect. In the event production requirements are inadequate at
any time to satisfy (a) all purchase orders received by Schering from
Distributor and any other persons and (b) other purchase requirements,
Schering shall allocate the available production of Products on an equitable
basis. Schering may supply any of Distributor's purchase orders from whatever
source Schering chooses.
4.07 PRODUCT SPECIFICATION CHANGES. Nothing in this Agreement
shall impose, or be deemed to impose, on Schering the obligation to
manufacture or sell any of the Products or prevent Schering from making such
changes in any of the Products as Schering, in its sole discretion, may deem
appropriate.
5
4.08 DIRECT SALES. Schering reserves the right to sell the
Products directly to present and future customers of Schering within the
Territory. Any such direct sale shall not entitle Distributor to any
compensation, indemnification, damages, or other payment of any kind.
4.09 NO LIABILITY FOR FAILURE TO SUPPLY. Distributor expressly
releases Schering from liabilities for any loss or damage, including, without
limitation, incidental or consequential damages or lost profits, arising from
the failure of Schering or its designee to fill any order by Distributor.
ARTICLE V. OBLIGATIONS OF SCHERING
-----------------------
5.01 ADEQUATE SUPPLY. Subject to Section 4.06 hereof, all
applicable import, export, currency and other applicable laws and
regulations, and the terms of this Agreement, Schering shall make available
to Distributor for purchase the Products in quantities adequate, in the
opinion of Schering, to meet the needs of Distributor's market throughout the
Territory.
5.02 DISTRIBUTOR ASSISTANCE. Schering shall render to
Distributor such assistance as Schering, in its sole discretion, believes is
reasonably necessary to enable Distributor, if so requested by Schering, to
(a) register the Products and (b) prepare and implement plans to disseminate
information regarding the Products to the trade or the public, as the case
may be.
5.03 PRODUCT WARRANTIES. The Products delivered hereunder
shall be manufactured in accordance with (a) Good Manufacturing Practices,
(b) applicable industry requirements regarding purity, shape, appearance,
potency, and shelf life, and (c) Schering's quality control standards and
applicable specifications for the Products. SCHERING MAKES NO WARRANTY THAT
THE PRODUCTS SHALL BE FIT FOR ANY PARTICULAR PURPOSE, EXCEPT AS EXPRESSLY
STATED ON THE PRODUCT LABEL, NOR IS THERE ANY OTHER WARRANTY, EXPRESS OR
IMPLIED, EXCEPT AS STATED IN THIS AGREEMENT.
ARTICLE VI. OBLIGATIONS OF DISTRIBUTOR
--------------------------
6.01 EXTRA-TERRITORIAL ORDERS. Distributor shall distribute
the Products only in the Territory and only under the Trademarks in
accordance with this Agreement. Distributor shall: (a) not solicit or accept
orders for the Products from customers located outside the Territory through
any means, including, without limitation, advertising; (b) not establish a
sales office, warehouse, or distribution center outside the Territory for the
Products; and (c) notify Schering of all inquiries or orders for the Products
(i) from
6
present or potential customers located outside the Territory or (ii) intended
to be sold outside the Territory.
6.02 DILIGENT EFFORTS. Distributor shall exercise diligent
efforts to promote, advertise, and increase the sales of the Products in the
Territory to customers in both the private and institutional sectors.
Distributor shall not implement or otherwise release any advertising or
promotional program and/or material prepared by or for Distributor without
Schering's prior written approval. Distributor shall: (a) adhere to
Schering's promotional and marketing programs; (b) implement such programs in
accordance with the time frames specified by Schering; and (c) inform each of
its customers in a timely manner of such programs. Schering shall have the
right to reasonably establish and amend from time to time, and Distributor
shall comply with, the quarterly and annual purchase goals set forth on
Exhibit B, which is attached hereto and made a part hereof.
6.03 DISTRIBUTOR'S FACILITIES. Distributor shall provide, at a
minimum, the following facilities:
(a) office space, desks, telephone service, and adequate
secretarial and clerical assistance for (i) all those engaged in the
promotion and sale of the Products, including, without limitation,
Professional Service Representatives, and (ii) any other person who may visit
the Territory in connection with the promotion or sale of the Products;
(b) a room or area adequate for the conduct of sales and marketing
meetings;
(c) warehouse space adequate for the storage and refrigeration of
the Products; and
(d) a room or area adequate for the storage of samples of the
Products and promotional literature pertaining to the Products.
6.04 MARKETING AND SALES REPORTING. Distributor shall, within
thirty (30) days from the date of receipt of a request by Schering and at
such frequency as Schering shall reasonably require, furnish to Animal Health
Institute EDI Project, c/o Animal Health Institute, 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Distributor's sales data with respect to each of
the Products. Distributor shall not, without Schering's prior written
consent, supply sales data in any other manner. In addition, Schering shall
have the right to require, as it deems necessary in its sole discretion, any
or all of the following from Distributor:
(a) monthly reports on the inventory and sales of Products by units
and sales values;
7
(b) quarterly reports on all customer complaints regarding the
Products in accordance with the procedures as Schering may, from time to
time, establish; and
(c) such other reports relating to the Products as Schering may
reasonably require.
6.05 FACILITY INSPECTION AND AUDIT. Distributor shall, upon
reasonable notice by Schering, grant Schering or its designee access to
Distributor's facility to (a) inspect such facility, (b) conduct a physical
inventory of Distributor's stock of the Products, and (c) audit Distributor's
books to ascertain compliance with the terms and conditions of this Agreement.
6.06 LEGEND DRUGS. Distributor shall, with respect to any
Products bearing the legend "CAUTION: FEDERAL LAW RESTRICTS THIS DRUG TO USE
BY OR ON THE ORDER OF A LICENSED VETERINARIAN," sell, or caused to be sold,
such Products only to, or on the order of, a duly licensed veterinarian for
use in the course of the professional practice of such veterinarian or to any
other person who is regularly and lawfully engaged in the distribution or
dispensing of the Products bearing such legend.
6.07 DUTIES AND OBLIGATIONS AFTER EXPIRATION. Distributor's
duties and obligations under this Agreement, including, without limitation,
Distributor's duties and obligations under Articles VI, VII, VIII, IX, and XI
hereof, shall survive the expiration or termination of this Agreement.
6.08 INSURANCE. During the term of this Agreement, Distributor
shall, at its cost and expense: (a) maintain, and shall cause any of its
Affiliates to maintain, general liability insurance, including coverage for
product liability and contractual liability, in an amount not less than
*********** Dollars (U.S. $******), with an umbrella coverage of not less
than ********** Dollars (U.S. $******); and (b) furnish to Schering written
notice of any change in or cancellation of any such insurance not less than
thirty (30) days prior to the date of such change or cancellation.
Distributor shall, within thirty (30) days from the date of this Agreement,
furnish to Schering a certificate of insurance evidencing compliance with the
requirements of this Section 6.08. Distributor's obligation to Schering shall
not be limited to the amount of such insurance or the amount of insurance
actually carried by Distributor.
6.09 CREDIT WORTHINESS. Distributor shall, within ten (10)
days from the date of receipt of a request by Schering, submit to Schering or
its designated credit representative Distributor's most recent financial
statements or such other information and documentation as Schering or such
representative may reasonably request to verify Distributor's financial
status, and Distributor agrees that such financial statements and other
information and documentation shall be complete, true and correct in all
respects.
***Confidential material omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.
8
Schering shall have the right to establish and amend, from time to time in
its sole discretion, credit limits applicable to the Distributor, and the
Parties agree that no shipment of Products shall be made in excess of such
credit limits.
6.10 ADVERSE DRUG EVENT REPORTING.
(a) Distributor shall, within twenty-four (24) hours of
becoming aware of, or receiving notice of or information concerning and in
accordance with applicable requirements of any governmental authority, notify
Schering of any Adverse Drug Event. Such notice shall include, but not be
limited to, the name, address, and telephone number of the person making the
complaint or report of an Adverse Drug Event, the Products involved, and the
nature of the Adverse Drug Event. Schering shall investigate any complaint or
report of an Adverse Drug Event, and Distributor shall provide all reasonable
and necessary information and assistance to Schering in connection with such
investigation, including, without limitation, completion of Schering's form
entitled "Product Experience Form" and collection of samples of the Products.
Schering shall notify Distributor of the results of, and any action taken
with respect to, Schering's investigation.
(b) Distributor shall, within thirty (30) days from the
date of receipt of a request by Schering, provide to Schering a print-out or
computer disk of each Adverse Drug Event reported to or known by Distributor
for the twelve- (12-)month period prior to the date of such request.
(c) Distributor shall, within ten (10) days from the date
of receipt of a request by Schering, make available to Schering or its
designee, for inspection and copying by Schering or such designee, records
(including computer disks) of Distributor relating to each Adverse Drug Event.
(d) Disclosure by Distributor of records and information
concerning any Adverse Drug Event to Schering shall continue as long as
Distributor continues to clinically test or market the Products.
(e) Schering and Distributor shall meet, in a timely
fashion and from time to time as may be reasonably required, to implement the
Adverse Drug Event reporting and consultation procedures prescribed in this
Article VI.
(f) Except as expressly provided in this Section 6.11 or
as expressly required by any governmental authority, Distributor shall not
make or file any report, or otherwise make any disclosure, with respect to
any Adverse Drug Event.
ARTICLE VII. TRADEMARKS
----------
7.01 PROTECTION. Distributor shall: (a) display the Trademarks
solely in connection with the marketing, advertising, and promotion of the
Products; (b) at all
9
times recognize the validity and ownership of the Trademarks, whether owned
by Schering or any Affiliate or licensor of Schering, and Schering's sole
right to use and license such Trademarks in the Territory, along with any and
all patents and patent applications of Schering or any Affiliate of Schering
or its licensor covering the Products; and (c) at no time do, nor allow to be
done by its employees, agents or representatives or any person on behalf of
Distributor or its employees, agents or representatives, whether by act,
omission or commission, anything that would (i) put in issue or otherwise
adversely affect such validity or ownership or (ii) damage or prejudice the
reputation or goodwill of Schering or any Affiliate or licensor of Schering.
The Parties hereby agree and intend that any and all use of the Trademarks
shall at all times inure to the benefit of Schering or any Affiliate or
licensor of Schering, as the case may be, as the owners of the Trademarks.
Distributor shall at no time use the name SCHERING CORPORATION or
SCHERING-PLOUGH ANIMAL HEALTH CORPORATION or any trademarks, logos or designs
owned by Schering or any Affiliate or licensor of Schering in or as a
trademark or trade name, without the prior written consent of Schering or
such Affiliate or licensor, as the case may be.
7.02 REGISTRATION. Distributor shall not, except with the
prior written consent of Schering or any Affiliate or licensor of Schering,
as the case may be, take any action in respect of the registration, renewal,
or infringement of the Trademarks. In the event that any such registration or
renewal is secured by Distributor, then Schering or such Affiliate or
licensor, as the case may be, shall be the beneficial owner of such
Trademarks, and Distributor shall, upon the request of Schering or its
Affiliate or licensor, in accordance with applicable law, make assignment
thereof or surrender the Trademarks for cancellation. Distributor shall
immediately notify Schering of any potential infringement of the Trademarks
or claims that any of the Trademarks infringe the rights of any person.
Schering may, in its sole discretion, determine if litigation to protect the
Trademarks is warranted, and Distributor shall, at its cost and expense,
cooperate with Schering in the prosecution and defense of the Trademarks.
Distributor shall not adopt, register, or use any trademarks or trade names
which are confusingly similar to any of the Trademarks or trade names covered
by this Agreement.
ARTICLE VIII. CONFIDENTIAL INFORMATION
------------------------
8.01 CONFIDENTIALITY. During the term of this Agreement and
for a period of ten (10) years after the expiration of this Agreement, a
Receiving Party shall, and shall use diligent efforts to ensure that each of
its officers, directors, employees and agents shall, (a) protect and hold in
confidence all Confidential Information of the Disclosing Party and (b) not
disclose, or cause to be disclosed; such information to any person, except as
expressly provided to the contrary in this Agreement. Nothing obtained by a
Receiving Party shall be deemed Confidential Information of the Disclosing
Party, if such information:
10
(a) is or becomes a matter of public knowledge through no act or
omission of the Receiving Party; PROVIDED, HOWEVER, that information shall
not be deemed a matter of public knowledge merely because it (i) is embraced
by more general information in the prior possession of a Party or any other
person or (ii) is expressed in public literature in general terms not
specifically in accordance with Confidential Information;
(b) is rightfully received by, or otherwise made available to, the
Receiving Party from an independent person without a duty of confidentiality;
or
(c) is already in the possession of the Receiving Party at the time
of receipt from the Disclosing Party, as documented by pre-existing records
of the Receiving Party.
8.02 DISCLOSURE.
(a) A Receiving Party shall immediately notify a Disclosing Party
of receipt of any process, subpoena or demand by any governmental authority
or any other person, requiring production of Confidential Information of the
Disclosing Party, and shall, within one (1) day from the date of such
receipt, furnish to the Disclosing Party a copy of such process, subpoena or
demand and of all materials and acts relating thereto. The Disclosing Party
shall have the right to take any legal action to prevent disclosure of its
Confidential Information, including, without limitation, the right to appear
on behalf of the Receiving Party, to represent the Receiving Party, and to
employ counsel of its choice for these purposes, all at its cost and expense.
(b) The Disclosing Party shall have the right to make any legal
arguments and to take any legal action, including, without limitation, trials
and appeals on behalf of itself and the Receiving Party, to prevent
disclosure of its Confidential Information. If a Disclosing Party elects to
exercise its rights under this Section 8.02, it shall do so at its cost and
expense and shall protect, hold harmless, defend, and indemnify the Receiving
Party from and against any and all legal responsibility or liability from the
exercise of these rights. If a Disclosing Party elects not to exercise any
such rights or if, in the absence of a protective order or other remedy or
the receipt of a waiver by the Disclosing Party, the Receiving Party is
nonetheless legally compelled to disclose Confidential Information of the
Disclosing Party, then the Receiving Party may, without liability hereunder,
disclose only that portion of such Confidential Information that it is
legally compelled to disclose.
8.03 CONFIDENTIALITY OF AGREEMENT. The provisions of this
Article 8 also shall apply to the contents of this Agreement; PROVIDED,
HOWEVER, that the contents hereof may be disclosed only (a) as required by
applicable law or (b) in connection with the enforcement of this Agreement.
8.04 NOTIFICATION OF BREACH. Each Party shall notify the other
Party in the event of any breach of this Article 8, including, without
limitation, conditions or
11
circumstances that indicate Confidential Information has been or may have
been prejudiced or otherwise exposed to loss or unauthorized disclosure or
use. A Receiving Party shall, upon request of the Disclosing Party, take all
steps reasonable necessary to recover any and all Confidential Information
that has been or may have been compromised, prejudiced, improperly disclosed
or otherwise exposed to loss or unauthorized use. The expense of taking such
steps shall be borne solely by the Receiving Party.
8.05 RETURN OF CONFIDENTIAL INFORMATION. All Confidential
Information shall be and remain the sole property of the Disclosing Party,
and the Receiving Party shall have no rights or interests (except as
hereinafter provided) to or in such information. Immediately upon termination
of this Agreement, each Party shall discontinue the use of Confidential
Information of the other Party; and the Receiving Party shall, upon the
written request of the Disclosing Party, return to such Party, within thirty
(30) days from the date of receipt of such request, all items of Confidential
Information of such Party, including, without limitation, all copies and
originals of such items of Confidential Information.
ARTICLE IX. PRODUCT RECALL
--------------
9.01 NOTIFICATION. In the event any governmental authority
issues a recall, or takes similar action, in connection with any Products
sold or distributed by Distributor in the Territory, Distributor shall,
within twenty-four (24) hours from the time of receipt or knowledge of such
recall or similar action, notify Schering, and Schering and Distributor shall
agree on an appropriate course of action; provided, however, that if Schering
and Distributor cannot agree on a course of action, then Distributor shall
implement the course of action as designated by Schering. In the event
Schering requests that Distributor recall one or more of the Products,
Distributor shall immediately cease all sales of such Products and take all
appropriate actions to recall such Products. Schering shall bear the cost and
expense of any recall requested by Schering or resulting from negligent
manufacturing, packaging, or shipment by Schering. Distributor shall bear the
cost and expense of any other recall. For the purposes of this Agreement, the
cost and expense of recall shall include, without limitation, the expenses of
notification and destruction or return of the recalled Products, but shall
not include the expense or service fees associated with the time of the
Professional Service Representatives, which time shall be borne solely by
Distributor. In the event a recall is requested by Schering, Distributor
shall be reimbursed by Schering in an amount equal to the sum paid by
Distributor to Schering for the Products recalled.
9.02 CUSTOMER RECORDS. In the event of a recall or similar
action regarding any Products, Distributor shall maintain, and make available
to Schering for inspection upon request, all information reasonably requested
by Schering, including, without limitation, a current written record of names
and addresses of its customers and lot numbers (to the extent possible) and
volume of the Products purchased.
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ARTICLE X. TERM AND TERMINATION
--------------------
10.01 TERM. This Agreement shall become effective as of the date
first above written and, except as provided in this Article X, shall continue
in effect for an initial period of one (1) year, to be automatically renewed
for one (1)-year periods, subject to the right of either Party to terminate
this Agreement, with or without cause, at any time, upon not less than thirty
(30) days prior written notice to the other Party.
10.02 TERMINATION FOR BREACH. Either Party may, at its option,
terminate this Agreement in the event the other Party breaches any material
obligation under this Agreement, including, without limitation, achievement
of any of the purchase or sales-out goals or requirements, and fails to
remedy or otherwise cure such breach within thirty (30) days from the date of
receipt of notice of such breach given by the non-breaching Party; PROVIDED,
HOWEVER, that if (a) such breach was outside the control of the other Party
or (b) the other Party cures such breach within such thirty (30)-day period,
then there shall be no termination of this Agreement.
10.03 INSOLVENCY. This Agreement shall terminate immediately,
without further notice or action by Schering, in the event: (a) Distributor
shall become insolvent, or shall make or seek to make an arrangement with, or
an assignment for the benefit of, creditors; (b) proceedings in voluntary or
involuntary bankruptcy shall be instituted by, on behalf of, or against
Distributor; or (c) a receiver or trustee of Distributor's property shall be
appointed.
10.04 GOVERNMENTAL INTERVENTION AND CHANGE OF CONTROL. This
Agreement shall be terminable at any time by Schering, upon written notice to
Distributor, in the event Distributor and/or any of its activities are
partially or completely nationalized, expropriated, taken over, or otherwise
intervened in by any governmental authority. In the event there is a change,
directly or indirectly, in the control in or over Distributor, this Agreement
shall terminate, without further notice or action by Schering, effective as
of the moment of the occurrence of such change.
10.05 EFFECT OF TERMINATION. Upon the effective date of expiration
or termination of this Agreement:
(a) Schering or its designee shall have the right (but not
the obligation) to purchase from Distributor, and Distributor shall sell to
Schering or such designee upon request, all or any portion of the inventory
of Products, including samples, held by or for Distributor. Schering or its
designee shall pay for such Products in the currency in which they were
purchased by Distributor at Distributor's landed cost (excluding storage
costs);
(b) To the extent that Schering or its designee may have
supplied to Distributor any of the Products or promotional literature for or
samples of such Products, either (i) on consignment or without charge or (ii)
without having duly
13
received full invoiced value thereof, Schering or its designee shall have the
right, paramount to all other persons as permitted by law, to repossess or
possess, as absolute owner, all or any portion of such Products, at the
warehouse of Distributor or any other person, without any charge to Schering
or its designee. To determine whether full payment has been made for any
Products hereunder, each shipment of Products shall be deemed a separate
obligation, and Schering shall apply all payments by Distributor in the
chronological order in which such shipments were made, notwithstanding any
different method of application either Party may have used prior to
expiration or termination of this Agreement;
(c) Notwithstanding any contrary payment terms established
from time to time under, this Agreement, invoices for any and all Products
that shall have been shipped to Distributor prior to termination or
expiration of this Agreement shall become immediately due and payable;
(d) Distributor shall: (i) cease any and all display of
the Trademarks; (ii) not register or use any trademark or trade name
confusingly similar to the Trademarks; or (iii) not use or register any
package designs, advertising copy, or other indicia of origin associated with
Trademarks If Distributor has been recorded as a registered user of the
Trademarks, then Distributor shall execute any documents reasonably requested
by Schering to cancel such record; and
(e) Distributor shall return to Schering all originals and
copies of all Confidential Information, and Distributor and its officers,
directors, employees, agents, and Affiliates shall not, directly or
indirectly, make, retain or use such Confidential Information, in whole or in
part.
10.06 NO LIABILITY FOR TERMINATION. Neither the expiration nor
termination of this Agreement, in accordance with any provision of this
Agreement or otherwise, shall subject either Party to any liability or
obligation to the other Party or to any other person, either by operation of
law or on any other basis, except as specifically set forth in this Agreement.
10.07 ADDITION OF PRODUCTS. Schering shall have the right, at
any time and from time to time, to add or delete Products to or from Exhibit
A hereto, and such addition or deletion of Products shall not result in the
termination of this Agreement, a claim of breach of contract, or any other
liability on the part of Schering.
ARTICLE XI. INDEMNIFICATION
---------------
11.01 INDEMNIFICATION.
(a) SCHERING INDEMNIFICATION. Schering shall, at its cost
and expense, indemnify, defend, and forever hold harmless Distributor and its
Affiliates from and against all claims, suits, actions, proceedings, damages,
losses, liability, costs, and
14
expenses (including reasonable attorneys' fees) arising out of or resulting
from (i) Schering's performance or breach of its obligations under this
Agreement or (ii) subject to Section 11.02 hereof, any defective Products, to
the extent that such claims, suits, actions, proceedings, damages, losses,
liability, costs, or expenses stem from Schering's negligence. Distributor
shall immediately notify Schering of receipt of notice of any claim, suit,
action, proceeding, damage, loss, liability, cost, or expense, and shall,
within one (1) day from the date of such receipt, furnish to Schering a copy
of such notice and all materials and facts relating thereto. Schering shall
have the right, at its cost and expense, to defend, handle and control such
claim, suit, action, proceeding, damage, loss, liability, cost, or expense.
Distributor shall have the right, at its cost and expense, to participate.
(b) DISTRIBUTOR INDEMNIFICATION. Distributor shall, at its
cost and expense, indemnify, defend, and forever hold harmless Schering and
its Affiliates from and against all claims, suits, actions, proceedings,
damages, losses, liability, costs, and expenses (including reasonable
attorneys' fees) arising out of or resulting from (i) Distributor's
performance or breach of its obligations under this Agreement, (ii) the
storage, handling, promotion, marketing, sale, or distribution of the
Products in the Territory, or (iii) Distributor's negligence, errors, or
omissions. Schering shall immediately notify Distributor of receipt of notice
of any claim, suit, action, proceeding, damage, loss, liability, cost, or
expense, and shall, within one (1) day from the date of such receipt, furnish
to Distributor a copy of such notice and all materials and facts relating
thereto. Distributor shall have the right, at its cost and expense, to
defend, handle and control such claim, suit, action, proceeding, damage,
loss, liability, cost, or expense. Schering shall have the right, at its cost
and expense, to participate.
(c) NO CONSEQUENTIAL DAMAGES. Schering shall not be liable
to Distributor for any special or consequential damages, whether based upon
lost goodwill, lost resale profits, work stoppage, or impairment of other
goods or arising out of breach of warranty, breach of contract, strict
liability or negligence.
(d) ASSISTANCE. Each Party shall provide all information in
its possession and reasonable assistance to the other Party as necessary to
enable the other Party to defend any such suit, claim, or demand.
11.02 REMEDY FOR DEFECTIVE PRODUCTS. Schering shall, as soon as
practicable after receipt of notice by Distributor, replace or rectify any
Products which are defective or fail to meet Schering's specifications.
Schering's sole obligation and Distributor's sole remedy under this Article
XI shall be, at Schering's option, (a) the refund by Schering to Distributor
of any amount paid to Schering by Distributor for any such Products, (b) the
re-working of any such Products so that they meet the specifications, or (c)
the replacement by Schering of any such Products. Schering shall have no duty
to indemnify or reimburse Distributor for any other cost, expense, claim, or
damage which may result from any such Products, including, without
limitation, any consequential or contingent damages or lost profits.
15
ARTICLE XlI. GENERAL PROVISIONS
------------------
12.01 COMPLIANCE WITH LOCAL LAWS.
(a) LOCAL LAWS AND REGULATIONS. At all times during the
term of this Agreement, Distributor shall comply with all laws, regulations
and policies which are in effect in the Territory and apply to the storage,
handling, distribution, sale, or promotion of the Products and conduct of
business under this Agreement.
(b) PAYMENTS TO OTHER PERSONS. No payments or benefits, if
any, received by Distributor from Schering pursuant to this Agreement, or
otherwise under arrangements hereafter agreed to, shall be paid to any other
person, except for reasonable and necessary business expenses not violative
of applicable laws or regulations.
(c) GOVERNMENTAL OFFICIALS. Distributor shall not hire or
retain any governmental employees or officials to assist Distributor in the
performance of its obligations under this Agreement, and Distributor shall
not perform any services on behalf of any undisclosed persons with respect to
matters covered by this Agreement. Distributor shall not pay, authorize,
offer, or promise anything of value, directly or indirectly, to any
governmental employee or official, political party, or candidate for
political office in connection with Distributor's activities under this
Agreement.
12.02 FORCE MAJEURE. Neither Party shall be liable for any delay or
failure of performance of any obligation hereunder by reason of any act or
circumstance beyond the control of such Party, including, without limitation,
an act of God, fire, flood, war, public disaster, strike or labor dispute, or
governmental enactment, rule or regulation; PROVIDED, HOWEVER, that such
Party shall: (a) be excused from such performance only to the extent of such
delay; (b) take good-faith efforts that are commercially reasonable to resume
performance hereunder; and (c) continue performance hereunder with the utmost
dispatch as soon as the cause for such delay is removed. In the event of any
delay attributable to any act or circumstance beyond the control of a Party,
the time for performance affected by such act or circumstance shall be
extended for a period equal to the time lost by reason of such delay. A Party
asserting any excuse for delay or failure of performance of any obligation
under this Section 12.02 shall immediately notify the other Party.
12.03 NON-WAIVER. Schering's failure to exercise or enforce any
right conferred upon it hereunder shall not be deemed to be a waiver of any
such right or any other right or operate to bar the exercise of performance
thereof at any time or times thereafter; nor shall Schering's waiver of any
right hereunder at any time, including right to any payment, be deemed a
waiver thereof for any other time.
12.04 GOVERNING LAW. This Agreement and all issues arising under or
relating to this Agreement, including, without limitation, its construction,
interpretation,
16
breach, and damages for breach, shall be governed by and construed in
accordance with the laws of the State of New Jersey (without regard to its
conflict of laws principles). Any action, cause of action or dispute arising
under or relating to this Agreement shall be brought only in the courts of
the State of New Jersey or the federal court of the United States, located in
Newark, New Jersey, and each of the Parties expressly consents to personal
jurisdiction in the State of New Jersey, with respect to such action, cause
of action, or dispute.
12.05 ASSIGNMENT AND AMENDMENT. This Agreement, any portion hereof,
or any obligation hereunder shall not be assigned by Distributor except with
the prior written consent of Schering. Neither this Agreement nor any of the
terms hereof may amended, supplemented, waived, or modified except in a
specific writing signed by the Parties; PROVIDED, HOWEVER, that any change in
Distributor's purchase order shall not constitute, or be deemed to
constitute, an amendment, supplement, waiver, or modification of this
Agreement.
12.06 SEVERABILITY. Any provision of this Agreement that may be
finally determined by a court of competent jurisdiction to be invalid or
unenforceable in any jurisdiction in the Territory for any reason shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability, without invalidating or rendering unenforceable any other
provision of this Agreement, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. The Parties shall negotiate in good faith to
replace such provision with an appropriate, legal provision and, to the
extent permitted by law, hereby waive any provision of law that renders any
provision of this Agreement invalid or unenforceable in any respect.
12.07 HEADINGS AND COUNTERPARTS. The division of this Agreement
into sections, the provision of a table of contents, and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original but all of which taken together shall constitute one and the same
instrument.
12.08 NOTICES. All notices required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent
by means of telex, facsimile or other wire transmission (with provision for
assurance of receipt in a manner typical with respect to communications of
that type), or (c) mailed by registered or certified first class mail, return
receipt requested, at the address or facsimile (fax) number set forth below
(or to such other person, address, or facsimile (fax) number as a Party may,
from time to time, designate by written notice):
17
(i) If to Schering:
Schering-Plough Animal Health Corporation
0000 Xxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
Attention: President
Fax: (000) 000-0000;
(ii) If to Distributor:
-------------------------------------------
-------------------------------------------
-------------------------------------------
Attention:_________________________________
Fax:_______________________________________
12.09 FURTHER ASSURANCES. Each of the Parties shall perform such
acts, execute and deliver such instruments and documents, and do all such
other things as may be reasonably necessary to accomplish the transactions
contemplated under this Agreement.
12.10 INDEPENDENT CONTRACTOR. Nothing contained in this Agreement
shall be construed to constitute either Party as a partner or agent of the
other Party or to create any other form of legal association that would
impose liability upon a Party for any act or omission of the other Party or
provide a Party with the right, power, or authority to create or impose any
duty or obligation on the other Party, it being intended that each Party
shall remain an independent contractor acting in its own name and for its own
account.
12.11 ENTIRE AGREEMENT. This Agreement, together with all Exhibits
hereto, represents and contains the full and complete understanding and
agreement of the Parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
statements, clauses, and conditions with respect to the transactions
contemplated by this Agreement or which may be contained in any other form or
document, including, without limitation, Distributors purchase order form.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed as of the date first above written.
PROFESSIONAL VETERINARY PRODUCTS LIMITED
By: /s/ Xx. Xxxxxx X. Xxxxxx
------------------------
Name: Xx. Xxxxxx X. Xxxxxx
Title: President
SCHERING-PLOUGH ANIMAL HEALTH CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President, Companion Animal Business Unit
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EXHIBIT A
---------
PRICE LIST AND TRADEMARKS
20
EXHIBIT B
---------
QUARTERLY AND ANNUAL PURCHASE GOALS
21
