EXHIBIT 10.10
MILITARY DISTRIBUTOR AGREEMENT
Military Distributor Agreement dated as of April 1, 2002, between PFIZER INC, a
Delaware corporation, having offices at 201 Tabor Road, Morris Plains, New
Jersey 07950 ("PFIZER") and MILITARY RESALE GROUP, INC., a Colorado corporation,
having offices at 2517 Durango Drive, Colorado Springs, CO 80910
("DISTRIBUTOR").
WITNESSETH:
WHEREAS, Pfizer is in the business of selling consumer healthcare, confectionery
and shaving products; and
WHEREAS, Pfizer desires to make such products available to military commissaries
("COMMISSARIES") in accordance with the information and guidelines contained in
the United States Department of Defense Commissary Agency ("DeCA") Information
Booklet dated March 25, 1991, as it may be modified or amended from time to time
("BOOKLET"); and
WHEREAS, Pfizer desires to engage Distributor to purchase, warehouse, distribute
and deliver its products to the Commissaries identified on Schedule A attached
hereto and made a part hereof;
NOW, THEREFORE, in consideration of the mutual promises contained herein, Pfizer
and Distributor agree as follows:
1. Distributor agrees to purchase at Pfizer distributor list prices, all
products listed on the Defense Personnel Support Center ("DPSC") Master
Supply Bulletin #263 ("PRODUCTS"). Pfizer's ROA numbers are 00G2420 and
00G2421. Distributor will maintain warehouse inventory levels sufficient to
meet daily order and fill requirements of all Commissaries identified on
Schedule A. Terms to Distributor will be (cash in bank) or
(cash in bank) as indicated. Unearned cash discounts will be
billed back and/or deducted from payments made to Distributor.
2. Orders for Pfizer Products will be transmitted electronically to
Distributor by the Commissaries as outlined in the Booklet. Any orders
received directly by Pfizer or its sales representatives will be
communicated by telephone to Distributor. Distributor agrees to process and
deliver all orders for Products in accordance with the terms of purchase
under the Frequent Delivery System as outlined in the Booklet. Upon
delivery of products by Distributor to a Commissary, Distributor shall
obtain signed delivery tickets evidencing receipt of all Products received
by the Commissary, from an authorized representative of the Commissary.
Resolution of discrepancies between Distributor shipments and Commissary
receipts shall be the responsibility of the Distributor. Any costs
associated with settling shortage claims made by the Commissaries will be
borne by the Distributor. Pfizer sales representatives and/or authorized
sales agents shall be responsible for stocking Commissary shelves.
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3. Within five (5) days of the end of each Roll-Up Period (as hereinafter
defined), Distributor agrees to provide Pfizer with a report summary
("ROLL-UP") of all Products delivered to Commissaries under the Frequent
Delivery System during the ROLL-UP PERIOD. The term "Roll-Up Period" shall
refer to the period from the first day to the fifteenth day of each month
or to the period from the sixteenth day to the last day of each month, as
the case may be. The Roll-Up shall indicate, for each Commissary, the
quantity of all Products shipped to such Commissary during the applicable
period, and the dates on which such Products were shipped. The Roll-Up is
an acknowledgement of the proof of delivery documents and shall be retained
by Distributor for a period of three (3) years from the date of the report.
4. (a) Distributor shall issue to Pfizer a transmittal, which shall summarize
each Roll-Up by indicating the quantity of each Product shipped by
Distributor to the Commissaries during the period, and the price that such
Products were purchased from Pfizer by Distributor. Based on such
transmittal and on the Roll-Up, Pfizer shall issue a check to Distributor
pursuant to which Distributor shall be reimbursed for Products delivered by
Distributor to Commissaries. Such check shall be issued to Distributor upon
Pfizer's receipt of payment from DeCA (which is expected to be
approximately twenty-five (25) days after Pfizer receives the Roll-Up from
Distributor. Pfizer further agrees to pay Distributor within thirty (30)
days of the end of each month, a drayage fee equal to
Product delivered by Distributor to the Commissaries. Both
parties hereto acknowledge and agree that Distributor shall not be involved
in any way with DeCA's procurement decisions. The Roll-Up/reimbursement
arrangement is an accommodation to internal accounting procedures.
(b) The drayage payment for pallet promotions will be paid at the
established per case rate that already exists. Pallet promotions fall into
two categories:
(i) Pallets with cases of regularly stocked items, in which case the
Distributor will be paid for the number of cases that are shipped
in the pallet; and
(ii) Pallets that contain non-cased items and/or items that are not
regularly stocked items for DeCA, in which case the equivalent
cases will be determined by using the case pack for regularly
stocked item closest in size. For example, the drayage fee for a
58-oz. Listerine pallet will be determined by reference to the
case pack for a 1.5 L Listerine pallet. Similarly, the drayage
fee for a 32-oz. Lubriderm pallet will be determined by reference
to the case pack for a 16-oz. Lubriderm pallet.
Drayage payments for pallets will be handled as an adjustment and sent
separately from the normal drayage payment to avoid delays in processing
the normal drayage payment. Pfizer will use reasonable efforts to advise
Distributor of the case equivalent of pallet promotions prior to their
shipping. All pre-packed floor displays and/or side wing units will be
counted as one (1) case.
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5. Distributor shall be responsible for proper rotation of stock, and shall
notify Pfizer or its designated sales representative of any Products for
which DeCA orders have ceased. Products that are discontinued by Pfizer or
a Commissary may be returned to Pfizer by Distributor and Distributor shall
be credited at its original purchase price for such Products. Pfizer shall
pay freight costs associated with such returns. Where an overstock occurs
due to a purchasing error by Distributor, Distributor shall pay return
freight costs, PROVIDED, HOWEVER, that Pfizer shall credit Distributor the
original purchase price for such returns. The terms of all other returns
shall be negotiated in good faith by the parties hereto and must be
authorized in advance by Pfizer.
6. Upon Pfizer's prior written request, Distributor shall grant Pfizer or its
designated sales representative access, during normal business hours, to
Distributor's warehouse to check stock and review future inventory
requirements in order to meet order and fill rate requirements of the
Commissaries and any promotional programs or events offered by Pfizer that
are designed to result in lower Product prices to be paid by Commissary
customers. Distributor agrees to comply with all shelf-life guidelines
promulgated by DPSC, as they may be altered or amended from time to time.
7. Pfizer shall hold Distributor harmless for all product liability claims and
will, upon written request, provide Distributor with a certificate of
insurance evidencing product liability insurance coverage; PROVIDED,
HOWEVER, that Products are stored and handled in accordance with
instructions provided by Pfizer, and PROVIDED FURTHER that such claims are
not due to the negligence of or failure by Distributor.
8. If, in addition to Pfizer's Military and Specialty Markets Division,
Distributor handles Products for non-Commissary distribution from the
following divisions ("DOMESTIC DIVISIONS") of Pfizer:
Warner-Lambert Consumer Healthcare;
Adams Group; and/or
Schick Shaving Products Group;
then Distributor must maintain the inventory to be delivered to
Commissaries separate from the inventory purchased from the Domestic
Divisions for non-Commissary distribution. All orders for Products to be
delivered to Commissaries must be placed with Pfizer's Military and
Specialty Markets Division. Distributor shall not use any Products
purchased for delivery to Commissaries for any other purpose, nor shall it
use any Products purchased from any Domestic Division for delivery to
Commissaries.
9. Title and risk of loss of Products shall remain with Pfizer until delivery
to Distributor, at which time Distributor shall assume title to Products.
10. Either party may terminate this agreement at any time upon thirty (30)
days' written notice. In the event of such notice, Pfizer agrees to
promptly arrange for the pickup of any remaining Products purchased by
Distributor and not delivered to Commissaries and to reimburse Distributor
at the current purchase prices; provided, however, that any such
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remaining Products have at least six (6) months dating and are not damaged
in any way. Distributor agrees to pay a handling charge with respect to
returned Products, which charge shall be mutually agreed upon.
11. Distributor represents, warrants and covenants that:
(i) Distributor shall comply with all applicable federal, state and local
laws, rules and regulations in carrying out its obligations hereunder;
(ii) In the course of performing services hereunder, Distributor will
protect Pfizer's ownership of its trademarks, service marks, trade
names, designs, logos and/or copyrights (collectively, "PFIZER'S
MARKS"). Distributor agrees that the use of any of Pfizer's Marks
shall be for Pfizer's sole benefit, shall not create any right in
Distributor with respect to Pfizer's Marks and shall terminate upon
the expiration or termination of this Agreement;
(iii) Distributor is a corporation duly authorized, validly existing and in
good standing under the laws of its state of incorporation;
(iv) Distributor has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and the execution,
delivery and performance of this Agreement by Distributor have been
duly and validly authorized and approved; and
(v) Distributor will provide sufficient personnel for the safe, timely and
satisfactory performance of its obligations hereunder.
12. Pfizer represents and warrants that:
(i) Pfizer is a corporation duly authorized, validly existing and in good
standing under the laws of the State of Delaware; and
(ii) Pfizer has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, and the
execution, delivery and performance of this Agreement by Pfizer have
been duly and validly authorized and approved by proper corporate
action.
13. During the term of this Agreement and thereafter, Distributor shall keep
confidential and not disclose to any third party, nor use for its own or
any third party's benefit, any of Pfizer's confidential or proprietary
information or other information, materials or documentation provided by
Pfizer to Distributor. This covenant shall not apply to information that is
in or enters the public domain through no fault of Distributor.
14. Distributor shall retain for a reasonable time all contracts, papers,
documents, correspondence, copybooks, accounts, invoices and other
information in the possession of Distributor relating to this Agreement and
shall make all such material, or such
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portions of it as Pfizer may request, available at Distributor's offices
during normal business hours for examination by Pfizer's authorized
representatives.
15. During the term of this Agreement, Distributor agrees to secure and keep in
place a comprehensive general liability insurance policy in the amount of
at least one million dollars ($1,000,000) which shall cover its contractual
liability and the services rendered hereunder. Distributor shall name
Pfizer as an additional insured under its policy, and shall provide a
certificate of insurance to Pfizer evidencing such coverage. In addition,
Distributor shall notify Pfizer at least thirty (30) days prior to the
expiration or termination of such coverage.
16. If for any reason not under the control of either party, including, without
limitation, strikes, enforcement of government laws or regulations, fire or
similar unforeseen event, either party cannot perform its obligations
pursuant to this Agreement, then the terms of this Agreement and the duties
and obligations of the parties hereunder shall be suspended for such time
as may be reasonable.
17. Distributor agrees to indemnify and hold Pfizer harmless from and against
all liability, damage or expense (including reasonable attorney's fees)
which Pfizer may incur as a result of any activities conducted or services
rendered hereunder by Distributor, its officers, employees, subcontractors,
agents or any persons connected with Distributor, arising out of its or
their performance or failure to perform, or a breach of its covenants,
representations, or warranties hereunder, or arising as a result of
Distributor's sale, distribution, storage or transportation of the Products
pursuant to this Agreement. These indemnification obligations shall survive
the termination or expiration of this Agreement.
18. This Agreement and the attached Schedule A constitute the entire
understanding and agreement between Distributor and Pfizer with respect to
the subject matter of this Agreement and shall not be altered or amended
unless in writing signed by Distributor and Pfizer.
19. Nothing contained herein shall be construed so as to constitute Pfizer and
Distributor as principal and agent, employer and employee, partners, or
joint venturers, nor shall any similar relationship be deemed to exist
between Pfizer and Distributor. Neither party shall have any power to
obligate or bind the other party.
20. Distributor may not assign this Agreement without the express written
consent of Pfizer.
21. All notices which either party is required or may desire to serve upon the
other shall be in writing and may be served either personally or by
depositing the same in the mail, first class postage prepaid, certified and
return receipt requested, addressed to the party to be served as follows,
unless a different address is designated in writing by the party to be
served:
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To Pfizer as follows:
Warner-Lambert Company
201 Tabor Road
Morris Plains, New Jersey 07950
Attn: Director, Military and Specialty Markets Division
with a copy to:
Pfizer Inc.
235 East 42nd Street
New York, New York 10036
Attn: Executive Vice President and General Counsel
Facsimile: (212) 808-8924
To the Distributor as follows:
Military Resale Group, Inc.
2517 Durango Drive
Colorado Springs, Colorado 80910
Facsimile: ______________________
Attn: Ethan Hokit
Any notice so mailed shall be deemed to have been served on the date of its
mailing.
24. This Agreement shall be governed by and construed in accordance with the
law of the State of New Jersey other than those provisions governing
conflicts of laws.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officer of each party hereto as of the date first above written.
MILITARY RESALE GROUP, INC.
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Name:
Title:
PFIZER INC.
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Name:
Title:
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SCHEDULE A
Commissary Store Locations Serviced by Military Resale Group, Inc.:
Military Base Location
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FT CARSON CO
PETERSON AFB CO
USAF ACADEMY CO
FE WARREN AFB CO
BUCKLEY AFB CO
ELLSWORTH AFB SD
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