Exhibit 10.2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIRST AMENDMENT TO
WHOLESALER SERVICE AGREEMENT
This First Amendment to Wholesaler Service Agreement ("FIRST AMENDMENT"), dated
November 12, 2001, and is between National Specialty Services, Inc. ("NSS") and
CollaGenex Pharmaceuticals, Inc. ("COLLAGENEX").
RECITALS
A. NSS and CollaGenex entered into a Wholesale Service Agreement dated
November 1, 2001 pursuant to which CollaGenex engaged NSS to provide
distribution services for Atridox(TM) and Atrisorb(TM) (the "ORIGINAL
AGREEMENT").
B. NSS and CollaGenex desire to amend the Original Agreement as further set
forth below.
NOW, THEREFORE, to implement the foregoing and in consideration of the covenants
and undertaking as set forth in this First Amendment, and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the parties, the parties hereby agree to incorporate the foregoing recitals into
this First Amendment as if fully rewritten herein, and agree as follows:
I. AMENDMENT. The following sections shall be added to the Original Agreement,
as if fully rewritten therein:
1. SHIPPING AND HANDLING FEES. Shipping and handling fees collected
for the shipment of Atridox, based on the pre-payment options
offered to NSS' customers will be shared equally between NSS and
CollaGenex. Any fees due CollaGenex will be paid on or before the
[**] business day of the month following collection of the fee
from the customer.
2. ACCOUNTS RECEIVABLE UNDERWRITING. In accordance with the
following terms and conditions, CollaGenex shall underwrite the
accounts receivable for customers purchasing Atridox and Atrisorb
that NSS would not normally extend a trade account, such accounts
to be pre-approved by CollaGenex; provided, however, the
institutional customers (i.e., dental schools and dental
universities) set forth on Exhibit A to this First Amendment have
been approved by CollaGenex. For all accounts approved by
CollaGenex for underwriting, NSS will invoice CollaGenex for the
amounts past due greater than [**] days from date of invoice,
plus the applicable service charge assessed on such amounts. At
such time NSS receives payment from CollaGenex, NSS will offset
the debt, and upon
notice to the customer, submit such outstanding amounts due to an
outside collection agency and cancel such customer's NSS trade
account. After such time, CollaGenex shall be solely responsible
for collecting all amounts due and NSS shall have no liability
with regard to the ultimate payment or non-payment of such
accounts. The payment by CollaGenex to NSS shall not relieve the
customer of its obligation to pay all amounts due and owing, and
CollaGenex shall notify such customer of its obligation to make
all future payments directly to CollaGenex. NSS will make a
commercially reasonable effort to collect all amounts due from
customers in accordance with NSS' then current collection
procedures. CollaGenex shall, at all times, comply with the
provisions of all applicable laws, rules and regulations and
shall indemnify and hold NSS harmless from any failure on
CollaGenex's part to do so. The terms and conditions of this
First Amendment shall be confidential and shall not be disclosed
to any third party, including, but not limited to, the customers
affected by the provisions hereof.
3. CONTRACT REVIEW. NSS and CollaGenex shall review the terms and
conditions of the arrangement set forth in the Original Agreement
and this First Amendment every six (6) months. The basis of this
review will be to determine if the Distribution Fees should be
increased or decreased, as applicable, based on average order
size, customer payment history, and other mutually agreed upon
operational indicators.
4. DAMAGED PRODUCT. CollaGenex acknowledges that it desires not to
participate in NSS' "Freeze Watch" program related to shipment of
products into certain climates. Therefore, NSS, at CollaGenex's
direction, will ship Atridox and Atrisorb to customers,
regardless of the weather conditions, and CollaGenex will bear
the risk of loss with regard to such shipment of the products. As
such, CollaGenex will reimburse NSS for the cost of product
(including the applicable distribution fee) for all Atridox and
Atrisorb damaged in transit to the customer due to weather
conditions. NSS will document such incidents via the return code
used to process the credit to the applicable customer. For
shipments of Atridox and Atrisorb into "Freeze Watch" areas, NSS
will upgrade the shipping to 8:30 a.m. delivery at a charge of
$[**] per delivery to CollaGenex; provided, however, if the
customer requests that the shipping be upgraded, any additional
charge will be borne by the customer in accordance with NSS'
standard terms and conditions of sale and not by CollaGenex. In
addition, NSS will include Tempshield(TM) Self-Sealed Bubble
pouches in the shipping containers for shipments of Atridox and
Atrisorb into "Freeze Watch" areas at a charge to CollaGenex of
$[**] per Tempshield(TM) pouch. Notwithstanding the upgraded
delivery and addition of Tempshield(TM) pouches, CollaGenex shall
continue bear the risk of loss with regard to the shipment of
products damaged in transit to the customer due to weather
conditions as set forth above.
II. EFFECTIVE DATE. The effective date of this First Amendment shall be January
25, 2002 ("Effective Date"). Except as otherwise amended herein, the terms
and conditions of the Original Agreement, as amended, shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the
date first set forth above.
NATIONAL SPECIALTY SERVIES, COLLAGENEX PHARMACEUTICALS, INC.
INC.
By: /s/ David J. Canniff By: /s/ Frank Ruffo
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Its: Vice President Its: Senior Director of Finance
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Date: 2-26-02 Date: 2-26-02
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EXHIBIT A
PRE-APPROVED INSTITUTIONAL CUSTOMERS
[to be completed]