CollaGenex Pharmaceuticals, Inc.,
                        ---------------------------------
                                       and
                       Innovative Customer Solutions, Ltd.
                       -----------------------------------

                    Consulting and Contract Service Agreement
                    -----------------------------------------

     This CONSULTING AND CONTRACT  SERVICE  AGREEMENT (the  "Agreement") is made
and entered into as of the 1st day of February  1997, by and between  CollaGenex
Pharmaceuticals,  Inc., a Delaware  corporation (the "Company"),  and Innovative
Customer Solutions, Ltd., an Ohio limited liability company ("ICS").

                                    RECITALS:

     WHEREAS,  Company is the  licensee of certain  patent  rights to  Periostat
("Periostat")  for which the  Company is  currently  seeking  approval  from the
United  States Food and Drug  Administration  (the "FDA");  and Company may also
enter into  co-promotional  or licensing  agreements  with other  pharmaceutical
companies for other  products (the  "Products");  and that Company plans to sell
both  Periostat  and the Products  (collectively  the "Dental  Products") in the
United States;

     WHEREAS,  ICS has the  necessary  expertise  to develop and  implement  the
appropriate  marketing,  selling  and  educational  programs  to  assist  in the
acceptance of the Dental Products by the dental and insurance community;

     WHEREAS, the Company desires to retain the services  ("Services") of ICS to
(but not limited to) i) develop marketing plans for the sale and distribution of
the Dental  Products ii) provide a contract  dental sales  organization  for the
sale of the  Dental  Products  iii)  establish  certain  necessary  third  party
relationships  that will be helpful to establish the Dental  Products within the
dental community.

     WHEREAS, ICS desires to provide Services to the Company.

     NOW,  THEREFORE,  in  consideration  of  the  mutual  terms  and  covenants
contained herein, and for other good and valuable consideration,  the receipt of
which is hereby acknowledged, the parties agree as follows:

     1.  Purpose.  Company shall engage ICS on a  non-exclusive  basis to render
advice and services in assisting  Company to market and sell the Dental Products
to the dental community.

     2. Duties of ICS.  ICS shall  provide  Company  with  services as specified
below,  provided  that  ICS  shall  not be  required  to  undertake  duties  not
reasonably  within the scope of the services in which ICS is generally  engaged.
In the  performance of these duties,  ICS shall provide Company with the benefit
of its best judgment and efforts.


<PAGE>

     ICS's duties shall  include,  but will not  necessarily  be limited to, the
following:

          a.   Brand management for Periostat (see Exhibit A, Section 1);

          b.   Development,  implementation  and  management of a contract sales
               organization  for Dental  Products (see Exhibit A, Section 2). It
               is understood  that a sales  representative  contracted by ICS to
               sell Dental  Products  will not sell  products  other than Dental
               Products to the dental community;

          c.   The establishment and leverage of third party  relationships that
               will assist with the  acceptance  of  Periostat by the dental and
               insurance communities;

          d.   The  development  and  production  of  marketing   materials  and
               advertising  programs for the Dental Products as requested by the
               Company.

     ICS agrees that in order to accomplish the forgoing duties, it will provide
its best efforts to develop and implement the programs and  procedures set forth
on Exhibit "A" attached hereto.

     3. Term. The term of this Agreement  shall commence on February 1, 1997 and
shall continue in accordance with details listed in Exhibit A, or termination of
this Agreement by Company or ICS in accordance with paragraph 7.

     4. Fees and Expenses.

          a.   Fees.  ICS  shall  receive  the fees  set  forth  below  upon the
               submission  of  appropriate   invoices  for  services   performed
               pursuant to Section 2 and Exhibit A,  Sections 1 and 2.  Invoices
               shall be payable within 30 days of receipt by CollaGenex.

               i)   Periostat  Brand  Management  (see  Exhibit A, Section 1 for
                    ----------------------------
                    details)

               Retainer: $6,000 per month for a period of twelve months.

               Development  costs:  The development of marketing  materials,  as
               approved  by  Company,  will be billed  monthly at $80 per effort
               hour.
               ii)  Products  Brand  Management  (see  Exhibit A,  Section 1 for
                    ---------------------------
                    details)

               Fee: $80 per effort hour, up to a maximum of 20 hours/quarter.


 <PAGE>

               iii) Contract Sales Effort (see Exhibit A, Section 2 for details)

               Project  establishment  fee:  $20,000  due on  signature  of this
               Agreement.

               Contract  compensation:  $43/contact  hour  billable  monthly  in
               accordance with actual hours  implemented the previous month, and
               consistent  with  the  action  plan  approved  by  Company,   for
               Periostat and up to an additional three (3) Products.

               iii) Dental Insurance Initiative
                    ---------------------------

               Company commitment: Company agrees that it will advise ICS of its
               intention to implement the dental  insurance  initiative no later
               than March 31st 1997.

               Project establishment fee: $20,000 due at date of commitment.

               Retainer:  $15,000 per month for a total period of twelve months.
               The twelve  month  period  will begin on the later of the date of
               commitment  or 6 months  prior to  Company's  best  estimate  for
               Periostat launch.

               Additional Services: Insurance Initiative services provided prior
               to the commitment date will be charged at a per diem rate of $700
               plus expenses.

     b.   Expenses.  The  Company  agrees to  reimburse  ICS for all  reasonable
          --------
          travel and other  related  expenses  incurred in  connection  with the
          performance  of its Contract  Brand  Management  and Dental  Insurance
          Initiative duties subject to the following conditions:

               i)   Aggregate  expenses  during the term of this  Agreement will
                    not exceed $48,000 without express permission from Company.

              ii)   Prior to the reimbursement of any expense, ICS shall provide
                    the  Company  with  a  summary  of  such  expense.   Expense
                    summaries will be provided via an expense report  designated
                    by the Company.

             iii)   Expense  reimbursements  shall  be  made  at the end of each
                    month  during  the  term of this  Agreement;  provided,  the
                    expense  report is  received by the Company not less than 10
                    days prior to the date for reimbursement.


<PAGE>

              iv)   Prior  approval  by the  Company is  required  for  expenses
                    anticipated to be in excess of $4,000 per month.

     ICS may provide  Company with  additional  services if requested by Company
and approved by ICS. ICS and Company  shall agree on a mutually  acceptable  fee
for any additional services provided to Company by ICS.

     5.  Independent  Contractor.  ICS shall provide its best efforts to perform
all services  hereunder as an  independent  contractor and not as an employee of
Company or any affiliate thereof. It is expressly understood and agreed that ICS
shall have no  authority  to act,  represent  or bind  Company or any  affiliate
thereof in any manner,  except as may be agreed  expressly by Company in writing
from time to time. As an independent contractor,  ICS recognizes and agrees that
no federal,  state or FICA  withholdings will be made by Company on ICS's behalf
and that ICS shall be solely  responsible  for  payment of all taxes of any type
attendant to Company's payments pursuant to Section 4.

     6.  Confidentiality.   ICS  acknowledges  that  during  the  term  of  this
Agreement,  ICS may have access to information,  knowledge and/or financial data
of Company which is of a secret or confidential nature. ICS agrees that it shall
not disclose and shall not permit the disclosure of such information  during the
term hereof or at any time thereafter. Company acknowledges that during the term
of this  Agreement,  Company may have access to  information,  knowledge  and/or
financial  data of ICS  which is of a secret  or  confidential  nature.  Company
agrees that it shall not  disclose and shall not permit the  disclosure  of such
information during the term hereof or at any time thereafter.  ICS shall not use
the secret or  confidential  information  of the Company for purposes other than
carrying out its duties specified hereunder.

     7. Early Termination. This Agreement can be terminated by Company by 60-day
written  notice if FDA action  results in a delay in Periostat  approval  beyond
January 1998.

Company  has the  right to  terminate  the  Agreement  or any one or more of the
duties  under  Section 2 of this  Agreement  for any  reason  upon 90 days prior
written notice to ICS.

Either party has the right to terminate  this  contract if either party fails to
provide  its best  efforts to perform  any of the  material  duties set forth in
Section 2 and Exhibit A, or breaches any of its material  obligations  set forth
in this Agreement. If said party does not cure such failure to perform within 90
days after receiving  notice,  the other party shall have the right to terminate
this agreement.

Project  establishment  fees  and  retainers  paid  to  ICS up to  the  time  of
termination are  non-refundable.  Fees and expenses will be pro-rated to date of
termination.


<PAGE>

     8.  Modification of Deliverables  and Time Lines.  This contract is written
under the assumption  that the timing of Periostat's FDA approval will allow for
market entry around  January 1, 1998. If during the course of this  Agreement it
becomes  apparent  that  market  entry  will  take  place  either  prior  to  or
significantly  later  than  January  1,  1998,  while  the  number  of months of
contracted service will remain the same,  deliverables,  priorities,  time lines
and payment  schedules can be  re-negotiated to optimally meet launch needs. The
foregoing  shall not  prohibit the Company from  terminating  this  agreement in
accordance with the first paragraph of section 7 of this agreement.

     9.  Indemnification.  Company  hereby  agrees to indemnify  ICS and hold it
harmless from any and all claims (including but not limited to product liability
claims  for the  Dental  Products),  liabilities,  losses,  actions,  suits,  or
proceedings,  at law or in  equity  that it may  incur  or with  which it may be
threatened by reason of its acting pursuant to the terms of this agreement,  and
in  connection  herewith,  to  indemnify  ICS any and  all  expenses  (including
attorney's  fees) or costs of resisting  any such action,  suit or proceeding or
resisting  any  such  claim;  provided,  however,  that the  provisions  of this
paragraph shall not apply in the event of any claim,  liability,  loss,  action,
suit or  proceeding  resulting  from the breach by ICS of any  provision of this
Agreement or from its  negligence or willful  misconduct or from its actions not
authorized  by the Company or pursuant to the terms of this  agreement,  or from
representations  made  by ICS  concerning  the  Company  not  authorized  by the
Company.

ICS hereby  agrees to  indemnify  Company and hold it harmless  from any and all
claims, liabilities, losses, actions, suits, or proceedings, at law or in equity
that it may incur or with which it may be  threatened by reason of the negligent
actions or willful misconduct of ICS or  representations  made by ICS concerning
the Company not  authorized  by the  Company;  and in  connection  herewith,  to
indemnify Company for any and all expenses (including  attorney's fees) or costs
of resisting  any such action,  suit or  proceeding or resisting any such claim;
provided,  however, that the provisions of this paragraph shall not apply in the
event of any claim,  liability,  loss, action, suit or proceeding resulting from
the  breach  by the  Company  of any  provision  of this  Agreement  or from its
negligence or willful misconduct.

     10. Marketing Obligation.  ICS shall advise Company promptly concerning any
market  information  that may come to the attention of ICS  respecting  Company,
Dental Products,  Company's market position or the continued  competitiveness of
Dental Products in the marketplace,  including charges,  complaints or claims by
any customer or other persons about Company or Dental Products. ICS shall confer
from time to time,  at the  request of  Company,  on matters  relating to market
conditions,  sales forecasting and product planning.  ICS shall not misrepresent
or disparage  Company or Dental Products in any way to any customer or any other
third party. ICS agrees that it shall not make any  representation of Company or
Dental Products unless such representation is authorized by Company.


<PAGE>

     11. Miscellaneous.

          a.   This Agreement  shall be binding upon and inure to the benefit of
               each of the parties hereto and their respective successor,  legal
               representatives and assigns;

          b.   This  agreement  may be executed in any number of counter  parts,
               each of which together shall constitute one and the same original
               document;

          c.   No  provision  of this  agreement  may be  amended,  modified  or
               waived, except in writing signed by the parties hereto;

          d.   This Agreement shall be construed in accordance with and governed
               by the laws of Ohio.

          e.   ICS will  provide,  without  restriction,  copies of the  account
               profiles which pertain to the sales of Dental  Products for which
               Company has  contracted  ICS to provide sales  services.  Account
               profiles  are  records  of  information   describing   individual
               accounts called on by ICS representatives in the course of acting
               on the Company's  behalf.  Profiles will minimally  include name,
               address of such accounts,  names of key contact people within the
               accounts,  and a history of ICS'  interactions  with that account
               while in Company's  service.  In  developing  and  modifying  the
               account profiles, ICS agrees not to breach any agreement with any
               third  party or  infringe  the  proprietary  rights  of any third
               party.

               ICS agrees to provide the company with the most recent version of
               any such account profiles upon the request of Company.  While ICS
               has full  responsibility  for the development and modification of
               the  account  profiles,  it is  intended  that there will be full
               cooperation   between  ICS  and  Company  with  respect  to  such
               development and  modification  and that there will be a free flow
               of  information  between  ICS and  Company  in order  to  promote
               development of commercially  useful account profiles.  During the
               term of this Agreement and upon the termination of this agreement
               for any  reason,  Company  shall be  entitled  to retain and use,
               without any limitation  upon such use, the most recent version of
               account profiles. Upon any such termination, ICS shall deliver to
               Company  the  complete  and most  recent  versions of the account
               profiles pertaining to Company's contracted services.


<PAGE>

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be duly
executed as the day and year first written above:




For ICS:                                    For Company:



By: /s/Walter Deinees                       By: /s/BM Gallagher                 
    -----------------                           ---------------                 



Name: Walter Deinees                        Name: BM Gallagher                  
      --------------                              ------------                  



Date: Jan 30, 1997                          Date: Jan 28, 1997



<PAGE>

                                    Exhibit A

                                    Section 1

                        Dental Products Brand Management


1. Periostat

ICS will be contracted  for a total of 12 months  beginning  February 1, 1997 to
provide all planning and  implementation  of marketing  activities  necessary to
optimize Periostat launch.

Objective:

Revise and implement marketing plan for Periostat to optimize sales.

Supporting activities:

Activities will include but are not limited to:

               1.   The  development  and production of marketing  materials and
                    advertising programs.
               2.   Recommendation of product pricing.
               3.   Development and implementation of product distribution plan.
               4.   Product forecasting.
               5.   Development    of    alternative     marketing     vehicles.
                    Responsibilities related to alternative sales vehicles:
                    I.   ICS will provide clear  rationale,  budget,  time lines
                         and expected  benefits along with each  vehicle/project
                         recommended.
                    ii.  Company will approve budget & time line
                    iii. ICS will deliver project on time and within budget
               6.   Development  of materials  for, and  attendance  at,  dental
                    conventions.
               7.   Development and implementation of sampling program.
               8.   Development and implementation of compliance program.
               9.   Development and  implementation of professional  educational
                    program, e.g., symposia, speakers' programs.

<PAGE>

Deliverables:

               1.   Provide detailed time and events schedule (Marketing "action
                    plan") to CollaGenex  management  for review and approval by
                    February 10, 1997.
               2.   Provide  hard copy of revised  Periostat  Marketing  Plan by
                    February 15, 1997.
               3.   Present Periostat advertising campaign by April 1, 1996
               4.   Provide  monthly  summary of  activities  vs. action plan to
                    CollaGenex management by the 15th of each month

Fee:

Retainer: $6,000 per month for a period of twelve months due on the first day of
each month. The first payment is due on February 1, 1997.

Development  costs:  The  development  of  marketing  materials,  as approved by
Company,  will be billed at $80 per effort hour. Payment will be due monthly, on
the first day of each month.

2. Products

Objective:

ICS will be contracted for a total of 12 months,  beginning  February 1, 1997 to
provide planning and implementation of marketing activities in order to optimize
the contract sales effort associated with the sales of up to 3 Products.

Supporting activities:

It is  anticipated  that brand  management  for Products  will be limited to the
following activities:

               1.   Conversion of promotional and detailing  material to be more
                    relevant for a dental audience
               2.   Development   of  convention   materials   appropriate   for
                    exhibition on CollaGenex convention booth
               3.   Product forecasting

However the exact  nature of the  activities  and  services  required  will only
become apparent when details of the co-promotional contracts are negotiated.

Fee:

For brand management activities related to Products, there will be an additional
charge of $80 per hour, to a maximum of up to 20 hours per quarter.

<PAGE>

                                    Exhibit A

                                    Section 2

                              Contract Sales Force

Scope:

ICS will  provide  contract  sales  services for  Periostat  and up to three (3)
Products. Additional Products will be the subject of addenda to this Exhibit.

1. Start date is targeted for April 1, 1997,  however  initiation of services is
contingent on securing of co-promotion agreements.

2. Specific products and product mix promoted at project initiation and over the
course of this  contract  will be  determined  based on  pending  co-promotional
agreements and the timing of FDA approval for Periostat.  Number of reps. needed
will  depend on number  and mix of  products,  desired  audience  reach and call
frequency and geography.  An illustration of rep. requirements and budgets for 6
possible scenarios is given in Table 1 below.

3.  Target  audience,  reach and  frequency  of calls for each  product  will be
determined  separately  for each product as each product  becomes  available for
promotion.  The agreed upon audience,  reach and frequency will then be included
as an amendment to this contract.

Services:

               1.   Creation and  implementation  of a sales strategy for Dental
                    Products,  integrating alternative sales vehicles to support
                    field sales activities.
               2.   Provision  of a detailed  time,  events  and costs  schedule
                    (sales  "action  plan") to CollaGenex  management for review
                    and approval prior to initiation.
               3.   Creation of sales territories and call plans.
               4.   Hiring,  training,  management  and  compensation  of  sales
                    personnel.
               5.   Call reporting.
               6.   Provision of ongoing  input and insight into sales  strategy
                    and planning process.
               7.   Monthly  forecasts of next months sales activities  relative
                    to sales  action  plan,  quarterly  performance  reviews and
                    planning sessions.

Deliverables:

               1.   For each Dental  Product,  an action plan will be  submitted
                    documenting product sales strategy,  integrating alternative
                    sales vehicles,  and including  recommended target audience,
                    reach and  frequency  possible  within  budget.  Due  before
                    product launch.

               2.   Monthly field  feedback and  performance  analysis vs action
                    plan, including reach, frequency,  and sample accountability
                    for each product in hard copy, due the 15th of the month for
                    the preceding month.

Fees:

Project establishment fee: $20,000 due on signature of this Agreement.

Contract  compensation:  $43/contract  hour billable  monthly in accordance with
actual hours implemented the previous month, and consistent with the action plan
approved by Company, for Periostat and up to an additional three (3) Products.