Exhibit 10.3


          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.


                        EXCLUSIVE DISTRIBUTION AGREEMENT
                        --------------------------------

      This Exclusive Distribution Agreement ("Agreement") is made as of March 1,
2002 (the "Effective Date"), between CollaGenex Pharmaceuticals,  a Pennsylvania
corporation,  having its  principal  place of business at 41  University  Drive,
Suite 200,  Newton,  PA 18940  ("Client"),  and CORD  Logistics,  Inc.,  an Ohio
corporation,  having its  principal  place of business  at 15 Ingram  Boulevard,
LaVergne, TN 37086 ("CORD").

      A. Client is,  among other  things,  in the  business  of  developing  and
marketing pharmaceutical products in the United States, the District of Columbia
and Puerto Rico (the "Territory").

      B.  CORD  is,  among  other  things,   in  the  business  of  distributing
pharmaceutical  products to  wholesalers,  specialty  distributors,  physicians,
clinics,  hospitals,   pharmacies,  and  other  health  care  providers  in  the
Territory,  and of providing Information Systems and other services that support
its customers' use of its distribution capabilities.

      C. Client desires to engage CORD as its exclusive  distribution  agent for
commercial  sales and  samples  of  Periostat,  Atrisorb-D  and  Atridox  in all
formulations  (collectively,  the  "Product"),  and  such  other  pharmaceutical
products  agreed to by the  parties in writing in the  Territory  and to perform
certain  other  services  described  in this  Agreement,  all upon the terms and
conditions set forth in this Agreement.

      THEREFORE,  in  consideration  of the mutual  conditions and covenants set
forth herein, CORD and Client (collectively referred to as "Party" or "Parties")
agree as follows:

      1. APPOINTMENT/AUTHORIZATION.

      1.1 Upon the terms and  conditions  set  forth in this  Agreement,  Client
appoints CORD as its exclusive  distribution agent of Product (including samples
of the  Product) in the  Territory  to Client's  customers,  including,  but not
limited to, wholesalers, specialty distributors, physicians, clinics, hospitals,
pharmacies  and other  health care  providers  in the  Territory  (collectively,
"Customers").

      1.2 Subject to the terms and conditions set forth in this Agreement,  CORD
accepts  the  appointment  to  represent  Client  as  its  authorized  exclusive
distribution agent of Product to Customers in the Territory.


<PAGE>


      2. SERVICES.

      2.1 CORD shall provide the services set forth in the Operating Guidelines,
which include,  without limitation,  storage,  distribution,  returns,  customer
support,  financial support, EDI and system access support ("Services").  A copy
of the Operating  Guidelines is attached hereto as Exhibit A and incorporated by
reference.

      2.2 The  Operating  Guidelines  may be amended  from time to time upon the
mutual written  agreement of the Parties;  provided,  however,  that any change,
modification or amendment to the Operating  Guidelines may result in an increase
in the fees charged by CORD in Section 5.

      2.3 CORD's services shall comply with the Operating  Guidelines,  provided
Client's  shipments  of Product to CORD are within [**]  percent  ([**]%) of its
Forecast (as hereinafter defined).

      2.4  All  Product  Returns  shall  be  processed  and  handled  by CORD in
accordance with the Operating  Guidelines;  and, any customization or additional
return  services  requested by Client shall be performed at an additional fee as
agreed by the Parties.

      2.5 Client is solely  responsible  for all Product  recalls.  In the event
Product is subject to recall,  or Client,  on its own  initiative,  recalls  any
Product,  CORD shall provide  assistance to Client as set forth in the Operating
Guidelines,  provided  that Client  shall pay to CORD an amount  equal to CORD's
actual  costs  incurred  with any such recall  services,  (such cost shall be in
addition to the Service Fees  described in Section 5 below),  unless such recall
is due solely to the  negligence  or willful  misconduct of CORD, in which case,
CORD shall  reimburse  Client for Client's  actual costs resulting from any such
recall.

      3. PRODUCT SUPPLY/CLIENT RESPONSIBILITIES.

      3.1 Client shall deliver Product to CORD at CORD's facility  located at 15
Ingram Boulevard,  Suite 100, La Vergne, TN 37086, or to such other distribution
facility as may be designated by CORD to Client in writing ("Facility").

      3.2 Client shall be  responsible  for delivery of Product to the Facility,
including all costs,  expenses and risk of loss  associated  with such delivery.
Title to Product  shall  remain with Client at all times,  even when  Product is
stored or  warehoused  at the  Facility.  Client  shall at all times  insure the
Product for damage, loss,  destruction,  theft or any such other property damage
("Loss")  as further  set forth in Section 17 below.  Except for Loss  resulting
solely from the gross  negligence or willful  misconduct  of CORD,  Client shall
bear all risk of loss or damage with respect to the Product stored or warehoused
at the Facility.

      3.3 Client shall  provide CORD with a forecast of the volume of Product to
be  handled  by CORD under  this  Agreement,  not less often than  semi-annually
("Forecast").  Upon execution of this Agreement,  Client shall deliver to CORD a
customer list,  which sets forth the Product prices (the "Customer Price List").
Client shall notify CORD of any change in the Customer


                                       2

<PAGE>


Price List not less than  seventy-two  (72) hours prior to the effective date of
any such change.  CORD shall use  commercially  reasonably  efforts to implement
such price change in accordance with Client's instruction.

      3.4 Upon  receipt of the  Product  at the  Facility,  CORD shall  visually
inspect  each  shipment  of Product for  external  damage or loss in transit and
notify Client of any such damage or loss within a commercially reasonable period
of time following discovery.

      4. INFORMATION SYSTEM ACCESS.

      4.1 CORD shall provide  Client access to an Operating  System Base,  which
consists  of the  software  used by CORD to support  the  services  provided  to
Client, including the server and other components needed to execute the software
and certain support services associated  therewith,  as further set forth in the
Operating Guidelines (collectively, the "System"), upon the terms and conditions
set forth in the System Access Agreement.  A copy of the System Access Agreement
is attached as Exhibit C and  incorporated  herein by  reference.  The  software
releases are (i)  EliteSeries  6.1.2,  as modified by CORD,  supplied by Tecsys,
Inc.,  a Montreal,  Quebec,  Canadian  company,  and any  upgrades,  maintenance
releases or modifications  implemented by CORD to support distribution  services
provided  by  CORD;  (ii)  BACCS  3.0 as  modified  by  CORD  and  any  upgrades
implemented by CORD to support  financial  services  provided by CORD; and (iii)
Impromptu 6.0,  supplied by Cognos Inc., a Canadian  company,  and any upgrades,
maintenance  releases or modifications  implemented by CORD to support reporting
services provided by CORD.

      4.2 The System shall be made  available to Client at the fees set forth in
the Fee Schedule,  except that any custom enhancements requested by Client shall
be billed  separately  based on an hourly rate set forth in the Fee Schedule (as
defined in Section 5).

      4.3 In  addition  to the terms set forth in the System  Access  Agreement,
Client shall  maintain (i) a local area network  sufficient to support  Client's
terminals  and  personal  computers  that have  access to the  System,  all such
personal  computers shall meet the minimum  specifications  necessary to support
software needed to access the system;  (ii) a centralized  server sufficient for
data storage,  if data export  requirements exist; and (iii) a connection to the
internet  sufficient  to  support  system  access.   Client  shall  also  assign
knowledgeable and qualified employees or representatives to facilitate access to
the System.

      5. FEES.

      5.1 As  compensation  for the Services,  Client shall pay to CORD the fees
(the "Fees") set forth on Exhibit B (the "Fee Schedule").

      5.2 CORD shall issue an invoice to Client for the Services  rendered under
this Agreement or for any other amounts due on a monthly  basis.  Payment is due
within  [**] days of the  invoice  date.  If the Invoice is not paid within such
[**] day period, a service charge on the unpaid amount calculated at the rate of
1.5% per month (or the maximum  rate  permitted by law if such rate is less than
1.5% per month) shall be imposed until such amount is paid in full.


                                       3

<PAGE>


      5.3 The Fees shall be held firm for the first contract  year.  Thereafter,
CORD shall  adjust the price not more often than once per  contract  year by the
greater  of (i) the  increase  in the  Producer  Price  Index - All  Commodities
published by the United States  Department of Labor,  Bureau of  Statistics,  as
amended  from  time  to  time,  or (ii)  five  percent  (5%).  For  purposes  of
sub-Section (i), the base point shall be the index level on the first day of the
contract year.

      5.4  Notwithstanding the terms set forth above in Section 5.3, if CORD can
reasonably demonstrate that the costs for providing the Services have materially
increased,  or are likely to  materially  increase in the coming year due to the
adoption of any  applicable  law or  regulation  (or any material  change in the
interpretation or administration  thereof),  or due to unforeseen  circumstances
beyond CORD's reasonable control,  then upon notice from CORD, the Parties agree
to meet in good faith and  negotiate  a mutually  acceptable  adjustment  to the
Fees.

      6. TERM AND TERMINATION.

      6.1 The initial term of this  Agreement  shall begin on the Effective Date
and shall continue for a period of three (3) years (the "Initial Term"),  unless
terminated earlier pursuant to this Agreement.  Thereafter, this Agreement shall
automatically  renew for additional  terms of one (1) year each,  unless written
notice of  termination  is given by either Party at least [**] days prior to the
end of the Initial Term, or such other term, in which case this Agreement  shall
terminate at the end of the then current term.

      6.2 Either Party shall have the right to terminate this Agreement:

            (a) upon [**] days prior written notice to the other Party, provided
that in the event Client terminates this Agreement,  without cause, prior to the
end of the Initial Term, such  termination  shall be effective only upon payment
to CORD of [**] of System Access Fees set forth on the Fee Schedule;

            (b) upon the breach by the other  Party of a material  provision  of
this  Agreement and that Party's  failure to cure such breach within thirty (30)
days following  written notice thereof from the  non-breaching  Party,  provided
that,  with  respect  to any  failure  to make any  payment  when due under this
Agreement, such period to cure shall be reduced to ten (10) days; or

            (c)  immediately  upon  notice  to the  other  Party  following  the
commencement of any bankruptcy or insolvency  proceeding  (whether  voluntary or
involuntary) with respect to such other Party or its assets,  which in the event
of an  involuntary  proceeding,  is not  dismissed  within sixty (60) days,  the
general  assignment  for the benefit of creditors  by such other  Party,  or the
appointment of a receiver, trustee or liquidator by or for such other Party.

      6.3  Termination or expiration of this Agreement  shall not relieve either
Party from any liability or obligation that accrued prior to such termination or
expiration.  Upon termination or expiration of this Agreement, all Product shall
be  returned  to Client or a  designee  of  Client,  at  Client's  sole cost and
expense.  Sections 13 and 14 shall  survive  termination  or  expiration of this
Agreement.


                                       4

<PAGE>


      7.  AUDITS.  No more than once per calendar  year,  Client or its designee
shall have the right during normal business hours (i.e.,  8:00 a.m. to 5:00 p.m.
local time),  upon fifteen (15) business days prior written  notice to CORD, to:
(a) conduct a physical  audit of such parties of the Facility that relate solely
to Product stored and warehoused at the Facility under this  Agreement;  and (b)
review and audit records that relate solely to the storage and  distribution  of
the Product.

      8.  COMPLIANCE  WITH LAWS.  Each Party  shall  conduct its  activities  in
connection  with this Agreement in compliance with all applicable  laws,  rules,
regulations, and orders of governmental entities.

      9. REPRESENTATIONS AND WARRANTIES.

      9.1 Each Party represents and warrants to the other that:

            (a) it has full power and authority to enter into this Agreement and
perform  all  obligations  and  conditions  to be  performed  by it  under  this
Agreement without any restriction by any other Agreement or otherwise;

            (b) the execution,  delivery and  performance of this Agreement have
been duly authorized by all necessary corporate action of that Party; and

            (c)  this  Agreement   constitutes  the  legal,  valid  and  binding
obligation of that Party.

      9.2 Client further represents and warrants to CORD that the Product:

            (a) is and shall be  manufactured  in conformity with the Food, Drug
and Cosmetic Act, as amended from time to time, and all other  applicable  laws,
rules,   regulations  and  orders  of  governmental  entities  relating  to  the
manufacture, promotion, sale or distribution of the Product; and

            (b) does not violate or infringe any patent, trademark, tradename or
other interest of any person or entity.

      10.  TAXES.  Client  shall pay when due all sales,  use,  gross  receipts,
excise,  personal  property  taxes  associated  with the Product  (excluding any
personal  property tax associated with CORD's  equipment used in connection with
the  Services),  and other  taxes now or  hereafter  imposed  as a result of the
transactions contemplated by this Agreement, none of which have been included in
the fees payable to CORD under this Agreement; provided that the amounts payable
by Client under this section  shall not include taxes based on the net income of
CORD.

      11. TRADEMARKS.  Neither Party shall have the right to use the name of the
other Party or any  Affiliate of the other Party,  or the other  Party's or such
Affiliates'  trademarks,  service  marks,  logos,  or other similar marks in any
manner except with the prior written  approval of that Party;  provided that the
foregoing  shall not prohibit CORD's use of Client' names or marks in connection
with the performance of the Services in a manner consistent with this Agreement.


                                       5

<PAGE>


"Affiliate," as used in this Agreement, means any legal entity which, during the
Term hereof,  controls,  is controlled by, or is under common control with, such
Party.  For  purposes of this  definition,  an entity shall be deemed to control
another entity if it owns or controls,  directly or  indirectly,  at least fifty
percent (50%) of the voting interest of all equity interests of the other entity
(or  other  such  comparable  ownership  interest  for an  entity  other  than a
corporation).

      12. CONFIDENTIALITY.

      12.1 Each Party  acknowledges  that as a result of this  Agreement  it may
learn and have access to trade secrets and other  confidential  and  proprietary
information of the other Party through employees,  representatives and/or agents
acting  on  behalf  of  or  subcontracted  to  either  Party  (collectively  the
"Representatives"),   including  without  limitation,   financial   information,
information  regarding  business  practices  and  techniques,  and  systems  and
technology information, or any information identified as confidential in writing
by  either  Party  (the  "Confidential  Information").   For  purposes  of  this
Agreement,  Confidential  Information shall not include information disclosed by
one Party to the other Party to the extent that such  information  can be proven
by written  evidence:  (a) to be in the public domain or generally  available in
the  industry in which the  disclosing  Party  engages in  business  without any
violation of this Agreement by the other Party;  (b) is already legally known to
the other Party or any of its  Affiliates  at the time of its  disclosure by the
disclosing  Party; (c) becomes known to the other Party or any of its Affiliates
from a third party without any  obligation of  confidentiality  or limitation on
use;  or  (d)  is  independently  developed  by the  other  Party  or any of its
Affiliates prior to the date of its disclosure.  The specific  material terms of
this Agreement shall be deemed to be the Confidential Information of each Party.
Confidential  Information  shall  not be deemed  to be in the  public  domain or
publicly known or in the receiving Party's  possession because it is embraced by
more general  information in the receiving  Party's  possession or because it is
embraced in general terms in publications.

      12.2  Neither  Party  shall,  directly  or  indirectly,  at any time:  (a)
disclose to any third person or entity any Confidential Information of the other
Party (whether learned before or after the date of this Agreement),  or (b) use,
or permit or assist  any third  person or entity to use,  any such  Confidential
Information,  excepting only: (i) disclosures required by law, rule,  regulation
or order, as reasonably determined by the disclosing Party or its legal counsel,
and (ii) disclosures on a confidential basis to directors,  officers, employees,
and agents of that Party or its  Affiliates  who have a reasonable  need to know
such Confidential  Information in the normal course of business of that Party or
any of that Party's Affiliates.

      12.3 The  obligations  of  confidentiality  hereunder  shall  survive  the
termination of this Agreement for a period of three (3) years.  Upon termination
of this Agreement (for any reason) each Party shall promptly:  (i) return to the
other Party all documentation and other materials  (including copies of original
documentation or other materials) containing any Confidential Information of the
other Party; or (ii) with the other Party's  consent,  which consent will not be
unreasonably withheld,  certify to the other Party, pursuant to a certificate in
form  and  substance  reasonably  satisfactory  to the  other  Party,  as to the
destruction of all such documentation and other materials.


                                       6

<PAGE>


      13. INDEMNIFICATION.  Each Party shall indemnify, defend and hold harmless
the other  Party and its parent  and  Affiliates,  and each of their  directors,
officers,  employees,  agents, and representatives  from and against all claims,
liabilities,   losses,   damages,  costs,  and  expenses,   including,   without
limitation,  reasonable  attorneys'  fees  ("Liability")  to a  third  party  or
property  arising  directly  or  indirectly  out of any failure of that Party to
perform  fully all  obligations  and  conditions  to be  performed by that Party
pursuant to this  Agreement or any breach of any warranty  made by that Party in
this  Agreement.  Client further  agrees to indemnify,  defend and hold harmless
CORD,  its  parent  and  Affiliates  and  each  of  their  directors,  officers,
employees,  agents  and  representatives  from  any  and all  Liability  arising
directly or indirectly  out of injury or death to person or property  alleged to
have been caused by Client's Product.

      14. LIMITATION OF LIABILITY.  NOTWITHSTANDING THE FOREGOING  PROVISIONS OF
SECTION 13, OR ANY OTHER  PROVISION OF THIS  AGREEMENT TO THE CONTRARY,  NEITHER
PARTY  SHALL BE LIABLE TO THE OTHER  PARTY FOR ANY  CONSEQUENTIAL  (SPECIFICALLY
EXCEPTING THOSE  CONSEQUENTIAL  DAMAGES ARISING FROM EACH PARTY'S  OBLIGATION TO
INDEMNIFY  THE OTHER FOR  LIABILITY  ARISING  OUT OF OR  RELATING TO THIRD PARTY
CLAIMS IN ACCORDANCE WITH SECTION 13 ABOVE), INCIDENTAL,  INDIRECT,  SPECIAL, OR
OTHER SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

      15.  INSURANCE.  During  the  term  of  this  Agreement  and  for as  long
thereafter as necessary to cover claims  resulting from this  Agreement,  Client
shall maintain: (i) product liability and commercial general liability insurance
having a limit of not less than $5 million;  and (ii) property damage  insurance
at replacement  value for the Product located at the CORD Facility or in transit
to or from the CORD Facility,  pursuant to one or more  insurance  policies with
reputable insurance  carriers.  Cardinal Health, Inc. and its subsidiaries shall
be  designated  as  "additional   insureds"  under  the  product  liability  and
commercial general liability insurance policy(ies) and under the property damage
insurance  policy(ies).  Prior to the Commencement Date, Client shall deliver to
CORD  certificates  evidencing such insurance.  Client shall not cause or permit
such  insurance  to be canceled or  modified to  materially  reduce its scope or
limits of coverage  during the term of this  Agreement or thereafter as provided
above.  Except for any losses  resulting  solely  from the gross  negligence  or
intentional  misconduct  of CORD,  Client  shall bear all risk of loss or damage
with respect to the Product, whether located at the Facility or otherwise.

      During the term of this Agreement,  CORD shall maintain commercial general
liability  insurance in the amount of Two Million Dollars  ($2,000,000).  Client
shall be designated as an  "additional  insured" under such  commercial  general
liability insurance.

      16.  DISPUTE  RESOLUTION.  The Parties  agree to use good faith efforts to
resolve  all  disputes  within  ninety  (90) days of written  notice that such a
dispute  exists.  If dispute  under this  Agreement  cannot be  resolved  by the
Parties within such sixty (60) day period, the Parties agree to refer the matter
to one executive from each Party not directly involved in the dispute for review
and  resolution.  A copy of the terms of this  Agreement,  agreed upon facts and
areas of  disagreement,  and a concise  summary  of the  basis  for each  side's
contentions  will be  provided  to both  executives  who shall  review the same,
confer,  and attempt to reach a mutual resolution of


                                       7

<PAGE>


the issue within forty-five (45) days after receipt of the materials  referenced
above.  If the matter has not been  resolved  within  such  forty-five  (45) day
period,  either or both  Parties  may pursue  resolution  of the matter  through
litigation or other process  available under law or equity.

      17. COMPLIANCE WITH PRESCRIPTION DRUG MARKETING ACT.

      17.1  Each  Party  shall  comply  with the  applicable  provisions  of the
Prescription  Drug Marketing Act ("PDMA") and the distribution of the samples of
the  Product  pursuant  to  this  Agreement  shall  be in  accordance  with  the
applicable provisions of the PDMA, including but not limited to the following.

      17.2 Client hereby  appoints CORD is an authorized  distributor  of record
(as that term is used in the PDMA) for purposes of  distributing  samples of the
Product.

      17.3 A written  request for a sample of the Product to be  delivered  to a
licensed  practitioner  must be  received  by CORD prior to the  delivery of the
sample of the Product. The request must contain the following information:

            (a) The name,  address,  professional  title,  and  signature of the
practitioner making the request;

            (b) The  practitioner's  State license or  authorization  number or,
where a scheduled drug product is requested, the practitioner's Drug Enforcement
Administration number;

            (c) The proprietary or established name and the strength of the drug
sample requested;

            (d) The quantity requested;

            (e)  The  name  of the  manufacturer  (Client)  and  the  authorized
distributor of record (CORD), if the drug sample is requested from an authorized
distributor of record; and

            (f) The date of the request.

      A written  request for a drug sample to be  delivered to the pharmacy of a
hospital or other health care entity is required to contain,  in addition to the
information  set  forth  above,  the name and  address  of the  pharmacy  of the
hospital  or other  health  care  entity  to  which  the  drug  sample  is to be
delivered.

      17.4 Client shall verify with the  appropriate  State  authority  that the
practitioner  requesting  the drug sample is licensed or authorized  under State
law to prescribe the drug product,  and shall  communicate such  verification to
CORD prior to shipment of the sample of the Product.

      17.5 The recipient of the drug sample must execute a written  receipt that
includes the following information when the drug sample is delivered:


                                       8

<PAGE>


            (a) If the drug sample is delivered to the licensed practitioner who
requested it, the receipt is required to contain the name, address, professional
title and  signature  of the  practitioner  or the  practitioner's  designee who
acknowledges  delivery of the drug sample;  the proprietary or established  name
and strength of the drug sample and the  quantity of the drug sample  delivered;
and the date of delivery.

            (b) If the drug sample is delivered to the pharmacy of a hospital or
other health care entity at the request of a licensed practitioner,  the receipt
is  required  to  contain  the  name  and  address  of the  requesting  licensed
practitioner;  the name and  address  of the  hospital  or  health  care  entity
pharmacy designated to receive the drug sample; the name, address,  professional
title,  and signature of the person  acknowledging  delivery of the drug sample;
the proprietary or established  name and strength of the drug sample  delivered;
and the date of delivery.


      The receipt shall be returned to CORD by the carrier.

      18. MISCELLANEOUS.

      18.1  Relationship of the Parties.  The relationship  among the Parties is
that of independent contractors, and this Agreement does not establish or create
a partnership, joint venture, or other agency relationship among the Parties.

      18.2 Notices. Any notice or other communication  required or desired to be
given to any Party under this Agreement  shall be in writing and shall be deemed
given:  (a) three  business  days after such notice is  deposited  in the United
States mail,  first-class  postage  prepaid,  and addressed to that Party at the
address for such Party set forth at the end of this Agreement;  (b) one business
day after delivered to Federal Express,  Airborne,  or any other similar express
delivery service for delivery to that Party at that address; or (c) when sent by
facsimile  transmission,  with  electronic  confirmation,  to that  Party at its
facsimile number set forth at the end of this Agreement. Any notice delivered by
facsimile  transmission  will be deemed  delivered upon electronic  confirmation
provided the notice is also  deposited  in the U.S.  mail,  first-class  postage
prepaid.  Any Party may change its address or facsimile number for notices under
this Agreement by giving the other Parties notice of such change.

      18.3 Governing Law. This  Agreement  shall be construed  under the laws of
the State of Tennessee, without regard to its conflicts of laws provisions.

      18.4  Severability.  If any term of this Agreement is declared  invalid or
unenforceable by a court or other body of competent jurisdiction,  the remaining
terms of this Agreement will continue in full force and effect.

      18.5  Non-Waiver.  No  failure  by  either  Party to  insist  upon  strict
compliance with any term of this Agreement, to enforce any right, or to seek any
remedy upon any default of the other Party shall affect,  or constitute a waiver
of, the first Party's right to insist upon strict  compliance,  to exercise that
option,  to enforce  that right,  or to seek that  remedy  with  respect to that
default or any  prior,  contemporaneous,  or  subsequent  default.  No custom or
practice of the Parties at


                                       9

<PAGE>


variance with any  provision of this  Agreement  shall  affect,  or constitute a
waiver of, that Party's right to demand strict compliance with all provisions of
this Agreement.

      18.6 Force  Majeure.  If the  performance of any part of this Agreement by
either Party shall be prevented, restricted, interfered with or affected for any
length of time by fire or other casualty,  government restrictions,  war, riots,
strikes or labor disputes,  lock out, transportation delays, acts of God, or any
other causes which are beyond the reasonable  control of such Party,  such Party
shall not be  responsible  for delay or failure of performance of this Agreement
for such length of time, provided,  however, that the obligation of one Party to
pay amounts due to the other  Party  shall not be subject to the  provisions  of
this Section.

      18.7  Complete   Agreement.   This   Agreement   constitutes   the  entire
understanding  between the Parties and supersedes  any contracts,  agreements or
understanding  (oral or  written)  of the  Parties  with  respect to the subject
matter  hereof.  No term of this  Agreement  may be amended  except upon written
agreement of both Parties, unless provided otherwise in this Agreement.

      18.8 Assignment.  Except as set forth herein, neither Party shall have the
right to assign this  Agreement,  or any of such Party's  rights or  obligations
under this  Agreement,  without the prior  written  consent of the other  Party,
provided,  however,  that CORD may assign its rights under this Agreement to any
parent,  subsidiary or affiliate without obtaining such consent.  This Agreement
shall be  binding  upon,  inure to the  benefit  of, and be  enforceable  by and
against the respective successors and assigns of the Parties.

      18.9  Independent  Contractor.  The relationship of the Parties is that of
independent  contractors,  and  neither  Party shall incur any debts or make any
commitments for the other Party except to the extent expressly  provided in this
Agreement. Nothing in this Agreement is intended to create or shall be construed
as creating between the Parties the relationship of joint ventures, co-partners,
employer/employee, principal and agent, or any other agency relationship.

      IN WITNESS  WHEREOF,  the undersigned  acknowledge and accept the terms of
this Agreement and have duly executed this Agreement.

CORD LOGISTICS, INC.                       COLLAGENEX PHARMACEUTICALS


By /s/ Frank C. Wegerson                   By /s/Frank Ruffo
  ----------------------------               --------------------------------
   Frank C. Wegerson
   Vice President and General Manager      Title Sr.  Director of Finance,
                                                 Controller
                                                 ----------------------------

   15 Ingram Boulevard                     41 University Drive, Suite 200
   LaVergne, TN 37086                      Newtown, PA 18940

   Facsimile No.  (615) 793-4783           Facsimile No. 215-579-8577
                                                        ---------------------


                                       10
<PAGE>


                                    EXHIBITS
                                    --------


                         Exhibit A   Operating Guidelines

                         Exhibit B   Fee Schedule

                         Exhibit C   System Access Agreement


                                       11

<PAGE>


                                                                       EXHIBIT A
                                                                       ---------

                              OPERATING GUIDELINES




























                                       12

<PAGE>


                                                                       EXHIBIT B
                                                                       ---------

                                  FEE SCHEDULE
<TABLE>

--------------------------------------------------------------------------------
DISTRIBUTION SERVICES
<S>                                                                     <C>
  Monthly per pallet refrigerated storage                               $   [**]
  Monthly per pallet ambient storage                                    $   [**]
  Product pick/pack/stage - per line (1)                                $   [**]
  Representative Sample Product pick/pack/stage - (first case)(1)       $   [**]
  Representative Sample Product pick/pack/stage - (each add'l case)(1)  $   [**]
  Monthly distribution system access and use (2)                        $   [**]
  Monthly account management fee (4)                                    $   [**]
  Emergency/International Orders                                        $   [**]
  Packing/Shipping Supplies (3)                              Cost plus [**]% handling fee
     (includes ordering, receiving, storage)
  Outbound Shipping Charges                                  Cost plus [**]% handling fee

CUSTOMER SERVICE
  Monthly fixed fee                                                     $   [**]
  Per order fee & per credit memo fee                                   $   [**]

FINANCIAL SERVICES
  Monthly fixed fee Accounts Receivable Management                      $   [**]
  Per order fee Accounts Receivable Management                          $   [**]
  Monthly fixed fee Chargeback Management                               $   [**]
  Per submission Chargeback Processing & Government Reporting           $   [**]
--------------------------------------------------------------------------------
</TABLE>

Note (1): This proposal is based on the  distribution of Periostat and Denatplex
only, any additional  products  requiring  distribution  services will be quoted
separately. The pick/pack fee will be tiered as follows:

                  [**] to [**] lines per month              $[**] per line
                  [**] to [**] lines per month              $[**] per line
                  >[**] lines per month                     $[**] per line

Note (2):  System access fee includes  licenses for two  concurrent  users.  Any
additional  licenses  required by  CollaGenex  will  increase the monthly fee by
$[**] per concurrent user.

Note (3): Supplies include boxes, tape, labels, bubble pack, etc. (approx. $[**]
to $[**] per shipment),  pallets if necessary ($[**] per pallet),  and any other
CollaGenex requirements.

Note  (4):  The  account  management  fee  includes  the  following:   logistics
management, inventory management, quality assurance (QA), regulatory, receiving,
supply control, process set-ups, and process scheduling.


                                       13

<PAGE>


                                                                       EXHIBIT C
                                                                       ---------


                             SYSTEM ACCESS AGREEMENT


      This System  Access  Agreement  ("Agreement")  is made as of March 1, 2002
between CORD Logistics,  Inc., an Ohio corporation ("Licensor"),  and CollaGenex
Pharmaceuticals, Inc., a Pennsylvania corporation ("Licensee"), who hereby agree
as follows:

      1.  Distribution  Services  Agreement.  Licensor and Licensee have entered
into a Distribution Services Agreement  ("Distribution  Agreement") of even date
with this Agreement, the terms of which are incorporated by reference.

      2. System  Access;  Maintenance  Obligations.  Licensor  hereby  grants to
Licensee a  nonexclusive,  nontransferable  limited  license (the  "License") to
utilize  Licensor's  Operating  System Base Package,  consisting of the computer
hardware (as set forth below),  software,  and other components described in the
Distribution  Agreement as well as future  upgrades and  maintenance of the base
package  (collectively,  the "System"),  for the information processing needs of
Licensee in  connection  with the Services to be provided by Licensor  under the
Distribution  Agreement.  Licensee  shall  maintain  during  the  term  of  this
Agreement  the local area  network  (including  without  limitation  centralized
server) and desktop processing  requirements for the System as further described
in the Distribution  Agreement or the Operating Guidelines,  a copy of which are
attached to the Distribution Agreement as Exhibit A.

      During  the  term of this  Agreement,  Licensor  shall  employ  reasonable
security   measures  and  policies   designed  to   safeguard   the   integrity,
accessibility,  and  confidentiality  of all of Licensee's  data resident on the
System and establish  and maintain  reasonable  disaster and emergency  recovery
plans  designed to minimize  disruption  from  System  operation  interruptions.
Licensee shall have the right to review the operation of the System from time to
time during regular  business hours,  upon reasonable prior notice and at a time
mutually agreeable by the parties; provided that such reviews shall be conducted
in a manner to avoid disruption of Licensor's business operations.

      3.  Lease of  Hardware.  Licensee  shall  have the right to lease a router
("Hardware")  from Licensor during the term of this Agreement,  at no additional
cost to Licensee,  other than the Fee set forth in the  Distribution  Agreement.
The  Hardware  shall be kept by Licensee (a) subject to  inspection  by Licensor
during  regular  business  hours,  upon  reasonable  prior  notice and at a time
mutually agreeable by the parties;  (b) at Licensee's  address, as stated at the
end of this Agreement,  which Hardware shall not be relocated  without the prior
written consent of Licensor,  which consent shall not be unreasonably  withheld;
(c) free of all security interests if any kind whatsoever,  liens,  encumbrances
and other claims; (d) marked with Licensor's identification marks or numbers and
if requested by Licensor,  conspicuously labeled "supplied by Licensor"; and (e)
maintained in good and efficient working order, condition and repair, reasonable
wear and tear accepted.


                                       14

<PAGE>


      Licensee shall use the equipment with due care to prevent injury  thereto,
and to any  person or  property  and in  conformity  with all  applicable  laws,
ordinances,  rules,  regulations  and  other  requirements  of  any  insurer  or
governmental  bonding and with all requirements of the manufacturer with respect
to use, maintenance and operation of the Hardware. Licensee shall not modify any
hardware without the prior written consent of Licensor,  which may be granted or
withheld in its sole discretion.  It is the intention and  understanding of both
Licensor  and  Licensee  that the  Hardware  shall be, and at all times  remain,
separately identifiable personal property of Licensor. Licensee shall not permit
any Hardware to be  installed  in or used,  stored or  maintained  with,  any of
Licensee's  personal  property in such manner or under such  circumstances  that
such  Hardware  might be or become an accession  to or confused  with such other
personal property. Licensee shall not permit such Hardware to be installed in or
used,  stored or maintained with, any real property in such manner or under such
circumstances  that  any  person  might  acquire  any  rights  in such  Hardware
paramount to the rights of the Licensor by reason of such Hardware  being deemed
to be real property or a fixture thereon.

      Licensee  shall at all times during the term of this  Agreement  and until
the  Hardware  has been  returned  to  Licensor,  at its own  expense,  maintain
physical damage  insurance in the amount of not less than the replacement  value
of the Hardware. All insurance so maintained shall provide for a thirty (30) day
prior  written  notice to  Licensor  or its  assignees  of any  cancellation  or
reduction of  coverages;  (ii) an option in Licensor or its assignees to prevent
cancellation  by payment of  premiums,  (iii) cover the interest of the Licensor
and (iv) provide that all  insurance  proceeds  shall be payable to the Licensee
and Licensor,  as their respective  interests may appear at the time of any such
payment.  Licensor  shall  be  named  as an  additional  insured  on any  public
liability insurance policy so maintained. Upon the request of Licensor, Licensee
shall furnish to Licensor satisfactory evidence of any insurance so maintained.

      4.  Proprietary  Rights.  Licensee  shall have the right to use the System
during the term of this Agreement as expressly provided in paragraphs 1 and 2 of
this  Agreement,  but not  otherwise.  Licensee  shall not  assign or  otherwise
transfer,  disclose, copy, modify, re-engineer,  sell, license,  disassemble, or
decompile  the  System or  disclose  or permit  access to the  System or related
documentation  to any other person or entity.  The System and all parts thereof,
in all of their  tangible  and  intangible  manifestations,  all existing or new
enhancements,   developments,   derivative   works,   and  other   adaptions  or
modifications to the System (or any part thereof),  and all related  proprietary
rights, are and shall remain the exclusive property of Licensor.  Except for the
License and Lease, Licensee shall have no right, title, or interest in or to the
System or any part thereof.  Upon termination of this Agreement,  Licensee shall
promptly  return to  Licensor  all  portions  of the System  then in  Licensee's
possession or under its control in accordance with the term set forth in Section
6 below.

      5. Warranties.  Licensee acknowledges that it has had adequate opportunity
to review the System and its features and  operation,  and Licensee  accepts the
System  "AS  IS"  for its use as  contemplated  in the  Distribution  Agreement.
LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES,  AND HEREBY EXPRESSLY DISCLAIMS
ALL  REPRESENTATIONS  AND WARRANTIES,  EXPRESS OR IMPLIED,  RELATING DIRECTLY OR
INDIRECTLY TO THE SYSTEM OR ANY PART THEREOF,  INCLUDING WITHOUT  LIMITATION ANY
WARRANTIES OF QUALITY,


                                       15

<PAGE>


PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

      6.  Limitation  On  Liability.  LICENSOR  SHALL  NOT  BE  LIABLE  FOR  ANY
CONSEQUENTIAL,  INDIRECT,  SPECIAL, OR OTHER SIMILAR DAMAGES ARISING DIRECTLY OR
INDIRECTLY  OUT OF THE USE OR INABILITY  TO USE THE SYSTEM OR ANY PART  THEREOF,
EVEN IF INFORMED OF THE  POSSIBILITY  OF SUCH  DAMAGES,  WHETHER  CLAIMED  UNDER
CONTRACT, TORT, OR ANY OTHER LEGAL THEORY.

      IF ANY OF THE  LIMITATIONS ON THE LIABILITY OF LICENSOR  CONTAINED IN THIS
AGREEMENT ARE FOUND TO BE INVALID OR UNENFORCEABLE FOR ANY REASON, THEN LICENSOR
AND LICENSEE  EXPRESSLY AGREE THAT THE MAXIMUM  AGGREGATE  LIABILITY OF LICENSOR
FOR ALL CLAIMS  RELATING TO THE SYSTEM  SHALL NOT EXCEED  100% OF THE  AGGREGATE
BASE PACKAGE FEES PAID BY LICENSEE TO LICENSOR FOR  LICENSEE'S USE OF THE SYSTEM
UNDER THE  DISTRIBUTION  AGREEMENT.

     7.  Taxes.  Licensee  shall pay when due all sales,  use,  gross  receipts,
excise,  property,  and other taxes (other than taxes based upon  Licensor's net
income) now or hereafter imposed as a result of the transactions contemplated by
this Agreement.

      8.  System  Availability.   The  System  shall  be  available  for  access
twenty-four  (24)  hours a day,  seven  (7) days a week,  except  for  scheduled
maintenance periods.

     9. Term. The term of this Agreement shall begin upon Licensee's initial use
of the  System as  evidenced  by the first  entry of  inventory  into the System
(which  may be a date  earlier  than the  Commencement  Date  specified  for the
Distribution Agreement) and shall end: (a) automatically upon the termination of
the  Distribution  Agreement  (for  any  reason),  or (b) on  any  earlier  date
specified by Licensee in notice to Licensor given not less than ninety (90) days
prior to the specified termination date; provided that: (i) paragraphs 4 through
10  inclusive  shall  survive the  termination  of this  Agreement,  and (ii) no
termination  of this  Agreement  shall affect any  liabilities  arising from, or
based upon, acts or omissions occurring prior to such termination.

      10. Expiration/termination.  Licensee shall continue to have access to the
System  for a  reasonable  period  of time  (not be  exceed  ninety  (90)  days)
following  termination of this  Agreement  solely for purposes of retrieving and
transferring   to  a  separate   system   Licensee's   data   relating   to  its
pre-termination   operations,  and  Licensor  shall  reasonably  cooperate  with
Licensee to preserve the integrity and  accessibility  of Licensee's data during
such period;  provided that, during such period,  Licensee shall continue to pay
the full Base Package and other fees payable by Licensee under the  Distribution
Agreement and comply with all other  requirements  imposed upon  Licensee  under
this Agreement.

      Upon the expiration of this Agreement,  Licensee shall return the Hardware
to Licensor in the same condition and configuration as received, receivable wear
and tear accepted.


                                       16

<PAGE>


      11. Notices.  Any notice or other communication  required or desired to be
given to either  Party  under this  Agreement  shall be in writing  and shall be
deemed given: (a) five (5) days after mailing, if deposited in the United States
mail,  first-class  postage prepaid,  and addressed to that Party at its address
set  forth at the end of this  Agreement;  (b) when  received  if  delivered  to
Federal Express or any other similar overnight  delivery service for delivery to
that Party at that  address;  or (c) when sent by facsimile  transmission,  with
electronic confirmation,  to that Party at its facsimile number set forth at the
end of this Agreement.  Either Party may change its address or facsimile  number
for  notices  under  this  Agreement  by giving the other  Party  notice of such
change.

      12.  Remedies.  Licensee  shall  indemnify  Licensor  and its  affiliates,
directors,  officers, employees, agents, and representatives against all claims,
liabilities,  losses, damages, costs, and expenses (including without limitation
reasonable attorneys' fees) arising directly or indirectly out of any failure of
Licensee to perform  fully all  obligations  and  conditions  to be performed by
Licensee pursuant to this Agreement.  Licensee acknowledges that in the event of
any violation by it of any of the provisions of paragraph 2 (Proprietary Rights)
of this Agreement,  Licensor would suffer  irreparable  harm and its remedies at
law would be inadequate. Accordingly, in the event of any violation or attempted
violation of any such  provisions by Licensee,  Licensor  shall be entitled,  in
addition to any other rights or remedies which may be available to Licensor,  to
a temporary restraining order, temporary and/or permanent injunctions,  specific
performance,  and other  equitable  relief,  without the showing of  irreparable
harm, injury,  damage or the inadequacy of damages, and without the necessity of
the posting of any bond.

      13. Force Majeure.  Notwithstanding any other provisions of this Agreement
or the Distribution  Agreement to the contrary,  each Party's  obligations under
this Agreement (exclusive of payment obligations) shall be excused if and to the
extent that any delay or failure to perform such  obligations  is due to fire or
other casualty,  government restrictions,  war, riot, strikes or labor disputes,
acts of God,  or other  causes  beyond the  reasonable  control  of that  Party;
provided,  however,  that  any  party  hindered  by such  condition  beyond  its
reasonable  control must employ reasonable efforts to overcome such hindrance as
promptly as practicable.

      14.  Successors.  Licensee  shall not assign or  otherwise  transfer  this
Agreement or any of its rights or obligations  under this Agreement  without the
prior  written  consent of Licensor,  which  consent  shall not be  unreasonably
withheld.  Subject to the preceding  sentence,  this Agreement  shall be binding
upon,  inure to the benefit of, and be enforceable by and against the respective
successors and assigns of each Party.

      15.  Interpretation.  This Agreement shall be governed by and construed in
accordance  with the laws of the State of Ohio.  If and to the  extent  that any
court of competent jurisdiction determines that it is impossible to construe any
provision  of this  Agreement  consistently  with any law or public  policy  and
consequently  holds that  provision to be invalid,  such holding shall in no way
affect the  validity  of the other  provisions  of this  Agreement,  which shall
remain in full force and effect.

      16. Complete  Agreement.  This Agreement  (together with the  Distribution
Agreement,  which is hereby  incorporated  herein by reference)  constitutes the
entire Agreement  between the Parties with respect to the subject matter of this
Agreement and supersedes all prior


                                       17

<PAGE>


or contemporaneous discussions,  negotiations,  representations,  warranties, or
Agreements relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise  modified except by a written  instrument  signed by
each Party.


IN WITNESS  WHEREOF,  the  undersigned  acknowledge and accept the terms of this
Agreement and have duly executed this Agreement.


CORD LOGISTICS, INC.                       COLLAGENEX PHARMACEUTICALS


By /s/ Frank C. Wegerson                   By /s/Frank Ruffo
  ----------------------------               --------------------------------
   Frank C. Wegerson
   Vice President and General Manager      Title Sr.  Director of Finance,
                                                 Controller
                                                 ----------------------------

   15 Ingram Boulevard                     41 University Drive, Suite 200
   LaVergne, TN 37086                      Newtown, PA 18940

   Facsimile No.  (615) 793-4783           Facsimile No. 215-579-8577
                                                        ---------------------


                                       18