Advertising Agency Agreement

EXHIBIT 10.8


ADVERTISING AGENCY AGREEMENT


THIS AGREEMENT is made effective October 1, 2001 between Endeavor Pharmaceuticals, Inc., a Delaware corporation, with Headquarters located at 127 Racine Drive, Suite 202, Wilmington, NC 28403 and with the Sales and Marketing Office located at 8 Campus Drive, Third Floor East, Parsippany, NJ 07054 (hereinafter referred to as "Company") and Accel Healthcare Communications, LLC., a Delaware limited liability company with a place of business at 30 Irving Place, New York, NY 10003 (hereinafter referred to as "Agency").


WHEREAS, Company is interested in retaining the services of an advertising agency for advertising and promotional activities for CE10 (conjugated estrogens) with brand name to be determined (hereinafter referred to as the "Product"); and


WHEREAS, Company and Agency have executed a CONFIDENTIAL DISCLOSURE AGREEMENT dated July 23, 2001 (the "CONFIDENTIAL DISCLOSURE AGREEMENT"); and


WHEREAS, Agency has represented to Company that it possesses all requisite skills, knowledge, experience and technical capabilities to perform these services for Company;


NOW, THEREFORE, and in consideration of the mutual promises and covenants hereinafter set forth, Company and Agency agree as follows:


1. AGENCY SERVICES


Company appoints Agency to serve as Company's advertising agency on a
non-exclusive basis in the United States with respect to such Product
and such services as Company may designate in accordance with a
mutually agreed upon Scope of Work. Agency agrees that it will not
accept other clients or work on other products where such work would
create a conflict of interest with Company's Product without the prior
written approval of Company. The Scope of Work for 2001-2002 is
attached to this Agreement as Schedule A and made part hereof. Company
may from time-to-time revise the Scope of Work for reallocation of
hours from anticipated projects to others and, such revised Scope of
Work shall govern thereafter. In addition to the tasks outlined in the
Scope of Work, Agency's duties shall include upon Company's request but
not be limited to:


1.1 Assigning and obtaining Company approval of a highly
professional integrated team to provide services as requested
in the Scope of Work. The team must represent all Agency
services and departments, and one person, whose identity must
be approved by Company, must be


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designated as sole head of that team: Charlene Prounis,
Managing Partner. Agency shall also designate key leaders to
be the main contact for certain Agency functions. The
composition of the team will comply with the specifications of
the staffing plan, attached to this Agreement as Schedule B.


1.2 Ensuring the team assigned to Company understands the assigned
Product, services and offerings, the category/industry within
which Company operates, and the key customer categories where
the assigned Product will be marketed.


1.3 Providing monthly and quarterly reporting to Company on all
work performed in hours spent on Company business in a
mutually agreed upon format. Monthly reports will include:
monthly hours by project and by employee, with year-to-date
totals and variances from estimated hours.


1.4 Analyzing present and potential marketing and advertising
opportunities and providing Company with verbal and/or written
(as requested) point-of-view on such.


1.5 Analyzing and reviewing market research to provide Company
with timely counsel and a verbal and/or written (as requested)
point-of-view on implications and recommended actions.


1.6 Providing Company with input for pre-launch and launch
marketing plans, which put forward reasonable proposals for
reaching Company objectives.


1.7 Preparing all recommendations, materials and other elements as
may be necessary to present ideas to Company or as may be used
in the execution of ideas into finished communications.


1.8 Supervising production of communications materials when
requested.


1.9 Advising Company of the availability of all media that can be
appropriately used in promoting the Company Product and
services.


1.10 Rendering all services necessary for the proper and efficient
use of all media in accordance with industry standards.


1.11 Negotiating and arranging for the contracting for all talent
including residuals. All such contracts with talent shall
reflect the independent contractor status of the talent and
shall provide that Company will not be responsible for taxes
or benefits of any kind on behalf of the talent.


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1.12 Except as set forth herein or otherwise agreed by the parties,
negotiating, arranging and contracting for all photography,
models, special effects, etc., as required within the Scope of
Work for the production of communications materials whether
broadcast or other.


1.13 Conducting research on and analyzing competitive spending and
messages when requested by the Company.


1.14 Providing reviews and assessing implications of significant
industry trends, such as direct response advertising and
evolving FDA regulations when requested by the Company.


1.15 Attending strategy and other meetings and performing research
as requested by Company.


1.16 Providing comprehensive project management and reporting for
all Agency departments, which can be used to plan and track
all programs and projects.


1.17 Providing other services as requested by Company and agreed to
by Agency with appropriate adjustments in the Scope of Work
and personnel assigned to the Product, if necessary.


1.18 Coordinating and cooperating as necessary with other agencies
or vendors retained by Company for the Product.


2. GENERAL TERMS


2.1 The parties recognize that this is a non-exclusive agreement
and during the term hereof, Agency may act as an advertising
agency for other pharmaceutical or chemical manufacturers
provided that Agency's services for/with such other companies
will not create, in the judgment of Company, a conflict of
interest (including, but not limited to, products related to
menopause including vasomotor symptoms, vaginal-vulvar
atrophy, osteoporosis, female sexual dysfunction, androgen
insufficiency, rapid wasting syndrome). Agency agrees that it,
including subsidiary companies, will not provide the services
contemplated herein for any product or service, which is
competitive with the Product, without specific written
approval from Company. Additionally, no individual performing
services under this Agreement shall perform similar services
for any product or service, which is competitive with the
Product for any affiliate of Agency, without specific written
approval from Company. It is also understood that Company may
engage advertising agencies for the Product other than Agency.


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2.2 Agency agrees to devote its reasonable best efforts to
Company's interests and to attempt in every way to make
Company's programs successful; Company agrees to aid Agency in
so doing by making available to Agency needed information and
materials pertaining to Company's Product and to cooperate
with Agency in expediting its work on Company's behalf.


2.3 Agency shall in no event place any advertisements of Company
in any advertising medium without first submitting the text
and designs therefor to Company and obtaining Company's
written approval. Agency agrees to comply with reasonable
requests of Company to deliver proposed pieces with sufficient
time for internal review.


Before incurring liability on Company's behalf for any item of
space or time in an advertising medium, or for artwork,
mechanical arts, printed matter, services or expenditures
within the scope of this Agreement, Agency shall obtain the
Company's prior written approval.


Agency shall be entitled to rely and act upon authorization
given by the members of the Company marketing team assigned to
work on the Product who are designated by Company in writing
as being empowered to give such instruction, approval, or
authorization as attached hereto and incorporated herein
Schedule C, as amended.


2.4 Agency shall use its reasonable best efforts to guard against
any loss to Company through failure of media or suppliers to
properly execute their commitments; but Agency shall not be
held responsible for any failure on the part of said media or
suppliers, unless such failure is due to or caused by the
negligence of Agency. However, when media or suppliers fail to
properly execute their commitments, Agency shall not settle
any disputes regarding such deficient performance without the
Company's prior written approval of the form and substance of
such settlement. Company shall be a third party beneficiary to
such agreement and shall have the right to seek recourse
against said media or supplier and Agency hereby agrees to
subrogate its rights thereto, except where agreements existing
on the effective date of this Agreement prohibit the
subrogation of Agency's rights, at Company's request.


2.5 Agency represents and warrants that performance of the
services required under this Agreement does not violate any
agreements or relationships existing between Agency and any
persons by whom Agency may otherwise be employed or with whom
Agency may have contractual arrangements.


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2.6 Agency represents and warrants that all material supplied to
Company or used on behalf of Company pursuant to this
Agreement shall either (i) not infringe the copyright of any
third party, or (ii) be licensed at net cost to Company under
a third party copyright. Company shall have the right, in its
discretion, to examine copies of releases obtained by Agency.
Agency further represents and warrants that Company shall be
free to use such material under this Agreement without
interference by or claims of third parties, subject to any
limitations on usage contained in the aforesaid releases,
licenses or other documentation and brought to the attention
of Company in writing prior to Company incurring any costs
related thereto.


In addition, in the event that the work carried out by Agency
in connection with this Agreement may utilize the names or
likenesses of independent third parties, Company shall not, in
such instance, be obligated for any additional consideration
or payment to such individuals, except where Agency has
obtained Company's prior approval to incur such additional
consideration or payment obligation, and Agency hereby
covenants and warrants that use of such names or likenesses
shall be legally and properly arranged.


2.7 All documents or other materials supplied to Agency by Company
and/or prepared by Agency for Company under this Agreement
("Work Product") shall be property of Company and shall be
delivered to Company at any time upon Company's request, or no
later than the termination of this Agreement, provided Agency
has been timely paid for the Work Product to be delivered.
Agency hereby transfers and assigns to Company any copyright
in such Work Product, including all of the exclusive rights
comprised in such copyright, whether published or unpublished
except for any proprietary products and software the Agency
developed, such as STAGES and e-visor, in which case the
Agency shall grant the Company a fully-paid non-exclusive
world-wide license in such products and software if they are
incorporated into any of the Company's Work Product to the
extent required to use such Work Product. Agency shall ensure
and hereby covenants that all individuals working on such Work
Product have assigned to Agency their rights to such Work
Product. Agency agrees to execute any documents necessary to
assign to Company Agency's full copyright interest in the Work
Product either solely or jointly with others for Company
pursuant to this Agreement. Also, it is clearly understood
that no restrictions will be placed on Agency by third parties
with respect to any Work Product without the prior written
consent of Company.


2.8 Agency shall not disclose the terms of this Agreement. This
Agreement does not entitle Agency to use the Company's name or
trademarks of Company, in any way, without prior written
authorization.


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2.9 The parties agree that the CONFIDENTIAL DISCLOSURE AGREEMENT
between the parties executed on July 23, 2001 (set forth in
Schedule F) is hereby incorporated by reference into this
Agreement, except that the term of said CONFIDENTIAL
DISCLOSURE AGREEMENT shall continue for seven years past the
termination of this Agreement. Agency agrees that all
information (oral, written or computerized), report,
instrument, document or paper generated or developed for
Company or provided to Agency by or on behalf of Company,
including the terms of this Agreement, shall be considered a
trade secret, proprietary and confidential information of the
Company as defined in the CONFIDENTIAL DISCLOSURE AGREEMENT
(the "Confidential Information").


Agency agrees (i) to use the Confidential Information only in
connection with its performance of this Agreement; (ii) to
disclose the Confidential Information only to those employees
who need to know such Confidential Information because they
are assisting in the performance of the services hereunder;
and (iii) will not disclose Confidential Information to any
third-party without the prior written consent of Company, and
prior to such approved disclosure shall require such third
parties to execute a confidentiality agreement protecting
Confidential Information in a form approved by Company.


2.10 Agency understands and agrees that, for purposes of this
Agreement, Agency and any employee(s) or other individual(s)
designated by Agency to perform services under this Agreement
("staff members") are acting in the capacity of independent
contractors. Agency is responsible for staffing the project
and providing any and all compensation and/or benefits to its
staff members. Company is not responsible for withholding, and
shall not withhold, taxes of any kind from any payments it
owes to Agency unless required by law. Agency agrees to comply
with all laws related to withholding and payment of payroll
taxes related to individuals providing services hereunder.
Neither Agency nor any of its staff members has authority to
represent or act on behalf of Company without Company's prior
written consent. Further, as independent contractors, neither
Agency nor any of its staff members is eligible to participate
in, nor are they eligible for coverage under, any of Company's
benefit plans, programs, employment policies or procedures or
workers' compensation insurance. In consideration of Company
agreeing to use Agency's services hereunder, Company will be
released from any liability arising from Company's failure to
provide such plans, programs, policies, procedures and
workers' compensation insurance. Agency shall defend and
indemnify Company for any and all claims, losses, injuries or
damages that may be asserted against Company as an alleged
employer


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with respect to any Agency employee or third party vendor
employee providing services in connection with this Agreement.


2.11 Any contract or other agreement that Agency enters into with
any third party for purpose of implementing this Agreement
(hereinafter "Agency Contract") will be solely between Agency
and such other third party. Agency has no authority to bind
Company. Each such Agency Contract (i) shall contain terms,
conditions and covenants that are substantially similar to
this Agreement, including, but not limited to, obligations of
confidentiality, assignment of copyrights and inventions (as
set forth in Sections 2.7, 2.9 and 2.12, respectively), and
(ii) shall expressly provide that such Agency Contract neither
creates a third party beneficiary relationship between Company
and such third party, nor vests any right of action to such
third party against Company. Agency remains responsible for
the performance of third parties under Agency Contracts.
Agency shall defend and indemnify Company for any and all
claims, injuries or damages of any kind that occur in
connection with any Agency Contract and/or the performance
thereunder, and Company will not be liable in any manner in
connection with claims of any nature. In the event that this
Agreement is terminated and Company wishes to retain another
agency to perform the services defined in Section 1 above,
Agency shall, at the request of Company, assign to Company or
its designee any such Agency Contract(s). Accordingly, each
Agency Contract shall contain a clause permitting Agency to
assign the contract to Company.


2.12 All information, inventions, discoveries, patent rights,
trademarks and copyrights which result from any services
performed by Agency pursuant to this Agreement ("Inventions"),
will be the exclusive property of Company. Agency shall
promptly disclose in writing to Company each such Invention
and provide to Company all information known to Agency
reasonably relating to such Invention. Agency agrees to sign
all necessary documents or take such other actions as Company
may reasonably request in order to perfect and enforce any and
all of its rights in such Inventions. In particular, Agency
shall assign to Company all of Agency's right, title and
interest in and to each such Invention. All costs and expenses
for perfecting and enforcing its rights in such Inventions
shall be born by Company.


3. AGENCY COMPENSATION


3.1 Company shall pay Agency professional fees at a blended rate
of $130 per hour for work performed by Agency at the request
of Company, consistent with the Scope of Work, as revised.
This fee shall be paid in monthly payments of $85,861.00, (the
"Pro Rata Monthly Fee") with a


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quarterly adjustment based upon the quarterly reconciliation
described below. In addition, Company shall reimburse Agency
for direct out-of-pocket expenses incurred by Agency
consistent with Sections 4 and 5 hereof.


3.2 Before commencing work on any given project, Agency will
provide a creative work plan/project description prior to the
initiation of new projects for Company approval. Agency shall
also submit to Company a cost estimate, including estimated
hours necessary for completion, and out-of-pocket expenses,
and shall obtain the prior written approval of Company to
proceed in accordance with Schedule C. Agency shall not exceed
the estimate by 10% for any project without prior written
approval by Company.


3.3 At the beginning of each calendar month, Agency shall submit
an invoice to Company for the Pro Rata Monthly Fee. Payment
for all invoices is due within thirty (30) days of receipt of
original invoice by Company, unless agreed otherwise by both
parties. Company will not pay for any services invoiced, or
identified in a quarterly reconciliation, more than three (3)
months after such services were performed unless prior written
notification is provided to Company. The Agency shall
reconcile the hours billed by Agency for each calendar quarter
to the Pro Rata Monthly Fee and report on the status of the
project(s). Agency will provide such quarterly reconciliation,
outlining the total hours worked compared to projected hours
with the invoices for the last month in each calendar quarter.
The variance will be addressed through a credit in dollars to
the Company or as an addition in dollars to the Agency. Such
credit or addition shall be applied against or added to the
next invoice for the Pro Rata Monthly Fee.


3.4 The total amount to be paid by Company for services rendered
during the term of this Agreement and for expenses incurred
consistent with Sections 4 and 5 shall not exceed
$2,482,660.00 without the prior written consent of Company.


3.5 Any purchase order issued by Company in connection with this
Agreement shall be for payment purposes only, and shall not be
deemed a contract document and its terms and conditions shall
not apply.


4. AGENCY REIMBURSEMENT


4.1 Agency shall provide estimates of direct out of pocket
expenses to Company for each project. Unless indicated
otherwise in this Section 4, Agency shall invoice Company for
direct out of pocket expenses as


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follows: (i) 20% of the project expenses as an advance upon
approval and start of a project, (ii) an additional 40% of the
project expenses as an advance at disk release or the midway
point of the project, as agreed to by Company, and (iii) a
final invoice upon the completion of the project presenting
total actual project expenses, that are no greater than 10% of
the original estimate, less any advance payments made by the
Company


4.2 Company shall reimburse Agency for reasonable direct expenses
incurred under this Section and Section 5 within thirty (30)
days of its receipt of an invoice, including adequate
supporting documentation. Itemized expenses will be provided
with the final invoice for a project. Such invoice will
include only those expenses incurred pursuant to this Section
and Section 5 of the Agreement, and shall be a separate
invoice from that provided under Section 3. Invoices shall
include receipts for all items in the amount of $25.00 or
more, and such receipts shall be cross-referenced to the
invoice or project.


4.3 Agency shall take advantage of all payment discounts offered
by vendors for the Company's projects. If ...