Sales Agency Agreement

EXECUTION COPY


SALES AGENCY AGREEMENT dated as of July 8, 1993
(this "Agreement"), between Bristol-Myers Squibb Company,
a Delaware corporation ("BMS"), and Oncology Therapeutics
Network Joint Venture, L.P., a Delaware limited
partnership ("Agent").


Preliminary Statement


BMS historically has marketed and sold its Products (as defined below) directly to the Customer Group (as defined below). BMS and Agent believe that the Customer Group historically has been under served by BMS and other sellers of the Products. BMS believes that it could serve the Customer Group in a more effective and efficient manner by engaging Agent as BMS's exclusive agent to market and sell the Products on behalf of BMS to the Customer Group.


Accordingly, BMS and Agent hereby agree as follows:


1. Definitions.


(a) "Products" shall mean all existing and future oncology drugs and biologics with respect to which BMS or any Controlled Affiliate of BMS has the right to sell in the United States and which BMS or any Controlled Affiliate of BMS chooses to sell in the United States.


(b) "Customer Group" shall mean the following customers for Products in the United States (whether in the form of corporations, clinics, associations, partnerships or otherwise): (i) physicians and (ii) infusion therapy centers not located in hospitals.


(c) "Controlled Affiliate" shall mean, with respect to any person, any corporation, partnership, joint venture, trust or unincorporated organization in which such person has a controlling interest. For purposes of the foregoing, "controlling" shall mean the power to direct the management and policies, by or through stock ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding, of any corporation, partnership, joint venture, trust or unincorporated organization.


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(d) "Axion" shall mean Axion Pharmaceuticals, Inc., a Delaware corporation.


(e) "OTNC" shall mean Oncology Therapeutics Network Corporation, a Delaware corporation and a wholly-owned subsidiary of Axion and the General Partner under the Partnership Agreement.


(f) "Partnership Agreement" shall mean the Limited Partnership Agreement dated as of July 8, 1993, between OTNC and Bristol-Myers Oncology Therapeutic Network, Inc.


(g) "Unrelated Products" shall mean all products sold by Agent other than the Products.


2. Effective Date. This Agreement shall become effective upon the later of the following: (i) date that OTNC contributes all its right, title and interest in the Oncology Therapeutics Network business to Agent pursuant to Section 3.1(b) of the Partnership Agreement and (ii) August 23, 1993.


3. Agency; Obligations of Agent and BMS. (a) Appointment of Agent. BMS hereby appoints Agent as the agent of BMS for soliciting, taking and filling orders for the sale by BMS of Products; such agency shall be exclusive with respect to the Customer Group and shall be nonexclusive with respect to other customers. Accordingly, during the Term neither BMS nor any Controlled Affiliate of BMS will directly solicit, take or fill orders for sales of Products to the Customer Group (except through the agency established by this Agreement) or appoint any other sales agent or representative to solicit, take or fill orders for sales by BMS or any Controlled Affiliate of BMS of Products to the Customer Group. BMS may sell the Products directly or through agents or representatives to any customer other than members of the Customer Group (including, without limitation, wholesalers and hospitals), some of whom may resell Products to members of the Customer Group; provided, however, that during the Term BMS will not appoint any other sales agent or representative to solicit, take or fill orders for sales by BMS of the Products to small hospitals.


(b) Agent Obligations. Agent is authorized and, during the Term will use best efforts, on behalf of BMS to solicit, take and fill orders for the Products from the Customer Group and to promote and market the Products to the


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Customer Group in a manner intended to maximize BMS sales of the Products to the Customer Group; provided, however, that Agent shall be entitled to allocate its efforts between sales of Products and sales of unrelated Products in a reasonable commercial manner. Agent's obligations as BMS's agent hereunder shall include using best efforts, consistent with Agent's business practices, to maintain appropriate BMS inventory availability levels in local facilities, ship Products supplied by BMS to fill orders, invoice and collect from customers payments for the Products and remit such collections to BMS. As BMS's agent hereunder, Agent shall act reasonably and in good faith with respect to the Bristol-Myers Oncology Division business. Agent shall not in any manner condition sales of the Products to any customer on such customer's purchase of Unrelated Products sold by Agent and Agent shall not in any manner condition sales of Unrelated Products to any customer on such customer's purchase of the Products.


(c) Invoicing and Collections. Agent shall comply with the following provisions in connection with invoicing customers and collecting payments from customers on behalf of BMS hereunder:


(i) Agent shall pay to BMS or a Controlled Affiliate designated
by BMS within 60 days of the issuance of any invoice to a customer, (A)
any amounts collected from such customer for Products on behalf of BMS
pursuant to such invoice (less Commissions payable to Agent as provided
in Section 4) and (B) any amount payable by such customer pursuant to
such invoice (less Commissions payable to Agent as provided in Section
4) prior to Agent's collection of such amount from such customer. Agent
shall use best efforts, consistent with Agent's business practices, to
collect from customers payments of all invoices and Agent shall be
entitled to retain the amount collected from the applicable customer as
reimbursement to Agent for any payments made by Agent to BMS pursuant to
clause (B) above.


(ii) Notwithstanding the provisions of clause (B) of paragraph
(i) above, BMS shall retain the risk of collectibility of accounts
receivable relating to all Products sold under this Agreement. With
respect to any invoice for which Agent has not received a collection
from the customer within 180 days after the date of such invoice (an
"Uncollected Invoice"),


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(A) Agent shall turn over to BMS for collection the Uncollected Invoice
and (B) BMS shall refund to Agent (I) the amount of the Uncollected
Invoice that was previously paid by Agent to BMS pursuant to clause (B)
of paragraph (i) above plus (II) 120 days' interest on the amount
specified in (I) at an annual rate of 12% or, if lower, the maximum rate
allowed by law.


(iii) Promptly following the end of each calendar quarter, Agent
shall provide BMS with a statement in reasonable detail setting forth
(A) the amounts of returns and allowances during such quarter relating
to sales of Products pursuant to this Agreement, (B) the percentage of
sales of Products pursuant to this Agreement that such returns and
allowances represented during such quarter and (C) if the percentage
referred to in clause (B) above is greater than 1%, reasonable support
or documentation as to the cause of all such returns and allowances.
Promptly following the delivery of such statement, Agent shall reimburse
BMS for all such returns and allowances that were due to the fault of
Agent (for example, due to shipments in error).


(iv) For purposes of this Agreement, Agent shall use the
following procedures in matching payments received from customers to
invoices relating to sales of Products hereunder: with respect to any
payment received from a customer, if more than one invoice is
outstanding with respect to such customer's account, Agent shall use
reasonable efforts to match invoices to applicable customer payments. If
after such efforts Agent is unable to match any payment to a particular
invoice, Agent shall apply the "first-in, first-out" principle in
determining the invoice to which such payment applies. One or more
invoices issued on the same date shall be aggregated and treated as a
single invoice for purposes of this paragraph. With respect to any
partial payment received from a customer applicable to an invoice that
covers both Products shipped pursuant to this Agreement and Unrelated
Products, such payment shall be allocated between the Products and
Unrelated Products on a pro rata basis based on the aggregate price of
the Products and the aggregate price of the Unrelated Products covered
by such invoice.


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(d) Reports. Agent shall provide BMS with such periodic reports relating to Product sales, invoices outstanding, collections, BMS inventories and other matters relevant to this Agreement as BMS shall reasonably request from time to time.


(e) Access to Information. Agent shall furnish or cause to be furnished to a mutually agreeable BMS selected independent certified public accountant access, during normal business hours, to such information (including all relevant books and records of Agent) as reasonably requested by BMS relating to Agent's activities under this Agreement. Furthermore, BMS shall have the right (through such accountant) to review and audit such information (including all relevant books and records of Agent) to its satisfaction. Such accountant shall be bound in confidence to disclose only noncompliance with the terms of this Agreement.


(f) Sales Tax. Agent shall comply with the following provisions in connection with any Applicable Sales Tax that arise in connection with the sale by BMS of Products to the Customer Group pursuant to this Agreement. On behalf of BMS, Agent shall (i) collect Applicable Sales Tax on behalf of BMS from customers of Products; (ii) separately set forth any Applicable Sales Tax on invoices issued to customers of Products; (iii) separately designate as "Sales Tax" any Applicable Sales Tax amounts remitted to BMS pursuant to Section 3(c); (iv) provide BMS, attention of Stanley I. Paul or any other person designated by BMS, with reports by the tenth (10) business day after the close of each calendar month that set forth with respect to amounts invoiced in such month (a) the amount invoiced to customers excluding Applicable Sales Tax and (b) the amount of Applicable Sales Tax invoiced, in each case for each state and local taxing jurisdiction for which there is an Applicable Sales Tax. For purposes of this Section, the term "Applicable Sales Tax" means any sales tax (a) that is (x) imposed by a state or local jurisdiction in the United States or any other jurisdiction and (y) designated in a written notice by BMS to Agent from time to time or (b) imposed by a jurisdiction not designated by BMS and for which Agent is aware that a sales tax applies. BMS shall indemnify, hold harmless, and defend Agent from any and all liability, loss, claims, lawsuits, damages, injury, settlements, reasonable costs and expenses whatsoever (as incurred), including, without limitation, reasonable attorneys' fees and court costs, (collectively


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"Liabilities") with respect to sales taxes that arise in connection with the sale by BMS of Products pursuant to this Agreement; provided, however, that Agent shall not be entitled to any such indemnification or other action by BMS with respect to any portion of such Liabilities that arise as a resuLt of the failure by Agent to comply with the provisions of this Agreement.


4. Commissions; Commission Adjustment. (a) Commissions. Agent will be entitled to a commission on amounts invoiced (less rebates and discounts reflected on such invoice) by Agent with respect to sales of Products by BMS hereunder (the "Commission"). The Commission shall be one half of one percent (.5%) prior to January 1, 1994, and two percent (2%) on and after January 1, 1994. Agent will be entitled to withhold the applicable Commission from amounts paid by Agent to BMS with respect to customer invoices pursuant to paragraph (i) of Section 3(c).


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