ENDO PHARMACEUTICALS HOLDINGS INC
SERVICE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.41
<SEQUENCE>9
<FILENAME>y52994ex10-41.txt
<DESCRIPTION>SERVICE AGREEMENT
<TEXT>
<PAGE>   1

                                                                   EXHIBIT 10.41


                                SERVICE AGREEMENT

      This agreement ("Agreement") effective as of February 1, 2001 by and
between VENTIV HEALTH U.S. SALES INC., a New Jersey corporation ("VHS") and
ENDO PHARMACEUTICALS INC., a Delaware corporation ("CLIENT").

                             W I T N E S S E T H:

      WHEREAS, VHS provides integrated outsourced sales and marketing solutions
worldwide, including client field forces to the healthcare industry and has
certain expertise in the marketing and promotion of pharmaceutical products; and

      WHEREAS, CLIENT is an integrated pharmaceutical company which requires
sales and promotional services of VHS as more fully described in the Scope of
Services set forth in Schedule A to this Agreement, as the same may be amended
from time to time (the "Services"); and

      WHEREAS, VHS and CLIENT desire to enter into an agreement under which VHS
will provide such services to CLIENT.

      NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, it is agreed as follows:

A)    DEFINITIONS

      1. "Additional Term" is defined in Section 1 of this Agreement.

      2. "Authorized Representative" means, for each party, that individual
designated in writing at the time of the execution of this Agreement, as may be
changed in writing by a senior executive of such party at any time.

      3. "Baseline Sales" means the monthly Net Demand Sales levels of the
Products calculated and set by CLIENT pursuant to Schedule B as those sales
levels may be revised by written agreement of the parties.
<PAGE>   2
      4. "Budget" is defined in Section 3.1 of this Agreement.

      5. "Call" means the activity undertaken by a Sales Representative to
detail the Products, further described as a face-to-face presentation by a Sales
Representative to a HCP Target, which includes, but is not limited to a
discussion with the HCP Target of the features and benefits of the Products,
their contraindications, FDA approved uses and other pertinent information, and
includes giving the HCP Target Product Literature and samples of the Products.

      6. "Call Plan" means a plan designed by CLIENT, which is intended to
enhance the efficiency and effectiveness of the Sales Representatives in making
Calls.

      7. "CLIENT Representatives" is defined in Section 9.1 of this Agreement.

      8. "Client Service Manager" means a full-time employee of VHS assigned to
coordinate providing support services under this Agreement with respect to the
Endo Pharma Field Force and the Endo Specialty Force.

      9. "Components" is defined in Schedule A-1A.

      10. "Confidential Information" is defined in Section 5 of this Agreement.

      11. "Contract Administration Costs" is defined in Section 3.1 of this
Agreement.

      12. "Contract Service Fee" is defined in Section 3.1 of this Agreement.

      13. "DEA" means the United States Drug Enforcement Agency.

      14. "Direct Client Expense" is defined in the Summary of Services set
forth in Schedule A.

      15. "Direct Marketing Expenses" means the funds (which are part of the
Budget) to facilitate the detailing activity of Sales Representatives to HCP
Targets.

      16. "Disclosing Party" is defined in Section 5 of this Agreement.

      17. "District Manager" means an employee of VHS who is engaged under this
Agreement to manage Endo Pharma Sales Representatives or Specialty Sales
Representatives, as the case may be.

      18. "Endo Pharma Field Force" means the Endo Pharma Sales Representatives,
District Managers and Regional Directors assigned to manage the Endo Pharma
Sales Representatives.


                                       2
<PAGE>   3
      19. "Endo Pharma Sales Representative" means an individual provided by VHS
who is engaged under this Agreement to detail the Products to the Endo Pharma
HCP Targets.

      20. "Endo Specialty Force" means the Endo Specialty Representatives and
the District Managers assigned to manage the Endo Specialty Representatives.

      21. "Endo Specialty Representative" means an individual provided by VHS
who is engaged under this Agreement to detail the Products in the assigned
specialty physician and institutional setting as designated by CLIENT.

      22. "Indirect Overhead" is defined in Section 3.1 of this Agreement.

      23. "Invoice Form" means the form of VHS monthly invoice described in
Section 3.1 of this Agreement, an example of which is set forth as Schedule B-Y
attached to this Agreement.

      24. "Net Demand Sales" means the total dispensed prescriptions of
Products, measured by IMS NPAPlus(TM) Prescription Audit multiplied by the fixed
average units per TRX multiplied by the fixed average net selling price as set
by CLIENT.

      25.   "PDMA" means the Prescription Drug Marketing Act as more fully
described in Schedule A-2.

      26. "Personnel Cost" is defined in Section 3.1 of this Agreement.

      27. "Product" shall mean any of the products sold by CLIENT, which are
listed in Schedule A-1A to this Agreement, as the same may be amended from time
to time; each iteration of which shall be dated and signed by the Authorized
Representative of each party to this Agreement.

      28. "Product Literature" shall mean promotional, informative and other
written information concerning the Products. All Product Literature shall be
provided by CLIENT and utilized by Endo Specialty Representatives and Endo
Pharma Sales Representatives when making Calls.

      29. "Project Manager" means an employee of VHS who is engaged under this
Agreement to assist VHS management and to coordinate administrative support for
the Endo Pharma Field Force and the Endo Specialty Force.


                                       3
<PAGE>   4
      30. "Receiving Party" is defined in Section 5 of this Agreement.

      31. "Regional Director" means a VHS employee who is engaged under this
Agreement to manage the portion of the Endo Pharma Field Force located in such
Regional Director's geographic region.

      32. "Reports" means periodic reports of Calls and other particular reports
given to CLIENT, as set forth in Schedule A-1B.

      33. "Sales Representative" means a Endo Pharma Sales Representative and/or
a Endo Specialty Representative.

      34. "Services" means services for certain pharmaceutical products as more
fully described in the Scope of Services set forth in Schedule A.

      35. "Significant Loss" is defined in Schedule A-2.

      36. "Summary of Services" is defined in Section 2.1 of this Agreement.

      37. "HCP Targets" means: (i) the Endo Pharma HCP Targets who are the
licensed practitioners or others who are identified by CLIENT to VHS in writing
as potential prescription writers and/or customers for the Products, as the same
may be amended from time to time, (ii) Endo Specialty HCP Targets who are the
licensed practitioners or medical specialists, who are identified by CLIENT to
VHS in writing as potential prescription writers and customers for the Products,
as the same may be amended from time to time.

      38. "Term" is defined in Section 1 of this Agreement.

      39. "Theft" is defined in Schedule A-2.

      40. "VHS Representatives" is defined in Section 9.1 of this Agreement.

      41. "Works" is defined in Schedule A-1A.


                                       4
<PAGE>   5
ARTICLE 1.   TERM

      This Agreement shall be in effect as of January 1, 2001 and shall remain
in effect through and including December 31, 2003 (the "Term"). This Agreement
will automatically renew for additional periods of one year each (each, an
"Additional Term"), unless, in the case of CLIENT, CLIENT gives written notice
of non-renewal to VHS at least ninety (90) days prior to the end of the Term or
any Additional Term and, in the case of VHS, VHS gives written notice of
non-renewal to CLIENT at least one hundred eighty (180) days prior to the end of
the Term or any Additional Term. The amount of compensation (both fixed and
variable fees) payable to VHS under Section 3.1 of this Agreement during any
Additional Term will be adjusted as mutually agreed upon. The provisions of this
Agreement (other than compensation), including those which expressly state that
they apply during the Term of this Agreement, shall continue to apply during any
Additional Term of this Agreement unless expressly amended or deleted.


ARTICLE 2.  SCOPE OF SERVICES AND PROFESSIONALISM AND COMPLIANCE

      2.1.  THE SCOPE OF SERVICES.

      The Scope of Services to be provided under this Agreement is set forth in
Schedule A to this Agreement as the same may be amended from time to time, each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement. The Scope of Services shall particularly include
the Reports (including the frequency and time for delivery of each Report as
specified in Schedule A-1B); each Report shall reflect 100% of the data intended
to be covered by such Report. Included with Schedule A is a Summary of Services
(the "Summary of Services") setting forth in summary fashion, broad categories
of Services to be provided under this Agreement; the Summary of Services is a
part of this Agreement and not simply a description of what this Agreement
contains. The Summary of Services may be amended from time to time with each
iteration dated and signed by the Authorized Representative of each party.
Should CLIENT elect to


                                       5
<PAGE>   6
change the Scope of Services to be provided under this Agreement, the
compensation paid to VHS will be appropriately adjusted to reflect the change.


      2.2.  PROFESSIONALISM AND COMPLIANCE.

      VHS shall perform the Services, and shall require each person provided by
VHS to perform the Services, (i) in a professional manner consistent with
industry standards; (ii) in conformance with that level of care and skill
ordinarily exercised by other professional contract sales organizations; and
(iii) in compliance with all applicable local, state and federal laws and
regulations.


ARTICLE 3.  COMPENSATION BUDGET AND REIMBURSEMENT

      3.1.  COMPENSATION - BASE FEES.


      Subject to the limitation set out below. CLIENT shall pay VHS compensation
for the Scope of Services performed under this Agreement, which compensation
shall be the Base Fee, as set forth in Schedule B to this Agreement, and shall
be based upon the following components (which for the year 2001 are subsumed in
the fixed Base Fee amount for 2001 set forth on Schedule B):

            a.    "Payroll Costs", which shall mean the amounts actually paid by
                  VHS to members of the Endo Pharma Field Force and the Endo
                  Specialty Force during the applicable period in respect of
                  salary and benefits (other than pursuant to a VHS bonus
                  program, the aggregate cost of which is approved and funded by
                  CLIENT as a passthrough expense);

            b.    "Contract Administration Costs", which mean the amounts, other
                  than Payroll Costs, actually paid by VHS during the applicable
                  period that are directly related to the provision of Services
                  that are identified under the Scope of Services under the
                  column headed "Included as Part of the VHS Base Fee" and that
                  are allocated to this Agreement on the books of VHS;

            c.    an allocation of indirect overhead and sales, general and
                  administrative expense of VHS ("Indirect Overhead") based
                  upon the ratio of:  (i) the total


                                       6
<PAGE>   7
                  number of Endo Pharma Sales Representatives plus Endo
                  Specialty Representatives to (ii) the total number of persons
                  employed by VHS as sales representatives; provided that (x)
                  the allocation to CLIENT shall not exceed 7.7% of the total
                  indirect overhead and sales, general and administrative
                  expense of VHS and (y) the allocation shall be determined by
                  using the total number of persons employed by VHS as sales
                  representatives (which shall for purposes of this
                  determination never be lower than 2,961, the number of such
                  sales representatives as of the end of the last payroll period
                  in January 2001).

In addition, CLIENT shall pay a fee (the "Contract Service Fee") which is
computed as a percentage of the quarterly Net Demand Sales of the Products up to
the Baseline Sales, with the relevant percentage set out on Schedule B.

      CLIENT shall notify VHS of the Net Demand Sales in a quarter reasonably
promptly after the end of that quarter and tender payment of the applicable
Contract Service Fee with that notice. Upon termination or expiration of this
Agreement, the Contract Service Fee for any quarter or portion thereof that has
not been invoiced shall be paid as a termination payment. VHS shall invoice
CLIENT monthly in arrears for the Base Fee and shall set forth on each invoice
the actual headcount of all persons employed by VHS as Sales Representatives as
of the end of the pay period ending in approximately mid-month for the month
covered by such invoice. In addition the Invoice Form, in addition to setting
out in reasonable detail the amounts of the Payroll Costs, Contract
Administration Costs and the Indirect Overhead (using the agreed upon line items
as reflected in Schedule B-Y) shall contain a written explanation of any line
item amount that varies by more than 10% plus or minus from that particular line
item reflected on the Budget for that same period (each a "Variant Amount",
provided that no such explanation is required and the variance is not a Variant
Amount if the dollar amount of the variation is $5,000 or less). Each VHS
invoice shall also separately set forth in


                                       7
<PAGE>   8
reasonable detail the amount of any Client Passthrough Expense for which VHS
seeks reimbursement. CLIENT shall pay the full amount of each VHS invoice except
any Client Passthrough Expense in excess of the amount allowed for such item in
the Budget. VHS and CLIENT shall in addition, review the aggregate of all
Variant Amounts within 30 days of the end of each calendar quarter. In that
connection, CLIENT may request additional justification for any Variant Amount
and, to the extent CLIENT is not reasonably satisfied with such justification,
CLIENT may require a credit against future invoices (or at the end of the Term,
a refund) equal to the unjustified Variant Amounts.

      3.2.  BUDGET

      The annual budget ("Budget") for 2001 is attached to this Agreement as
Schedule B-Y.

      VHS shall prepare a draft Budget for each calendar year of the Term of
this Agreement beginning with calendar year 2002 (and any Additional Term) and
deliver such Budget to CLIENT at least sixty (60) days prior to the beginning of
that calendar year. The Budget shall set out in reasonable detail the Base Fee
and CLIENT Passthrough Expenses, if any, estimated to be payable by CLIENT in
the forthcoming year. Upon receipt thereof, CLIENT will promptly review the
Budget and the parties will then reconcile any issues related thereto. CLIENT
and VHS recognize that the Budget, as with any projection, may require
adjustment due to changes in expenses, market conditions and numerous other
factors and agree to review the Budget no less frequently than every three (3)
months for possible adjustment.

      If CLIENT does not approve a Budget at least thirty (30) days prior to the
beginning of any calendar year, or is unable to reach agreement with VHS on any
proposed adjustment thereto, including a CLIENT-required reduction in Client
Passthrough Expenses (as set forth in Section 3.3 of this Agreement), CLIENT and
VHS agree to have their senior officers meet forthwith in an attempt to resolve
the matter. If such a resolution is not reached within thirty (30) days from
such meeting and unless each party agrees in writing to continue good faith
negotiations as to the Budget for an


                                       8
<PAGE>   9
additional sixty (60) days, CLIENT shall be deemed to have given notice of
termination under Section 10.1 of this Agreement effective ninety (90) days
after such thirtieth (30th) day referred to the prior clause.

      3.3.  CLIENT PASSTHROUGH EXPENSES

      VHS may request that CLIENT approve particular Client Passthrough Expense
items prior to incurrence thereof and once approved by CLIENT, CLIENT shall pay
the same when invoiced. In addition, CLIENT may require, on not less than thirty
(30) days' notice, that amounts provided in the Budget for Client Passthrough
Expenses be reduced; provided that such reduction shall not materially impair
the ability of VHS to meet its performance obligations under this Agreement.

      Notwithstanding anything herein to the contrary, in no event shall CLIENT
be required to pay VHS Client Passthrough Expenses in excess of the amounts
provided for such expenses in the Budget unless otherwise specifically agreed to
by CLIENT in writing.

      3.4.  ADDITIONAL EXPENSES

      CLIENT may request VHS to incur particular expenses in addition to those
already relating to the Scope of Services and reflected in the Budget, in which
case those expenses will be added to the Client Passthrough Expenses payable by
CLIENT. All additional expenses must be agreed to in writing by CLIENT prior to
such expenses being incurred.

      3.5.  VARIABLE FEES

      In addition to the amounts set forth above, CLIENT shall pay to VHS the
Variable Fees based solely upon VHS exceeding the performance measures set forth
in Schedule B to this Agreement.


                                       9
<PAGE>   10
      3.6.  PAYMENT DUE

      Invoices are due and payable within 30 days of receipt thereof, except to
the extent of any amount disputed by CLIENT. CLIENT shall pay the undisputed
amount of each invoice as and when due. In addition to VHS's right to terminate
this Agreement under Section 10.2 in the case of non-payment of any undisputed
amount, if VHS elects not to terminate this Agreement in the case of non-payment
of any undisputed amount, CLIENT shall pay VHS a finance charge of
one-and-one-half (1.5%) percent per month for the undisputed amount on each
invoice past due for more than 60 days from the payment date stated in the
invoice.


      3.7.  INSPECTION RIGHT

      Upon prior written notice and at mutually agreeable times within 14 days
of such prior written notice, CLIENT has the right to inspect the books and
records of VHS that relate to this Agreement for the purpose of auditing the
documents and invoices with respect to the Scope of Services provided hereunder.



                                       10
<PAGE>   11
ARTICLE 4. REPRESENTATIONS OF THE PARTIES

      4.1.  VHS REPRESENTATIONS

      VHS represents to CLIENT that:

            (a) it has the requisite expertise, experience and skill to render
the Services and that it shall use all reasonable efforts to cause the Services
to be performed in a competent, efficient and professional manner and no less
favorable than the overall manner in which similar services are performed for
other parties by VHS.

            (b) the execution, delivery and performance of this Agreement by VHS
and the consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action; that this Agreement constitutes
the legal, valid and binding obligation of VHS, enforceable in accordance with
its terms (except to the extent enforcement is limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general principles of equity); and that this Agreement and performance
hereunder does not violate or constitute a breach under any organizational
document of VHS or any contract, other form of agreement, or judgment or order
to which VHS is a party or by which it is bound.

            (c) VHS will maintain insurance with financially sound carriers in
the amounts and types (with the deductibles or retentions) as set forth in
Schedule C to this Agreement, as the same may be amended from time to time; each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement.

      4.2.  CLIENT REPRESENTATIONS

      CLIENT represents to VHS that:

            (a) The execution, delivery and performance of this Agreement by
CLIENT and the consummation of the transactions contemplated hereby have been
duly authorized by all requisite


                                       11
<PAGE>   12
corporate action; that this Agreement constitutes the legal, valid and binding
obligation of CLIENT, enforceable in accordance with its terms (except to the
extent enforcement is limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally and by general principles of equity);
and that this Agreement and performance hereunder does not violate or constitute
a breach under any organizational document of CLIENT or any contract, other form
of agreement, or judgment or order to which CLIENT is a party or by which it is
bound.

            (b) CLIENT will maintain insurance with financially sound carriers
or through one or more financially sound self-insurance arrangements in the
amounts and types (and with the deductibles or retentions) as set forth in
Schedule C to this Agreement, as the same may be amended from time to time; each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement.

ARTICLE 5.  CONFIDENTIALITY

      During the performance of the Services contemplated by this Agreement,
each party may learn confidential, proprietary and/or trade secret information
of the other party ("Confidential Information"). The party disclosing
Confidential Information shall be referred to as the "Disclosing Party" and the
party receiving Confidential Information shall be referred to as the "Receiving
Party."

      Confidential Information means any information, unknown to the general
public, which is disclosed by the Disclosing Party to the Receiving Party under
this Agreement. Confidential Information includes, without limitation,
technical, trade secret, commercial and financial information about either
party's (a) research and development; (b) marketing plans and techniques,
contacts and customers; (c) organization and operations; (d) business
development plans (i.e., licensing, supply, acquisitions, divestitures and
combined marketing); (e) products, licenses, trademarks, patents, other types of
intellectual property and any other contractual rights or interests and (f) in
the case of VHS, the names and work assignments of VHS employees. The Receiving
Party shall neither use nor


                                       12
<PAGE>   13
disclose Confidential Information from the Disclosing Party for any purpose
other than is specifically allowed by this Agreement.

      Upon the expiration or termination of this Agreement, the Receiving Party
shall return to the Disclosing Party all tangible forms of Confidential
Information, including any and all copies and/or derivatives of Confidential
Information made by either party or their employees as well as any writings,
drawings, specifications, manuals or other printed or electronically stored
material based on or derived from, Confidential Information. Any material or
media that is unable to be returned, as expressly consented to by the Disclosing
Party, must be destroyed and the destroying party shall provide the Disclosing
Party a certificate that such destruction has occurred. The Receiving Party
shall not disclose to third parties any Confidential Information or any reports,
recommendations, conclusions or other results of work under this Agreement
without the prior consent of an executive officer of the Disclosing Party. The
obligations set forth in this Section 5, including the obligations of
confidentiality and non-use shall be continuing and shall survive the expiration
or termination of this Agreement and will continue for a period of five (5)
years from the date of such expiration or termination.

      The obligations of confidentiality and non-use set forth herein shall not
apply to the following: (i) Confidential Information at or after such time that
it is or becomes publicly available through no fault of the Receiving Party;
(ii) Confidential Information that is already independently known to the
Receiving Party as shown by prior written records; (iii) Confidential
Information at or after such time that it is disclosed to the Receiving Party by
a third party with the legal right to do so; (iv) Confidential Information
required to be disclosed pursuant to judicial process, court order or
administrative request, provided that the Receiving Party shall so notify the
Disclosing Party sufficiently prior to disclosing such Confidential Information
as to permit the Disclosing Party to seek a protective order.


                                       13
<PAGE>   14
ARTICLE 6.  INDEPENDENT CONTRACTOR

      VHS and its directors, officers and the persons providing services under
this Agreement are at all times independent contractors with respect to CLIENT.
Persons provided by VHS to perform Services shall not be deemed employees of
CLIENT. CLIENT shall not be responsible for VHS's acts or the acts of its
officers, agents and employees while performing the Services whether on CLIENT
premises or elsewhere.

      VHS shall not be responsible for any cost, however, attributable to: (i)
any actions by CLIENT that caused a person provided by VHS to perform services
under this Agreement to be reclassified as an employee of CLIENT, (ii) any
unlawful or discriminatory acts of CLIENT, and (iii) language in any CLIENT
benefit plan that is deemed to extend coverage to persons provided by VHS to
perform services under this Agreement based on their activities under this
Agreement.


ARTICLE 7.  OWNERSHIP OF PROPERTY AND DEVELOPMENTS

      Except as otherwise provided in Schedule A-1A attached to this
Agreement, all materials and documents supplied by VHS to CLIENT during the Term
of this Agreement, which relate to the Services shall be the sole and exclusive
property of CLIENT. Each party agrees to hold all such property and
developments, confidential in accordance with Section 5 of this Agreement. All
property and developments, distributed to licensed practitioners, shall be
returned, delivered or assigned to CLIENT upon the expiration or termination of
this Agreement.


ARTICLE 8.  FINDER'S FEES; PROPERTY TRANSFER AND THIRD PARTY EMPLOYMENT

      8.1.  EMPLOYMENT OR RETENTION BY CLIENT

      CLIENT may not employ or retain, during the Term of this Agreement or
within one (1) year after the termination of this Agreement, any person employed
by VHS to provide services under this Agreement unless the applicable finder's
fee is paid to VHS by CLIENT in the amount set forth in


                                       14
<PAGE>   15
Schedule B to this Agreement (as the same may be amended from time to time, each
iteration of which shall be dated and signed by the Authorized Representative of
each party to this Agreement).


      8.2.  TRANSFER OF PROPERTY WHEN CLIENT EMPLOYS VHS PERSONNEL

      In the event CLIENT employs or retains any VHS personnel in accordance
with Section 8.1 of this Agreement, the parties agree that:

            (i)   any and all training materials provided to or made
                  exclusively available to such VHS personnel in connection
                  with providing services under this Agreement shall (other
                  than proprietary selling skills, materials of VHS and, as
                  to all others, only so long as, in the case of any licensed
                  training materials, such transfer is permitted by the
                  license), at the option of CLIENT (exercised by giving
                  prompt written notice to VHS), be transferred to CLIENT
                  with no payment by CLIENT (except, in the case of any
                  licensed training material, CLIENT shall pay to the
                  licensor any applicable license transfer or termination
                  fee), so long as in the case of any licensed material,
                  CLIENT assumes in writing all remaining obligations under
                  the license and shall use all reasonable efforts to obtain
                  a release of VHS for any liability for the same; and

            (ii)  any and all equipment provided to such VHS personnel in
                  connection with the Services under this Agreement and which
                  has been approved by CLIENT may, at the option of CLIENT (so
                  long as, in the case of any leased or licensed equipment, such
                  transfer is permitted by the lease or license, as the case may
                  be), be transferred (x) in the case of equipment owned by VHS
                  or in which VHS has equity under a finance lease, upon payment
                  by CLIENT of an amount equal to the net book value (if any) of
                  the equipment on the books of VHS at the time of transfer and
                  (y) in the case of leased or licensed equipment, upon payment
                  by CLIENT of any amount due the lessor or licensor as a


                                       15
<PAGE>   16
                  transfer or termination fee and upon assumption in writing by
                  CLIENT of all remaining obligations under the lease or
                  license, as the case may be, together with using all
                  reasonable efforts to obtain the release of VHS for any
                  liability for the same.


      8.3.  EMPLOYMENT OR RETENTION BY THIRD PARTY

      Should any third party contract service organization with a contract with,
or seeking to enter into an arrangement with, CLIENT (under which the third
party is supplying or will supply field force services to CLIENT), employ or
retain (as a consultant or otherwise) with the active and intentional
participation of CLIENT during the Term of this Agreement or within one (1) year
after the termination of this Agreement, any person employed by or used by VHS
to provide services under this Agreement, CLIENT shall use all reasonable
efforts to cause such third party to pay VHS $25,000 for each person so employed
or retained as liquidated damages. To the extent the amount payable to VHS under
the immediately prior sentence is not paid within two weeks of invoicing, CLIENT
shall pay VHS that amount.


                                       16
<PAGE>   17
ARTICLE 9.  INDEMNIFICATION

      9.1.  VHS INDEMNIFIES

      VHS agrees to indemnify and hold CLIENT, its officers, directors, agents,
representatives and employees (collectively, "CLIENT Representatives") harmless
from and against any and all liabilities, losses, proceedings, actions, damages,
claims or expenses of any kind, including costs and attorneys' fees, which
result from, relate to or arise from (i) any negligent or willful acts or
omissions by VHS or any of its officers, directors, employees, agents or
representatives (collectively, "VHS Representatives"), (ii) any acts or
omissions by any VHS Representatives outside the scope of this Agreement or
(iii) any breach of this Agreement by any VHS Representative in connection with
the representations, duties and obligations of VHS under this Agreement.

      9.2.  CLIENT INDEMNIFIES

      CLIENT agrees to indemnify and hold VHS Representatives harmless from and
against any and all liabilities, losses, proceedings, actions, damages, claims
or expenses of any kind, including costs and attorneys' fees, which result from
(i) any negligent or willful acts or omissions by any CLIENT Representative in
connection with the representations, duties and obligations of CLIENT under this
Agreement, (ii) any breach of this Agreement by any CLIENT Representative in
connection with the representations, duties and obligations of CLIENT under this
Agreement or (iii) products liability claims relating to any Product of CLIENT
involved with the Services.

      9.3.  INDEMNIFICATION PROCESS

      Any indemnity available hereunder shall be dependent upon the party
seeking indemnity providing prompt notice to the indemnitor of any claim or
lawsuit giving rise to the indemnity; provided, however, that failure to comply
with this notice requirement shall not reduce the indemnitor's indemnification
obligation except to the extent that the indemnitor is prejudiced as a result.
Thereafter, the indemnitor shall have exclusive control over the handling of the
claim or


                                       17
<PAGE>   18
lawsuit, and the indemnitee shall provide reasonable assistance to the
indemnitor in defending the claim; provided that indemnitor shall keep
indemnitee regularly apprised of the status of such claim or lawsuit and shall
not settle such claim or lawsuit without first obtaining the written consent of
the indemnitee.


ARTICLE 10. TERMINATION

      10.1. NOTICE

      Notwithstanding any implication raised by the renewal provisions of
Section 1 of this Agreement, (i) CLIENT may terminate this Agreement at any time
by giving 90 days prior written notice to VHS and (ii) VHS may terminate this
Agreement at any time by giving 180 days prior written notice to CLIENT. Upon
the effective date of any such termination, the parties shall have no further
obligation to each other (other than those set forth in Sections 5, 7, 8, 9,
10.3 and 11 hereof), except that CLIENT shall: (a) pay the amount of any fixed
and/or variable fees due under Section 3.1 of this Agreement for Services
actually performed by VHS through the date such termination is effective; and
(b) pay any reimbursement amount due under Section 3.3 of this Agreement for
Client Passthrough Expenses actually incurred and related to the performance of
Services through the date such termination is effective.


      10.2. IMMEDIATE TERMINATION

      This Agreement may be terminated effective immediately upon giving written
notice as follows:


                                       18
<PAGE>   19
            (a) by VHS, if payment to VHS by CLIENT is not made when due and
such payment is not made within thirty (30) days from the date of notice to
CLIENT of such nonpayment, which notice shall include notice of the risk of
termination if such nonpayment continues for more than an additional thirty (30)
days; or

            (b) by either party, in the event that the other party has committed
a material breach of this Agreement and such breach has not been cured within
thirty (30) days of receipt of written notice from the non-breaching party of
such breach; or

            (c) by either party, in the event that the other party has become
insolvent or has been dissolved or liquidated, filed or has filed against it, a
petition in bankruptcy and such petition is not dismissed within sixty (60) days
of the filing; makes a general assignment for the benefit of creditors; or has a
receiver appointed for all or substantially all of its assets.

      Upon the effective date of such termination, the parties shall have no
further obligation to each other (other than those set forth in Sections 5, 7,
8, 9, 10.3 and 11), except that CLIENT shall: (a) pay the amount of any fixed
and/or variable fees due under Section 3.1 of this Agreement for Services
actually performed by VHS through the date such termination is effective; and
(b) pay any reimbursement amount due under Section 3.3 of this Agreement for
Client Passthrough Expenses actually incurred and related to the performance of
Services through the date such termination is effective.

      10.3. SPECIAL TERMINATION EXPENSES

      In the case of any termination of this Agreement by CLIENT under Section
10.1 of this Agreement, CLIENT, at its sole option, may elect to have any
equipment provided to VHS personnel in connection with the Services under this
Agreement transferred to CLIENT to the same extent as such equipment would be
transferable under Section 8.2 (ii) of this Agreement, upon payment by


                                       19
<PAGE>   20
CLIENT of the amounts and assumption of any lease all as set forth in Section
8.2 (ii).

      In the case of any termination of this Agreement by VHS under Section
10.2, CLIENT shall (in addition to all other payment obligations under this
Agreement) promptly pay (or if paid by VHS, reimburse VHS therefor) (i) the
amount due any lessor or licensor of property provided to VHS personnel in
connection with providing services under the Agreement, for any early
termination of the lease or license and (ii) in the case of equipment provided
to VHS personnel in connection with providing services under this Agreement
owned by VHS or in which VHS has equity under a finance lease, an amount equal
to the net book value (if any) of the equipment on the books of VHS at the time
of termination; provided that such licensed or leased equipment shall then be
the sole property of CLIENT (except in the case of a finance lease, where CLIENT
will have sole ownership only after the finance lease is paid.)


ARTICLE 11. MISCELLANEOUS

      11.1. ASSIGNMENT

      Neither VHS nor CLIENT may assign this Agreement or any of its rights,
duties or obligations hereunder without the other party's prior written consent;
provided, however, that either VHS or CLIENT may assign its rights, duties and
obligations as part of an acquisition of VHS or CLIENT, as the case may be,
without obtaining the other party's prior written consent so long as the
acquirer (i) is a financially capable business entity and (ii) expressly assumes
in writing those rights, duties and obligations under this Agreement and this
Agreement itself.

      11.2. MERGER

      This Agreement supersedes all prior arrangements and understandings
between parties related to the subject matter of this Agreement other than
Section 11 of the Agreement, dated January 15, 1999, between the parties hereto.
This Agreement, including any schedules, attachments or exhibits


                                       20
<PAGE>   21
entered into hereunder, contains all of the terms and conditions of this
Agreement between the parties and constitutes the complete understanding of the
parties with respect thereto.

      11.3. FORCE MAJEURE

      Noncompliance with the obligations of this Agreement due to a state of
force majeure, the laws or regulations of any government, regulatory or judicial
authority, war, civil commotion, destruction of facilities and materials, fire,
flood, earthquake or storm, labor disturbances, shortage of materials, failure
of public utilities or common carriers, and any other causes beyond the
reasonable control of the applicable party, shall not constitute a breach of
contract.

      11.4. SEVERABILITY

      If any provision of this Agreement is finally declared or found to be
illegal or unenforceable by a court of competent jurisdiction, both parties
shall be relieved of all obligations arising under such provision, but, if
capable of performance, the remainder of this Agreement shall not be affected by
such declaration or finding.

      11.5. AMENDMENT

      No modification, extension or release from any provision hereof shall be
affected by mutual agreement, acknowledgment, acceptance of contract documents,
or otherwise, unless the same shall be in writing signed by the other party and
specifically described as an amendment or extension of this Agreement.

      11.6. GOVERNING LAW

      This Agreement shall be construed according to the laws of the State of
Delaware without regards to the conflict of laws provisions thereof.

      11.7. ARBITRATION

      a. All disputes over the meaning and interpretation of this Agreement
shall be resolved by conciliation and non-binding mediation and if such
mediation is unsuccessful then such disputes shall be finally settled by a
single Arbitrator selected by VHS and CLIENT. If VHS and CLIENT


                                       21
<PAGE>   22
cannot agree on a single Arbitrator, then disputes shall be resolved by an
Arbitration Panel comprising one arbitrator appointed by VHS and one arbitrator
appointed by CLIENT, and a Chairman of the Arbitration Panel appointed by the
first two arbitrators. Any such arbitration proceeding shall be conducted in
accordance with the arbitration rules of the AAA; shall be held in the
Commonwealth of Pennsylvania, unless otherwise agreed by the parties; and the
arbitration award shall be final and nonappealable and such award may be entered
in any court having jurisdiction.

      b. In order to initiate procedures for dispute resolution by conciliation,
mediation and arbitration either party may give written notice to the other of
intention to resolve a dispute, and absent satisfactory resolution, then to
arbitrate. Such notice shall contain a statement setting forth the nature of the
dispute and the resolution sought. If, within thirty (30) days of such notice a
resolution by conciliation between the parties themselves or by mediation has
not been achieved to the satisfaction of both parties, and if within sixty (60)
days from said written notice an Arbitration Panel has not been appointed with
an arbitration schedule satisfactory to both parties, then either party may
proceed with judicial remedies.

      11.8. COUNTERPARTS

      This Agreement may be executed in any number of counterparts, each of
which, when executed, shall be deemed to be an original and all of which
together shall constitute one and the same document.

      11.9. NOTICES

      Any notices required or permitted under this Agreement shall be given in
person or sent by first class, certified mail or by facsimile transmission, by
overnight courier or by hand delivery to:


                                       22
<PAGE>   23
      VHS:

            Ventiv Health U.S. Sales, Inc.
            200 Cottontail Lane
            Somerset, NJ 08873
            Attention: William C. Pollock, President
            Fax #: (732) 537-4999



      with a copy to:

            Peter D. Hutcheon, Esq.
            Norris, McLaughlin & Marcus, P.A.
            721 Route 202/206
            P.O.  Box 1018
            Somerville, NJ  08876-1018
            (Overnight delivery address: 721 Route 202/206, Bridgewater, NJ
            08807)
            Fax #: (908) 722-0755

      CLIENT:

            Endo Pharmaceuticals Inc.
            100 Painters Drive
            Chadds Ford, PA 19317
            Attention: Peter A. Lankau, Sr. Vice President, U.S. Business
            Fax #: (610) 558-9682



      with a copy to:

            Endo Pharmaceuticals Inc.
            100 Painters Drive
            Chadds Ford, PA 19317
            Attention: Caroline E. Berry, General Counsel
            Fax #: (610) 558-9684


or to such other address or to such other person as may be designated by written
notice given from time to time during the term of this Agreement by one party to
the other. Notice shall be deemed to have been given immediately in the case of
notice delivered by facsimile transmission (if transmission is confirmed) or by
hand delivery. Notices shall be deemed given on the next business day in the
case of notice sent by overnight courier.


                                       23
<PAGE>   24
      WHEREFORE, the parties hereto have caused this Agreement to be executed by
their duly authorized representatives as of the date first above written.



                                       VENTIV HEALTH U.S. SALES, INC.


                                       By:   /s/ PATRICK FORTEAU
                                             ----------------------------------
                                             Name:  Patrick Fourteau
                                             Title: President



                                       ENDO PHARMACEUTICALS INC.




                                       By:   /s/ PETER A. LANKAU
                                             ----------------------------------
                                             Name:  Peter A. Lankau
                                             Title: Senior Vice President, U.S.
                                                    Business


                                       24

</TEXT>
</DOCUMENT>
