|                       |  | [GRAPHIC APPEARS HERE]     
|---------------------- |  | ---------------------------
|                       | 
|Private & Confidential |  |                            
|                       |  | Mayne Group Limited        
|                       |  | ABN 56 004 073 410         
|                       | 
|24 February, 2003      |  | PO Box 1671N GPO Melbourne 
|                       |  | Victoria 3001 Australia    
|Michael Kotsanis       |  | 390 St Kilda Road Melbourne
|310A Danks St          |  | Victoria 3004 Australia    
|MIDDLE PARK VIC 3206   |  | Telephone 61 3 9868 0700   
|                       |  | Fax 61 3 9867 1179         



Dear Michael,



It is with pleasure that I offer you appointment to the position of Vice President Asia
Pacific, under the following terms and conditions. You will report to the Group General Manager, Pharmaceuticals, Mayne and you will be located in Victoria.



Employer



Your contract of employment is with Mayne Pharma Pty Ltd ABN 58 097 064 330, a subsidiary of Mayne Group Limited ABN 56 004 073 410 (Mayne). As an employee within the Mayne Group, you may be required to provide
services to any company in the Mayne Group, and all entities which are subsidiaries of Mayne.



Contract Terms



This contract shall
take effect from 1 February 2003 and will supersede in its entirety your current employment contract and arrangements, which shall be deemed to have terminated by mutual consent as from 31 January 2003. However, for the purposes of service-related
benefits of employment, your service with Mayne will be regarded as continuous from the 26 July 1999, the date you initially commenced employment with the Group or a related company.



Duties



Your specific duties and responsibilities in this position are as previously outlined. You may, however, be required to undertake other duties and responsibilities from
time to time in addition to or as variations of the duties and responsibilities of the position. As a consequence, or for other reasons, your reporting responsibility and/or position title may also be altered from time to time. In this event, your
remuneration and other benefits under this contract will not be altered without your consent, except to the extent that this contract permits.



Remuneration



Your remuneration will be made up of a total employment cost (TEC) at the rate of $215,000 p.a., inclusive of salary, Superannuation and benefits you may wish to charge to the TEC.



Your remuneration will be reviewed annually, usually in June, with any increase, which may
arise from each review being effective on 1 July. The review and operative dates may be altered by Mayne from time to time.



Short Term Incentive (Bonus)



You will be eligible to participate in the Mayne short term incentive scheme where a bonus of 20% of TEC may be awarded for the achievement of agreed target objectives,
related to the success factors of the Group. For outstanding performance a higher bonus to a maximum of 40% of TEC may be awarded. Your target performance will be agreed at the commencement of each measurement period



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Superannuation



You will be required to remain a member of the Mayne Group Superannuation Fund.



Full details of the range of Superannuation entitlements are supplied in the Members Booklet, which is already in your possession.



The benefits provided in the Superannuation Fund and the contributions made by Mayne meet the
Superannuation Guarantee requirements.



Re-assignment



Mayne has a policy in which it reserves the right to reassign employees geographically from
time to time. Such reassignment will occur after consultation and agreement with you, particularly as to your career development and your own circumstances.



Termination of Employment



You may resign from your employment and terminate this contract by giving to Mayne no less than three (3) months notice in writing. If you do so, Mayne is not
obliged to provide you with duties during the notice period. In the event you resign to join a competitor, Mayne reserves the right to require you to serve the notice period on an active or passive basis.



Similarly, Mayne may, at any time, terminate your employment by giving no less than three (3)
months notice in writing or payment in lieu. Payment in lieu of notice will be at the rate equivalent to your TEC for the period of notice.



In the case of serious misconduct (including disclosure of confidential information or other serious or continuing breaches of this contract) Mayne may terminate your
employment without notice. In this case you will receive only accrued but un-taken leave entitlements.



Retrenchment



If your employment is
terminated on the grounds of redundancy, retrenchment benefits payable to you will accord with the terms of the retrenchment policy applicable to Mayne staff at that time, except that, the payment in respect of notice will be not less than the
notice period provided above.



Mayne Group Policies



You will be required to comply with Mayne Group policies and procedures generally, as
established and varied from time to time.



Confidentiality



It is agreed that, without limiting any express or implied obligation of confidentiality
upon you under any statute (including the corporation law) you undertake that you will not divulge to any person or use any trade secrets or confidential information concerning the business, financial arrangements or any further information, which
is not publicly available, except with the written authority of the undersigned.



Restriction on Activities



It is agreed that you will not
during your employment with Mayne or within six months after cessation, either on your own account or jointly with any other person, or company, solicit interfere with or endeavor to entice away from Mayne or its subsidiaries any employee or
customer of the Group.



Applicable Law



This contract of employment will be governed by the law of the State of Victoria.



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Schedule of Benefits



The employment benefits applicable to you in this position are recorded in the attached Schedule A.



Date of Effect



This contract takes effect on the 1 February 2003.



Attachments



The enclosed attachments to this letter form part of the terms and conditions of your contract of employment.



Acceptance



To signify your acceptance of this offer of employment under the conditions outlined above, please sign, date, and return the duplicate of this letter to me.



Yours sincerely,



|/s/ Alan Reid                         
|--------------------------------------
|Alan Reid                             
|Group General Manager, Pharmaceuticals



Att:    Schedule
of Benefits



I acknowledge having received and read this letter and each
of its attachments, and I accept the offer of employment on the terms set out in this letter.



/s/ Michael KotsanisMichael KotsanisDate: 11/3/03




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Schedule A



SCHEDULE OF BENEFITS



|Name:     |  | Michael Kotsanis           
|--------- |  | ---------------------------
|          | 
|Position: |  | Vice President Asia Pacific
|          | 
|Date:     |  | February 24, 2003          
|         
|         



These benefits apply subject to the
variations contained in the covering letter. Full details of the benefits and conditions are available from Group General Manager, Personnel.



Annual Leave



Annual leave will continue to accrue at the rate of 4 weeks (20 working days) per annum. Leave loading is included in the TEC package.



Sick Leave



Sick leave credit will continue to accrue at the rate of 10 days on the anniversary of each complete year of service to a maximum of 52 weeks credit. Discretion will
apply to the payment for sick leave beyond available credits.



Long Service
Leave



Long service leave of 13 weeks becomes due after 15 years
continuous service. Thereafter, long service leave accrues a rate of 4 and 1/3 weeks for each 5 years service.



Where the provisions of Awards or State legislation exceed the above, the provisions of the relevant Award or State legislation shall apply.



Other Leave



Provisions with respect to other leave will be in accordance with the guidelines issued to Mayne staff from time to time.



Contact and Entertainment Expenses



Contact and entertainment expenses which are business related and of benefit to the company
will be reimbursed through the process of claim and approval by the Group General Manager, Pharmaceuticals.



Class of Air Travel



Domestic air
travel on company business shall be economy class, except for flights in excess of three hours where the employee may, subject to the approval of an appropriate manager with the delegated authority, upgrade from economy class to business class.



Travel on international flights on company business shall be business class.



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Attachment.



TOTAL EMPLOYMENT COST



Michael Kotsanis



|Previous Remuneration |  | Revised TEC | 
|--------------------- |  | ----------- | 
|Salary + benefits     |  | $189,480    | 
|Superannuation        |  | $10,520*    | 
|TOTAL                 |  | $200,000    | 



|Short Term Incentive
|--------------------
|Minimum             
|Minimum             

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|* | Previously nominated to reduce superannuation to SGC maximum
|- | ------------------------------------------------------------