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                                LICENSE AGREEMENT




                                  PERIOSTAT(R)



                                     BETWEEN




                         COLLAGENEX PHARMACEUTICALS, INC


                                        &


                        COLLAGENEX INTERNATIONAL LIMITED


                                       AND


                         LABORATOIRES PHARMASCIENCE S.A.






                 Dated and effective this 30th day of June 1998



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                         KNOW-HOW AND LICENSE AGREEMENT
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This KNOW-HOW AND LICENSE  AGREEMENT  (hereinafter  "the Agreement") is made and
effective the 30th day of June 1998 by and between  COLLAGENEX  PHARMACEUTICALS,
INC a company  organised  and existing  under the laws of the State of Delaware,
USA and  having  a  place  of  business  at 301  South  State  Street,  Newtown,
Pennsylvania  18940, USA through its affiliate company COLLAGENEX  INTERNATIONAL
LIMITED a company  registered  and existing under the laws of England and having
its  registered  office  at  The  Old  Stable  Block,  7  Buttermarket,   Thame,
Oxfordshire OX9 3EW, United Kingdom (hereinafter collectively  "CollaGenex") and
LABORATOIRES  PHARMASCIENCE S.A. a company organised and existing under the laws
of the  Republic of France and having a place of business at 73  Boulevard de la
Mission Marchand, F - 92402 Courbevoie Cedex, France (hereinafter "Licensee")

WITNESSETH:

WHEREAS  CollaGenex  has  developed  and has rights to the  Products  as defined
herein  and  desires  to grant a License  to  Licensee  to  market  and sell the
Products in the  Territory as defined  herein and on the terms set forth herein;
and

WHEREAS Licensee desires to License the rights to the Products as defined herein
from  CollaGenex  for the purposes of marketing  and selling the Products in the
Territory;

NOW,  THEREFORE,  in  Consideration of the premises and the mutual covenants and
agreements  hereinafter contained,  the parties hereto,  intending to be legally
bound, hereby undertake and agree as follows:-

1.      DEFINITIONS

1.1.    The term  "Affiliate"  shall  mean any  entity  in which the party has a
        direct or indirect  ownership  of at least fifty per cent (50%),  or any
        entity which directly or indirectly, through one or more intermediaries,
        controls,  or is  controlled  by, or is under  common  control  with the
        party.

1.2.    The term "Commercial  Sale" shall mean any sale which transfers title to
        any Product,  as defined herein, to a third party.  Transfer of title to
        an Affiliate of Licensee shall not  constitute a Commercial  Sale unless
        such Affiliate is the intended end user of the Product.

1.3.    The term  "Confidential  Information" shall mean any and all information
        or any portion thereof disclosed to or otherwise acquired or observed by
        either party or its employees,
<PAGE>

        agents or Affiliates  (each  individually  referred to as a "Recipient")
        either directly or indirectly from the other party,  including,  but not
        limited   to,   the   Products   and/or   improvements,    enhancements,
        modifications,  discoveries,  claims, formulae, processes,  apparatuses,
        research,  development,  patents,  Confidential  Information,  Know-how,
        trade secrets, knowledge, designs, drawings,  specifications,  concepts,
        data, reports, methods, documentation,  methodology,  pricing, marketing
        plans,  customer  lists,  salaries  or business  affairs,  and any other
        information  or knowledge  owned or developed  or  controlled  by either
        party, except for information which the Recipient can demonstrate:-

1.3.1.  was at the  time of  disclosure  to such  Recipient  part of the  public
        domain or thereafter becomes part of the public domain through no act or
        omission by such Recipient; or

1.3.2.  was  lawfully in such  Recipient's  possession  as  evidenced by written
        records  prior to  disclosure  by the  disclosing  party and without any
        obligation of confidentiality; or

1.3.3.  was lawfully  received by such Recipient  after  disclosure from a third
        party without  obligation of  confidentiality  and without  violation by
        said third party of any obligation of  confidentiality to another party;
        or

1.3.4.  was required to be disclosed by law or court order.

1.4.    The term "Improved  Products"  shall mean any major  improvements to the
        Products based on sub antimicrobial  doses of doxycycline  hyclate as an
        inhibitor of  collagenolytic  activity  for use in the  treatment of any
        form of periodontal disease.  Examples of Improved Products include, but
        may not be limited to (a) a once a day  formulation  of the Products (b)
        any improvement resulting in patentable subject matter in the Territory.
        A change in the salt for the  product  formulation  as defined in Clause
        1.7. hereof shall not constitute an Improved Product.

1.5.    The term "Know-how"  shall mean all data and information  concerning the
        Products.

1.6.    The term "Net Sales" of the Products  shall mean the gross invoice price
        received and  attributable to the Commercial Sale of the Products in the
        Territory  by Licensee or by an Affiliate  of  Licensee;  less  returns,
        promotional allowances,  import or export taxes, any tax or Governmental
        charge levied on the sale,  transportation  or delivery of such Products
        and  borne by the  seller  thereof,  commissions  to third  parties  and
        customary trade discounts actually taken.

1.7.    The term "the  Products"  shall mean  Periostat(R),  the  doxycycline
        hyclate  product  developed by CollaGenex as a therapy for the treatment
        of periodontal disease.

1.8.    The term "the Territory"  shall mean France,  including its Departements
        et Territories d'Outre-Mer  ("DOM-TOM");  Morocco,  Algeria, Tunisia and
        the other countries of French speaking Africa.
<PAGE>

1.9.    The term "Gross Margin" shall mean the difference  between the Net Sales
        price  of the  Products  and  the  price  paid  by the  Licensee  to the
        manufacturer  of the Products  plus any  transport,  duty or local taxes
        incurred for the Licensee to receive the Products in its warehouse.

2.      LICENSES AND OTHER RIGHTS

2.1.    GRANT  OF  LICENSES.   Subject  to  the  limitations   described  below,
        CollaGenex  hereby  grants to Licensee an  exclusive  License to use the
        Know-how  and an  exclusive  License  to use,  sell and  distribute  the
        Products in the  Territory.  Licensee  shall have no right to  transfer,
        assign or  sub-license  any of its rights  hereunder to any third party,
        other than Affiliates of Licensee, for any purposes, without the express
        written consent of CollaGenex.

2.2.    EXCLUSIVITY  OF  LICENSE.  All  exclusive  licenses  granted to Licensee
        hereunder will be exclusive as to CollaGenex and all others.  CollaGenex
        shall  retain  title to, and be the owner of,  any and all  Confidential
        Information.

2.3.    PROHIBITED  TRANSFERS.  During  the term of this  Agreement,  CollaGenex
        agrees that, without Licensee's express written consent, CollaGenex will
        not  assign,  sell,  convey,  lease,  license,  transfer,   hypothecate,
        encumber  or  suffer  imposition  of any lien  on,  grant  any  right or
        interest in, or disclose to any third party in the  Territory any of the
        Confidential Information concerning the Products save as may be required
        to obtain marketing authorisations for the Products in the Territory.

        Licensee shall not disclose any  Confidential  Information  furnished by
        CollaGenex  pursuant to Clause 2.1.  hereof to third parties  during the
        term  hereof,  or  any  extension  hereto,  or at any  time  thereafter,
        provided,  however, that disclosure may be made of any such Confidential
        Information   to  the  extent   necessary  to  market  the  Products  to
        purchasers; provided that such purchasers agree to be bound to a similar
        non  disclosure  agreement.  Licensee  shall  not use  any  Confidential
        Information  furnished by CollaGenex  other than in the marketing of the
        Products in the Territory and only during the term of this Agreement and
        any extension hereto.

2.4.    SUPPLY OF PRODUCTS.  During the term hereof,  and any extension  hereto,
        Licensee  may either (a) purchase the Products for resale by Licensee in
        the Territory from a European  manufacturer  licensed and/or approved by
        CollaGenex and approved by the relevant regulatory bodies and/or holding
        the relevant,  current  manufacturing  certificates  or approvals in the
        country of manufacture to manufacture  the Products  and/or (b) purchase
        the  Products  from  another  European  source,  approved  in advance by
        CollaGenex,  such source to comply with all regulatory  requirements for
        the  manufacture of the Products and for such  manufacture to be carried
        out under a  confidentiality  agreement.  The terms and  conditions  for
        supply of the  Products  shall be agreed upon by Licensee and such third
        party manufacturers independent of CollaGenex. Relevant commitments from
        the European manufacturing source to Licensee shall be attached to
<PAGE>

        this  Agreement  as Appendix  I, such  Appendix I to be attached to this
        Agreement  within  thirty  (30)  days  of  the  effective  date  hereof.
        CollaGenex  will  render  all  reasonable   assistance  to  Licensee  in
        procuring  supply of the  Products for sale in the  Territory.  Licensee
        shall be responsible for ensuring that all of the Products  sourced from
        a  third  party  manufacturer  shall  be  of  merchantable  quality  and
        otherwise  manufactured in accordance with applicable law. Licensee may,
        at its  discretion,  be permitted  to source the  Products  from another
        Licensee of CollaGenex,  upon terms to be agreed between such Licensees,
        provided that the other terms and  conditions of this Clause 2.4.  shall
        be complied with. Other than as defined in Clause 12 hereof, the failure
        of a manufacturing  source to supply the Products to Licensee  resulting
        in Licensee  having an out of stock situation that lasts up to three (3)
        months  shall  not  be  cause  for  termination  of  this  Agreement  by
        CollaGenex.

2.5.    RIGHTS TO IMPROVED  PRODUCTS.  CollaGenex agrees to notify Licensee,  in
        writing, of any Improved Products in a reasonably timely manner.  Unless
        prevented by virtue of other licensing  agreements with other licensees,
        CollaGenex  agrees  to grant  Licensee  a "right of first  refusal"  for
        ninety (90) days from the date of notification of the Improved  Products
        to negotiate a license  agreement under  reasonable  commercial terms to
        obtain (a) an exclusive  right and license to use,  sell and  distribute
        Improved  Products  in the  Territory  and (b) an  exclusive  right  and
        license under patents applicable to the Territory,  if any, to use, sell
        and distribute Improved Products in the Territory.

2.6.    GOVERNMENT  SUBMISSIONS.  CollaGenex shall use all reasonable efforts to
        obtain the applicable  marketing  authorisations for the Products in the
        Territory from the relevant  authorities,  save where such  applications
        are  made,  by  prior  agreement,  by  Licensee;  and to  maintain  such
        marketing  authorisations  during  the  term  hereof  and any  extension
        hereto. CollaGenex shall be the owner and party of record sponsoring all
        submissions to the regulatory  authorities in the Territory with respect
        to the Products and to the Improved  Products.  CollaGenex  will furnish
        Licensee  with all Know-how and relevant  documentation  required by the
        regulatory  authorities  in the Territory to allow Licensee to use, sell
        and distribute the Products in the Territory.

        Upon the request of CollaGenex,  Licensee shall provide reasonable local
        technical and local market knowledge assistance to CollaGenex and/or any
        professional  advisors to CollaGenex which shall include, but may not be
        limited  to,  contract  research  and  contract  regulatory  and similar
        organisations;    in   obtaining   and    maintaining    the   marketing
        authorisations.

2.7.    COMMERCIAL  INFORMATION.  CollaGenex shall use its reasonable commercial
        efforts  to  furnish   Licensee  with  all  commercial   information  in
        CollaGenex's  possession  which may include,  but may not be limited to;
        market  research  data;   marketing  plans;  sales  plans;   promotional
        activities;  conferences;  seminars;  exhibitions  and the like in which
        CollaGenex   and/or   Affiliates  of  CollaGenex   and/or  licensees  of
        CollaGenex  outside of the Territory  may be involved or concerned,  and
        relating to the Products, in English; within a reasonable period of such
        commercial  information  becoming  available
<PAGE>

        to CollaGenex  and which may reasonably be required by Licensee in order
        for Licensee to fulfil its obligations  hereunder.  Licensee understands
        and agrees that such commercial information may constitute  Confidential
        Information  hereunder.  Licensee shall be responsible for obtaining all
        local  commercial  and pricing  authorisations  for the marketing of the
        Products in the Territory in accordance with the regulations  pertaining
        to the Territory and shall keep CollaGenex or an Affiliate of CollaGenex
        fully   informed  with  regard  to  progress  in  obtaining  such  local
        commercial and pricing authorisations.

3.      LICENSING FEES AND ROYALTY PAYMENTS

3.1.    MILESTONE  PAYMENTS  AND  RUNNING  ROYALTIES.  In  consideration  of the
        License  granted  under  this  Agreement,  Licensee  agrees  to  pay  to
        CollaGenex  the  following  milestone  payments  at the  time  intervals
        specified:-

3.1.1.  The sum of  $400,000.00  (four  hundred  thousand US  dollars)  upon the
        signing  of this  Agreement,  less any sums  that may have  been paid in
        advance.

3.1.2.  The sum of               *                          US dollars) upon the
        submission  of  the  dossier  for  the  marketing  authorisation  to the
        relevant  authorities  in France or the  submission of the dossier under
        the European Mutual Recognition Procedure to a number of countries which
        shall include France.

3.1.3.  The sum of               *                        US  dollars)  upon the
        granting of the marketing  authorisation  in France  whether or not this
        shall have been obtained via direct submission to the French authorities
        or under the European Mutual Recognition Procedure.

3.1.4.  The sum of               *                                   US dollars)
        upon the  earlier  of either  (a) the  granting  of the  lesser of (i) a
        reimbursed  price with a Gross Margin of at least       *               
        or  (ii)   mutually   agreed   commercially   acceptable   pricing   and
        reimbursement  price approvals by the Commission de Transparence and the
        Comite  Economique in France, or (b) the introduction of the Products in
        the French market within the French  medicines  reimbursement  system in
        accordance with the provisions of Clause 8.5. hereof.

        In  addition,  a running  royalty  will be paid in  accordance  with the
        following terms:-

3.1.5.  If the approved  price in France shall generate a gross margin of   *   
                       or more to  Licensee,  a sum  equivalent  to      *      
              of the Net Sales for the term of this  Agreement or any  extension
        hereto; or

3.1.6.          *          plus        *             of the  difference  between
        the Gross  Margin and          *              with a minimum of     *   
                  and a maximum of       *           .

*    Confidential  information  has been omitted and filed  separately  with the
     Securities and Exchange Commission.

<PAGE>

3.2.    REPORTS  AND  PAYMENTS.  Payments  pursuant to Clauses  3.1.1.,  3.1.2.,
        3.1.3.  and  3.1.4.  inclusive  hereof  will  be  paid  by  Licensee  to
        CollaGenex,  by a method  designated by  CollaGenex,  within thirty (30)
        days of the milestone or other event specified therein.

        No payment  shall be due in  accordance  with the  provisions  of Clause
        3.1.1.  hereof if, within thirty (30) days of the effective date of this
        Agreement,  the parties have met with an Expert Rapporteur to the French
        Medicines  Agency and have  mutually  agreed that there is no reasonable
        probability  of  acceptance  by  the  French   Medicines  Agency  of  an
        application for a marketing  authorisation  in France and this Agreement
        shall immediately terminate save as for the provisions of this Agreement
        that shall survive termination.

        Licensee undertakes and agrees to notify CollaGenex,  in writing, within
        seven (7) days of the  commercial  and pricing  approvals  specified  in
        Clause 3.1.4. hereof being obtained. Payments pursuant to Clauses 3.1.5.
        and  3.1.6.  hereof,  as  applicable,  will  be  paid,  as  directed  by
        CollaGenex,  within  fifteen  (15) days  after the end of each  calendar
        quarter  during the term hereof or any extension  hereto with respect to
        the  applicable  Net Sales  made by  Licensee  and/or any  Affiliate  of
        Licensee during each calendar quarter.

        With each quarterly  payment,  Licensee will provide  CollaGenex  with a
        written report stating the actual Net Sales made by the Licensee  and/or
        any  Affiliate of Licensee  during such prior  calendar  quarter and the
        amount of royalties due to CollaGenex thereon pursuant to this Clause 3.
        The  minimum  payment  shown in Clause  10.3.  hereof  shall be  payable
        annually after calculation against the actual royalties remitted and any
        shortfall remitted,  in a manner to be designated by CollaGenex,  within
        thirty (30) days of the end of such quarter.

        The parties have the option to mutually agree,  at an appropriate  time,
        for  royalties  to be remitted in the European  currency  "the Euro" (or
        such other  designation as may be given to a common  European  currency)
        provided that the parties have agreed an exchange  rate,  subject to the
        terms above,  of the Euro against the  currency in which  royalties  had
        been previously remitted or would have been remitted.

3.3.    RECORDING AND INSPECTION. Licensee agrees that for a period of three (3)
        years after delivery of each report referred to in Clause 3.2. above, it
        shall  keep at its  principal  place of  business  complete  records  of
        applicable  Net Sales  received  by  Licensee  and/or any  Affiliate  of
        Licensee  and all other  information  necessary  to permit  Licensee  to
        verify  the  accuracy  of the  calculations  of Net  Sales,  and to make
        regular entries in such records at its earliest business convenience for
        the purpose of determining the Net Sales as defined herein.

        For  the  sole  purpose  of  verifying  Licensee's  performance  of  its
        obligations to make payments hereunder,  CollaGenex,  solely through its
        certified  public  accountant  or authorised  representative  thereof or
        other independent  third party designee,  will have the right to examine
        Licensee's  records  reflecting  such Net Sales  and other  information,
        provided that such  examination is made within three (3) years after the
        close of the
<PAGE>
        calendar year in respect of which Licensee's records are being examined,
        conducted  within  Licensee's  normal business hours,  made after thirty
        (30) days advance written notice to Licensee and limited to no more than
        one   examination  in  any  one  calendar  year.  The  results  of  such
        examination  shall be made available to both parties.  CollaGenex  shall
        bear the full cost of the performance of such  examination,  unless such
        examination discloses a variance of more than two per cent (2%) from the
        amount of the  original  report or  payment  calculation.  In such case,
        Licensee shall bear the full cost of the performance of such examination
        and Licensee shall promptly pay to CollaGenex any variance  disclosed in
        such examination.

3.4.    CURRENCY OF PAYMENT. All payments shall be made in United States dollars
        (US$).  Royalty  payments in United States  dollars  pursuant to Clauses
        3.1.5.  and 3.1.6 hereof shall be  translated at the rate of exchange at
        which  United  States  dollars  are  listed in the Wall  Street  Journal
        against the French franc, or, as applicable,  the Euro; at an average of
        the  daily  rate  during  the  calendar  quarter  in which Net Sales are
        received by Licensee or by an Affiliate of Licensee.

3.5.    METHOD OF PAYMENT.  All payments  shall be made in  accordance  with the
        provisions  of  Clause  3.2.  hereof by Direct  Wire  Transfer  or other
        generally accepted method of Bank to Bank currency transfer, all charges
        to account of drawer,  to an account of  CollaGenex's  definition and at
        the sole discretion of CollaGenex.

4.      TRADEMARK MATTERS

4.1.    Licensee shall be permitted to use the trade mark  "Periostat" in styles
        and formats to be  designated  solely by CollaGenex  for the  marketing,
        selling, advertising and distribution of the Products in the Territory.

4.2.    Registration of the trade mark, maintenance and protection of such trade
        mark,   and  all   costs   associated   therewith   shall  be  the  sole
        responsibility of CollaGenex.

4.3.    Licensee shall promptly notify CollaGenex,  in writing,  in the event of
        any  infringement  of the trade mark, or potential  infringement  of the
        trade mark, in the Territory  coming to its attention,  or the attention
        of one of its  Affiliates,  and shall assist  CollaGenex,  to the extent
        requested and/or directed by CollaGenex, in protecting the trade mark in
        the Territory.

5.      REPRESENTATIONS WARRANTIES AND COVENANTS OF THE PARTIES

5.1.    REPRESENTATIONS   AND  WARRANTIES  OF  COLLAGENEX.   CollaGenex   hereby
        represents and warrants to Licensee that:-

5.1.1.  it is a  corporation  duly  organised,  validly  existing  and  in  good
        standing under the relevant laws of the State of Delaware, United States
        of America and of England and has full corporate  power and authority to
        own its  properties  and to  conduct  the  business  in  which it is now
        engaged;
<PAGE>

5.1.2.  it has full  corporate  power and  authority to execute and deliver this
        Agreement  and  to  perform  all of its  obligations  hereunder,  and no
        consent or approval of any other  person or  Governmental  authority  is
        required  therefor.  The  execution  and  delivery of this  Agreement by
        CollaGenex;   the   performance  by  CollaGenex  of  its  covenants  and
        agreements   hereunder  and  the   consummation  by  CollaGenex  of  the
        transactions  contemplated  hereby  have  been  duly  authorised  by all
        necessary  corporate  action.  This  Agreement  constitutes  a valid and
        binding obligation of CollaGenex,  enforceable  against it in accordance
        with its terms;

5.1.3.  neither  the  execution  nor the  delivery  of this  Agreement,  nor the
        consummation  of  the  transactions  contemplated  hereby,  violate  any
        provision of the  Certificate  of  Incorporation  or the  Memorandum and
        Articles of Association  or Bye-Laws of CollaGenex or any law,  statute,
        ordinance,  regulation,  order,  judgement  or  decree  of any  Court or
        Governmental  agency;  or conflicts with or results in any breach of any
        of the  terms  of or  constitutes  a  default  under or  results  in the
        termination  of or the creation of any lien pursuant to the terms of any
        contract or agreement to which  CollaGenex is a party or by which any of
        the assets of CollaGenex is bound; and

5.1.4.  CollaGenex has no knowledge of, and has received no notice of, any claim
        of ownership or other  adverse  interest of any third party with respect
        to the Products or the  Confidential  Information. 

5.2.    REPRESENTATIONS AND WARRANTIES OF LICENSEE. Licensee hereby warrants and
        represents to CollaGenex that:-

5.2.1.  it is a  corporation  duly  organised,  validly  existing  and  in  good
        standing under the laws of the Republic of France and has full corporate
        power and authority to own its properties and to conduct the business in
        which it is now engaged.

5.2.2.  it has full  corporate  power and  authority to execute and deliver this
        Agreement  and  to  perform  all of its  obligations  hereunder,  and no
        consent or approval of any other  person or  Governmental  authority  is
        required  therefor.  The  execution  and  delivery of this  Agreement by
        Licensee;  the  performance  by Licensee of its covenants and agreements
        hereunder  and  the   consummation  by  Licensee  of  the   transactions
        contemplated hereby have been duly authorised by all necessary corporate
        action.   This  Agreement   constitutes  a  valid  and  legally  binding
        obligation of Licensee,  enforceable  against it in accordance  with its
        terms; and

5.2.3.  neither  the  execution  and  delivery  of  this   Agreement,   nor  the
        consummation  of the  transactions  contemplated  hereby,  violates  any
        provision of the  organisational or governing  documents of Licensee nor
        any law, statute, ordinance,  regulation,  order, judgement or decree of
        any Court or  Governmental  agency,  or conflicts with or results in any
        breach of any of the terms of or  constitutes a default under or results
        in the  termination of or the creation of any lien pursuant to the terms
        of any contract or  agreement  to which  Licensee is a party or by which
        any of the assets of Licensee is bound.
<PAGE>

5.2.4.  it will  comply  in all  respects  with the  legal  requirements  of the
        Territory  relating  to  the  sourcing,  storage,  marketing,  sale  and
        distribution of the Products.

6.      INDEMNIFICATION

6.1.    INDEMNIFICATION  BY  THE  PARTIES.  Each  of  the  parties  hereto  will
        indemnify  the other party from and against any and all losses,  claims,
        demands,  obligations,  liabilities,  costs,  expenses or damages of any
        kind or nature (collectively "Damages"),  including, but not limited to,
        reasonable  fees of  attorneys;  accountants  and  other  professionals,
        incurred by the indemnified party as a result of any claim or proceeding
        brought against the indemnified  party by any person not a party to this
        Agreement,  to the extent that such claim or  proceeding is based on any
        of the  representations or warranties  contained in this Agreement being
        untrue  or upon  breach  of any of the  provisions  of  this  Agreement;
        provided that the indemnified  party promptly  notifies the indemnifying
        party  of any  such  claim  or  proceeding  in  writing  and  gives  the
        indemnifying  party the  opportunity  to defend or settle  such claim or
        proceeding.   The  indemnified  party  agrees  to  co-operate  with  the
        indemnifying party, at the indemnifying party's expense, in defending or
        settling such claim or proceeding.

6.2.    PRODUCT  INDEMNIFICATION.  Licensee agrees to defend, indemnify and hold
        harmless  CollaGenex  from any and all  Damages  arising  from injury or
        damage to persons or property  (including,  without limitation,  product
        liability)  resulting  directly or indirectly from Licensee's  sourcing,
        storage,  marketing,  sale  and  distribution  of  the  Products  in the
        Territory.  CollaGenex  warrants to Licensee that all data  submitted by
        CollaGenex to the appropriate  regulatory  authority in France or in any
        other  country  where  CollaGenex  has  applied  for  or may  apply  for
        marketing  authorisations  are an  accurate  representation  of clinical
        trial and other data, to the best of CollaGenex's  knowledge and belief,
        as warranted by CollaGenex to the appropriate regulatory authorities.

7.      CONFIDENTIALITY

7.1.    CONFIDENTIALITY.  Except  to the  extent  expressly  authorised  by this
        Agreement or otherwise  agreed in writing,  the parties agree that,  for
        the term of this  Agreement  any  extension  thereto and for a period of
        seven  (7)  years  thereafter,   the  Recipient  shall  keep  completely
        confidential and shall not publish or cause to be published or otherwise
        disclose and shall not use for any purposes any Confidential Information
        furnished  to it by the  other  party  or  developed  pursuant  to  this
        Agreement;  provided,  however, that after the expiration or termination
        of this Agreement,  or any extension hereto,  either party shall be free
        to exploit  commercially in any manner any  proprietary  information and
        technology which belongs solely or jointly to it.

7.2.    AUTHORISED DISCLOSURE.  Each party may disclose Confidential Information
        of the  party  to its  employees,  agents  and  Affiliates  who  (a) are
        required to know such  information in connection  with the permitted use
        of such information hereunder and who (b) are bound by customary non-use
        and confidentiality obligations as set forth in this Clause 7.
<PAGE>

7.3.    BUSINESS  TERMS.  The parties  acknowledge  and agree that the financial
        terms  contained in Clause 3 of this  Agreement  shall be  considered as
        Confidential  Information  hereunder.  The  parties  further  agree that
        publication  of the existence of this  Agreement  may be of  significant
        commercial  value to each  party  and the  parties  agree  to allow  the
        publication of press releases  announcing the Agreement by either party,
        but only following approval by both parties of the content of such press
        releases, or as required by law.

8.      TERM AND TERMINATION AND REVERSION OF TECHNOLOGY

8.1.    TERM. The term of this  Agreement  shall be for a period of fifteen (15)
        years  from the date of first  Commercial  Sale of the  Products  in the
        Territory and shall thereafter be extended for consecutive five (5) year
        terms  unless  either  party  shall  give the  other  written  notice of
        termination  eighteen  (18)  months  prior to the end of the  applicable
        term.

8.2.    MUTUAL  TERMINATION.  The parties hereto may terminate this Agreement by
        mutual written consent.  Such termination  shall be effective sixty (60)
        days after such a  determination  or upon such other date as the parties
        may mutually agree.

8.3.    TERMINATION RELATED TO REGISTRATION.  The parties agree that gaining the
        necessary marketing  authorisation for the Products in France is pivotal
        to this Agreement. CollaGenex agrees to keep Licensee informed regarding
        the progress towards  necessary  regulatory  approvals but neither party
        shall be liable to the other in the event of delays directly relating to
        the actions of a regulatory  authority  and neither party shall have the
        right to terminate this  Agreement in relation to regulatory  timeframes
        except in accordance with Clause 8.2. hereof.  CollaGenex  undertake and
        agree that the dossier will be submitted to the appropriate  authorities
        in France either direct or via the European Mutual Recognition Procedure
        within three years of the effective date of this Agreement.

8.4.    TERMINATION  OF LICENSE  WITHOUT  CAUSE.  Licensee  may  terminate  this
        Agreement  and  revert  its  rights to  source,  use,  market,  sell and
        distribute  the Products in the  Territory  under this  Agreement at any
        time  upon               *                    days  written   notice  to
        CollaGenex.  Such reversion  shall be free of any continuing lien on, or
        grant of any right or  interest  in, the  Products  or the  Confidential
        Information.  In the  event of such  termination,  no  further  payments
        relating to the  milestones  specified  in Clauses  3.1.2.,  3.1.3.  and
        3.1.4. hereof relating to the Products shall accrue or be due under this
        Agreement   subsequent  to  the  effective  date  of  such  termination;
        provided,  however,  that Licensee shall pay to CollaGenex any royalties
        accrued on Net Sales prior to the effective  date of the  termination of
        the License under this Clause 8.4.

8.5.    TERMINATION BY FAILURE OF LICENSEE TO MARKET.  CollaGenex shall have the
        right to terminate this Agreement  should  Licensee fail to initiate and
        maintain for the term of this Agreement an active  marketing,  sales and
        distribution  programme  and  launch the  Product  in France  within    
                   *             days of written advice from CollaGenex that the
        marketing  authorisation  has been granted  and/or  written  advice from
        Licensee to CollaGenex in accordance with Clause 3.1.4.  hereof that the
        reimbursement

*    Confidential  information  has been omitted and filed  separately  with the
     Securities and Exchange Commission.

<PAGE>

        price has been  published  in the  "JOURNAL  OFFICIEL",  or Licensee has
        received official  notification that reimbursement for the Products will
        not be granted, whichever shall be the later.

8.6.    BREACH OF MATERIAL  OBLIGATIONS.  Failure by either party to comply with
        any of the  material  obligations  contained  in  this  Agreement  shall
        entitle  the  other  party  to  give  to the  party  in  default  notice
        specifying  the nature of the default and requiring such party to remedy
        such  default.  If such default is not remedied  within ninety (90) days
        (or, if the default cannot be remedied within such ninety day period and
        the party in default does not commence and diligently  continue  actions
        to remedy such default), the notifying party shall be entitled,  without
        prejudice to any of its other rights  conferred on it by this Agreement,
        to all remedies available to it by law or in equity, including,  without
        limitation, the termination of this Agreement.

8.7.    INSOLVENCY  OR  BANKRUPTCY.  Either  party may, in addition to any other
        remedies  available to it by law or in equity,  terminate this Agreement
        by written  notice to the other party in the event the other party shall
        have become insolvent or bankrupt,  or shall have made an assignment for
        the  benefit of its  creditors,  or there  shall have been  appointed  a
        trustee or receiver of the other party for all or a substantial  part of
        its  property,  or any case or proceeding  shall have been  commenced or
        other  action  taken by or  against  the other  party in  bankruptcy  or
        seeking   re-organisation,    liquidation,    dissolution,    winding-up
        arrangement,  composition  or  re-adjustment  of its debts or any relief
        under any bankruptcy,  insolvency,  re-organisation or other similar act
        or law of any  jurisdiction  now or hereafter in effect,  or there shall
        have been issued a warrant of  attachment,  execution  or  distraint  or
        similar  process  against any  substantial  part of the  property of the
        other party, and any such event shall have continued for sixty (60) days
        undismissed, unbonded and undischarged.

8.8.    RIGHT TO SELL STOCK ON HAND. Upon the termination of the License granted
        hereunder  for any  reason  other  than a failure  to remedy a  material
        breach of this  Agreement by Licensee,  Licensee shall have the right to
        complete all work in progress and for one year (or such longer period as
        the parties may reasonably and mutually  agree) to dispose of all of the
        Products then on hand by way of normal trade sales in the Territory, and
        royalties  shall be paid to CollaGenex with respect to such sales of the
        Products as though such License had not terminated or expired.

8.9.    EFFECT OF  TERMINATION.  In the event of termination of this  Agreement,
        except as otherwise  provided for herein; all rights to the Products and
        the  Confidential  Information  shall revert to CollaGenex  who shall be
        free to  develop,  license or  otherwise  exploit the  Products  and the
        Confidential  Information in the Territory as it deems  appropriate  and
        Licensee  shall (a) take  whatever  steps are  reasonably  necessary and
        appropriate  to revert to CollaGenex  all rights in the Products and the
        Confidential  Information  in the Territory and (b) return to CollaGenex
        all   information   relating  to  the  Products  and  the   Confidential
        Information  without retaining any copies or extracts  therefrom save as
        may be required  to  identify  the  obligations  of Licensee  under this
        Agreement  and  (c)  make  no  further  use of 
<PAGE>

        any of the  Confidential  Information  and (d) take  whatever  steps are
        reasonably  necessary and  appropriate  to transfer to CollaGenex or its
        designees  all  submissions  to  regulatory  authorities  (or  any  part
        thereof) in the Territory and (e) to immediately  cease to use the Trade
        Marks and in the event that  (contrary to the  intention of  CollaGenex)
        the  Licensee  has  acquired  any  rights in or over the trade  marks to
        transfer  the  same,  unencumbered,  to  CollaGenex  and  (f) to take no
        actions that would in any way have a negative effect on the sales of the
        Products in the Territory.

8.10.   SURVIVING RIGHTS.  Any termination under this Agreement shall be without
        prejudice to the rights and remedies of either party with respect to any
        provisions  of this  Agreement or arising out of breaches  prior to such
        termination  and  shall  not  relieve  either  of  the  parties  of  any
        obligation or liability  accrued  hereunder  prior to such  termination,
        including,  without limitation,  indemnity  obligations,  nor rescind or
        give rise to any right to rescind  anything done or any payments made or
        other   consideration   given  hereunder  prior  to  the  time  of  such
        termination  and shall not affect in any  manner  any  vested  rights of
        either party arising out of this Agreement prior to such termination.

9.      NON COMPETE CLAUSE

        Licensee shall not, during the term of this Agreement,  or any extension
        hereto,  or for a  period  of two (2)  years  after  the  expiration  or
        termination of this  Agreement,  or any extension  hereto;  manufacture,
        cause to have manufactured by a third party on its behalf,  market, sell
        or distribute any other products containing low dose doxycycline hyclate
        as a therapy for periodontal disease.

10.     BEST ENDEAVOURS AND MINIMUM PERFORMANCE

10.1.   Licensee  shall,  during the term of this  Agreement  and any  extension
        hereto,  use its best endeavours to develop the sales of the Products in
        the Territory.

10.2.   Within sixty (60) days of the signing of this Agreement,  Licensee shall
        provide to CollaGenex,  for approval by CollaGenex,  a forecast of sales
        of the Products in the  Territory,  such  forecast to attach to and form
        part of this  Agreement  as  Appendix  II,  for each of the three  years
        following  the  date of first  Commercial  Sale of the  Products  in the
        Territory  and this Schedule II will be updated by Licensee on an annual
        basis,  in accordance  with  Licensee's own business and budget planning
        process,  and such updates will include the  following  years so that at
        all times  CollaGenex  shall have a three year  forecast of sales of the
        Products in the  Territory.  Such  forecasts  shall  reasonably  reflect
        actual historical  Commercial Sales and Commercial Sales trends, if any.
        Prior to first  Commercial  Sale,  any  changes to  Schedule II shall be
        subject to the  approval of  CollaGenex.  Such  schedule,  in the agreed
        format of Appendix II, shall be furnished by Licensee to  CollaGenex  by
        no later than the 1st January of each calendar year for the term of this
        Agreement and any extension hereto.

10.3.   Upon the  acceptance by CollaGenex of Schedule II to this  Agreement (as
        described  in Clause  10.2.  hereof)  there shall be       *            
        during the first twelve (12)

*    Confidential  information  has been omitted and filed  separately  with the
     Securities and Exchange Commission.

<PAGE>

        month period from date of first  Commercial  Sale of the Products in the
        Territory.  In the second  twelve  (12) month  period from date of first
        Commercial   Sale  of  the  Products  in  the  Territory,   the  Minimum
        Performance  as defined  in this  Clause  10.3.  shall be       *       
              of the most recent  forecast for such period.  Commencing with the
        third twelve (12) month period from the date of first Commercial Sale of
        the  Products in the  Territory,  and for each twelve (12) month  period
        thereafter,  a sum equivalent to            *                of the most
        recent  forecast  for  such  period  shall  be  agreed  as  the  Minimum
        Performance  of  Licensee  for such  period,  hereinafter  "the  Minimum
        Performance".

        In the event of the actual  Net Sales of  Licensee,  as defined  herein,
        being less than the Minimum  Performance,  then Licensee  shall have the
        right to pay the royalty as defined in Clauses 3.1.5. and 3.1.6.  hereof
        based on the Minimum  Performance  as defined  herein in order to retain
        its rights under this Agreement, failing which CollaGenex shall have the
        right to terminate  this  Agreement in  accordance  with the  provisions
        hereof.

11.     MISCELLANEOUS PROVISIONS

11.1.   FURTHER ASSURANCES. The parties hereto agree to execute and deliver such
        other  documents,  instruments  and  agreements  and to take such  other
        actions  as may be  necessary,  proper or  appropriate  to carry out the
        terms of this Agreement.

11.2.   NOTICES. All notices required or permitted under this Agreement shall be
        in writing and delivered by any method providing proof of delivery.  Any
        notice  shall be deemed to have been given on date of  receipt.  Notices
        shall be delivered  to the parties at the  following  addresses  until a
        different address has been designated by notice to the other party:


If to CollaGenex:             CollaGenex Pharmaceuticals, Inc.,
                              301 South State Street,
                              Newtown,
                              Pennsylvania 18940,
                              United States of America.
                              Attention: Robert A. Ashley

                              CollaGenex International Limited,
                              The Old Stable Block,
                              7 Buttermarket,
                              Thame,
                              Oxfordshire OX9 3EW,
                              United Kingdom.
                              Attention: David A. Pettit

*    Confidential  information  has been omitted and filed  separately  with the
     Securities and Exchange Commission.

<PAGE>


with copies to:               Buchanan Ingersoll,
                              College Center,
                              500 College Road East,
                              Princeton,
                              New Jersey 08540,
                              United States of America.
                              Attention: David J. Sorin

If to Pharmascience:          Laboratoires Pharmascience S.A.,
                              73 Boulevard de la Mission Marchand,
                              F - 92402 Courbevoie Cedex,
                              France.
                              Attention: Gerald VIEUILLE

11.3.   COUNTERPARTS.   This   Agreement  may  be  executed  in  any  number  of
        counterparts,  each of which  shall be  deemed an  original,  but all of
        which taken together shall constitute one and the same instrument.

11.4.   RECORDATION.  If either  CollaGenex  or Licensee so requests in writing,
        the parties will promptly file and record with any applicable  office or
        authority,  a copy  or  memorandum  of  this  Agreement  and  any  other
        agreement   granting   Licensee  rights  in  the  Products  and  in  the
        Confidential Information.

11.5.   ENTIRE  AGREEMENT,  MODIFICATIONS.  This  Agreement  contains the entire
        agreement  between the parties hereto with respect to the subject matter
        hereof,  and no modification,  amendment,  change or supplement shall be
        effective unless in writing and signed by the authorised officers of the
        parties.   This   Agreement   supercedes   all   prior   understandings,
        negotiations  and agreements,  whether written or oral,  relating to the
        subject matter hereof.

11.6.   WAIVER.  The waiver by either party of a breach or default of any of the
        provisions  contained  herein  shall  be in  writing  and  shall  not be
        construed  as a waiver of any  succeeding  breach or  default  or of the
        provision itself.

11.7.   EXPENSES.  Except as may be otherwise  provided  for in this  Agreement,
        each of the  parties  hereto  shall bear such  party's  own  expenses in
        connection with this Agreement and the transaction contemplated hereby.

11.8.   GOVERNING  LAW.  This  Agreement  shall be  governed  and  construed  in
        accordance  with the laws of England and the Courts of England  shall be
        deemed the Courts of competent jurisdiction.

11.9.   CLAUSE  HEADINGS.  The clause  headings in this Agreement are solely for
        convenience  or  reference  and shall not affect the  interpretation  or
        construction of this Agreement or any of the provisions hereof.
<PAGE>

11.10.  SEVERABILITY.  If any  provision of this  Agreement  shall be held to be
        illegal or unenforceable,  such holding shall not affect the validity or
        enforceability of any of the other provisions of this Agreement.

11.11.  BINDING  EFFECT,  ASSIGNMENT.  This Agreement  shall be binding upon and
        insure to the benefit of each of  CollaGenex  and  Licensee  and each of
        their  respective  successors  and assigns.  Licensee may not assign its
        rights and  obligations  hereunder  without the prior written consent of
        CollaGenex.  CollaGenex may assign its rights and obligations  hereunder
        to a subsidiary or Affiliate of CollaGenex.

11.12.  INDEPENDENT  CONTRACTORS.  Nothing in this  Agreement  shall  create any
        association, partnership or joint venture between the parties hereto, it
        being understood and agreed that the parties are independent contractors
        and neither  party  shall have the power or  authority  to obligate  the
        other in any way.

11.13.  APPROPRIATE WORDS.  Except where the context otherwise  requires,  words
        denoting the singular include the plural and vice versa;  words denoting
        one gender include all genders; words denoting persons include firms and
        corporations and vice versa.

11.14.  REFERENCE TO STATUTES.  Reference to any statute, statutory provision or
        regulation includes a reference to the statute or statutory provision or
        regulation as from time to time amended, extended or re-enacted.

11.15.  TIME OF THE  ESSENCE.  Time of payment  should be of the  essence of the
        Agreement for any payment to be made by the Licensee,  its affiliates or
        assigns as the case may be  pursuant  to Clause 3 of this  Agreement  or
        otherwise.

12.     FORCE MAJEURE

12.1.   All  incidences  of  force  majeure  (being   circumstances  beyond  the
        reasonable  control  of  either  party and which  have,  or may have,  a
        material   affect  on  the  ability  to  perform  under  this  Agreement
        including,  but not  limited  to,  failure of power or other  utility or
        sanitary supplies; fire; flood; earthquake;  explosion;  riot; strike or
        lock-out of that party's own workforce;  civil  insurrection  or unrest;
        terrorist   activity;   war  and   regulations   of  any   Governmental,
        transnational  or local  authority)  shall for the  duration  and to the
        extent of the  effects  caused  thereby  release  the  parties  from the
        performance of their contractual obligations hereunder.

12.2.   The party who has  suffered the force  majeure  ("the  Affected  Party")
        shall  notify  the  other  party  without  delay of any  such  incidents
        occurring and the parties shall discuss the effects of such incidents on
        this Agreement and the measures to be taken.

12.3.   Each party shall  endeavour  and take all  reasonable  steps to avoid or
        restrict any force majeure.
<PAGE>

12.4.   In the event of an incident or incidents of force  majeure,  the parties
        shall  as  soon as  reasonably  possible  resume  performance  of  their
        obligations  hereunder  but in the  event  that the  force  majeure  has
        prevailed for a continuous period in excess of six (6) months, the party
        which is not the Affected  Party may terminate  this Agreement by notice
        in writing, citing force majeure, to the Affected Party.


IN WITNESS  WHEREOF,  THE PARTIES  HAVE CAUSED THIS  AGREEMENT TO BE SIGNED BY
THEIR DULY AUTHORISED REPRESENTATIVES THE DAY AND YEAR FIRST ABOVE WRITTEN


COLLAGENEX PHARMACEUTICALS, INC
by

/s/  BM Gallagher
------------------------------------------------
Brian M. Gallagher, President and Chief Executive Officer


Attest

/s/  Lisa Shultz
------------------------------------------------

COLLAGENEX INTERNATIONAL LIMITED
by

/s/  Robert A. Ashley
------------------------------------------------

Robert A. Ashley, Managing Director


LABORATOIRES PHARMASCIENCE S.A.
by

/s/  Jean-Paul Berthome
------------------------------------------------

Jean-Paul BERTHOME, President and
Chief Executive Officer