**EXHIBIT        4.2**

**AMENDING AGREEMENT NO.** **1**

THIS        AGREEMENT made the 6th day of January , 2005.

BETWEEN:

ONCOLYTICS BIOTECH INC.

(“Oncolytics”)

 

- and        -

 

GEORGE M.        GILL, M.D.

(“Gill”)

WHEREAS Oncolytics and Gill entered into a Services Agreement dated the 16th        day of October, 2001 (the “Services Agreement”);

AND WHEREAS the parties wish to amend the Services Agreement;

NOW THEREFORE the parties agree as follows:

Section 1 – Amendments

The Services Agreement is hereby amended by replacing        Schedule ”B” with the following:

“**RETAINER AND EXPENSES**

|   | (1) | For the period commencing January 1, 2005 and ending                    December 31, 2005, Oncolytics shall pay Gill an annual retainer of                    US$103,000, payable in equal monthly installments of US$8,583.33 on the last                    day of each month. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Oncolytics shall reimburse Gill for all reasonable out-of-pocket                    expenses including travel expenses, incurred by Gill in performing the                    Services. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**COMPENSATION FOR REDUCED SERVICES**

If the Services are reduced pursuant to Section 10(2), the compensation        payable by Oncolytics to Gill shall be based upon a daily fee of US$1,500, together with        reimbursement

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for reasonable out-of-pocket expenses, including travel expenses, incurred        by Gill in performing the Reduced Services. Any expenses to be incurred in excess of US$500        are to be approved in advance by Oncolytics.”

 

Section 2 - Effective Date

| (1) | This Amending Agreement shall be effective from and after                    January 1, 2005. |
|-----|----------------------------------------------------------------------------------------------------|

(2)          In all other respects the parties confirm that the Services Agreement, as        amended, shall remain in full force and effect.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day        and year first above written.

**ONCOLYTICS BIOTECH INC.**

         

Per:     /s/ Doug        Ball                                         

|   | Doug Ball               |   |
|--------|-------------------------|--------|
|   | Chief Financial Officer |

 

|                                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| /s/ Karyn C.                    Gill                                                                                                                                                                                                                                          | /s/ George M.                    Gill                                                                   |
| WITNESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                   | GEORGE M. GILL, M.D |

 

 

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