REPRESENTATIVE AND MANUFACTURING FACILITY AGREEMENT

      THIS IS A REPRESENTATIVE AND MANUFACTURING FACILITY AGREEMENT dated as of
January 1, 1998 between Closure Medical Corporation, of Raleigh, North Carolina
("Closure"), and Innocoll GmbH, of Saal-Donau, Germany ("Innocoll").

                                   Background

      Closure develops, commercializes and manufactures medical tissue cohesive
products based on its proprietary cyanoacrylate technology. Closure is seeking
to market its current and future products in Europe. Innocoll is a collagen/drug
delivery manufacturing entity, and has agreed to act as Closure's representative
in Europe with respect to such products.

                                      Terms

      In consideration of the mutual premises herein contained and intending to
be legally bound hereby, the parties agree as follows:

      1. Engagement as Representative. Closure hereby retains Innocoll, and
Innocoll hereby agrees to act, as Closure's representative in Europe to provide
the services set forth in Exhibit A hereto.

      2. Manufacturing Facility. Innocoll will provide to Closure, on an as
needed basis, up to 20,000 square feet of space at its facility in Saal-Donau,
Germany, for use as an alternative manufacturing facility, including quality
control support services, for Closure's products.

      3. Compensation.

            3.1 Representative Payments. Closure will pay to Innocoll $120,000
per year for the services provided pursuant to Section 1, payable quarterly.

            3.2 Facility Payments. Closure will pay to Innocoll $60,000 per year
for the space provided pursuant to Section 2, payable quarterly.

      4. Confidential Information. Innocoll recognizes and acknowledges that by
reason of its engagement by and service to Closure, it has had and will continue
to have access to financial, proprietary and other confidential information of
Closure and its affiliates, including, without limitation, information and
knowledge pertaining to products and services offered, research ideas, methods
and results, innovations, designs, ideas, plans, trade secrets, proprietary
information, distribution and sales methods and systems, sales and profit
figures, customer and client lists, and relationships between Closure and its
affiliates, distributors, customers, clients, suppliers and other who have
business dealings with Closure and its affiliates ("Confidential Information").
Innocoll
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acknowledges that such Confidential Information is a valuable and unique asset
and covenants that it will not, either during or after the term of this
Agreement, disclose any such Confidential Information to any person for any
reason whatsoever without the prior written authorization of the Board, unless
such information is in the public domain through no fault of Innocoll or except
as may be required by law with prior notice to Closure.

      5. Notices. All notices and other communications hereunder or in
connection herewith shall be in writing and shall be deemed to have been given
when delivered by hand or reputable express delivery service, mailed by
certified or registered mail, return receipt requested, or sent by fax to the
party as follows (provided that notice of change of address shall be deemed
given only when received):

      If to the Company, to:  J. Blount Swain, Chief Financial Officer
                              Closure Medical Corporation
                              5265 Capital Boulevard
                              Raleigh, North Carolina  27604
                              Telefax:  919-876-7874

      If to Innocoll, to:     Mr. Horst Bosczcyk, Geschaftsfuhrer
                              INNOCOLL GmbH
                              Postfach 45 / Donaustrasse 24
                              D-93342 SAAL / Donau / Germany
                              Telefax:  011-49-9441-68 60 30

or to such other names or addresses as Closure or Innocoll, as the case may be,
shall designate by notice to the other party in the manner specified in this
Section.

      6. Term; Termination. The term of this Agreement shall commence on the
date hereof and end on the fifth anniversary thereof.

      7. Miscellaneous. This Agreement (i) constitutes the entire agreement, and
supersedes any prior agreements relating to the subject matter hereof; (ii) may
be modified only in a writing duly executed by the parties hereto and Innocoll
and Closure acknowledge that the effect of this provision is that no oral
modifications of any nature whatsoever to this Agreement shall be permitted; and
(iii) shall be binding upon and inure to the benefit of and be enforceable by
the respective heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto, except that the duties and
responsibilities of Innocoll as set forth in Section 1 of this Agreement are of
a personal nature and shall not be assignable or delegable in whole or in part
unless mutually agreed by both parties hereto.
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      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

                                       CLOSURE MEDICAL CORPORATION


                                       BY: /s/ J. Blount Swain
                                           -------------------------------------


                                       INNOCOLL GmbH


                                       BY: /s/ Horst Bosczcyk
                                           -------------------------------------
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                                                                       EXHIBIT A

1.    Act as Closure's representative to obtain CE Mark (and other regulatory
      approvals and clearances) which may be required to market the Company's
      current and future products (not current) in the European Union.

2.    Act as an authorized representative under the Medical Devices Directive
      (93/42/EEC) to represent Closure for the purpose of responding to any
      inquiry by a Competent Authority.

3.    Maintain technical documentation for Closure products to be supplied or
      made available to the Notified Body and kept available for the Competent
      Authorities, as required by MDD 93/42/EEC.

4.    Notify Closure of all complaints and the Competent Authority of all
      incidents that involve Closure products which might lead to or might have
      led to the death of a patient or user or to a serious deterioration in
      their state of health, as described in the vigilance requirements of MDD
      93/42/EEC.
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