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                                  EXHIBIT 10.35

                              EMPLOYMENT AGREEMENT

[QLT INC. LOGO]

      This Employment Agreement made effective as of September 26, 2005 (the
"EFFECTIVE DATE").

BETWEEN:

      QLT INC., having an address of 887 Great Northern Way, Vancouver, British
      Columbia, V5T 4T5, Canada.

      ("QLT" or the "COMPANY")

AND:

      ROBERT L. BUTCHOFSKY, having an address of [Redacted], British Columbia,
      [Redacted], Canada.

      ("MR. BUTCHOFSKY")

WHEREAS:

A. Mr. Butchofsky has been employed by QLT since 1998 and currently serves as
   Senior Vice President, Marketing and Sales Planning of QLT.

B. QLT has offered to Mr. Butchofsky, and Mr. Butchofsky has accepted, a
   promotion to Acting Chief Executive Officer.

C. QLT and Mr. Butchofsky wish replace the prior employment agreement dated
   August 25, 1998, as amended, entered to enter into between them with this
   Agreement to set out the new terms and conditions of Mr. Butchofsky's
   employment with QLT in the position as Acting Chief Executive Officer.

NOW THEREFORE in consideration of the payment of $10 by QLT to Mr. Butchofsky
and in further consideration of the compensation to be paid to Mr. Butchofsky
under this Agreement, the promises made by each party to the other as set out in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge and agree, QLT and Mr. Butchofsky
agree as follows:

1. POSITION AND DUTIES

1.1 POSITION - Effective immediately, Mr. Butchofsky will be employed by QLT in
    the position of Acting Chief Executive Officer and Mr. Butchofsky agrees to
    be employed by QLT in that position, subject to the terms and conditions of
    this Agreement.

1.2 DUTIES, REPORTING AND EFFORTS - In the performance of his duties as Acting
    Chief Executive Officer, Mr. Butchofsky shall:

    (a) OVERALL RESPONSIBILITIES - Have the responsibilities commensurate with
        the position of Acting Chief Executive Officer and with the goal of
        achieving QLT's overall long-term strategic objectives, increasing
        shareholder value and maintaining the integrity of QLT's internal
        controls and reporting systems.

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    (b) REPORT - Report, as and when required, to the Board of Directors of QLT
        (the "BOARD").

    (c) BEST EFFORTS - Use his best efforts, industry and knowledge to improve
        and increase QLT's business, to comply with all of QLT's rules,
        regulations, policies (including QLT's Code of Ethics and Code of
        Exemplary Conduct) and procedures, as established from time to time and
        to ensure that QLT is at all times in compliance with applicable
        provincial, state, federal and other governing statutes, policies and
        regulations.

    (d) WORKING DAY - Devote the whole of his working day attention and energies
        to the business and affairs of QLT.

2. COMPENSATION

2.1 ANNUAL COMPENSATION - In return for his services under this Agreement,
    effective immediately, QLT agrees to pay or otherwise provide the following
    total annual compensation to Mr. Butchofsky:

    (a) BASE SALARY - A base salary in the amount of Cdn.$520,000 in 24 equal
        installments payable semi-monthly in arrears, subject to periodic annual
        reviews at the discretion of QLT.

    (b) BENEFIT PLANS - Coverage for Mr. Butchofsky and his eligible dependents
        under any employee benefit plans provided by/through QLT to its
        employees, subject to:

        I.   Each plan's terms for eligibility,

        II.  Mr. Butchofsky taking the necessary steps to ensure effective
             enrollment or registration under each plan, and

        III. Customary deductions of employee contributions for the premiums of
             each plan.

        As at the date of this Agreement, the employee benefit plans provided
        by/through QLT to its employees include life insurance, accidental death
        and dismemberment insurance, dependent life insurance, vision-care
        insurance, health insurance, dental insurance and short and long term
        disability insurance. QLT and Mr. Butchofsky agree that employee benefit
        plans provided by/through QLT to its employees may change from time to
        time.

    (c) EXPENSE REIMBURSEMENT - Reimbursement, in accordance with QLT's Policy
        and Procedures Manual (as amended from time to time), of all reasonable
        business related promotion, entertainment and/or travel expenses
        incurred by Mr. Butchofsky, subject to him maintaining proper accounts
        and providing documentation for these expenses upon request.

    (d) VACATION - That number of weeks of paid vacation per year as determined
        in accordance with QLT's standard vacation policy for executive level
        employees. As per QLT's Policy and Procedures Manual (as amended from
        time to time), unless agreed to in writing by QLT:

        I.  All vacation must be taken within one year of the year in which it
            is earned by Mr. Butchofsky, and

        II. Vacation entitlement shall not be cumulative from year to year.

    (e) RRSP CONTRIBUTIONS - Provided the conditions set out below have been
        satisfied, in January or February of the year following the year in
        which the income is earned by Mr. Butchofsky (the "INCOME YEAR"), QLT
        shall make a contribution of up to 7% of Mr. Butchofsky's annual base
        salary for the Income Year to Mr. Butchofsky's Registered Retired
        Savings Plan ("RRSP"). The contribution to Mr. Butchofsky's RRSP as set
        out above is subject the following conditions:

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        I.  The maximum contribution to be made by QLT to Mr. Butchofsky's RRSP
            is 50% of the annual limit for Registered Retirement Savings Plans
            as established by Canada Customs and Revenue Agency for the Income
            Year,

        II. Mr. Butchofsky must have contributed an equal amount into his RRSP,
            and

        III. Mr. Butchofsky is still actively employed by QLT when the matching
             contribution would otherwise be made.

    (f) CASH INCENTIVE COMPENSATION PLAN - Participation in the Cash Incentive
        Compensation Plan offered by QLT to its senior executives in accordance
        with the terms of such Plan, as amended from time to time by the Board.
        Under the Cash Incentive Compensation Plan, Mr. Butchofsky will be
        eligible to receive each year as a lump sum payment a target Cash
        Incentive Compensation Amount equal to 40% of his base salary in respect
        of that part of 2005 worked prior to September 26, 2005 and 50% of his
        base salary in respect of periods worked on or after September 26, 2005.
        The amount of that payment each year will be determined at the sole
        discretion of the Board and will be based on the performance of QLT
        relative to pre-set corporate objectives and milestones for the
        immediately preceding fiscal year.

    (g) SPECIAL STOCK OPTION GRANT - The Board has approved, and QLT will grant
        to Mr. Butchofsky, options to purchase 250,000 common shares of QLT at a
        price equal to the closing price of QLT's common shares on the Toronto
        Stock Exchange on September 23, 2005. Those options will vest (a) as to
        options to purchase 75,000 common shares of QLT, on the earlier of (i)
        March 25, 2006, the date that Mr. Butchofsky's employment is terminated
        by QLT without cause, or (iii) the date that Mr. Butchofsky resigns for
        Good Reason (as defined in paragraph 5.2), and (b) as to the remaining
        options to purchase 175,000 common shares of QLT, will vest monthly in
        equal numbers over three years from the grant date. The options will be
        subject to the terms and conditions set out in QLT's current Stock
        Option Incentive Plan and have a five year term from the date of grant.

    (h) STOCK OPTION PLAN - Participation in any stock option plan offered by
        QLT to its employees, in accordance with the terms of the plan in effect
        at the time of the stock option offer(s).

2.2 ADDITIONAL COMPENSATION - In addition to any cash incentive payment made
    under paragraph 2.1(f), as additional consideration for the obligations
    assumed by Mr. Butchofsky under this Agreement, QLT will pay to Mr.
    Butchofsky a one-time bonus of Cdn.$100,000 (less statutory deductions)
    promptly after the Effective Date. In addition, QLT will provide to Mr.
    Butchofsky during 2005 temporary accommodation assistance for a maximum of
    3-months temporary accommodation in such a place and at such rates as
    designated by QLT.

3. RESIGNATION

3.1 RESIGNATION - Mr. Butchofsky may resign from his employment with QLT by
    giving QLT 60 days prior written notice (the "RESIGNATION NOTICE") of the
    effective date of his resignation. Unless Mr. Butchofsky is resigning for
    Good Reason (as defined in paragraph 5.2), then on receiving a Resignation
    Notice, QLT may elect to provide the following payments in lieu of notice to
    Mr. Butchofsky and require him to leave the premises forthwith:

    (a) BASE SALARY - Base salary owing to Mr. Butchofsky for the 60-day notice
        period.

    (b) BENEFITS - Except as set out below in this subparagraph 3.1(b), for the
        60-day notice period, all employee benefit plan coverage enjoyed by Mr.
        Butchofsky and his eligible dependents prior to the date of his
        Resignation Notice. Mr. Butchofsky acknowledges and agrees that any
        pension and short and long term disability plans provided through QLT
        will not be continued beyond the last day that

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    Mr. Butchofsky works at QLT's premises (the "LAST ACTIVE DAY").

    (c) EXPENSE REIMBURSEMENT - Reimbursement (in accordance with QLT's Policy
        and Procedures Manual, as amended from time to time) of all reasonable
        business related promotion, entertainment and/or travel expenses
        incurred by Mr. Butchofsky prior to his Last Active Day, subject to the
        expense reimbursement provisions set out in subparagraph 2.1(c).

    (d) VACATION PAY - Payment in respect of accrued but unpaid vacation pay
        owing to Mr. Butchofsky as at the expiry of the 60-day notice period.

    (e) PRORATED RRSP CONTRIBUTION - A prorated contribution to Mr. Butchofsky's
        RRSP, the pro-ration to be with respect to the portion of the current
        calendar year worked by Mr. Butchofsky, up to and including the 60-day
        notice period, and the contribution to be subject to the conditions set
        out in subparagraph 2.1(e), except condition III.

3.2 OTHERS - In the event of resignation of Mr. Butchofsky as set out in
    paragraph 3.1, the parties agree:

    (a) NO BONUS - Mr. Butchofsky will have no entitlement to participate in
        QLT's Cash Incentive Compensation Plan for the year in which he resigns
        his employment with QLT; and

    (b) STOCK OPTION PLAN - Mr. Butchofsky's participation in any stock option
        plan offered by QLT to its employees shall be in accordance with the
        terms of the plan in effect at the time of the stock option offer(s) to
        Mr. Butchofsky.

4. RETIREMENT

4.1 RETIREMENT - Effective the date of retirement (as defined in QLT's Policy
    and Procedures Manual, as amended from time to time) of Mr. Butchofsky from
    active employment with QLT, the parties agree that:

    (a) THIS AGREEMENT - Subject to the provisions of paragraph 10.6, both
        parties' rights and obligations under this Agreement will terminate
        without further notice or action by either party.

    (b) STOCK OPTIONS - Mr. Butchofsky's participation in any stock option plan
        offered by QLT to its employees shall be in accordance with the terms of
        the plan in effect at the time of the stock option offer(s) to Mr.
        Butchofsky.

5. TERMINATION

5.1 TERMINATION FOR CAUSE - QLT reserves the right to terminate Mr. Butchofsky's
    employment at any time for any reason. Should Mr. Butchofsky be terminated
    for cause, he will not be entitled to any advance notice of termination or
    pay in lieu thereof.

5.2 TERMINATION OTHER THAN FOR CAUSE OR RESIGNATION FOR GOOD REASON - QLT
    reserves the right to terminate Mr. Butchofsky's employment at any time
    without reason. However, if (a) QLT terminates Mr. Butchofsky's employment
    for any reason other than for cause, or (b) Mr. Butchofsky resigns from QLT
    as a result of a person other than Mr. Butchofsky being appointed as Chief
    Executive Officer of QLT ("GOOD REASON"), then, except in the case of Mr.
    Butchofsky becoming completely disabled (which is provided for in paragraph
    5.6) and subject to the provisions set forth below, Mr. Butchofsky shall be
    entitled to receive notice, pay and/or benefits (or any combination of
    notice, pay and/or benefits) as more particularly set out in paragraph 5.3.

5.3 SEVERANCE NOTICE AND PAY - In the event QLT terminates Mr. Butchofsky's
    employment as set out in

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    paragraph 5.2, Mr. Butchofsky shall be entitled to:

    (a) NOTICE - Advance written notice of termination ("SEVERANCE NOTICE"), or
        pay in lieu thereof ("SEVERANCE PAY"), or any combination of Severance
        Notice and Severance Pay, as more particularly set out below:

        I.  A minimum of eighteen months Severance Notice, or Severance Pay in
            lieu thereof, and

        II. One additional month's Severance Notice, or Severance Pay in lieu
            thereof, for each complete additional year of continuous employment
            with QLT commencing on or after September 26, 2006,

        up to a maximum total of 24 months' Severance Notice, or Severance Pay
        in lieu of Severance Notice. Mr. Butchofsky acknowledges and agrees that
        Severance Pay is in respect of base salary only and will be made on a
        bi-weekly or monthly basis, at QLT's discretion.

    (b) BENEFITS - Except as set out below, for 30 days after Mr. Butchofsky's
        Last Active Day, all employee benefit plan coverage enjoyed by Mr.
        Butchofsky and his dependents prior to the date of termination.
        Thereafter, and in lieu of employee benefit plan coverage, Mr.
        Butchofsky shall receive compensation ("BENEFITS COMPENSATION") in the
        amount of 10% of his base salary for the balance of his Severance Notice
        period. Mr. Butchofsky acknowledges and agrees that any pension and
        short and long term disability plans provided through QLT will not be
        continued beyond Mr. Butchofsky's Last Active Day.

    (c) OUT PLACEMENT COUNSELING - QLT will pay to an out placement counseling
        service (to be agreed to by Mr. Butchofsky and QLT, each acting
        reasonably) a maximum of Cdn$5,000 for assistance rendered to Mr.
        Butchofsky in seeking alternative employment.

    (d) OTHER COMPENSATION - QLT will provide the following additional
        compensation:

        I.  QLT will reimburse (in accordance with QLT's Policy and Procedures
            Manual, as amended from time to time) Mr. Butchofsky for all
            reasonable business related promotion, entertainment and/or travel
            expenses incurred by Mr. Butchofsky on or prior to his Last Active
            Day, subject to the expense reimbursement provisions set out in
            subparagraph 2.1(c).

        II. QLT will make a payment to Mr. Butchofsky in respect of his accrued
            but unpaid vacation pay to the date of termination of his employment
            with QLT.

        III. QLT will make a prorated contribution to Mr. Butchofsky's RRSP, the
            pro-ration to be with respect to the portion of the current calendar
            year worked by Mr. Butchofsky and the contribution to be subject to
            the conditions set out in subparagraph 2.1(e), except condition III.

        IV. QLT will make a prorated payment to Mr. Butchofsky in respect of his
            entitlement to participate in QLT's Cash Incentive Compensation
            Plan, the pro-ration to be with respect to the portion of the
            current calendar year worked by Mr. Butchofsky and the entitlement
            to be at the target level Mr. Butchofsky would have otherwise been
            eligible to receive in the current calendar year if all corporate,
            and, if applicable, individual goals were met but not exceeded
            (which target level is currently 50% of his base salary).

        V.  Mr. Butchofsky's participation in any stock option plan offered by
            QLT to its employees shall be in accordance with the terms of the
            plan in effect at the time of the stock option offer(s) to Mr.
            Butchofsky.

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5.4 ACKNOWLEDGEMENT AND RELEASE - Mr. Butchofsky acknowledges and agrees that in
    the event QLT terminates Mr. Butchofsky's employment as set out in paragraph
    5.2, in providing:

    (a) The Severance Notice or Severance Pay, or any combination thereof;

    (b) The Benefits Compensation;

    (c) Out placement counseling service as more particularly set out in
        subparagraph 5.3(c); and

    (d) The other compensation set out in subparagraph 5.3(d);

    QLT shall have no further obligations, statutory or otherwise, to Mr.
    Butchofsky in respect of this Agreement and Mr. Butchofsky's employment
    under this Agreement.

5.5 DUTY TO MITIGATE

    (a) DUTY TO MITIGATE - Mr. Butchofsky acknowledges and agrees that if his
        employment is terminated without cause or he resigns for Good Reason as
        set out in paragraph 5.2, his entitlement to Severance Pay, Benefits
        Compensation and other compensation as set out in paragraph 5.3 is
        subject to his duty to mitigate such payments by looking for and
        accepting suitable alternative employment or contract(s) for services.
        If Mr. Butchofsky obtains new employment or contract(s) for services of
        four weeks or longer, Mr. Butchofsky agrees that he will notify QLT of
        this fact in writing (the "NEW EMPLOYMENT NOTICE") within five working
        days of such an occurrence and in this event the following provisions
        apply:

        I. Mr. Butchofsky acknowledges and agrees that his entitlement to
        Severance Pay and Benefits Compensation will cease as of the date on
        which his new employment or contract for services commences.

        II. Within 10 working days of receipt of the New Employment Notice from
        Mr. Butchofsky, QLT agrees that it will pay Mr. Butchofsky a lump sum
        amount equivalent to 50% of the Severance Pay and Benefits Compensation
        as set out in paragraph 5.3 otherwise owing to Mr. Butchofsky for the
        balance of the Severance Notice period.

    (b) WAIVER OF DUTY TO MITIGATE ON DELIVERY OF RELEASE - In the event that
        either on or before the date of termination of Mr. Butchofsky's
        employment with QLT or within 30 days after termination of his
        employment Mr. Butchofsky executes and delivers to QLT a release in the
        form set out in Appendix "A" to this Agreement, the provisions of
        paragraph 5.5(a) shall be deemed to not apply and Mr. Butchofsky shall
        have no duty to mitigate nor any reduction in the Severance Pay or
        Benefits Compensation in the event that he obtains alternative
        employment or contract(s) for service.

5.6 TERMINATION DUE TO INABILITY TO ACT

    (a) TERMINATION - QLT may immediately terminate this Agreement by giving
        written notice to Mr. Butchofsky if he becomes completely disabled
        (defined below) to the extent that he cannot perform his duties under
        this Agreement either:

        I.  For a period exceeding six consecutive months, or

        II. For a period of 180 days (not necessarily consecutive) occurring
            during any period of 365 consecutive days,

        and no other reasonable accommodation can be reached between QLT and Mr.
        Butchofsky. Notwithstanding the foregoing, QLT agrees that it will not
        terminate Mr. Butchofsky pursuant to this provision unless and until Mr.
        Butchofsky has been accepted by the insurer for ongoing long-term
        disability payments or, alternatively, has been ruled definitively
        ineligible for such payments.

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    (b) PAYMENTS - In the event of termination of Mr. Butchofsky's employment
        with QLT pursuant to the provisions of this paragraph 5.6, QLT agrees to
        pay to Mr. Butchofsky Severance Pay and Benefits Compensation as set out
        in paragraph 5.3 and if Mr. Butchofsky ceases to be completely disabled,
        then the provisions of paragraph 5.3(c) (out placement counseling) shall
        apply.

    (c) DEFINITION - The term "completely disabled" as used in this paragraph
        5.6 shall mean the inability of Mr. Butchofsky to perform the essential
        functions of his position under this Agreement by reason of any
        incapacity, physical or mental, which the Board, based upon medical
        advice or an opinion provided by a licensed physician acceptable to the
        Board, determines to keep Mr. Butchofsky from satisfactorily performing
        any and all essential functions of his position for QLT during the
        foreseeable future.

5.7 DEATH - Except as set out below, effective the date of death (the "DATE OF
    DEATH") of Mr. Butchofsky, this Agreement and both parties' rights and
    obligations under this Agreement shall terminate without further notice or
    action by either party. Within 30 days after the Date of Death (and the
    automatic concurrent termination of this Agreement), QLT shall pay the
    following amounts to Mr. Butchofsky's estate:

    (a) BASE SALARY - Base salary owing to Mr. Butchofsky up to his Date of
        Death.

    (b) PAYMENT IN LIEU OF BENEFITS - In lieu of employee benefit coverage for
        his eligible dependents after his Date of Death, a payment in the amount
        of 10% of his annual base salary in effect at his Date of Death.

    (c) EXPENSE REIMBURSEMENT - Reimbursement (in accordance with QLT's Policy
        and Procedures Manual, as amended from time to time) of all reasonable
        business related promotion, entertainment and/or travel expenses
        incurred by Mr. Butchofsky prior to his Date of Death, subject to the
        expense reimbursement provisions set out in subparagraph 2.1(c).

    (d) VACATION PAY - Payment in respect of accrued but unpaid vacation pay
        owing to Mr. Butchofsky as at his Date of Death.

    (e) RRSP CONTRIBUTION - A prorated contribution to Mr. Butchofsky's RRSP,
        the pro-ration to be with respect to the portion of the current calendar
        year worked by Mr. Butchofsky and the contribution to be subject to the
        conditions set out in subparagraph 2.1(e), except condition III.

    (f) BONUS - A prorated payment to Mr. Butchofsky in respect of his
        entitlement to participate in QLT's Cash Incentive Compensation Plan,
        the pro-ration to be with respect to the portion of the current calendar
        year worked by Mr. Butchofsky and the entitlement to be at the target
        level Mr. Butchofsky would have otherwise been eligible to receive in
        the current calendar year if all corporate, and, if applicable,
        individual goals were met but not exceeded (which target level is
        currently 50% of his base salary).

    After his Date of Death, Mr. Butchofsky's participation and/or entitlement
    under any stock option plan offered by QLT to its employees shall be in
    accordance with the terms of the plan in effect at the time of the stock
    option offer(s) to Mr. Butchofsky.

5.8 NO DUPLICATION - In the event that the Severance Pay provisions of this
    Agreement and the payment provisions of any other agreement that have been
    or may be entered into between QLT and Mr. Butchofsky with respect to a
    change of control of QLT are both applicable, Mr. Butchofsky agrees that he
    will give written notice to QLT with respect to which agreement he wishes to
    be paid out under and that he is not entitled to severance pay under both
    agreements.

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6 CONFLICT OF INTEREST

6.1 AVOID CONFLICT OF INTEREST - Except as set out below, during the term of his
    employment with QLT, Mr. Butchofsky agrees to conduct himself at all times
    so as to avoid any real or apparent conflict of interest with the
    activities, policies, operations and interests of QLT. To avoid improper
    appearances, Mr. Butchofsky agrees that he will not accept any financial
    compensation of any kind, nor any special discount or loan from persons,
    corporations or organizations having dealings or potential dealings with
    QLT, either as a customer or a supplier or a co-venturer. QLT and Mr.
    Butchofsky acknowledge and agree that from time to time the Board may
    consent in writing to activities by Mr. Butchofsky which might otherwise
    appear to be a real or apparent conflict of interest.

6.2 NO FINANCIAL ADVANTAGE - During the term of his employment with QLT, Mr.
    Butchofsky agrees that neither he nor any members of his immediate family
    will take financial advantage of or benefit financially from information
    that is obtained in the course of his employment related duties and
    responsibilities unless the information is generally available to the
    public.

6.3 COMPLY WITH POLICIES - During the term of his employment with QLT, Mr.
    Butchofsky agrees to comply with all written policies issued by QLT dealing
    with conflicts of interest.

6.4 BREACH EQUALS CAUSE - Mr. Butchofsky acknowledges and agrees that breach by
    him of the provisions of this Section 6 shall be cause for immediate
    termination by QLT of his employment with QLT.

7. CONFIDENTIALITY

7.1 INFORMATION HELD IN TRUST - Mr. Butchofsky acknowledges and agrees that all
    business and trade secrets, confidential information and knowledge which Mr.
    Butchofsky acquires during his employment with QLT relating to the business
    and affairs of QLT, its affiliates or subsidiaries or to technology,
    systems, programs, ideas, products or services which have been or are being
    developed or utilized by QLT, its affiliates or subsidiaries or in which
    QLT, its affiliates or subsidiaries are or may become interested
    (collectively, "CONFIDENTIAL INFORMATION"), shall for all purposes and at
    all times, both during the term of Mr. Butchofsky's employment with QLT and
    at all times thereafter, be held by Mr. Butchofsky in trust for the
    exclusive benefit of QLT.

7.2 NON DISCLOSURE - Mr. Butchofsky acknowledges and agrees that both during the
    term of his employment with QLT and at all times thereafter, without the
    express or implied consent of QLT, Mr. Butchofsky will not:

    (a) DISCLOSE - Disclose to any company, firm or person, other than QLT and
        its directors and officers, any of the private affairs of QLT or any
        Confidential Information; or

    (b) USE - Use any Confidential Information that he may acquire for his own
        purposes or for any purposes, other than those of QLT.

7.3 INTELLECTUAL PROPERTY RIGHTS

    (a) DISCLOSE INVENTIONS - Mr. Butchofsky agrees to promptly disclose to QLT
        any and all ideas, developments, designs, articles, inventions,
        improvements, discoveries, machines, appliances, processes, methods,
        products or the like (collectively, "INVENTIONS") that Mr. Butchofsky
        may invent, conceive, create, design, develop, prepare, author, produce
        or reduce to practice, either solely or jointly with others, in the
        course of his employment with QLT.

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    (b) INVENTIONS ARE QLT PROPERTY - All Inventions and all other work of Mr.
        Butchofsky in the course of his employment with QLT shall at all times
        and for all purposes be the property of QLT for QLT to use, alter, vary,
        adapt and exploit as it shall see fit, and shall be acquired or held by
        Mr. Butchofsky in a fiduciary capacity solely for the benefit of QLT.

    (c) ADDITIONAL REQUIREMENTS - Mr. Butchofsky agrees to:

        I.  Treat all information with respect to Inventions as Confidential
            Information.

        II. Keep complete and accurate records of Inventions, which records
            shall be the property of QLT and copies of which records shall be
            maintained at the premises of QLT.

        III. Execute all assignments and other documents required to assign and
            transfer to QLT (or such other persons as QLT may direct) all right,
            title and interest in and to the Inventions and all other work of
            Mr. Butchofsky in the course of his employment with QLT, and all
            writings, drawings, diagrams, photographs, pictures, plans, manuals,
            software and other materials, goodwill and ideas relating thereto,
            including, but not limited to, all rights to acquire in the name of
            QLT or its nominee(s) patents, registration of copyrights, design
            patents and registrations, trade marks and other forms of protection
            that may be available.

        IV. Execute all documents and do all acts reasonably requested by QLT to
            give effect to this provision.

7.4 RECORDS - Mr. Butchofsky agrees that all records or copies of records
    concerning QLT's activities, business interests or investigations made or
    received by him during his employment with QLT are and shall remain the
    property of QLT. He further agrees to keep such records or copies in the
    custody of QLT and subject to its control, and to surrender the same at the
    termination of his employment or at any time during his employment at QLT's
    request.

7.5 NO USE OF FORMER EMPLOYER'S MATERIALS - Mr. Butchofsky certifies that he has
    not brought to QLT and will not use while performing his employment duties
    for QLT any materials or documents of any former employer which are not
    generally available to the public, except if the right to use the materials
    or documents has been duly licensed to QLT by the former employer.

8. POST-EMPLOYMENT RESTRICTIONS

8.1 NON-COMPETE - Mr. Butchofsky agrees that, by virtue of his senior position
    with QLT, he possesses strategic sensitive information concerning the
    business of QLT, its affiliates and subsidiaries. As a result, and in
    consideration of the payments to be made by QLT to Mr. Butchofsky under this
    Agreement, without the prior written consent of QLT, for a period of two
    years following termination of his employment with QLT for any reason (by
    resignation or otherwise), as measured from his Last Active Day, Mr.
    Butchofsky shall not:

    (a) PARTICIPATE IN A COMPETITIVE BUSINESS - Directly or indirectly, own,
        manage, operate, join, control or participate in the ownership,
        management, operation or control of, or be a director or an employee of,
        or a consultant to, any business, firm or corporation that, as a part of
        conducting its business, is in any way competitive with QLT or any of
        its affiliates or subsidiaries (including, without limitation, QLT USA,
        Inc.) with respect to:

        I.  The development and/or commercialization and/or marketing of
            pharmaceutical products that are directly competitive with QLT's
            then current commercial products, Visudyne or Eligard or any other
            products then being commercialized by or on behalf of QLT or its
            affiliates or subsidiaries which individually have worldwide annual
            net sales of U.S.$50 million or more in the calendar year preceding
            Mr. Butchofsky's Last Active Day,

        II. The development and/or commercialization and/or marketing of
            light-activated pharmaceutical

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            products for photodynamic therapy in the treatment of cancer,
            ophthalmic, dermatology, urology and auto-immune disease, or

        III. the development and/or commercialization and/or marketing of
             pharmaceutical products that are based on a polymer based drug
             delivery technology platform and are used in the treatment of
             substantially the same medical indications as products which have
             become a significant component of QLT's core business or the core
             business of any affiliate or subsidiary of QLT,

        anywhere in Canada, the United States or Europe.

    (b) SOLICIT ON BEHALF OF A COMPETITIVE BUSINESS - Directly or indirectly
        call upon or solicit any QLT employee or QLT customer or known
        prospective customer of QLT on behalf of any business, firm or
        corporation that, as part of conducting its business, is in any way
        competitive with QLT with respect to:

        I.  The development and/or commercialization and/or marketing of
            pharmaceutical products that are directly competitive with QLT's
            then current commercial products, Visudyne or Eligard or any other
            products then being commercialized by or on behalf of QLT or its
            affiliates or subsidiaries which individually have worldwide annual
            net sales of U.S.$50 million or more in the calendar year preceding
            Mr. Butchofsky's Last Active Day,

        II. The development and/or commercialization and/or marketing of
            light-activated pharmaceutical products for photodynamic therapy in
            the treatment of cancer, ophthalmic, urology, dermatology and
            auto-immune disease, or

        III. the development and/or commercialization and/or marketing of
            pharmaceutical products that are based on a polymer based drug
            delivery technology platform and are used in the treatment of
            substantially the same medical indications as products which have
            become a significant component of QLT's core business or the core
            business of any affiliate or subsidiary of QLT,

        anywhere in Canada, the United States or Europe.

    (c) SOLICIT EMPLOYEES - Directly or indirectly solicit any individual to
        leave the employment of QLT or any of its affiliates or subsidiaries for
        any reason or interfere in any other manner with the employment
        relationship existing between QLT, its affiliates or subsidiaries and
        its current or prospective employees.

    (d) SOLICIT CUSTOMERS - Directly or indirectly induce or attempt to induce
        any customer, supplier, distributor, licensee or other business relation
        of QLT or its affiliates or subsidiaries to cease doing business with
        them or in any way interfere with the existing business relationship
        between any such customer, supplier, distributor, licensee or other
        business relation and QLT or its affiliates or subsidiaries.

8.2 MINORITY SHARE INTERESTS ALLOWED - The parties agree that nothing contained
    in paragraph 8.1 is intended to prohibit Mr. Butchofsky from owning less
    than 5% of the issued and outstanding stock of any company whose stock or
    shares are traded publicly on a recognized exchange.

9. REMEDIES

9.1 IRREPARABLE DAMAGE - Mr. Butchofsky acknowledges and agrees that:

    (a) BREACH - Any breach of any provision of this Agreement could cause
        irreparable damage to QLT;

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        and

    (b) CONSEQUENCES OF BREACH - In the event of a breach of any provision of
        this Agreement by him, QLT shall have, in addition to any and all other
        remedies at law or in equity, the right to an injunction, specific
        performance or other equitable relief to prevent any violation by him of
        any of the provisions of this Agreement including, without limitation,
        the provisions of Sections 7 and 8.

9.2 INJUNCTION - In the event of any dispute under Sections 7 and/or 8, Mr.
    Butchofsky agrees that QLT shall be entitled, without showing actual
    damages, to a temporary or permanent injunction restraining his conduct,
    pending a determination of such dispute and that no bond or other security
    shall be required from QLT in connection therewith.

9.3 ADDITIONAL REMEDIES - Mr. Butchofsky acknowledges and agrees that the
    remedies of QLT specified in this Agreement are in addition to, and not in
    substitution for, any other rights and remedies of QLT at law or in equity
    and that all such rights and remedies are cumulative and not alternative or
    exclusive of any other rights or remedies and that QLT may have recourse to
    any one or more of its available rights and remedies as it shall see fit.

10. GENERAL MATTERS

10.1 TAX WITHHELD - The parties acknowledge and agree that all payments to be
    made by QLT to Mr. Butchofsky under this Agreement will be subject to QLT's
    withholding of applicable withholding taxes.

10.2 INDEPENDENT LEGAL ADVICE - Mr. Butchofsky acknowledges that he has obtained
    or had the opportunity to obtain independent legal advice with respect to
    this Agreement and all of its terms and conditions.

10.3 BINDING AGREEMENT - The parties agree that this Agreement shall enure to
    the benefit of and be binding upon each of them and their respective heirs,
    executors, successors and assigns.

10.4 GOVERNING LAW - The parties agree that this Agreement shall be governed by
    and interpreted in accordance with the laws of the Province of British
    Columbia and the laws of Canada applicable to this Agreement. All disputes
    arising under this Agreement will be referred to the Courts of the Province
    of British Columbia, which will have exclusive jurisdiction, unless there is
    mutual agreement to the contrary.

10.5 NOTICE - The parties agree that any notice or other communication required
    to be given under this Agreement shall be in writing and shall be delivered
    personally or by facsimile transmission to the addresses set forth on page 1
    of this Agreement to the attention of the following persons:

    (a) IF TO QLT - Attention: Chairman, Fax No. (604) 707-7001,

        WITH A COPY TO:

        QLT Inc.
        887 Great Northern Way
        Vancouver, British Columbia
        Attention:  Principal Legal Officer
        Fax No.:    (604) 873-0816

    (b) IF TO MR. BUTCHOFSKY - To the address for Mr. Butchofsky specified on
        page 1 of this Agreement;

    or to such other addresses and persons as may from time to time be notified
    in writing by the parties.

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    Any notice delivered personally shall be deemed to have been given and
    received at the time of delivery. Any notice delivered by facsimile
    transmission shall be deemed to have been given and received on the next
    business day following the date of transmission.

10.6 SURVIVAL OF TERMS

    (a) MR. BUTCHOFSKY'S OBLIGATIONS - Mr. Butchofsky acknowledges and agrees
        that his representations, warranties, covenants, agreements, obligations
        and liabilities under any and all of Sections 7, 8 and 10 of this
        Agreement shall survive any termination of this Agreement.

    (b) COMPANY'S OBLIGATIONS - QLT acknowledges and agrees that its
        representations, warranties, covenants, agreements, obligations and
        liabilities under any and all of Sections 3, 4, 5 and 10 of this
        Agreement shall survive any termination of this Agreement.

    (c) WITHOUT PREJUDICE - Any termination of this Agreement shall be without
        prejudice to any rights and obligations of the parties arising or
        existing up to the effective date of such expiration or termination, or
        any remedies of the parties with respect thereto.

10.7 WAIVER - The parties agree that any waiver of any breach or default under
    this Agreement shall only be effective if in writing signed by the party
    against whom the waiver is sought to be enforced, and no waiver shall be
    implied by indulgence, delay or other act, omission or conduct. Any waiver
    shall only apply to the specific matter waived and only in the specific
    instance in which it is waived.

10.8 ENTIRE AGREEMENT - The parties agree that the provisions contained in this
    Agreement, any Stock Option Agreements or agreements relating to a change of
    control of QLT entered into between QLT and Mr. Butchofsky constitute the
    entire agreement between QLT and Mr. Butchofsky with respect to the subject
    matters hereof and thereof, and supersede all previous communications,
    understandings and agreements (whether verbal or written) between QLT and
    Mr. Butchofsky regarding the subject matters hereof and thereof. QLT and Mr.
    Butchofsky hereby agree that the employment agreement previously entered
    into between them dated August 25, 1998, as amended, is terminated and
    replaced by this Agreement. To the extent that there is any conflict between
    the provisions of this Agreement and any Stock Option Agreements between QLT
    and Mr. Butchofsky, the following provisions shall apply:

    (a) CHANGE OF CONTROL - If the conflict is with respect to an event,
        entitlement or obligation in the case of a Change of Control of QLT (as
        defined in any agreement relating to a change of control of QLT entered
        into between QLT and Mr. Butchofsky), the provisions of that change of
        control agreement will govern (unless Mr. Butchofsky otherwise elects as
        contemplated in paragraph 5.8 of this Agreement).

    (b) STOCK OPTIONS - If the conflict is with respect to an entitlement or
        obligation with respect to stock options of QLT, the provisions of the
        Stock Option Agreements will govern (unless the parties otherwise
        mutually agree).

    (c) OTHER - In the event of any other conflict, the provisions of this
        Agreement will govern (unless the parties otherwise mutually agree).

10.9 SEVERABILITY OF PROVISIONS - If any provision of this Agreement as applied
    to either party or to any circumstance is adjudged by a court of competent
    jurisdiction to be void or unenforceable for any reason, the invalidity of
    that provision shall in no way affect (to the maximum extent permissible by
    law):

    (a) The application of that provision under circumstances different from
        those adjudicated by the court;

    (b) The application of any other provision of this Agreement; or

    (c) The enforceability or invalidity of this Agreement as a whole.

    If any provision of this Agreement becomes or is deemed invalid, illegal or
    unenforceable in any jurisdiction by reason of the scope, extent or duration
    of its coverage, then the provision shall be deemed amended to the

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     extent necessary to conform to applicable law so as to be valid and
     enforceable or, if the provision cannot be so amended without materially
     altering the intention of the parties, then such provision shall be
     stricken and the remainder of this Agreement will continue in full force
     and effect.

10.10 CAPTIONS - The parties agree that the captions appearing in this Agreement
     have been inserted for reference and as a matter of convenience and in no
     way define, limit or enlarge the scope or meaning of this Agreement or any
     provision.

10.11 AMENDMENTS - Any amendment to this Agreement shall only be effective if
     the amendment is in writing and is signed by QLT and Mr. Butchofsky.

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

QLT INC.

BY:    /s/ E. Duff Scott                              /s/ Robert. L. Butchofsky
     ---------------------                           --------------------------
     E. DUFF SCOTT                                   ROBERT L. BUTCHOFSKY
     Chairman of the Board

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