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                                                                    EXHIBIT 99.3

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is by and between Zila, Inc., a Delaware corporation
(the "Company"), and Douglas D. Burkett, Ph.D. (the "Executive") and was
originally entered to be effective as of July 24, 2002 (the "Effective Date")
and was subsequently amended effective as of October 21, 2003 (the "Amendment
Effective Date").

                                   BACKGROUND

         The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued employment and dedication of the Executive.

         The Board has further determined that it is desirable to provide the
Executive with compensation and benefits terms which adequately compensate the
Executive for the services he renders to the Company, and, to ensure that such
compensation and benefits are consistent with those of like executives of other
public companies.

                                    AGREEMENT

         Now, therefore, it is hereby agreed as follows:

         1.       EMPLOYMENT PERIOD. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on October 20, 2008 ( the
"Employment Period").

         2.       TERMS OF EMPLOYMENT.

                  2.1      Position and Duties.

                           2.1.1    Position. During the Employment Period, the
Executive shall be employed in executive capacities in the positions of
President and Chief Executive Officer of the Company at its headquarters in the
Phoenix, Arizona metropolitan area.

                           2.1.2    Duties.

                                    2.1.2.1  During the Employment Period, and
         excluding any periods of vacation and sick leave to which the Executive
         is entitled, the Executive will devote his full attention and time to
         the business and affairs of the Company as its President and Chief
         Executive Officer. The Executive will supervise the business and
         affairs of the Company and the performance by all of its other officers
         of their respective duties, subject to the control of the Board. The
         Executive will report to the Board. The

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         Executive will use his best efforts to perform faithfully and
         efficiently such duties and responsibilities.

                                    2.1.2.2  While employed hereunder, the
         Executive agrees to devote all of his business time, attention, skill
         and efforts to the faithful and efficient performance of his duties
         under this Agreement; provided, however, that the Executive may engage
         in the following activities so long as they are approved in advance by
         the Board and do not interfere in any material respect with the
         performance of Executive's duties and responsibilities hereunder: (i)
         serve on corporate, civic or charitable boards or committees and (ii)
         deliver lectures, fulfill speaking engagements or teach on a part-time
         basis at educational institutions.

                  2.2      Compensation.

                           2.2.1    Base Salary. The Executive shall receive an
annual base salary of Two Hundred Fifty Thousand Dollars ($250,000) from the
Effective Date through October 20, 2003. Commencing on the Amendment Effective
Date, the Executive shall receive an annual base salary of Three Hundred Ten
Thousand Dollars ($310,000). Thereafter, the Board or the Compensation Committee
of the Board (the "Committee") may review the Executive's salary and total cash
compensation within one hundred twenty (120) days of the end of each of the
Company's fiscal years during the Employment Period to determine what, if any,
increases shall be made thereto. The base salary payable to the Executive in any
given year is hereafter referred to as the "Annual Base Salary." Any increase in
the Annual Base Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement. The Annual Base Salary shall not be
reduced after any increase and the term "Annual Base Salary," as used in this
Agreement, shall refer to the Annual Base Salary as increased. The Annual Base
Salary shall in all instances be payable in twenty-six (26) equal bi-weekly
installments.

                           2.2.2    Bonus. The Company paid the Executive a
bonus of thirty-five thousand dollars ($35,000) on the Effective Date.

                           2.2.3    Annual Bonus and Option Plans. The Executive
shall also be eligible to participate in any applicable Company bonus plan or
program, stock option, restricted stock or other plan or program in effect
immediately prior to the Effective Date, or put into effect by the Board at any
time after the Effective Date or the Amendment Effective Date. The Company
issued the Executive options to purchase (i) 200,000 shares of its Common Stock
on the Effective Date, which options are exercisable at a price of $ .76 per
share; and (ii) 100,000 shares of its Common Stock on the first anniversary of
the Effective Date, which options are exercisable at a price of $3.18 per share.
The options issued under this Section 2.2.3 have a ten-year term from the date
of their issue, were incentive stock options to the extent allowable under the
Internal Revenue Code and non-qualified options as to the balance, and vest
one-third upon grant and the balance in two equal annual installments from their
dates of grant.

                           2.2.4    Incentive, Savings and Retirement Plans.
During the Employment Period, the Executive shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies and programs
applicable generally to other executives of the Company, as the same may be
amended from time to time, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities, savings
opportunities

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and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company to other
executives of the Company; provided, however, the dollar value awarded Executive
in the reasonable discretion of management need not be equal to that awarded to
all other executives. The Company shall also purchase for the Executive a
$500,000 term life insurance policy and a long-term disability insurance policy
with a benefit equal to one half of the Executive's Annual Base Salary at the
point of the disability.

                           2.2.5    Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company
(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other executives of the Company, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such plans, practices,
policies and programs provided generally at any time after the Effective Date to
other executives of the Company.

                           2.2.6    Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in the conduct of Company business.

                           2.2.7    Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation of four weeks annually and
otherwise be in accordance with the plans, policies, programs and practices of
the Company in all respects as in effect for the Executive during the one
hundred twenty (120) day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time after the
Effective Date with respect to other executives of the Company.

                           2.2.8    Automobile Allowance. The Company shall also
pay the Executive an automobile allowance of $950 per month, or as otherwise
increased by the Board or Committee.

                           2.2.9    Financial, Estate and Tax Planning. The
Company will pay the expenses relating to estate and tax planning and tax return
preparation for the Executive not to exceed $5,000 per year.

                           2.2.10   No Director Fees. In no event shall the
Executive be entitled to receive any additional compensation for serving as a
director, member and/or manager of the Company or any affiliate of the Company.

         3.       TERMINATION OF EMPLOYMENT.

                  3.1      Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that any Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the

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Executive written notice in accordance with Section 10.2, of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the thirtieth (30th) day after
receipt of such notice by the Executive (the "Disability Effective Date"),
provided that, within the thirty (30) days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, the term "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time basis for
one hundred eighty (180) consecutive business days as a result of incapacity due
to mental or physical illness certified by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative.

                  3.2      Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, the term "Cause" shall mean: (i) the willful and continued failure of
the Executive to perform substantially the Executive's duties with the Company
as set forth in Section 2.1.2, "Duties," (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board, accompanied
by a resolution adopted by the vote of two-thirds (2/3) of the entire Board,
excluding the Executive, at a meeting of the Board held for such purpose, which
resolution specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive's duties and
Executive has not cured any such failure to perform within ten (10) business
days of such demand; (ii) material violation of any of the Company's policies;
(iii) breach by the Executive of his obligations under this Agreement; or (iv)
if the Executive is charged with illegal conduct by a governmental body or
regulatory authority, or has engaged in gross misconduct that is materially
injurious to the Company as determined by a resolution adopted by the vote of
three-fourths (3/4) of the entire Board, excluding the Executive, at a meeting
of the Board held for such purpose, which resolution specifically identifies the
alleged illegal conduct or gross misconduct. For purposes of this provision, no
act or failure to act, on the part of the Executive, shall be considered
"willful" unless it is done, or omitted to be done, by the Executive in bad
faith. The vote of the Board on the resolutions contemplated in (i) and (iv) of
this Section 3.2 will not be taken until after written notice of not less than
five (5) business days to the Executive of the meeting and an opportunity for
Executive to be heard before the Board at such meeting.

                  3.3      Good Reason. The Executive may terminate his
employment for Good Reason at any time within ninety (90) days after the
Executive first has actual knowledge of the occurrence of such Good Reason. For
purposes of this Agreement, the term "Good Reason" shall mean:

                           3.3.1    the assignment to the Executive of any
duties that are not consistent with the duties set forth in Section 2.1.2,
"Duties," or any other action by the Company that results in a material
diminution in any of the Executive's positions as set forth in Section 2.1.1,
"Position," or in the Executive's authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;

                           3.3.2    any failure by the Company to comply with
any of the provisions of Section 2.2, "Compensation," other than an isolated,
insubstantial and inadvertent failure not

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occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

                           3.3.3    the Company's requiring the Executive,
without the Executive's consent and full agreement, to be based at any office
other than in the Phoenix, Arizona metropolitan area or a position other than as
provided in Section 2.1.1;

                           3.3.4    any purported termination by the Company of
the Executive's employment otherwise than as expressly permitted by this
Agreement;

                           3.3.5    any action taken by the Company or its Board
of Directors in connection with a "Change in Control," as defined in Section
4.5, "Change in Control," that results in the Executive being removed as the
Chairman of the Board of the Company; or

                           3.3.6    any failure by the Company to comply with
and satisfy Section 9.3.

                  3.4      Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 10.2
of this Agreement. For purposes of this Agreement, the term "Notice of
Termination" means a written notice that:

                           3.4.1    indicates the specific termination provision
in this Agreement relied upon;

                           3.4.2    to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated; and

                           3.4.3    if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date, which date shall be not more than thirty (30) days after the
giving of such notice. The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the rights
of the Executive or the Company under this Agreement.

                  3.5      Date of Termination. The term "Date of Termination"
means:

                           3.5.1    if the Executive's employment is terminated
by the Company for Cause, or by the Executive for Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be;

                           3.5.2    if the Executive's employment is terminated
by the Company other than for Cause or Disability, the date on which the Company
notifies the Executive of such termination; and

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                           3.5.3    if the Executive's employment is terminated
by reason of death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be.

                  3.6      Resignation as Director. If the Executive's
employment under this Agreement is terminated for any reason, the Executive
shall resign as a director of the Company and as a director, member and/or
manager of all affiliates of the Company of which Executive is a director,
member and/or manager. Such resignation will be effective (i) in the case of a
termination by the Executive pursuant to Section 1, "Employment Agreement," or
Section 3, "Termination of Employment," on the date the Executive delivers the
relevant Notice of Termination in accordance with such Sections; (ii) in the
case of a termination by the Company, on the date Executive receives the
relevant Notice of Termination; and (iii) in the case of a termination for any
other reason, no later than the relevant Termination Date.

         4.       OBLIGATIONS OF THE COMPANY UPON TERMINATION.

                  4.1      Termination for Good Reason, Other Than for Cause,
Death or Disability. If, during the Employment Period, the Company shall
terminate the Executive's employment other than for Cause, Death or Disability,
or the Executive shall terminate employment for Good Reason, the Company shall
pay to the Executive within thirty (30) days after the Date of Termination the
aggregate of the amounts set forth in Section 4.1.2 through Section 4.1.6 in a
lump sum in cash and shall pay the amounts due under Section 4.1.1 and Section
4.1.7 as provided in those Sections:

                           4.1.1    the amount of Annual Base Salary
compensation that would be payable to the Executive over a twenty-four (24)
month period, provided that the Company will pay such amount to the Executive
over the period that the compensation would have been due had the termination
not occurred;

                           4.1.2    any declared and accrued, but as of then
unpaid, bonus or stock options grant (whether or not vested) to which the
Execute would have received but for such termination. Additionally, any stock
options owned or granted shall be deemed immediately vested, not forfeitable,
and shall be the property of Executive, exercisable according to their terms for
the balance of the term of years of the options;

                           4.1.3    any accrued vacation pay;

                           4.1.4    any amounts payable pursuant to the
Company's Defined Benefit Pension Plan, 401(k) plan, including such amounts
which would have accrued (whether or not vested) if the Executive's employment
had continued after the Date of Termination for the period then remaining under
this Agreement, as it may have been renewed as provided for in Section 1,
"Employment Period";

                           4.1.5    any other amounts or benefits required to be
paid or provided or which the Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company (such other
amounts and benefits shall be referred to as the "Other Benefits");

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                           4.1.6    for the remaining term of this Agreement, as
it may have been renewed pursuant to Section 1, "Employment Period," or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 2.2.5, "Welfare Benefit Plans," of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other executives of the
Company and their families, provided, however, that if the Executive becomes
re-employed with another employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility, and for purposes
of determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, the Executive shall be considered to have remained employed for the
remaining term of this Agreement, as it may have been renewed pursuant to
Section 1, "Employment Period," and to have retired on the last day of such
period; and

                           4.1.7    the Company shall, at its sole expense as
incurred, provide the Executive with out-placement services, the scope and
provider of which shall be selected by the Executive in the Executive's sole
discretion, provided that the total cost of such services shall not exceed
$10,000.

                  4.2      Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for (i) payment of any death
benefit compensation under other contracts; (ii) payment of the amounts due
under the term life insurance policy described in Section 2.2.4, "Incentive
Savings and Retirement Plans"; (iii) full vesting and non-forfeiture of stock
options granted to Executive; and (iv) the timely payment or provision of Other
Benefits. Such amounts shall be paid to the Executive's estate or beneficiary,
as applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination. The term "Other Benefits" as utilized in this Section 4.2 shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company to the estates and beneficiaries of other
executives of the Company under such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other
executives and their beneficiaries at any time during the one hundred twenty
(120) day period immediately preceding the Effective Date or, if more favorable
to the Executive's estate and/or the Executive's beneficiaries, as in effect on
the date of the Executive's death with respect to other executives of the
Company and their beneficiaries.

                  4.3      Disability. If the Executive's employment is
terminated by reason of the Executive's Disability under Section 3.1, "Death or
Disability," during the Employment Period, this Agreement shall terminate
without further obligations to the Company, other than for the timely payment or
provision of (i) Base Salary through the Termination Date; (ii) accrued bonus
through the Termination Date; (iii) payment of pension, 401(k), and Other
Disability Benefits; (iv) full vesting and non-forfeiture of stock options; and
(v) the receipt of fully-paid Welfare Benefit Plans under Section 2.2.5,
"Welfare Benefit Plans," for the balance of the term of this

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Agreement. In addition, Executive shall be paid for the term of this Agreement
at regular pay periods that amount equal to the difference between his Annual
Base Salary and the disability insurance payment received by the disabled
Executive under the Company's disability insurance program. The term "Other
Benefits" as utilized in this Section 4.3 shall include, and the Executive shall
be entitled after the Disability Effective Date to receive, disability and other
benefits at least equal to the most favorable of those generally provided by the
Company to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other executives and their families at any time
during the one hundred twenty (120) day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other
executives of the Company and their families.

                  4.4      Termination by the Company for Cause; and Termination
by the Executive for Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Company other than the obligation
to pay to the Executive: (i) the Annual Base Salary through the Date of
Termination; (ii) the amount of any compensation previously deferred by the
Executive; and (iii) Other Benefits under Sections 4.2, "Death," and Section
4.3, "Disability," in each case to the extent therefore unpaid. If the Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason by the Executive, this Agreement shall terminate
without further obligations to the Company, other than for items (i), (ii) and
(iii) of this paragraph, accrued but unpaid vacation leave, and the timely
payment or provision of Other Benefits. In such case, all accrued obligations
shall be paid to the Executive in a lump sum in cash within thirty (30) days of
the Date of Termination.

                  4.5      Change in Control. If, during the term of this
Agreement and within two years after a "Change in Control," as defined below,
the Company shall terminate the Executive's employment other than for Cause,
Death or Disability or the Executive shall terminate employment for Good Reason,
the Company shall (i) pay to the Executive the amount of compensation that would
have been payable to the Executive over the period then remaining under this
Agreement and on the same schedule as such payments would have been due had the
termination not occurred, provided that the Company shall pay the Executive for
a minimum of twenty-four (24) months on this basis; and (ii) cause all stock
options issued to the Executive that have not vested as of the termination to be
immediately vested.

                           4.5.1    The term "Change in Control" shall mean an
event or the last of a series of related events by which:

                           4.5.2    the Company merges or consolidates with or
into another entity or completes any other corporate reorganization, if more
than fifty percent (50%) of the combined voting power of the continuing or
surviving entity's securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization; or

                           4.5.3    the Company sells, transfers or otherwise
disposes of all or substantially all of the consolidated assets of the Company
or its subsidiaries and the Company

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does not own stock in the purchaser or purchasers having more than 50% of the
voting power in elections for directors; or

                           4.5.4    the composition of the Board changes, as a
result of which fewer than one half of the incumbent directors are directors who
either:

                                    (i)      had been directors of the Company
                                             twenty-four (24) months prior to
                                             such change; or

                                    (ii)     were elected, or nominated for
                                             election, to the Board with the
                                             affirmative votes of at least a
                                             majority of the directors who had
                                             been directors of the Company
                                             twenty-four (24) months prior to
                                             such change and who were still in
                                             office at the time of the election
                                             or nomination.

A transaction shall not constitute a Change of Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the Persons who held
the Company's securities immediately before such transaction; or

                           4.5.5    any Person acquires direct or indirect
beneficial ownership of more than thirty-three percent (33%) of the voting power
of the Company, whether in a single transaction or a series of transactions.

                           4.5.6    As used in this Agreement, a "Person" means
any "person," as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended, together with all of that person's
"affiliates" and "associates," as those terms are defined in Rule 12b-2 of such
Act.

                  4.6      Life Insurance and Health Plan Coverage. If, during
the term of this Agreement, the Executive's employment terminates for any reason
other than for Cause, the Company shall provide the Executive coverage for a
continuation period beginning on the Effective Date and ending on the earlier of
(i) balance of the Employment Period plus six months, but not more than a total
of two (2) years; or (ii) the date of the Executive's death. During the
Continuation Period, the Executive (and, where applicable, the Executive's
dependents) shall be entitled to continue participation in the group term life
insurance plan and in the health care plan for employees maintained by the
Company as if the Employee were still an employee of the Company. The coverage
provided under this Section 4.6. shall run concurrently with and shall be offset
against any continuation coverage under Part 6 of Title I of the Employee
Retirement Income Security Act of 1974, as amended. Where applicable, the
Executive's compensation for purposes of such plans shall be deemed to be equal
to the Executive's compensation (as defined in such plans) in effect on the date
of the employment termination. To the extent that the Company finds it
undesirable to cover the Executive under the group life insurance and health
plans of the Company, the Company shall provide the Executive (at its own
expense) with the same level of coverage under individual policies.

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         5.       NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company and for which the Executive
may qualify, nor, subject to Section 4, "Obligations of the Company Upon
Termination," shall anything herein limit or otherwise affect such rights as the
Executive may have under any other contract or agreement with the Company.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement. Executive is
currently a party to, and in the future may be a party to other, employment
arrangements, agreements, and incentive plans, including but not limited to, a
death benefit plan, stock option agreements, and a change of control agreement.
This Agreement shall not supersede any of the terms or conditions of such other
agreements. To the extent of any inconsistency in these agreements, the
agreements shall be interpreted and applied in the way to confer upon the
Executive the greatest benefits. The agreements shall be read and applied
consistent with each other, but in the event of a conflict, the terms most
favorable to the Executive will be applied from the various provisions of the
agreements in the aggregate.

         6.       FULL SETTLEMENT; LEGAL FEES. The Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall be subject to any set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against the
Executive. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and except as
specifically provided in Section 4.1.6, such amounts shall not be reduced
whether or not the Executive obtains other employment. Provided that the
Executive is the prevailing party, the Company will reimburse the Executive to
the full extent permitted by law, all legal fees and expenses that the Executive
may reasonably incur as a result of any contest by the Company, the Executive or
others of the validity or enforceability of, or liability or entitlement under,
any provision of this Agreement or any guarantee of performance thereof (whether
such contest is between the Company and the Executive or between either of them
and any third party, and including as a result of any contest by the Executive
about the amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate ("Applicable
Federal Rate") provided for in Section 7872(f)(2)(A) of the Internal Revenue
Code of 1986, as amended (the "Code").

         7.       CONFIDENTIAL INFORMATION; NONCOMPETITION.

                  7.1      Nondisclosure. The Executive shall hold in fiduciary
capacity for the benefit of the Company all secret, proprietary or Confidential
Information, knowledge or data relating to the Company and its businesses, which
shall have been obtained by the Executive during the Executive's employment by
the Company. During the period the Executive is employed with the Company, and
after termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. The

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restrictions set forth in this Section 7 will not apply to information which is
generally known to the public or in the trade, unless such knowledge results
from an unauthorized disclosure by the Executive or representatives of the
Executive in violation of this Agreement. This exception will not affect the
application of any other provisions of this Agreement to such information in
accordance with the terms of such provision. All documents and tangible things
embodying or containing confidential information are the Company's exclusive
property. The Executive will protect the confidentiality of their content and
will return all copies, facsimiles and specimens of them and any other form of
confidential information in the Executive's possession, custody or control to
the Company before leaving the employment with the Company.

                  7.2      Definition of Confidential Information. The term
"Confidential Information" includes all information of any nature and in any
form which at the time or times concerned is not generally known to the public,
other than by act or acts of an employee not authorized by Company to disclose
such information, and which relates to any one or more of the aspects of the
present and past business of Company or any of its predecessors, including, but
not limited to, patents and patent applications, inventions and improvements,
whether patentable or not, development projects, policies, processes, formulas,
techniques, know-how and other facts relating to sales, advertising,
franchising, promotions, financial matters, customers, customer lists, customer
purchases or requirements, licenses or trade secrets.

                  7.3      Competition. During the term of the Executive's
employment with the Company, and for the period during which he receives
compensation from the Company under Section 4.1.1 after the termination of his
employment with the Company, the Executive will not, directly or indirectly,
engage, participate or invest in or be employed by any business anywhere in the
world which:

                           7.3.1    develops or manufactures products that are
competitive with or similar to products developed or manufactured by the
Company; or

                           7.3.2    distributes, markets or otherwise sells
products manufactured by others which are competitive with or similar to
products distributed, marketed or sold by the Company; or provides services
which are competitive with or similar to services provided by the Company,
including, in each case, any products or services the Company has under
development or which are the subject of active planning at any time during the
term of the Executive's employment.

                  The foregoing restriction shall apply regardless of the
capacity in which the Executive engages or engaged, participates or
participated, or invests or invested in or is employed by a given business,
whether as owner, partner, shareholder, consultant, agent, Executive,
co-venturer or otherwise. In addition, during the term of the Executive's
employment with the Company, and for a period of twelve (12) months thereafter,
the Executive will not, directly or indirectly, without the prior written
consent of the Company, hire or solicit for hire with any business any person
who is employed by the Company at such time or was employed by the Company
within the preceding twelve (12) months. The provisions of this Section 7 shall
not prevent the Executive from acquiring or holding publicly traded stock or
other publicly traded securities of a business, so long as the Executive's
ownership does not exceed ten percent (10%) of the outstanding securities of
such company of the same class as those held by the

                                      -11-
<PAGE>

Executive or from engaging in any activity or having an ownership interest in
any business that is reviewed by the Board. The Executive understands that the
restrictions set out in this Section 8 are intended to protect the Company's
interest in its secret, proprietary or confidential information and established
customer relationships and goodwill, and agrees that such restrictions are
reasonable and appropriate for this purpose.

                  7.4      Damages. The Executive agrees that it would be
difficult to measure any damages caused to the Company which might result from
any breach by the Executive of the promises set forth in this Agreement, and
that in any event money damages would be an inadequate remedy for any such
breach. Accordingly, the Executive agrees that in the case of breach, or
proposed breach, of any portion of this Agreement, the Company shall be
entitled, in addition to all other remedies that it may have, to an injunction
or other appropriate equitable relief to restrain any such breach without
showing or proving any actual damage to the Company.

         8.       DISPUTE RESOLUTION. If there shall be any dispute between the
Company and the Executive (i) in the event of any termination of the Executive's
employment by the Company, provided such termination was not for Cause, or (ii)
otherwise arising out of this Agreement, the dispute will be resolved in
accordance with the dispute resolution procedures set forth in Exhibit A
attached to this Agreement, the provisions of which are incorporated as a part
of this Agreement, and the parties of this Agreement agree that such dispute
resolution procedures will be the exclusive method for resolution of disputes
under this Agreement; provided, however, that (a) either party may seek
preliminary judicial relief if, in such party's judgment, such action is
necessary to avoid irreparable injury during the pendency of such procedures,
and (b) nothing in Exhibit A will prevent either party from exercising the
rights of termination set forth in this Agreement. IT IS EXPRESSLY UNDERSTOOD
THAT BY SIGNING THIS AGREEMENT, WHICH INCORPORATES BINDING ARBITRATION, THE
COMPANY AND EXECUTIVE AGREE, EXCEPT AS SPECIFICALLY PROVIDED OTHERWISE IN
SECTION 7, "CONFIDENTIAL INFORMATION; NONCOMPETITION," AND THIS SECTION 8, TO
WAIVE COURT OR JURY TRIAL AND TO WAIVE PUNITIVE, STATUTORY, CONSEQUENTIAL, AND
ANY DAMAGES, OTHER THAN COMPENSATORY DAMAGES.

         9.       SUCCESSORS.

                  9.1      This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assigned by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

                  9.2      This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

                  9.3      The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such

                                      -12-
<PAGE>

succession had taken place. As used in this Agreement, the term "Company" shall
mean the Company as defined above and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

         10.      MISCELLANEOUS.

                  10.1     This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona, without reference to
principles of conflict of laws. The captions of this Agreement are set forth for
convenience only and shall have no separate force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

                  10.2     All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

                                    If to the Executive:

                                    Douglas D. Burkett, Ph.D.
                                    Zila, Inc.
                                    5227 N. 7th Street
                                    Phoenix, Arizona 85014

                                    If to the Company:

                                    Zila, Inc.
                                    ATTN: Chief Financial Officer
                                    5227 N. 7th Street
                                    Phoenix, Arizona  85014

                                    With a copy to:

                                    Chairman - Compensation Committee of
                                    the Board of Directors
                                    c/o Zila, Inc.
                                    5227 N. 7th Street
                                    Phoenix, Arizona 85014

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  10.3     The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                  10.4     The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

                                      -13-
<PAGE>

                  10.5     The failure of the Executive or the Company to insist
upon strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement, except that if the Executive chooses to terminate employment for Good
Reason pursuant to Section 3.3, "Good Reason," and complies with the provisions
of Section 3, "Termination of Employment," the Executive shall only be entitled
to compensation and benefits applicable to such event of termination.

         IN WITNESS WHEREOF, pursuant to the authorization from its Compensation
Committee and Board of Directors, the Company has caused this Agreement to be
executed in its name on its behalf, as of the dates first above written.

                                    COMPANY:

                                    ZILA, INC.

                                    By     /s/ Andrew A. Stevens
                                           -------------------------------------

                                    Title  Chief Financial Officer
                                           -------------------------------------


                                    EXECUTIVE:

                                    /s/ Douglas D. Burkett, Ph.D.
                                    --------------------------------------------
                                    Douglas D. Burkett, Ph.D.


                                      -14-
<PAGE>

                                    EXHIBIT A

                          DISPUTE RESOLUTION PROCEDURES

         1.       If a controversy arises that is covered by Section 8, "Dispute
Resolution," of the Agreement, then not later than twelve (12) months from the
date of the event that is the subject of dispute either party may serve on the
other a written notice specifying the existence of such controversy and setting
forth in reasonably specific detail the grounds of the notice ("Notice of
Controversy"); provided that, in any event, the other party will have at least
thirty (30) days from and after the date of the Notice of Controversy to serve a
written notice of any counterclaim ("Notice of Counterclaim"). The Notice of
Counterclaim will specify the claim or claims in reasonably specific detail. If
the Notice of Controversy or the Notice of Counterclaim, as the case may be, is
not served within the applicable period, the claim set forth therein will be
deemed to have been waived, abandoned and rendered unenforceable.

         2.       For a three (3) week period following receipt of the Notice of
Controversy or the Notice of Counterclaim, as the case may be, the parties will
make a good faith effort to resolve the dispute through negotiation ("Period of
Negotiation"). Neither party will take any action during the Period of
Negotiation to initiate arbitration proceedings.

         3.       If the parties agree during the Period of Negotiation to
mediate the dispute, then the Period of Negotiation will be extended by an
amount of time to be agreed upon by the parties to permit such mediation. In no
event, however, may the Period of Negotiation be extended by more than five
weeks or, stated differently, in no event may the Period of Negotiation be
extended to encompass more than a total of eight weeks.

         4.       If the parties agree to mediate the dispute but are thereafter
unable to agree within a week on the format and procedures for the mediation,
then the effort to mediate will cease, and the period of Negotiation will
terminate four weeks from the Notice of Controversy or the Notice of
Counterclaim, as the case may be.

         5.       Following the termination of the Period of Negotiation, the
dispute, including the main claim and counterclaim, if any, will be settled by
arbitration, governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.
("FAA"), and judgment upon the award may be entered in any court having
jurisdiction. The format and procedures of the arbitration are set forth below
(referred to below as the "Arbitration Agreement").

         6.       A notice of intention to arbitrate ("Notice of Arbitration")
will be served within forty-five (45) days of the termination of the Period of
Negotiation. If the Notice of Arbitration is not served within this period, the
claim set forth in the Notice of Controversy or the Notice of Counterclaim, as
the case may be, will be deemed to have been waived, abandoned and rendered
unenforceable.

         7.       The arbitration, including the Notice of Arbitration, will be
governed by the Commercial Rules of the American Arbitration Association ("AAA")
in effect on the date of the Notice of Arbitration, except that the terms of
this Arbitration Agreement will control in the

<PAGE>

event of any difference or conflict between such Rules and the terms of this
Arbitration Agreement.

         8.       The arbitrator will reach a decision on the merits on the
basis of applicable legal principles as embodied in the law of the State of
Arizona. The arbitration hearing will take place in Phoenix, Arizona.

         9.       There will be one arbitrator, regardless of the amount in
controversy. The arbitrator selected, in order to be eligible to serve, will be
a lawyer in Phoenix, Arizona with at least fifteen (15) years experience
specializing in either general commercial litigation or general corporate and
commercial matters. In the event the parties cannot agree on a mutually
acceptable single arbitrator from the list submitted by the AAA, the AAA will
appoint the arbitrator who will meet the foregoing criteria.

         10.      At the time of appointment and as a condition of the
appointment, the arbitrator will be apprised of the time limitations and other
provisions of this Arbitration Agreement and will indicate such dispute
resolver's agreement to the Tribunal Administrator to comply with such
provisions and time limitations.

         11.      During the thirty (30) day period following appointment of the
arbitrator, either party may serve on the other a request for limited numbers of
documents directly related to the dispute. Such documents will be produced
within seven (7) days of the request.

         12.      Following the thirty-day period of document production, there
will be a forty-five (45) day period during which limited depositions will be
permissible. Neither party will take more than five (5) depositions, and no
deposition will exceed three (3) hours of direct testimony.

         13.      Disputes as to discovery or prehearing matters of a procedural
nature will be promptly submitted to the arbitrator pursuant to telephone
conference call or otherwise. The arbitrator will make every effort to render a
ruling on such interim matters at the time of the hearing (or conference call)
or within five (5) business days thereafter.

         14.      Following the period of depositions, the arbitration hearing
will promptly commence. The arbitrator will make every effort to commence the
hearing within thirty (30) days of the conclusion of the deposition period and,
in addition, will make every effort to conduct the hearing on consecutive
business days to conclusion.

         15.      An award will be rendered, at the latest, within nine (9)
months of the date of the Notice of Arbitration and within thirty (30) days of
the close of the arbitration hearing. The award will set forth the grounds for
the decision (findings of fact and conclusions of law) in reasonably specific
detail. The award will be final and nonappealable except as provided in the FAA
and except that a court of competent jurisdiction will have the power to review
whether, as a matter of law, based upon the findings of fact by the arbitrator,
the award should be confirmed or should be modified or vacated in order to
correct any errors of law made by the arbitrator. Such judicial review will be
limited to issues of law, and the parties agree that the findings of fact made
by the arbitrator will be final and binding on the parties and will serve as the
facts to

                                      -2-
<PAGE>

be relied upon by the court in determining the extent to which the award should
be confirmed, modified or vacated.

         The award may only be made for compensatory damages, and if any other
damages (whether exemplary, punitive, consequential, statutory or other) are
included, the award will be vacated and remanded, or modified or corrected, as
appropriate to promote this damage limitation.

                                      -3-