Document:

EX-10.1

Exhibit 10.1 to Recoton Form 10-Q

for the Quarter Ended June 30, 2000

Approved by Board: 3/23/98

Approved by Shareholders: 6/10/98

Amendment to Increase Shares Approved by Board: 4/5/00

Amendment to Increase Shares Approved by Shareholders: 6/7/00

RECOTON CORPORATION

1998 STOCK OPTION PLAN

     1.  Purpose. The purpose of
this Stock Option Plan is to advance the interests of the Corporation by
encouraging and enabling the acquisition of a larger personal proprietary
interest in the Corporation by directors, employees and consultants of the
Corporation and its Subsidiaries upon whose judgment and keen interest the
Corporation is largely dependent for the successful conduct of its operations.
It is anticipated that the acquisition of such proprietary interest in the
Corporation will stimulate the efforts of such directors, employees and
consultants on behalf of the Corporation and its Subsidiaries and strengthen
their desire to remain with the Corporation and its Subsidiaries. It is also
expected that the opportunity to acquire such a proprietary interest will enable
the Corporation and its Subsidiaries to attract desirable personnel, directors
and consultants.

     2.  Definitions. When used in
this Plan, unless the context otherwise requires: "Board of Directors" shall
mean the Board of Directors of the Corporation, as constituted at any time.

	   
	a)
	"Chairman of the Board" shall mean the person who at the time
shall be Chairman (or Co-Chairman) of the Board of Directors.

	   
	b)
	"Committee" shall mean the Committee hereinafter described in
Section 3.

	   
	c)
	 "Corporation" shall mean Recoton Corporation.

	   
	d)
	Fair Market Value” on a specified date shall mean the
closing price at which one Share was traded on the stock exchange, if any, on
which Shares are primarily traded on the prior day, or the last sale price or
average of the bid and asked closing prices at which one Share was traded on the
over-the-counter market on the prior day, as reported on the National
Association of Security Dealers Automated Quotation System, but if no Shares
were traded on such date, then on the last previous date on which a Share was so
traded, or, if none of the above are applicable the value of a Share as
established by the Committee for such date using any reasonable method of
valuation. 

	   
	e)
	"Options" shall mean the stock options granted pursuant to this
Plan.

	   
	f)
	"Plan" shall mean this 1998 Stock Option Plan of Recoton
Corporation, as adopted by the Board of Directors on March 23, 1998, as such
Plan from time to time may be amended.

	   
	g)
	"Share" shall mean a common share of the Corporation.

	   
	h)
	"Subsidiary" shall mean any corporation 50% or more of whose
stock having general voting power is owned by the Corporation, or by another
Subsidiary as herein defined, of the Corporation.

     3.  Committee. The Plan shall
be administered by a Committee which shall consist of two or more directors of
the Corporation, each of whom shall be a "Non-Employee Director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and an "outside director" within the meaning of Section 162 (m)
of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"),
to the extent that such persons are available to serve (and at any time when
there are not at least two of such persons, the Board of Directors shall
function as the Committee). The members of the Committee shall be selected by
the Board of Directors. Any member of the Committee may resign by giving written
notice thereof to the Board of Directors, and any member of the Committee may be
removed at any time, with or without cause, by the Board of Directors. If, for
any reason, a member of the Committee shall cease to serve, the vacancy shall be
filled by the Board of Directors. The Committee shall establish such rules and
procedures as are necessary or advisable to administer the Plan.

     4.  Participants. The class of
persons who are potential recipients of Options granted under this Plan consist
of the (i) employees of the Corporation or a Subsidiary, as determined by the
Committee in its sole discretion; (ii) directors of the Corporation or a
Subsidiary who are not also employees of the Corporation or a Subsidiary, as
determined by the Board of Directors in its sole discretion and (iii)
consultants to the Corporation or a Subsidiary, as determined by the Committee
or the Board of Directors in its sole discretion. Notwithstanding any other
provision of the Plan to the contrary, all determinations with respect to any
Option granted to a director of the Corporation or a Subsidiary who is not also
an employee of the Corporation or a Subsidiary shall be made by the Board of
Directors and, with respect to any such Option and Options to consultants
granted by the Board of Directors, all references in the Plan to the Committee
shall be deemed to refer to the Board of Directors.

     5.  Shares. Subject to the
provisions of Section 14, the aggregate number of Shares which may be the
subject of Options granted under this Plan shall be 2,500,000 Shares, which may
be either Shares held in treasury or authorized but unissued Shares. The maximum
number of Shares which may be the subject of Options granted to any individual
during any calendar year shall not exceed 250,000 Shares. If the Shares that
would be issued or transferred pursuant to any Option are not issued or
transferred and cease to be issuable or transferable for any reason, the number
of Shares subject to such Option will no longer be charged against the
limitation provided for herein and may again be made subject to Options;
provided, however, that with respect to any Option granted to any person who is
a "covered employee" as defined in Section 162(m) of the Code and the
regulations promulgated thereunder that is canceled or repriced, the number of
Shares subject to such Option shall continue to count against the maximum number
of Shares which may be the subject of Options granted to such person and such
maximum number of Shares shall be determined in accordance with Section 162(m)
of the Code and the regulations promulgated thereunder.

     6.  Grant of Options. The
number of Options to be granted to any individual shall be determined by the
Committee in its sole discretion.

     At the time an Option is granted, the Committee
may, in its sole discretion, designate whether such Option (a) is to be
considered as an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code, or (b) is not to be treated as an incentive stock option
for purposes of this Plan and the Internal Revenue Code. No Option which is
intended to qualify as an incentive stock option shall be granted under this
Plan to any individual who, at the time of such grant, is not an employee of the
Corporation or a Subsidiary.

     Notwithstanding any other provision of this
Plan to the contrary, to the extent that the aggregate Fair Market Value
(determined as of the date an Option is granted) of the Shares with respect to
which Options which are designated as incentive stock options, and any other
incentive stock options, granted to an employee (under this Plan, or any other
incentive stock option plan maintained by the Corporation or any Subsidiary that
meets the requirements of Section 422 of the Internal Revenue Code) first become
exercisable in any calendar year exceeds $100,000, such Options shall be treated
as Options which are not incentive stock options. Options with respect to which
no designation is made by the Committee shall be deemed to be incentive stock
options to the extent that the $100,000 limitation described in the preceding
sentence is met. This paragraph shall be applied by taking options into account
in the order in which they are granted.

     If any Option shall expire, be canceled or
terminate for any reason without having been exercised in full, the unpurchased
Shares subject thereto may again be made subject to Options under the Plan.

     Nothing herein contained shall be construed to
prohibit the issuance of Options at different times to the same employee,
director or consultant.

     A certificate of Option signed by the Chairman
of the Board of Directors or the President or a Vice President of the
Corporation, shall be issued to each person to whom an Option is granted, in the
form attached hereto as Exhibit A with respect to an incentive stock option, in
the form attached hereto as Exhibit B with respect to a non-qualified stock
option granted to an employee or consultant and in the form attached hereto as
Exhibit C with respect to a non-qualified stock option granted to a director who
is not also an employee.

     7. Price. The price per Share of
the Shares to be purchased pursuant to the exercise of any Option shall be
determined by the Committee at the time of grant; provided, however, that the
purchase price per share of the Shares to be purchased pursuant to the exercise
of an Option which is intended to be an incentive stock option shall not be less
than the Fair Market Value of a Share on the day on which the Option is
granted.

     8.  Duration of Options. The
duration of any Option granted under this Plan shall be determined by the
Committee in its sole discretion at the time of grant; provided, however, that
no Option which is intended to be an incentive stock option shall remain in
effect for a period of more than ten years from the date upon which the Option
is granted.

     9.  Ten Percent Shareholders.
Notwithstanding any other provision of this Plan to the contrary, no Option
which is intended to qualify as an incentive stock option may be granted under
this Plan to any employee who, at the time the Option is granted, owns shares
possessing more than ten percent of the total combined voting power or value of
all classes of stock of the Corporation, unless the exercise price under such
Option is at least 110% of the Fair Market Value of a Share on the date such
Option is granted and the duration of such Option is no more than five
years.

     10.  Consideration for
Options. The Corporation shall obtain such consideration for the grant of an
Option as the Committee in its discretion may request.

     11  Restrictions on
Transferability of Options. Options shall not be transferable otherwise than
by will or by the laws of descent and distribution or as provided in this
Section 11. Notwithstanding the preceding, the Committee may, in its discretion,
authorize a transfer of all or a portion of any Option, other than an Option
which is intended to qualify as an incentive stock option, by such holders who
are or were executive officers of the Company (as such officers are determined
from time to time by the Board of Directors of the Company) to (i) the spouse,
children, stepchildren, grandchildren or other family members of the initial
holder ("Family Members"), (ii) a trust or trusts for the exclusive benefit of
such Family Members or (iii) such other persons or entities which the Committee
may permit; provided, however, that subsequent transfers of such Options shall
be prohibited except by will or the laws of descent and distribution. Any
transfer of such an Option shall be subject to such terms and conditions as the
Committee shall approve, including that such Option shall continue to be subject
to the terms and conditions of the Option and of the Plan as amended from time
to time. The events of termination of employment or service under Section 13
shall continue to be applied with respect to the initial holder, following which
a transferred Option shall be exercisable by the transferee only to the extent
and for the periods provided pursuant to Section 13. An Option which is intended
to qualify as an incentive stock option shall not be transferable otherwise than
by will or by the laws of descent and distribution and shall be exercisable
during the holder's lifetime only by the holder thereof.

     12.  Exercise of Options. An
Option, after the grant thereof, shall be exercisable by the holder at such rate
and times as may be determined by the Committee.

     Notwithstanding the foregoing, all or any part
of any remaining unexercised Option granted to any person may be exercised in
the following circumstances (but in no event prior to approval of the Plan by
shareholders as provided in Section 18 or after the expiration of the Option):
(a) subject to the provisions of Section 13 hereof, upon the holder's retirement
as an employee from the Corporation and all Subsidiaries at or after age 65, (b)
subject to the provisions of Section 13 hereof, upon the disability (to the
extent and in a manner as shall be determined by the Committee in its sole
discretion) or death of the holder, (c) upon the occurrence of such special
circumstance or event as in the opinion of the Committee merits special
consideration, or (d) if, while the holder is employed by, or serving as a
director of or consultant to, the Corporation or a Subsidiary, there occurs a
Change in Control. For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if (i) any "person" or group of "persons" (as the term
"person" is used in Sections 13(d) and 14(d) of the Exchange Act ("Person"),
acquires (or has acquired during the twelve-month period ending on the date of
the most recent acquisition by such Person) the beneficial ownership, directly
or indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the then outstanding securities of the Corporation;
(ii) during any period of twelve months, individuals who at the beginning of
such period constitute the Board of Directors, and any new director whose
election or nomination was approved by the directors in office who either were
directors at the beginning of the period or whose election or nomination was
previously so approved, cease for any reason to constitute at least a majority
thereof; (iii) a Person acquires beneficial ownership of stock of the
Corporation that, together with stock held immediately prior to such acquisition
by such Person, possesses more than 50% of the total fair market value or total
voting power of the stock ("50% Ownership") of the Corporation, unless the
additional stock is acquired by a Person possessing, immediately prior to such
acquisition, beneficial ownership of 40% or more of the Common Stock; or (iv) a
Person acquires (or has acquired during the twelve-month period ending on the
date of the most recent acquisition by such Person) assets from the Corporation
that have a total fair market value equal to or more than one-third of the total
fair market value of all of the assets of the Corporation immediately prior to
such acquisition. Notwithstanding the foregoing, for purposes of clauses (i) and
(ii), a Change in Control will not be deemed to have occurred if the power to
control (directly or indirectly) the management and policies of the Corporation
is not transferred from a Person to another Person; and for purposes of clause
(iv), a Change in Control will not be deemed to occur if the assets of the
Corporation are transferred: (A) to a shareholder in exchange for his or her
stock, (B) to an entity in which the Corporation has (directly or indirectly)
50% Ownership, or (C) to a Person that has (directly or indirectly) at least 50%
ownership of the Corporation with respect to its stock outstanding, or to any
entity in which such Person possesses (directly or indirectly) 50%
Ownership.

     An Option shall be exercised by the delivery of
a written notice duly signed by the holder thereof to such effect ("Exercise
Notice"), together with the Option certificate and the full purchase price of
the Shares purchased pursuant to the exercise of the Option, to the Chairman of
the Board or an officer of the Corporation appointed by the Chairman of the
Board for the purpose of receiving the same. Payment of the full purchase price
shall be made as follows: in cash or by check payable to the order of the
Corporation; by delivery to the Corporation of Shares which shall be valued at
their Fair Market Value on the date of exercise of the Option (provided, that a
holder may not use any previously owned Shares unless the holder has
beneficially owned such Shares for at least six months); by providing with the
Exercise Notice an order to a designated broker to sell part or all of the
Shares and to deliver sufficient proceeds to the Corporation, in cash or by
check payable to the order of the Corporation, to pay the full purchase price of
the Shares and all applicable withholding taxes; or by such other methods as the
Committee may permit from time to time.

     Within a reasonable time after the exercise of
an Option, the Corporation shall cause to be delivered to the person entitled
thereto, a certificate for the Shares purchased pursuant to the exercise of the
Option. If the Option shall have been exercised with respect to less than all of
the Shares subject to the Option, the Corporation shall also cause to be
delivered to the person entitled thereto a new Option certificate in replacement
of the certificate surrendered at the time of the exercise of the Option,
indicating the number of Shares with respect to which the Option remains
available for exercise, or the original Option certificate shall be endorsed to
give effect to the partial exercise thereof.

     13.  Termination of Employment or
Service. All or any part of any Option, to the extent unexercised, shall
terminate immediately (i) in the case of an employee, upon the cessation or
termination for any reason of the Option holder's employment by the Corporation
and all Subsidiaries, or (ii) in the case of a director of the Corporation or a
Subsidiary who is not also an employee of the Corporation or a Subsidiary or in
the case of a consultant to the Corporation or a Subsidiary, upon the holder's
ceasing to serve as a director of or consultant to (as the case may be) the
Corporation or a Subsidiary, except that in either case under clause (i) or (ii)
above, the Option holder shall have three months following the cessation of the
holder's employment with the Corporation and Subsidiaries or his service as a
director of or consultant to the Corporation or a Subsidiary, as the case may
be, and no longer, to exercise any unexercised Option that the holder could have
exercised on the day on which such employment, or service as a director or
consultant, terminated; provided, however, that such exercise must be
accomplished prior to the expiration of the term of such Option and provided,
further, that if the cessation of employment or service as a director or
consultant is due to disability (to an extent and in a manner as shall be
determined in each case by the Committee in its sole discretion) or to death,
the Option holder or the representative of the Estate or the heirs of a deceased
Option holder shall have the privilege of exercising the Options which are
unexercised at the time of such disability or death, at any time within one year
after the Option holder's disability or death, as the case may be, but prior to
the expiration of the term of such Option. Notwithstanding the foregoing or any
other provision of the Plan to the contrary, with respect to any Option, the
Committee may determine, in its sole discretion, either at the time of grant or
thereafter, to permit such Option to be exercised for such period extending
beyond the three-month and one-year periods specified above as the Committee
deems appropriate, but in no event beyond the expiration of the term of such
Option. If the employment or service of any Option holder with the Corporation
or a Subsidiary shall be terminated because of the Option holder's violation of
the duties of such employment or service with the Corporation or a Subsidiary as
such holder may from time to time have, the existence of which violation shall
be determined by the Committee in its sole discretion (which determination by
the Committee shall be conclusive), all unexercised Options of such Option
holder shall terminate immediately upon such termination of the holder's
employment or service with the Corporation and all Subsidiaries, and an Option
holder whose employment or service with the Corporation and Subsidiaries is so
terminated, shall have no right after such termination to exercise any
unexercised Option that such holder might have exercised prior to the
termination of employment or service with the Corporation and Subsidiaries.

     Nothing contained herein or in the Option
certificate shall be construed to confer on any employee, director or consultant
any right to be continued in the employ of the Corporation or any Subsidiary or
as a director of or consultant to the Corporation or a Subsidiary or derogate
from any right of the Corporation and any Subsidiary to request the resignation
of or discharge any employee, director or consultant (without or with pay), at
any time, with or without cause.

     14.  Adjustment of Optioned
Shares. If prior to the complete exercise of any Option there shall be
declared and paid a stock dividend upon the common stock of the Corporation or
if the common stock of the Corporation shall be split up, converted, exchanged,
reclassified, or in any way substituted for, the Option, to the extent that it
has not been exercised, shall entitle the holder thereof upon the future
exercise of the Option to such number and kind of securities or other property
subject to the terms of the Option to which such holder would have been entitled
had such holder actually owned the Shares subject to the unexercised portion of
the Option at the time of the occurrence of such stock dividend, split-up,
conversion, exchange, reclassification or substitution; and the aggregate
purchase price upon the future exercise of the Option shall be the same as if
the originally optioned Shares were being purchased thereunder. Any fractional
shares or securities payable upon the exercise of the Option as a result of such
adjustment shall be payable in cash based upon the Fair Market Value of such
shares or securities at the time of such exercise. If any such event should
occur, the number of Shares with respect to which Options remain to be issued,
or with respect to which Options may be reissued, shall be adjusted in a similar
manner. Notwithstanding any other provision of the Plan, in the event of a
recapitalization, merger, consolidation, rights offering, separation,
reorganization or liquidation, or any other change in the corporate structure or
outstanding Shares, the Committee may make such equitable adjustments to the
number of Shares and the class of shares available hereunder or to any
outstanding Options as it shall deem appropriate to prevent dilution or
enlargement of rights.

     15.  Issuance of Shares and
Compliance with Securities Act. The Corporation may postpone the issuance
and delivery of Shares upon any exercise of an Option until (a) the admission of
such Shares to listing on any stock exchange on which Shares of the Corporation
of the same class are then listed, and (b) the completion of such registration
or other qualification of such Shares under any State or Federal law, rule or
regulation as the Corporation shall determine to be necessary or advisable. Any
person exercising an Option shall make such representations and furnish such
information as may, in the opinion of counsel for the Corporation, be
appropriate to permit the Corporation, in the light of the then existence or
non-existence with respect to such Shares of an effective Registration Statement
under the Securities Act of 1933, as from time to time amended (the "Securities
Act"), to issue the Shares in compliance with the provisions of the Securities
Act or any comparable act. The Corporation shall have the right, in its sole
discretion, to legend any Shares which may be issued pursuant to the exercise of
an Option, or may issue stop transfer orders in respect thereof.

     16.  Income Tax Withholding.
If the Corporation or a Subsidiary shall be required to withhold any amounts by
reason of any national, state or local tax rules or regulations in respect of
the issuance of Shares pursuant to the exercise of such Option, the Corporation
or the Subsidiary shall be entitled to deduct and withhold such amounts from any
cash payments to be made to the holder of such Option. In any event, the holder
shall make available to the Corporation or Subsidiary, promptly when requested
by the Corporation or such Subsidiary, sufficient funds to meet the requirements
of such withholding; and the Corporation or Subsidiary shall be entitled to take
and authorize such steps as it may deem advisable in order to have such funds
made available to the Corporation or Subsidiary out of any funds or property due
or to become due to the holder of such Option.

     17.  Administration and Amendment
of the Plan. Except as hereinafter provided, the Board of Directors or the
Committee may at any time withdraw or from time to time amend the Plan as it
relates to, and the terms and conditions of, any Options not theretofore
granted, and the Board of Directors or the Committee, with the consent of the
affected holder of an Option, may at any time withdraw or from time to time
amend the Plan as it relates to, and the terms and conditions of, any
outstanding Option. Notwithstanding the foregoing, any amendment by the Board of
Directors or the Committee which would increase the number of Shares issuable
under Options granted pursuant to the Plan or to any individual during any
calendar year or change the class of persons to whom Options may be granted
shall be subject to the approval of the shareholders of the Corporation within
one year of such amendment.

     Determinations of the Committee as to any
question which may arise with respect to the interpretation of the provisions of
the Plan and Options shall be final. The Committee may authorize and establish
such rules, regulations and revisions thereof not inconsistent with the
provisions of the Plan, as it may deem advisable to make the Plan and Options
effective or provide for their administration, and may take such other action
with regard to the Plan and Options as it shall deem desirable to effectuate
their purpose.

     18.  Effective Date. This Plan
is conditioned upon its approval by the hareholders of the Corporation on or
before March 22, 1999, at any special or annual meeting of the shareholders of
the Corporation, except that this Plan is adopted and approved by the Board of
Directors effective March 23, 1998, to permit the grant of Options prior to the
approval of the Plan by the shareholders of the Corporation as aforesaid. If
this Plan is not approved by the shareholders of the Corporation within the time
period noted above, this Plan and any Options granted hereunder shall be void
and of no force or effect.

     19.  Final Issuance Date. No
Option shall be granted under the Plan after March 22, 2008.

Exhibit A     

Form of Certificate

for Incentive

Stock Options

OPTION CERTIFICATE

INCENTIVE STOCK OPTION

(Non-Assignable)

To Purchase _____________ Common Shares of

RECOTON CORPORATION

Issued Pursuant to the 1998

Stock Option Plan of Recoton Corporation

     THIS CERTIFIES that on ________________, 19__,
_________________________________ (the "Holder") was granted an option
("Option"), to purchase at the Option price of $_________ per share all or any
part of _____________ fully paid and non-assessable shares Common Shares, p.v.
$.20 (the "Shares") of Recoton Corporation ("Corporation"), upon and subject to
the following terms and conditions.

     This Option shall expire on _________________,
20__.

     This Option may be exercised or surrendered
during the Holder's lifetime only by the Holder. This Option shall not be
transferable by the Holder otherwise than by will or by the laws of descent and
distribution.

     Except as otherwise provided in the 1998 Stock
Option Plan of Recoton Corporation (the "Plan"), this Option shall be
exercisable as follows: [insert vesting schedule; also insert any extension of
post-termination exercise period beyond three-month and one-year periods, if
determined at time of grant].1 In no event, however, may this Option be
exercised after the Option's expiration date.

__________

        1 If, at the
time of grant, the post-termination exercise period extends beyond the
three-month and one-year periods, then also add the following: In the event the
Option is exercised more than three months after the Holder’s termination
of employment for reasons other than death or disability, or more than one year
after the Holder’s termination of employment due to the Holder’s
disability, then the Option, to the extent so exercised, shall be deemed not to
be an incentive stock option.

     The Option and this Option certificate are
issued pursuant to and are subject to all of the terms and conditions of the
Plan, the terms and conditions of which are hereby incorporated by reference and
a copy of which is attached to this certificate. A determination of the
Committee under the Plan as to any questions which may arise with respect to the
interpretation of the provisions of the Option and of the Plan shall be final.
The Committee may authorize and establish such rules, regulations and revisions
thereof not inconsistent with the provisions of the Plan, as it may deem
advisable.

     WITNESS the signature of the Corporation's duly
authorized officer.

Dated: _______________________, 19__.

	 
	RECOTON CORPORATION

By:                           
                

Exhibit B         

Form of Certificate

for Employees' and Consultants'

Non-Qualified Options

OPTION CERTIFICATE

NON-QUALIFIED STOCK OPTION

To Purchase _____________ Common Shares of

RECOTON CORPORATION

Issued Pursuant to the 1998

Stock Option Plan of Recoton Corporation

     THIS CERTIFIES that on ________________, 19__,
____________________ (the "Holder") was granted an option ("Option"), which is
not an incentive stock option, to purchase at the Option price of $_________ per
share all or any part of _____________ fully paid and non-assessable Common
Shares, p.v. $.20 (the "Shares"). of Recoton Corporation ("Corporation"), upon
and subject to the following terms and conditions.

     This Option shall expire on _________________,
20__.

     This Option shall not be transferable by the
Holder otherwise than by will or by the laws of descent and distribution or as
provided pursuant to the 1998 Stock Option Plan of Recoton Corporation (the
"Plan").

     Except as otherwise provided in the Plan, this
Option shall be exercisable as follows: [insert vesting schedule; also insert
any extension of post-termination exercise period beyond three-month and
one-year periods, if determined at time of grant]. In no event, however, may
this Option be exercised after the Option's expiration date.

     The Option and this Option certificate are
issued pursuant to and are subject to all of the terms and conditions of the
Plan, the terms and conditions of which are hereby incorporated by reference and
a copy of which is attached to this certificate. A determination of the
Committee or the Board of Directors under the Plan as to any questions which may
arise with respect to the interpretation of the provisions of the Option and of
the Plan shall be final. The Committee or the Board of Directors may authorize
and establish such rules, regulations and revisions thereof not inconsistent
with the provisions of the Plan, as it may deem advisable.

     WITNESS the signature of the Corporation's duly
authorized officer.

Dated: _______________________, 19__.

	 
	RECOTON CORPORATION

By:                           
                

Exhibit C   

Form of

Certificate

for Non-Employee

Directors' Options

OPTION CERTIFICATE

NON-QUALIFIED STOCK OPTION

To Purchase _____________ Common Shares of

RECOTON CORPORATION

Issued Pursuant to the 1998

Stock Option Plan of Recoton Corporation

     THIS CERTIFIES that on ________________, 19__,
_____________________ (the "Holder") was granted an option ("Option"), which is
not an incentive stock option, to purchase at the Option price of $_________ per
share all or any part of _____________ fully paid and non-assessable shares
Common Shares, p.v. $.20 (the "Shares") of Recoton Corporation ("Corporation"),
upon and subject to the following terms and conditions.

     This Option shall expire on _________________,
20__.

     This Option shall not be transferable by the
Holder otherwise than by will or by the laws of descent and distribution or as
provided pursuant to the 1998 Stock Option Plan of Recoton Corporation (the
"Plan").

     Except as otherwise provided in the Plan, this
Option shall be exercisable as follows: [insert vesting schedule; also insert
any extension of post-termination exercise period beyond three-month and
one-year periods, if determined at time of grant]. In no event, however, may
this Option be exercised after the Option's expiration date.

     The Option and this Option certificate are
issued pursuant to and are subject to all of the terms and conditions of the
Plan, the terms and conditions of which are hereby incorporated by reference and
a copy of which is attached to this certificate. A determination of the Board of
Directors of the Corporation as to any questions which may arise with respect to
the interpretation of the provisions of the Option and of the Plan shall be
final. The Board of Directors of the Corporation may authorize and establish
such rules, regulations and revisions thereof not inconsistent with the
provisions of the Plan, as it may deem advisable.

     WITNESS the signature of the Corporation's duly
authorized officer.

Dated: _______________________, 19__.

	 
	RECOTON CORPORATION

By:Exhibit 10.1
                  SECOND AMENDED AND RESTATED MASTER AGREEME

                  THIS SECOND AMENDED AND RESTATED MASTER AGREEMENT, is made as
of this fifth day of June, 2000, (the Effective Date) between NAPRO
BIOTHERAPEUTICS, INC., a corporation organized under the laws of the State of
Delaware with its principal place of business at 6304 Spine Road, Unit A,
Boulder, Colorado 80301, United States of America ("NaPro"), and F.H. FAULDING &
CO., LIMITED, a corporation organized under the laws of Australia (ACN 007 870
984), with its principal place of business at 115 Sherriff Street, Underdale,
South Australia 5032 ("Faulding").

                                    RECITALS:

                  WHEREAS, the parties entered into an Amended and Restated
Master Agreement as of the 19th day of January, 1994 which amended and restated
the terms of their business relationship(the "Original Agreement");

                  WHEREAS, the parties propose further to amend the Master
Agreement as set forth herein and

                  WHEREAS, the parties deem it advisable to integrate the Master
Agreement and all of the amendments thereto into a single amended and restated
agreement;

                  NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby enter into this
Second Ameneded and Restated Master Agreement as follows:

                                    ARTICLE I

                                   Definitions

         1.1 In this Agreement, the following terms when used with initial
capital letters shall have the meanings set forth below:

                  "Affiliate" shall mean with respect to a Person, any other
person controlling, controlled by or under common control with such Person.

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                  "Claims" shall mean all claims, demands, actions, causes of
action and judgments of any kind.

                  "Commercial Use" shall mean use of a product in a particular
country in the Territory for alleviating or curing a cancer indication in
humans, once Registration by Faulding of that product has been obtained in that
country for that indication.

                  "Compassionate Use" shall mean use of a product in a
particular country in the Territory for alleviating or curing a cancer
indication in humans, prior to Registration by Faulding of that product in that
country for that indication.

                  "Confidential Information" shall have the meaning set forth in
Article IX.

                  "Development Use" shall mean use of a product for development
purposes in a particular country in the Territory including, but not limited to
[THIS PORTION HAS BEEN REDACTED].

                  "Dollars or $" shall mean U.S. Dollars.

                  "Ex works" shall mean such delivery term as defined in the
current edition of the International Chamber of Commerce publication
"Incoterms."

                  "Faulding Sale Price" shall mean, for sales within the
category of Commercial Use, the price per gram (net of taxes)for Formulated
Product calculated by taking the price invoiced by Faulding or its Affiliates to
third parties, divided by the number of grams of Product contained in the
package sold. In the event that Faulding shall receive payments for sales other
than by way of invoiced sales; or if Faulding sells Formulated Product to a
third party other than in an arms-length sale; or if the price charged by
Faulding is otherwise reduced for consideration unrelated to such Formulated
Product, then the Faulding Sale Price of such Formulated Product shall be the
average price (during the calendar quarter in question) of Formulated Product
sold at arms length for Commercial Use without any reduction in price for
consideration unrelated to such Formulated Product.

                  "FDA" shall mean the United States Food and Drug
Administration or any successor body.

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                  "Field" shall mean the development, Registration, sale and
distribution of products containing Paclitaxel for human use.

                  "Formulated Product" shall mean Paclitaxel in [THIS PORTION
HAS BEEN REDACTED], as specified in Exhibit A, as such formulation may be
amended by mutual agreement from time to time, or other formulations of
Paclitaxel (including new Delivery systems) which Faulding may market in the
future.

                  "GMP" shall mean good manufacturing practice as
required by regulations of the United States FDA, and any governmental authority
in any country in the Territory whose approval of Product is required.

                  "IND" shall mean the application with the regulatory authority
required in a particular country in relation to the Formulated Product in order
that the Formulated Product may be used for investigational clinical use with
human subjects notwithstanding that the local name for such an application may
be different.

                  "Loss" shall mean all loss, damage, cost and expense,
including reasonable attorney's fees.

                  "Middle East" shall mean Libya, Egypt, Jordan, Syria, Iraq,
Saudi Arabia, Yemen, Southern Yemen, Oman, the United Arab Emirates, Qatar,
Bahrain, Kuwait, Lebanon, Cyprus, Iran, and Turkey.

                  [THIS PORTION HAS BEEN REDACTED]

                  "Original Agreement" shall have the meaning set forth in the
Recitals.

                  "Paclitaxel" shall mean the chemical entity of the formula set
forth in Exhibit B.

                  [THIS PORTION HAS BEEN REDACTED]

                  "Person" shall mean any company, corporation, partnership,
trust, or any other legal entity.

                  "Primary Standard Product" shall mean high purity Paclitaxel
as specified in Exhibit C, as such specification may be amended by mutual
agreement from time to time.

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                  "Product" shall mean Paclitaxel as specified in Exhibit D,
manufactured according to GMP, as such specification may be amended by mutual
agreement from time to time.

                  "Registration" shall mean the registration with the regulatory
authority required in a particular country in relation to the Formulated Product
in order that the Formulated Product can be marketed for human use to the
general public or any part thereof in that country.

                  "Rejection" shall mean in the case of an application for
Registration in a particular country:

                           (i)      The classification of such application as
                                    "not approvable" or "not approved";

                           (ii)     Any formal suspension of consideration of
                                    the application.

                  "Rejection" shall mean in the case of a product for which a
Registration has been obtained in a particular country, the suspension,
cancellation or non-renewal of the Registration.

                  "Specification" shall mean the specification for the Product
set forth in Exhibit D, as such specification may be amended from time to time,
either by mutual agreement of the parties or in response to directives issued by
a relevant governmental authority in connection with the registration or
marketing of the Formulated Product in a particular jurisdiction. If the
Australian TGA issues a written directive that [THIS PORTION HAS BEEN REDACTED]
to the level required. In such event, the cost to Faulding of Product with [THIS
PORTION HAS BEEN REDACTED] of not more than [THIS PORTION HAS BEEN REDACTED] (as
determined in the Specification) shall be the same as Product supplied under the
current Specification, provided that such [THIS PORTION HAS BEEN REDACTED] does
not result in changes to other portions of the Specification. If such [THIS
PORTION HAS BEEN REDACTED] does result in any such changes to the current
Specification or if, for any other reason, as set forth above, the Specification
is amended, the parties shall confer in good faith with respect to the
implementation of such amendment and shall share equally the additional costs,
if any, that are directly caused by such amendment to the Specification. All
Product supplied by NaPro shall be manufactured according to GMP.

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<PAGE>

                  "Territory" shall mean the following countries: Australia, New
Zealand, Singapore, Malaysia, Thailand, the Philippines, Indonesia, India, Hong
Kong, South Korea, Macau, Bangladesh, Taiwan, Pakistan, Vietnam, Tunisia,
Morocco, Algeria, Cambodia, Laos, Brunei, Papua New Guinea, the Pacific Islands
excluding those governed by the United States, Myanmar, Afghanistan, Bhutan, Sri
Lanka, Nepal, the People's Republic of China, the countries of Central and South
America, including Mexico and the Carribean but excluding those governed by the
United States, Libya, Egypt, Jordan, Syria, Iraq, Saudi Arabia, Yemen, Southern
Yemen, Oman, the United Arab Emirates, Qatar, Bahrain, Kuwait, Lebanon, Cyprus,
Iran, Turkey, South Africa. If any of these countries becomes a part of the
European Community, then twelve months following admission to the European
Community, such country will no longer form a part of the Territory, and
Faulding shall transfer any existing product registrations to NaPro or NaPro's
designee in exchange for a payment of fifty thousand dollars ($50,000.) Cyprus
and Turkey shall be deemed non-exclusive Territories, and any grant of rights by
NaPro to Faulding pursuant to this Agreement shall be non-exclusive as to Cyprus
and Turkey.

                                   ARTICLE II

                               Original Agreement

         2.1      Cancellation of Original Agreement.  With effect from
the Effective Date, the Original Agreement is hereby cancelled
and of no further effect except that:

                  2.1.1 Regulatory Activities.  Regulatory activities
commenced under the Original Agreement shall be continued under
the terms of this Agreement, but subject to the terms of this
Agreement.

                  2.1.2 Patent Assignments.  Those patent assignments
undertaken as part of the Original Agreement shall continue to be
in full force and effect.

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         2.2 Entire Agreement. As of the Effective Date, this Second Restated
and Amended Master Agreement supersedes and replaces in its entirety the Amended
and Master Agreement that was entered into as of January 19, 1994.

                                   Article III

                                      Term

         3.1 Term. This Agreement shall commence on the Effective Date and shall
continue, unless terminated earlier pursuant to the terms of this Agreement, for
an initial period until March 22, 2013. Thereafter, this Agreement shall
continue from year to year, unless terminated on the anniversary thereof by one
party giving written notice to the other party at least one hundred and eighty
(180) days prior to the expiration of the initial term or any subsequent one (1)
year term.

                                   ARTICLE IV

                         Supply and Purchase Obligation

         4.1      Requirements and Exclusivity.

                  4.1.1 Subject to the terms of this Agreement, NaPro shall sell
Paclitaxel within the Territory for use in the Field exclusively to Faulding.
Faulding shall purchase all of its requirements of Paclitaxel for use in the
Field exclusively from NaPro and from no other source, except as provided in
paragraph 4.2 hereof.

                  4.1.2 To the extent such obligations are in accordance with
applicable law, NaPro shall prohibit its customers with whom NaPro has supply
agreements or licenses, or other agreements relating to Paclitaxel from: 1)
selling any product containing Paclitaxel in the Territory for use in the Field;
or 2) from purchasing Paclitaxel from any source other than NaPro unless NaPro
is unable to meet such customers' or licensees' requirements. Faulding shall not
sell any product containing Paclitaxel to customers located outside the

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Territory or for use outside the Field or for resale or distribution outside the
Territory. Without NaPro's prior written consent, neither Faulding nor any
Affiliate shall use any NaPro Confidential Information except in connection with
the development, registration, improvement, manufacture, storage, handling,
distribution, promotion, or sale of Formulated Product in the Field in the
Territory pursuant to and during the term of this Agreement.

                  [THIS PORTION HAS BEEN REDACTED]

          4.2      Exceptions to Exclusivity

                  Upon receipt of each quarterly forecast from Faulding pursuant
to paragraph 4.7.1 hereof, the parties shall confer and use their best efforts
to determine whether or not NaPro will be able to supply Faulding with the
amounts of Product for the various Uses in the various countries within the
Territory throughout the twelve month period covered by the forecast. NaPro
shall promptly advise Faulding in writing if at that time, or at any other time
during the term of this Agreement, NaPro believes that it will be unable to
supply Faulding with Product which Faulding has forecasted for any use in any
country or countries in the Territory, specifying the amount, and forecasted
Use, of Product that it will be unable to supply. Upon such notification by
NaPro, provided that Faulding has materially complied with paragraph 4.7.1 and
subject to paragraphs 4.7.2 and subparagraphs of 4.7.2 below, Faulding shall be
free to purchase Paclitaxel as set forth in paragraphs 4.2.1, 4.2.2 and
subparagraphs of 4.2.2 below from any third party or parties for such Use in
such country.

                  4.2.1 For Product that Faulding has specified in any of its
purchase orders or shipping schedules to be used for any Use in any country or
countries in the Territory, if NaPro

         (A) advises Faulding in writing, as set forth in paragraph 4.2 above,
         that it will not be able to supply Product for such Use in such
         country, or

         (B) fails to supply Faulding with Product for such Use within [THIS
         PORTION HAS BEEN REDACTED] after the date specified by Faulding in its
         shipping schedule,

then, provided that Faulding has materially complied with paragraph 4.7.1 and
subject to paragraphs 4.7.2 and subparagraphs of 4.7.2 below, Faulding shall be
free to purchase Paclitaxel as set forth in paragraphs 4.2.1, 4.2.2 and

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<PAGE>

subparagraphs of 4.2.2 below from any third party or parties for such Use in
such country.

                  [THIS PORTION HAS BEEN REDACTED]

         4.3 Pricing. The price for sale of Product (other than Primary Standard
Product) from NaPro to Faulding shall depend on the end use of such Product, as
set forth below, except that after Registration of the Formulated Product in a
country within the Territory, the price for all Product sold within such country
(other than Product lost or destroyed), shall be the price applicable to
Commercial Use.

                  4.3.1 Development Use. The ex works Boulder (or other NaPro
facility) price for sale of Product (other than Primary Standard Product) to
Faulding for Development Use shall be [THIS PORTION HAS BEEN REDACTED] dollars
[THIS PORTION HAS BEEN REDACTED] per gram.

         4.3.2 Commercial Use Compassionate Use. Except as set forth below in
subparagraph 4.3.2.1, the ex works Boulder (or other NaPro facility) price for
sale of Product (other than Primary Standard Product) from NaPro to Faulding for
Commercial Use or Compassionate Use shall be [THIS PORTION HAS BEEN REDACTED]
percent [THIS PORTION HAS BEEN REDACTED] of the Faulding Sale Price or [THIS
PORTION HAS BEEN REDACTED] dollars [THIS PORTION HAS BEEN REDACTED] per gram
whichever is greater.

                  [THIS PORTION HAS BEEN REDACTED]

         4.4 Primary Standard. The ex works Boulder (or other NaPro facility)
price for sale of Primary Standard Product to Faulding shall be [THIS PORTION
HAS BEEN REDACTED] dollars [THIS PORION HAS BEEN REDACTED] per gram (bulk). For
primary standard product or multi-component standard in solution, the price
shall be [THIS PORTION HAS BEEN REDACTED] per 100 micro-liter vial.

         4.5 Lost Product or Destroyed Product. The ex works Boulder (or other
NaPro Facility) price for sale of Product (other than Primary Standard Product)
to Faulding, which Product is used internally by Faulding, or otherwise lost,
corrupted, contaminated or destroyed shall be [THIS PORTION HAS BEEN REDACTED]
dollars [THIS PORTION HAS BEEN REDACTED] per gram.

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<PAGE>

                  4.5.1 NaPro shall, for a reasonable charge, use reasonable
efforts to restore Product which Faulding has corrupted or contaminated so that
such Product will meet the Specifications.

         4.6      Orders and Payment.  Order and payment procedures shall
be undertaken as set forth below.

                  4.6.1 Invoice and Payment. NaPro shall invoice the Product
upon delivery and payment shall be due sixty (60) days following delivery.
Payments shall be made by wire transfer to the account specified by NaPro from
time to time.

         4.7      Supply Forecast, Orders and Allocation of Faulding
Sales.

                  4.7.1 By [THIS PORTION HAS BEEN REDACTED] of each year,
Faulding shall provide NaPro with (i) a forecast of Product to be ordered for
delivery during the twelve (12) month period commencing on [THIS PORTION HAS
BEEN REDACTED] of that year (the "Annual Forecast"), (ii) a good faith estimate
of the amounts of Product ordered to be used for Development Use, Compassionate
Use or Commercial Use which will be used in each of the countries within the
Territory and (iii) a good faith estimate of its Commercial Use Faulding Sale
Prices for sales in each country within the Territory for such period (the
"Estimated Prices"). In addition, by [THIS PORTION HAS BEEN REDACTED] of each
calendar year, Faulding shall issue to NaPro a firm purchase order for the
coming calendar quarter, together with its updated forecast of Product to be
ordered for the subsequent three (3) calendar quarters. With each quarterly firm
purchase order, Faulding shall also submit its requested shipping schedule as
well as an update of its good faith estimates of the amounts of Products ordered
to be used for Development Use, Compassionate Use or Commercial Use which will
be used in each of the countries within the Territory, as well as any Product
anticipated to be used internally, lost, or destroyed.

                  4.7.2 Except as set forth below, the forecast to be submitted
by Faulding shall not create a binding obligation on the part of either party to
this Agreement.

                           4.7.2.1 Provided that NaPro meets its supply
obligations to Faulding pursuant to paragraph 4.7.2.2 below, Faulding shall be
required to purchase a minimum of [THIS PORTION HAS BEEN REDACTED] percent [THIS
PORTION HAS BEEN REDACTED] of that amount specified by the Annual Forecast.

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<PAGE>

                           4.7.2.2 NaPro shall use its commercially
reasonable efforts to supply all of Faulding's requirements of Product according
to Faulding's requested delivery schedule, regardless of whether or not such
Product requirements were reflected in Faulding's current forecast. Provided
that Faulding has complied with its obligations as set forth in paragraph 4.7.1
above, and provided that the amounts reflected in the Annual Forecast do not
vary by more than [THIS PORTION HAS BEEN REDACTED] percent [THIS PORTION HAS
BEEN REDACTED] from the amounts in the updated interim forecasts, NaPro shall
supply Faulding with the amount of Product specified by Faulding in the Annual
Forecast, no later than [THIS PORTION HAS BEEN REDACTED] after the dates
requested by Faulding, and shall use its best efforts to supply such Product
according to Faulding's requested delivery schedule. [THIS PORTION HAS BEEN
REDACTED]. Faulding shall give NaPro notice of which of these remedies (if any)
it intends to exercise. Faulding shall provide such notice within [THIS PORTION
HAS BEEN REDACTED] of the occurrence of NaPro's breach of its supply obligations
which gives rise to the remedy.

                  4.7.3 NaPro shall calculate the invoice price for each
quarterly order submitted by Faulding based on the forecast allocations of sales
and the Estimated Prices submitted by Faulding pursuant to paragraph 4.7.1. At
the close of each period of twelve calendar months ending on [THIS PORTION HAS
BEEN REDACTED], Faulding shall calculate the actual end use of Product supplied
to Faulding during such period and any prior period still remaining to be
determined, to the extent ascertained, on the basis that the first Product to be
supplied to Faulding is the first to be sold and that Product is used
internally, lost, or destroyed after Product has first been sold. Faulding shall
also calculate the actual Faulding Sale Prices per gram for Commercial Use sales
during such twelve (12) month period. Any under or overpayment detected by such
calculation shall be paid by May 31 of each year and verified as provided in
paragraph 4.7.4.

                  4.7.4 Faulding shall on an annual basis within sixty (60) days
after the end of the applicable twelve (12) month period pursuant to paragraph
4.7.1, provide NaPro with a report on sales or use of Formulated Product by
Product use in each of the countries within the Territory as well as information
on all applicable Faulding Sale Prices in each of the countries within the
Territory, purchases of Paclitaxel from third parties pursuant to paragraph 4.2
and sales of Formulated Product made with such third party Paclitaxel, and other
information pertinent to the loss, corruption, contamination, or destruction of
Product subject to paragraph 4.5 of this Agreement. At NaPro's request, and no
more than once in any twelve month period, Faulding shall cause its auditors to

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verify and report upon in writing the payments due under this Agreement and to
provide its report and working papers to the auditors for NaPro, for the
purposes of verifying price and payments hereunder. NaPro shall have the right
to hire an independent accountant and that accountant may, upon reasonable
notice and during normal business hours, review Faulding's books and records
relating to price, or payments made pursuant to this Agreement. Should any
underpayment equaling or exceeding five percent (5%) of the payments due over
any twelve (12) month period be detected, then the cost of such audit shall
be borne by Faulding and any such underpayment shall be promptly paid by
Faulding.

         4.8 Product Quality. Each lot of Product supplied by NaPro to Faulding
shall meet the Specification as such Specification may be amended from time to
time, either by mutual agreement of the parties or in response to directives
issued by a relevant government authority in connection with the registration or
marketing of the Product in a particular jurisdiction, provided that NaPro is
able to comply with such directions within its current cost structure. All
Product supplied by NaPro shall be manufactured according to GMP. NaPro shall
pay for all reasonable costs with respect to gaining GMP approval from the
relevant government authorities in the Territory, including, without limitation,
paying all reasonable costs associated with the Australian inspectors' travel to
and inspection of NaPro's facilities. With each lot of Product supplied by NaPro
to Faulding, NaPro shall submit to Faulding an appropriate certificate of
analysis confirming compliance with the Specification. Upon delivery of the
Product to Faulding, Faulding shall forthwith inform NaPro by written notice of
any damaged or otherwise defective Product alleged to have been delivered by
NaPro and shall, upon the request of NaPro, return the damaged or defective
Product to NaPro and the reasonable cost of return shall be borne by NaPro and
NaPro shall as soon as practicable replace the damaged or defective Product,
provided that such damage or defect shall have been caused by NaPro and not by
Faulding or the shipper to Faulding. Any failure by Faulding to detect latent
defects in the Product delivered to Faulding shall not affect NaPro's indemnity
obligations under this Agreement except that Faulding shall be responsible for
any claims arising out of defects which should have been detected by the
pre-formulation tests required of Faulding under applicable regulatory
requirements.

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<PAGE>

         4.9      NaPro Indemnity.  NaPro shall protect, indemnify and
hold harmless Faulding from and against all Loss incurred by
Faulding by reason of:

                  4.9.1 Product Defect. Any defect (whether of a design or
manufacturing origin) in the Product supplied to Faulding pursuant to this
Agreement, including failure to meet the Specification except to the extent that
any defect or failure is the result of any action or inaction by NaPro at
Faulding's direction.

                  4.9.2  Breach.  The uncured breach by NaPro of any of
its warranties or obligations under this Agreement.

         4.10     Faulding Indemnity.  Faulding shall protect, indemnify
and hold harmless NaPro from and against all Loss incurred by
NaPro by reason of:

                  4.10.1  Product Defect.  The manufacture by Faulding of
any product containing the Product other than by reason of a
defect in the Product where such defect is the fault of NaPro.

                  4.10.2  Faulding Activities.  The formulation, storage,
handling, promotion, distribution, Registration or sale of any
product containing the Product or the storage or handling of the
Product.

                  4.10.3  Breach.  The uncured breach by Faulding of any
of its warranties or obligations under this Agreement.

         4.11 Voluntary Compensation. In circumstances where any clinical trial
is to be undertaken, where voluntary compensation guidelines are agreed upon
with respect to participants in that trial, Faulding shall agree with NaPro to
the terms of the compensation and any compensation which is actually given to
participants.

         4.12 Product Liability Insurance. Faulding shall use all reasonable
efforts to obtain product liability insurance in the amount of at least [THIS
PORTION HAS BEEN REDACTED] covering sale of the Formulated Product or any future
product containing the Product. NaPro shall use all reasonable efforts to obtain
product liability insurance in the initial amount of five million dollars
($5,000,000) covering sale of the Product. NaPro shall use reasonable efforts to
increase the amount of such coverage as NaPro's sales of Product to Faulding
increase.

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<PAGE>

         4.13 Shipping. NaPro shall deliver the Product ex works NaPro's
manufacturing facility. NaPro shall cooperate with Faulding to ship the products
to Faulding at Faulding's expense. Risk of loss to the Product shall pass upon
delivery to Faulding's common carrier. Faulding shall use its best efforts to
obtain suitable import licenses to import the Product into the various countries
of the Territory for regulatory approval, finishing and sale according to the
terms of this Agreement. Faulding will assist NaPro in obtaining necessary
export licenses for export of the Product from the place of manufacture to the
Territory.

                                    ARTICLE V

                                 Regulatory Work

         5.1      Registration.  Faulding shall at its own expense use its
reasonable efforts to rapidly pursue Registration of the Formulated Product in
the Field throughout the Territory. NaPro shall have the option to amend the
Registration to include an alternate manufacturing site for the Formulated
Product. If NaPro exercises this option: (i) Faulding shall provide regulatory
support at a reasonable cost and (ii) Faulding shall promptly provide to NaPro
copies of the product specification and other relevant registration documents
for Formulated Product which are used in Faulding's applications for
Registration, provided, however, that any such information provided by Faulding
to NaPro shall be deemed Confidential Information (as defined in paragraph 8.1
hereof) of Faulding and shall be used for no other purpose other than to amend
such Registration.

         5.2 Compassionate Use. In addition to Faulding's obligation to pursue
Registration as provided in paragraph 5.1, Faulding shall also pursue
opportunities to supply Formulated Product through Compassionate Use or other
programs allowing sale of the Formulated Product in the Field in the Territory
prior to Registration.

         5.3 Retention of Exclusive Distribution Rights. Faulding shall use
commercially reasonable efforts to register and market the Formulated Product
for sale within all countries within the Territory. Such efforts shall be
equivalent to Faulding's efforts relating to other drugs intended for human
antineoplastic use. In the event of failure by Faulding to pursue such efforts
in any country within the Territory, NaPro shall be entitled to terminate this

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<PAGE>

Agreement as to such country by at least [THIS PORTION HAS BEEN REDACTED]prior
written notice to Faulding, provided that Faulding shall not during such notice
period commence efforts and provided that such delay in pursuing registration
and/or marketing is not beyond the reasonable control of Faulding.

         5.4 Clinical Study Protocols. If Faulding undertakes clinical studies
relating to Formulated Product, then Faulding shall conduct any such clinical
studies of the Formulated Product in accordance with applicable regulatory
standard. Faulding shall allow NaPro to assist in protocol design for the
Australian clinical studies, so long as NaPro complies with minimal applicable
regulatory requirements, in order to improve the likelihood of admissibility of
the Australian clinical data in any application for Registration that NaPro may
elect to file in the United States of America or elsewhere outside the
Territory.

         5.5      Clinical Trial Committee.  During any period in which Faulding
is undertaking clinical studies with Formulated Product, NaPro and Faulding will
each appoint two or three (2 or 3) persons as agreed from time to time to be
members of a clinical trial committee which will jointly develop and review a
program for compliance with regulatory requirements in the Territory and monitor
such program. This committee will meet no less frequently than annually by the
end of each calendar year to review clinical studies underway and to discuss and
consider clinical studies covering additional cancer indications. Each party may
appoint substitutes for its committee members and each party shall be permitted
to send additional observers to committee meetings.

         5.6 Pre-clinical/Clinical Data. The parties agree to share with each
other pre-clinical and clinical data developed by or available to them for the
Formulated Product under applications for Registration or IND's including raw
data and final reports. Each party shall promptly inform the other of any
adverse reactions encountered in their clinical studies relating to Paclitaxel.
Neither party shall alter the specification of the Formulated Product to be used
in the Territory without the prior written consent of the other party. NaPro
shall jointly own all clinical data developed by Faulding for use in the
Territory and shall only have the right to use such clinical data outside the
Territory. Faulding shall jointly own all such clinical data and shall only have
the right to use such clinical data within the Territory. Following termination
of this Agreement, NaPro shall have the right to use such clinical data anywhere

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<PAGE>

in the world. Following termination of this Agreement, for any reason other than
expiration of term as set forth in paragraph 3.1, Faulding shall initially have
the right to use such clinical data only within the Territory. After a period of
three (3) years following termination of this Agreement, Faulding shall have the
right to use such clinical data outside of the Territory. Following termination
of this Agreement due to expiration of the full term as set forth in paragraph
3.1, Faulding may use such clinical data immediately both within and outside the
Territory.

         5.7 Regulatory Filings. Faulding agrees to provide reasonable
assistance in NaPro's regulatory filings for Formulated Product outside the
Territory by providing to NaPro (in a reasonable time frame)such information,
regulatory documents and files (including obtaining certificates of free sale if
necessary) as are required to obtain registration in NaPro's name or the name of
NaPro's licensee in the country in question. NaPro shall pay Faulding's out of
pocket costs and a reasonable fee, mutually agreed upon between the parties, to
compensate Faulding for the efforts involved in connection with all assistance
rendered by Faulding to NaPro pursuant to this clause 5.8. Prior to providing
Faulding Confidential Information [THIS PORTION HAS BEEN REDACTED] to any third
party on NaPro's behalf, Faulding may require such third party to enter into
appropriate confidentiality agreements with Faulding in order to preserve the
confidentiality, and prevent the misuse of Confidential Information provided by
Faulding to such third party.

         5.8      Accuracy of Clinical Information.  Faulding acknowledges that
Faulding has had the opportunity to visit with NaPro's management in its
facilities, as well as to review all published NCI pre-clinical and clinical
data and any NaPro pre- clinical data possessed by NaPro. Each party hereby
represents, warrants and covenants to the other that any and all clinical
information already provided or to be provided by one party to the other in
relation to the Product is or will be, to the best of that party's knowledge,
true and complete in every material particular, and that such party will
promptly provide to the other any additional information which comes into its
possession which affects or relates to the Product and which is relevant to its
use, safety, efficacy or Registration or which may be regarded as indicating
that the above representation or warranty as applicable to information
previously provided is no longer materially correct. Each party shall now and at
all times hereafter protect, indemnify and hold harmless the other from and

                                       15

<PAGE>

against all Loss arising from any Claims arising out of or attributable to any
breach by such party of the representations set forth in this paragraph.

         5.9 Monitoring of Applications for Registration. The parties shall
provide each other, upon written request, and no more than once per quarter, a
written update on the status of registration efforts throughout the world. The
parties shall cooperate with one another in reporting adverse events relating to
Formulated Product.

         5.10 Form of Application for Registration; Marketing Materials. To the
extent permissible under applicable laws or regulations, each application for
Registration in relation to the Formulated Product containing Product supplied
by NaPro shall name Faulding as the finisher of the Formulated Product and NaPro
as the manufacturing source of the Product, and Formulated Product leaflets,
promotional materials, and Formulated Product cartons shall state that the
active drug substance of the Formulated Product is supplied by NaPro
BioTherapeutics, Inc., U.S.A. under license. To the extent permissible under
applicable laws or regulations, and if space is available and it is reasonable
to do so, Formulated Product vials containing Product supplied by NaPro shall
also state that the active drug substance of the Formulated Product is supplied
by NaPro BioTherapeutics, Inc., U.S.A. under license. Packaging, vials and other
promotional materials used in connection with Formulated Product containing
Paclitaxel supplied by a third party shall not use NaPro's name.

                                   ARTICLE VI

                               Proprietary Rights

         6.1      Representation and Warranty.  NaPro represents and warrants
that to its best knowledge, the Product does not infringe the patent rights of
any person in the Territory. NaPro makes no representation or warranty as to any
infringement which may occur through any formulation or finishing of the Product
carried out by Faulding or as to any features of the Product required by or
agreed with Faulding.

         6.2      Intellectual Property Indemnity.  NaPro shall protect,
indemnify and hold harmless Faulding from and against all Loss arising out of or
attributable to any breach of the representations set forth in paragraph 6.1.

                                       16

<PAGE>

         6.3 Prosecution of Patents. NaPro shall, in accordance with NaPro's
reasonable business judgment, prosecute in a timely manner in Australia any
patent applications owned by NaPro relating to Paclitaxel pending as of the date
of this Agreement if equivalents may be filed there. In addition, NaPro shall in
the future, in accordance with its reasonable business judgment, file
applications owned by NaPro relating to Paclitaxel in Australia as well as other
countries within the Territory that may be mutually agreed upon. In the event
that NaPro shall determine not to file or prosecute any such patent applications
in Australia then Faulding shall have the right to prosecute such applications
in the name of NaPro to the extent that the product covered by such applications
is the subject of this Agreement.

         6.4 Paclitaxel Delivery Systems. Both parties shall disclose to each
other any inventions or improvements that they and, if they are permitted, that
their respective licensees may make relating to solubility and/or efficacy
and/or targeting and/or delivery ("Delivery Systems") of Paclitaxel.

                  [THIS PORTION HAS BEEN REDACTED]

         6.5      Other Products.  NaPro agrees to inform Faulding of
products other than Paclitaxel which may be developed by NaPro or
to which NaPro may obtain rights and which NaPro is free to offer
to Faulding.

         6.6 Technology Transfer. This Agreement does not anticipate technology
transfer from NaPro to Faulding relating to the manufacture of Paclitaxel in the
ordinary course of events. However, in the event that NaPro should elect in the
future, during the term of this Agreement, to license its technology in the
Territory in the Field, Faulding shall have the right to negotiate for a license
to NaPro's Paclitaxel production technology for manufacture and sale in the
Field in the Territory, including a license under applicable patents, patent
applications and trade secrets. If NaPro makes an offer in such respect, and
Faulding does not accept such offer within ninety (90) days, then NaPro shall be
free to make the same offer to others, provided that the price and terms under
which the offer is made to others during a period of one (1) year commencing on
the date of its offer to Faulding shall be no more favorable than the price and
terms specified in NaPro's offer to Faulding and provided, further, that any
agreement entered into with any such third party licensee shall provide that
such licensee shall supply Faulding with Paclitaxel pursuant to the terms of
this Agreement (including those terms relating to exclusivity) and shall not

                                       17

<PAGE>

sell any product containing Paclitaxel in the Territory during the term of this
Agreement.

         [THIS PORTION HAS BEEN REDACTED]

                                   ARTICLE VII

                       Termination and Dispute Resolution

         7.1 Termination By Either Party; Reorganization Insolvency.
Notwithstanding anything else contained in this Agreement, this Agreement may be
terminated by either party giving written notice to the other upon the happening
of any of the following events:

                  7.1.1 The expiration of twenty-one (21) days after the other
party having a receiver validly appointed for the whole or any substantial part
of its assets or immediately where a court order is validly made or a resolution
of such party's shareholders passed for the winding up of such party other than
for the purpose of reorganization or reconstruction.

                  7.1.2 In the event that the other party files a petition in
bankruptcy or similar proceedings or is adjudicated bankrupt or if a petition
for bankruptcy or similar proceedings is filed against such party and is not
stayed or discharged within forty-five (45) days of such filing or if such party
becomes insolvent or makes an assignment for the benefit of creditors or any
agreement pursuant to bankruptcy law or otherwise acknowledges insolvency or is
adjudged bankrupt or if such party discontinues business.

         7.2      Termination By Either Party; Change of Control.

                  7.2.1 If a third party which either itself or through any
Affiliate sells Paclitaxel in the Territory (a) becomes the "beneficial owner"
(as defined in Rule 13d-3 promulgated under the Securities Exchange Act of
1934), directly or indirectly, of securities of NaPro representing forty percent
(40%) or more of the combined voting power of NaPro's then outstanding
securities, (b) merges into or consolidates with NaPro, (c) purchases all or a
substantial part of NaPro's property, business, or assets, (d) has the right to
designate a majority of the Board of Directors of NaPro or any new merged entity
or (e) by contractual right can exercise effective management control or
negative veto rights over substantial management decisions of NaPro or any new
merged

                                       18

<PAGE>

entity, then Faulding may terminate this Agreement any time thereafter upon
written notice to NaPro unless such entity undertakes in writing that it and its
Affiliates will cease all Paclitaxel sales in the Territory except to Faulding
as provided for in this Agreement and will otherwise honor the terms of this
Agreement. If IVAX Corporation or Bristol Myers Squibb or any Affiliate of
either of them (a) becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934), directly or indirectly,
of securities of NaPro representing forty percent (40%) or more of the combined
voting power of NaPro's then outstanding securities, (b) merges into or
consolidates with NaPro, (c) purchases all or a substantial part of NaPro's
property, business, or assets, (d) has the right to designate a majority of the
Board of Directors of NaPro or any new merged entity or (e) by contractual right
can exercise effective management control or negative veto rights over
substantial management decisions of NaPro or any new merged entity, then
Faulding may terminate this Agreement any time thereafter upon written notice to
NaPro.

                  7.2.2 If a third party which manufactures, formulates,
distributes or otherwise produces or markets Paclitaxel itself or through
another Affiliate (a) becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934 or any Australian
equivalent), directly or indirectly, of securities of Faulding representing
forty percent (40%) or more of the combined voting power of Faulding's then
outstanding securities, (b) merges into or consolidates with Faulding, (c)
purchases all or a substantial part of Faulding's property, business, or assets,
(d) has the right to designate a majority of the Board of Directors of Faulding
or any new merged entity or (e) by contractual right can exercise effective
management control or negative veto rights over substantial management decisions
of Faulding or any new merged entity, then Faulding shall elect to either cause
such Person to cease such Paclitaxel-related activities, or terminate this
Agreement. Such election shall occur within ninety (90) days from the date of
such affiliation, and on the date of such election, Faulding shall either notify
NaPro that this Agreement shall terminate, or shall provide NaPro with written
assurance signed by an officer of Faulding's relevant Affiliate that such
Affiliate shall immediately cease all Paclitaxel-related activities. If this
Agreement is terminated pursuant to this paragraph 7.2.2, then such termination
shall take effect ten (10) days following notice to NaPro of Faulding's election
to terminate.

                                       19

<PAGE>

         7.3  Termination By Faulding; Non-supply.  This Agreement
may be terminated by Faulding upon ten (10) days' written notice
to NaPro upon the happening of any of the following events:

                  7.3.1 If, beginning on [THIS PORTION HAS BEEN REDACTED], NaPro
has failed to deliver:

         (i) by the end of the first quarter of the first contract
         year at least [THIS PORTION HAS BEEN REDACTED],

         (ii) by the end of any subsequent first quarter of any
         contract year at least [THIS PORTION HAS BEEN REDACTED],

         (iii) by the end of any second or third quarter of any
         contract year at least [THIS PORTION HAS BEEN REDACTED], or

         (iv) by thirty (30) days from the end of the fourth quarter of any
         contract year at least [THIS PORTION HAS BEEN REDACTED]

of the cumulative amount of Product ordered by Faulding pursuant to the terms of
this Agreement for all Uses throughout the Territory provided that Faulding has
materially complied with paragraph 4.7.1 and subject to paragraphs 4.7.2 and
subparagraphs of 4.7.2 above.

         7.4 Governing Law. This Agreement shall be construed in accordance with
and governed by the internal laws of the State of New York, excluding such
state's rules relating to conflicts of laws, and its form, execution, validity,
construction and effect shall be determined in accordance with such internal
laws.

         7.5      Effects of Termination.  Upon termination of this
Agreement, the following provisions shall have effect:

                  7.5.1 Upon termination of this Agreement,howsoever arising,
the following provisions shall have effect: The obligations of the parties
pursuant to Article VIII shall continue, notwithstanding termination of this
Agreement. The full amount of any amounts outstanding by one party to the other
shall be paid forthwith. All rights and licenses granted hereunder, other than
joint ownership of clinical data and related Registration product specification,
shall terminate. The patent assignments undertaken in connection with the
Original Agreement shall survive termination of this Agreement. Neither party
nor any of its Affiliates shall utilize any of the Confidential Information

                                       20

<PAGE>

provided by the other party pursuant to this Agreement, except as otherwise
provided herein. NaPro shall be free to use, and Faulding shall provide to NaPro
to the extent not already provided, the clinical data and the product
specifications for Formulated Product as used in Registrations or pending
Registrations which will allow NaPro to make use of the clinical data in
obtaining Registration in NaPro's name or the name of NaPro's licensee. Faulding
shall not be required to disclose to NaPro Faulding Confidential Information
regarding the process of formulating Formulated Product.

                  7.5.2  Upon notice of termination pursuant to paragraph
3.1, Faulding shall take any reasonable measures from a regulatory standpoint
(as opposed to requiring the parties to negotiate a commercial arrangement)
necessary to allow NaPro or its designee to enjoy the full and immediate benefit
of any existing Registrations, pending Registrations, or data relevant to
Registration, including assigning such Registrations or pending Registrations
into the joint name of NaPro or its designee. NaPro shall bear the reasonable
costs of such regulatory measures. NaPro shall cooperate with Faulding in
amending existing or pending Registrations to name a third party specified by
Faulding as an alternate source of Product and shall take any other reasonable
measures necessary from a regulatory standpoint (as opposed to requiring the
parties to negotiate a commercial arrangement) to allow Faulding the continued
benefit of such Registrations. Faulding shall bear the reasonable costs of such
measures. During any period of time, not to exceed two (2) years in which NaPro
is prevented from selling Formulated Product for a given Use (Commercial,
Compassionate, or Developmental Use) in a country within the Territory because
of Faulding's failure to transfer the benefit of existing or pending
Registrations to NaPro (provided that NaPro has taken all steps reasonably
necessary to take advantage or such transfer), Faulding shall not sell
Formulated Product in such country for those Uses unavailable to NaPro.

                  7.5.3 If this Agreement is terminated by NaPro pursuant to
paragraph 7.1 or 7.6, or is terminated by Faulding due to change of control of
Faulding pursuant to paragraph 7.2.2, Faulding shall take any reasonable
measures necessary from a regulatory standpoint (as opposed to requiring the
parties to negotiate a commercial arrangement) to allow NaPro or its designee to
enjoy the full and immediate benefit of any existing Registrations, pending
Registrations, or data relevant to Registration, including assigning such
Registrations or pending Registrations into the joint name of NaPro or its
designees. During any period of time, not to exceed two (2) years in which NaPro
is prevented from selling Formulated Product for a given Use (Commercial,

                                       21

<PAGE>

Compassionate, or Developmental Use) in a country within the Territory because
of NaPro's inability to enjoy the benefit of existing or pending Registrations
or inability to qualify an alternate formulation site for Formulated Product,
Faulding shall not sell Formulated Product in such country for those Uses
unavailable to NaPro.

                  7.5.4 If this Agreement is terminated by Faulding pursuant to
paragraphs 7.1, 7.3, or 7.6, then NaPro shall cooperate with Faulding in
amending existing or pending Registrations to name a company specified by
Faulding as an alternate source of Product and shall take any other reasonable
measures from a regulatory standpoint (as opposed to requiring the parties to
negotiate a commercial arrangement) necessary to allow Faulding the continued
benefit of such Registrations. During any period of time, not to exceed two (2)
years in which Faulding is prevented from selling Formulated Product for a given
Use (Commercial, Compassionate, or Developmental Use) in a country within the
Territory because of Faulding's inability to enjoy the benefit of existing or
pending Registrations or inability to qualify an alternate source of Product,
NaPro shall not sell Formulated Product in such country for those Uses
unavailable to Faulding.

         7.6      Contract Breach/Cure.

                  7.6.1 Except as set forth in paragraphs 7.1, 7.2 and 7.3
above, should either party materially breach this Agreement, the other party may
serve notice of such breach in writing upon the breaching party. The breaching
party shall have ninety (90) days after receipt of the notice to cure such
breach or to demonstrate that no such breach exists. In the event that any such
breach remains unresolved after such 90 day period, then the matter shall

                                       22

<PAGE>

forthwith be referred to arbitration pursuant to the terms of paragraph 7.7. In
such circumstances, the arbitrators shall have the power to determine whether
this Agreement should be terminated or should continue according to its terms,
and the appropriate remedy for any such breach.

                  7.6.2 In the event of termination pursuant to paragraphs 7.1,
7.2, or 7.3, the only issue that the parties may refer to arbitration, pursuant
to paragraph 7.6.1 above, shall be the appropriate amount of damages, if any,
payable to either party. Such termination will be effective upon ten days'
notice by the terminating party. During such 10 day period, the parties shall
have the mutual obligation to confer in good faith to attempt to resolve their
differences, provided, however that if no such resolution and conciliation
occurs after the parties have conferred, the Agreement shall nonetheless
terminate at the end of the 10 day period.

         7.7 Arbitration Hearings. Any disputes arising under or relating to
this Agreement shall be settled by binding arbitration under the rules then in
effect of the American Arbitration Association by three (3) arbitrators selected
by the parties hereto in conformity with said rules, and such arbitration
proceeding shall be held in New York, New York, unless the parties agree
otherwise in writing; provided, however, that the American Arbitration
Association shall designate arbitrators who are able to comply with the
provisions of this paragraph 7.7. Any arbitration conducted pursuant to the
provisions of this paragraph 7.7 shall be conducted as follows, unless the
parties agree otherwise in writing:

                  7.7.1 Once hearings have begun, the hearings (a) shall be
conducted at least three full business days per week (at least 9:30 a.m. to 5:00
p.m.) and (b) shall proceed from week to week on consecutive weeks until the
hearings are concluded.

                  7.7.2 In the event the American Arbitration Association cannot
designate arbitrators who agree to comply with the provisions of paragraph 7.8.1
hereof, the arbitration shall be referred to Endispute which shall appoint a
single arbitrator to conduct the hearings as hereinabove set forth in paragraph
7.7.1.

         7.8 Past Breaches. All breaches of this Agreement of which the parties
are aware as of the Effective Date are hereby forgiven by both parties, and no
such alleged breach shall be relied upon by either party as grounds for
termination of this Agreement or any claim for damages.

                                  ARTICLE VIII

                                 Confidentiality

         8.1 Transfer of Information. Each party has provided to the other
information relating to Paclitaxel in connection with negotiation of the
Original Agreement and performance of the Original Agreement and each party will
in the future provide information in relation to this Agreement which the

                                       23

<PAGE>

disclosing party considers to be confidential ("Confidential Information").
"Confidential Information" shall not include any information which:

                  8.1.1 Is now, or hereafter becomes, through no act or failure
to act on the part of the receiving party, generally known or available to the
public.

                  8.1.2 Is known to the receiving party at the time of
disclosure provided that the receiving party promptly notifies the disclosing
party in writing of this prior knowledge within a reasonable time of discovery
of such prior knowledge.

                  8.1.3 Is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on disclosure, provided that
the receiving party promptly notifies the disclosing party of this third party
disclosure within thirty (30) days thereafter.

                  8.1.4  Is disclosed with the written approval of the
disclosing party.

         8.2 Restricted Disclosure. The parties will restrict dissemination of
Confidential Information received from the other party to only those employees
with a need to know such information, except that:

                  8.2.1 In the case of Faulding, such Information may be
provided to regulatory authorities in connection with an application for an IND
or Registration for the Formulated Product.

                  8.2.2 In the case of NaPro, such Information may be provided
to regulatory authorities in connection with an application for an IND or
Registration for the Formulated Product or to any other Person with which NaPro
has an agreement relating to Registration and sale of the Formulated Product
outside the Territory for the purpose of obtaining an IND or Registration for
the Formulated Product, subject to suitable confidentiality undertakings.

         8.3 Precautions. Each party shall maintain Confidential Information
received from the other party as confidential, and protect the same from misuse,
espionage, loss or theft and shall not disclose the Confidential Information to
others except as provided in paragraph 8.2.

                                       24

<PAGE>

                                   ARTICLE IX

                                  Force Majeure

         9.1 Force Majeure. Neither party shall be liable to the other in the
event that performance of its obligations hereunder shall be prevented by any
cause beyond its reasonable control, including without limitation acts of God,
acts of government, shortage of material, accident, fire, delay or destruction
of means of transport or other disaster ("events of force majeure"), but the
affected party shall use reasonable efforts to avoid or remove the cause of such
nonperformance and shall continue performance hereunder with the utmost dispatch
whenever such cause is removed.

                                    ARTICLE X

                            Miscellaneous Provisions

         10.1 Severability. The provisions of this Agreement shall be severable,
and if any of them are held invalid or unenforceable, for any reason, such
provision shall be modified to the extent necessary to cure such invalidity. The
invalidity or unenforceability of one provision shall not affect any other
provision of this Agreement.

         10.2 Assignment/Third Parties. Neither party shall assign any rights or
obligations hereunder to third parties without the agreement of the other party.
Notwithstanding this provision, within the Territory Faulding shall be entitled
to perform any one or more of its obligations according to this Agreement by
appointing third parties to do so on its behalf and in its name, provided that
NaPro has given Faulding its prior written consent to each such appointment,
which consent shall not be unreasonably withheld or delayed.

         10.3 Relationship of Parties. Nothing contained in this Agreement shall
be construed so as to operate or to place any party hereto in the relationship
of employee or agent or joint venturer or legal representative of the other
party and it is hereby expressly agreed and acknowledged that each of the
parties hereto is an independent contracting party which does not have the
authority or power for or on behalf of the other party hereto to enter into any
contract to incur debts, to accept money, to assume any obligations or to make
any warranties or representations whatsoever.

                                       25

<PAGE>

         10.4 Waiver. The failure of either of the parties to insist upon a
strict performance of any of the provisions of this Agreement shall not be
deemed a waiver of any subsequent breach of such provision or of the provision
itself.

         10.5     Contract Variation.  Any modification, alteration, change or
variation in any provision of this Agreement shall be only made in writing,
executed by both parties.

         10.6     Notices.  Notices by one party to the other shall be in
writing by registered mail or major air courier delivery (receipt provided) or
by telecopy confirmed both by contemporaneous telephone conversation with the
recipient and by airmail letter. Notices by Faulding to NaPro shall be directed
to NaPro's Chief Executive Officer at its offices at 6304 Spine Road Unit A
Boulder, CO 80301, USA. Fax: (303) 530-1296. Notices by NaPro to Faulding shall
be directed to Faulding's Secretary, at 115 Sheriff Street, Underdale, South
Australia 5032, Australia. Fax: 011-61-8-8234-8230.

         10.7 Entire Agreement. Except as set out in this Agreement, this
Agreement constitutes the entire agreement of the parties (and into which all
prior negotiations, commitments, representations and undertakings with respect
to the subject matter are merged and there are no other undertakings, warranties
or agreements between the parties relating to the subject matter of this
Agreement and this Agreement is not based upon any representations as to profit
or worth nor has any representation been made (whether by this Agreement or
otherwise) to induce NaPro or Faulding to accept and execute this Agreement.

         10.8 Compliance with Law. It shall be the responsibility of each party
to follow all procedures and take all actions which are necessary or required
for agreements of this type by the laws, treaties or regulations applicable in
each country in which that party shall deal in the Product. Faulding shall
ensure that the storage, marketing or sale of the Product and Formulated
Product does not breach any law or statute rule or regulation relating to drugs
in each country in which Faulding shall deal in the Product. NaPro agrees to
supply Faulding with all requisite information concerning manufacture of the
Product to enable Faulding to apply for, gain and maintain registration of the
Product in the Territory.

         10.9 Interpretation. Headings in this Agreement are for ease of
reference only and shall not be used to interpret this Agreement. The language

                                       26

<PAGE>

of this Agreement shall be deemed to be the language mutually chosen by the
parties and no rule of strict construction shall be applied against either party
hereto.

         10.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but which together shall form
one agreement.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the date
hereof.

F.H. FAULDING & CO. LIMITED              NAPRO BIOTHERAPEUTICS, INC.

By: /s/ Mark Laurie                      By:  /s/ Kai P. Larson
    Mark Laurie, Vice                         Kai P. Larson
    President of Investor Relations           Vice President, General Counsel

                                       27

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