Document:

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                                                                EXHIBIT NO. 10.3

  CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
                EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                            STOCK PURCHASE AGREEMENT

         THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 24th
day of August, 2001 (the "Execution Date"), by and between Atrix Laboratories,
Inc., a Delaware corporation having offices at 2579 Midpoint Drive, Fort
Collins, CO 80525-4417 (hereinafter, the "Investor"), and CollaGenex
Pharmaceuticals, Inc., a Delaware corporation having offices at 41 University
Drive, Newtown, PA 18940 (hereinafter, "CGPI").

         THE PARTIES HEREBY AGREE AS FOLLOWS:

1.       Purchase and Sale of Stock.

         1.1.     Sale and Issuance of Common Stock. Subject to the terms and
                  conditions of this Agreement, at the Closing (defined below)
                  Investor will purchase and the CGPI will sell and issue to
                  Investor 330,556 shares of CGPI Common Stock (the "Shares")
                  for the purchase price per share equal to $9.0756, which is
                  [**] of the average closing prices reported on the Nasdaq
                  National Market System for the [**] consecutive trading days
                  prior to, but not including, the Execution Date, for an
                  aggregate purchase price of $2,999,994.03 (the "Purchase
                  Price").

         1.2.     Closing. The purchase and sale of the Shares shall take place
                  at the offices of the Investor, 2579 Midpoint Drive, Fort
                  Collins, Colorado 80525, on the "Effective Date", as such term
                  is defined in the License Agreement of even date herewith
                  between the parties hereto (the "License Agreement"), or at
                  such other times and places as CGPI and Investor mutually
                  agree upon in writing (which times and places are designated
                  as the "Closing"). At the Closing, CGPI shall deliver to its
                  transfer agent, American Stock Transfer & Trust Company, a
                  letter, in the form of Exhibit A, which letter directs
                  American Stock Transfer & Trust Company to deliver promptly to
                  Investor a certificate representing the Shares.

         1.3.     Purchase Price. At the Closing, the Purchase Price shall be
                  paid by Investor to CGPI in immediately available funds by
                  wire transfer to a bank account designated by CGPI two (2)
                  business days prior to the Closing Date or, if not so
                  designated, then by certified or official bank check payable
                  in immediately available funds to the order of CGPI in such
                  amount.

         1.4.     Definition.

                           (a)      The following terms, as used herein, have
                                    the following meanings:

                                    "Affiliate" shall have the meaning defined
                                    in Rule 501 of Regulation D as promulgated
                                    under the 1933 Act.
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                                    "Closing Date" means the date of the
                                    Closing.

                                    "Common Stock" means the Common Stock, par
                                    value $.01 per share of CGPI.

                                    "GAAP" means generally accepted accounting
                                    principles in the United States.

                                    "Material Adverse Effect" means a material
                                    adverse effect on the condition (financial
                                    or otherwise), business, assets, results of
                                    operations of CGPI and its subsidiaries
                                    taken as a whole.

                                    "1934 Act" means the Securities Exchange Act
                                    of 1934, as amended, and the rules and
                                    regulations promulgated thereunder.

                                    "1933 Act" means the Securities Act of 1933,
                                    as amended, and the rules and regulations
                                    promulgated thereunder.

                                    "Person" shall mean an individual,
                                    corporation, partnership, trust, business
                                    trust, association, joint stock company,
                                    joint venture, pool, syndicate, sole
                                    proprietorship, and any other form of entity
                                    not specifically listed herein.

                                    "SEC" shall mean the U.S. Securities and
                                    Exchange Commission.

2.       Representations and Warranties of CGPI. CGPI hereby represents and
         warrants to Investor that:

         2.1.     Organization, Good Standing and Qualification. CGPI is a
                  corporation duly organized, validly existing and in good
                  standing under the laws of the State of Delaware and has all
                  requisite corporate power and authority to carry on its
                  business as now conducted. CGPI is duly qualified to transact
                  business and is in good standing in each jurisdiction in which
                  the failure to so qualify would have a Material Adverse
                  Effect.

         2.2.     Capitalization. The authorized capital of CGPI consists of:

                  (a)      Preferred Stock. 5,000,000 shares of preferred stock,
                           $.01 par value, of which (i) 200,000 shares have been
                           designated Series D Convertible Preferred Stock, of
                           which 200,000 are issued and outstanding; and (ii)
                           4,800,000 shares are undesignated, none of which are
                           issued and outstanding.

                  (b)      Common Stock. 25,000,000 shares of Common Stock, of
                           which 10,669,017 shares were issued and outstanding
                           on August 15, 2001.

         2.3.     Authorization. All corporate action on the part of CGPI, its
                  officers, directors and stockholders necessary for (i) its
                  authorization, execution and delivery of this

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                  Agreement, (ii) the performance of all obligations of CGPI
                  hereunder and (iii) the authorization, issuance (or
                  reservation for issuance) and delivery of the Common Stock
                  being sold hereunder, to the extent that the foregoing
                  requires performance on or prior to the Closing, has been
                  taken. This Agreement, assuming due authorization, execution
                  and delivery by Investor, constitutes the valid and legally
                  binding obligation of CGPI, enforceable against CGPI in
                  accordance with its terms, except as such enforcement may be
                  limited by applicable bankruptcy, insolvency, reorganization,
                  moratorium or similar laws affecting the enforcement of
                  creditors' rights generally or by equitable principles
                  relating to enforceability (regardless of whether considered
                  in a proceeding at law or in equity).

         2.4.     Valid Issuance of Common Stock. The Shares, when issued
                  against payment thereof in accordance with this Agreement,
                  will be duly and validly issued, fully paid and nonassessable
                  and, based in part upon the representations of the Investor in
                  this Agreement and except for requisite Federal securities and
                  state blue sky filings, will be issued in compliance with all
                  applicable federal and state securities laws.

         2.5.     SEC Filings. CGPI has registered its Common Stock pursuant to
                  Section 12 of the 1934 Act, and the Common Stock is quoted on
                  the Nasdaq National Market. CGPI has filed all 1934 Act
                  reports for a period of at least twelve (12) months
                  immediately preceding the offer or sale of the Shares. CGPI's
                  filings with the SEC complied as of their respective filing
                  dates, or in the case of registration statements, their
                  respective effective dates, as to form in all material
                  respects with all applicable requirements of the 1933 Act and
                  the 1934 Act and the rules and regulations promulgated
                  thereunder. None of such filings, including, without
                  limitation, any exhibits, financial statements or schedules
                  included therein, at the time filed, or in the case of
                  registration statements, at their respective filing dates,
                  contained any untrue statement of a material fact or omitted
                  to state a material fact required to be stated therein or
                  necessary to make the statements therein, in light of the
                  circumstances under which they were made, not misleading. The
                  audited financial statements of CGPI included in CGPI's Annual
                  Report on Form 10-K for the year ended December 31, 2000
                  comply as to form in all material respects with the published
                  rules and regulations of the SEC with respect thereto, and
                  such audited financial statements (i) were prepared from the
                  books and records of CGPI, (ii) were prepared in accordance
                  with GAAP applied on a consistent basis (except as may be
                  indicated therein or in the notes or schedules thereto) and
                  (iii) present fairly the financial position of CGPI as of the
                  dates thereof and the results of operations and cash flows for
                  the periods then ended. The unaudited financial statements
                  included in CGPI's Quarterly Reports on Form 10-Q for the
                  quarterly periods ended March 31, 2001 and June 30, 2001
                  comply as to form in all material respects with the published
                  rules and regulations of the SEC with respect thereto; and
                  such unaudited financial statements (i) were prepared from the
                  books and records of CGPI, (ii) were prepared in accordance
                  with GAAP, except as otherwise permitted under the 1934 Act
                  and the rules and regulations thereunder, on a consistent
                  basis (except as may be indicated therein or in the notes or
                  schedules thereto, and except that they do not contain
                  footnotes and other

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                  presentation items that may be required by GAAP) and (iii)
                  present fairly the financial position of CGPI as of the dates
                  thereof and the results of operations and cash flows (or
                  changes in financial condition) for the periods then ended,
                  subject to normal year-end adjustments and any other
                  adjustments described therein or in the notes or schedules
                  thereto.

         2.6.     Litigation. Except as disclosed in CGPI's filings with the
                  SEC, there is no action, suit or proceeding before or by any
                  court or governmental agency or body, domestic or foreign, now
                  pending or, to the knowledge of CGPI, threatened, against or
                  affecting CGPI, or any of its properties, which could
                  reasonably be expected, individually or in the aggregate, (i)
                  to have a Material Adverse Effect or (ii) to result in the
                  issuance of an order restraining, enjoining or otherwise
                  prohibiting or making illegal the consummation of any of the
                  transactions contemplated by this Agreement.

         2.7.     No Default. Except as disclosed in CGPI's filings with the
                  SEC, CGPI is not in default in the performance or observance
                  of any material obligation, agreement, covenant or condition
                  contained in any indenture, mortgage, deed of trust or other
                  material agreement or instrument to which it is a party or by
                  which it or its property may be bound and which is filed as an
                  exhibit to CGPI's 1934 Act reports, except for defaults that
                  have not had and would not reasonably be expected to have,
                  individually or in the aggregate, a Material Adverse Effect.

         2.8.     Subsequent Events; Undisclosed Liabilities. Since June 30,
                  2001, CGPI has not incurred any liability or obligation,
                  contingent or otherwise, that taken as a whole, is material in
                  the aggregate to CGPI, except (i) in the ordinary course of
                  business consistent with past practices, or (ii) as reflected
                  in or reserved against in the balance sheet of CGPI as of June
                  30, 2001. Since June 30, 2001, CGPI has conducted its business
                  in the ordinary course of business consistent with past
                  practices, and there has not been any Material Adverse Effect
                  and there is no condition existing that could reasonably be
                  expected to result in a Material Adverse Effect on the
                  business of CGPI.

         2.9.     Consents and Approvals. No material consent, approval,
                  qualification, order or authorization of, or filing with, any
                  local, state or federal governmental authority or any third
                  party, including any approval under the Hart-Scott-Rodino
                  Antitrust Improvements Act of 1976, as amended, is required on
                  the part of CGPI in connection with CGPI's valid execution,
                  delivery or performance of this Agreement, or the offer, sale
                  or issuance of the Shares by CGPI, other than the filings that
                  have been made prior to the Closing, except that any notices
                  of sale required to be filed by CGPI with the SEC under
                  Regulation D of the 1933 Act and filings required by the rules
                  of the Nasdaq National Market, or such post-closing filings as
                  may be required under applicable state securities laws, which
                  will be timely filed within the applicable periods therefor.

         2.10.    Compliance with Laws and Court Orders. CGPI is not in
                  violation of any applicable law, rule, regulation, judgment,
                  injunction, order or decree except for

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                  violations that have not had and would not reasonably be
                  expected to have, individually or in the aggregate, a Material
                  Adverse Effect.

         2.11.    No Conflict. Except for rights to anti-dilution protection for
                  holders of CGPI's Series D Preferred Stock, the execution and
                  delivery of this Agreement and CGPI's performance of its
                  obligations under this Agreement will not (i) violate any
                  applicable law, ordinance, rule or regulation of any
                  governmental authority or (ii) conflict with or result in a
                  breach of the terms and conditions of, or constitute any
                  default under, CGPI's Certificate of Incorporation or By-laws,
                  or any contract, agreement or instrument to which CGPI or any
                  subsidiary is a party or by which CGPI or any Subsidiary or
                  any of their respective property if bound, except, in each
                  case, for violations, conflicts or breaches which individually
                  or in the aggregate would not have a Material Adverse Effect.

         2.12.    Insurance. CGPI has in full force and effect fire and
                  casualty, general liability and product liability insurance
                  policies, with extended coverage, in amounts customary for
                  companies similarly situated to CGPI.

3.       Representations and Warranties of Investor. Investor hereby represents
         and warrants to CGPI that:

         3.1.     Organization and Existence. Investor is a corporation duly
                  incorporated, validly existing and in good standing under the
                  laws of Delaware and has all requisite corporate power and
                  authority to carry on its business as now conducted.

         3.2.     Corporate Authorization. Investor has full corporate power and
                  authority to execute and deliver this Agreement and perform
                  its obligations hereunder. The execution, delivery and
                  performance by Investor of this Agreement have been duly
                  authorized by all requisite corporate action. This Agreement,
                  assuming due authorization, execution and delivery by CGPI,
                  constitutes the valid and legally binding obligation of
                  Investor, enforceable against Investor in accordance with its
                  terms, except as such enforcement may be limited by applicable
                  bankruptcy, insolvency, reorganization, moratorium or similar
                  laws affecting the enforcement of creditors' rights generally
                  or by equitable principles relating to enforceability
                  (regardless of whether considered in a proceeding at law or in
                  equity).

         3.3.     Purchase Entirely for Own Account. Investor is sophisticated
                  in transactions of this type and capable of evaluating the
                  merits and risks of the transactions described herein, and has
                  the capacity to protect its own interests. Investor has not
                  been formed solely for the purpose of entering into the
                  transactions described herein. The Shares to be received by
                  Investor will be acquired for investment for Investor's own
                  account, not as a nominee or agent, and not with a view to the
                  resale or distribution of any part thereof, and that Investor
                  has no present intention of selling, granting any
                  participation in, or otherwise distributing the same. By
                  executing this Agreement, Investor further represents that
                  Investor does not have any contract, undertaking, agreement or
                  arrangement with any person to sell,

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                  transfer or grant participation to such person or to any third
                  person, with respect to any of the Shares.

         3.4.     Restricted Securities. Investor understands that the shares of
                  Common Stock it is purchasing are characterized as "restricted
                  securities" under the federal securities laws inasmuch as they
                  are being acquired from CGPI in a transaction not involving a
                  public offering and that under such laws and applicable
                  regulations such securities may be resold without registration
                  under the 1933 Act only under certain limited circumstances.
                  Investor represents that it is familiar with SEC Rule 144, as
                  presently in effect, and understands the resale limitations
                  imposed thereby and by the 1933 Act.

                  Investor agrees that it shall not sell or otherwise transfer
                  any of the Shares without registration under the 1933 Act, or
                  pursuant to Rule 144 under the 1933 Act, or pursuant to an
                  opinion of counsel reasonably satisfactory to CGPI that an
                  exemption from registration is available, and fully
                  understands and agrees that it must bear the total economic
                  risk of its purchase for an indefinite period of time because
                  of the restricted nature of the Shares. Investor understands
                  that CGPI is under no obligation to register the Shares on its
                  behalf. Investor understands the lack of liquidity and
                  restrictions on transfer of the Shares and that this
                  investment is suitable only for a person or entity of adequate
                  financial means that has no need for liquidity of this
                  investment and that can afford a total loss of its investment.

         3.5.     Legends. Investor acknowledges that the certificates
                  evidencing the Shares shall bear the following or
                  substantially similar legend and such other legends as may be
                  required by state or other applicable securities laws:

                           "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT
                           BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                           AMENDED (THE "ACT"), OR THE SECURITIES ACT OF ANY
                           STATE. THE SHARES MAY NOT BE SOLD, TRANSFERRED FOR
                           VALUE, PLEDGED, HYPOTHECATED OR OTHERWISE ENCUMBERED
                           IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM
                           UNDER THE ACT AND/OR THE SECURITIES ACT OF ANY STATE
                           OR IN THE ABSENCE OF AN OPINION OF COUNSEL ACCEPTABLE
                           TO CGPI THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
                           SUCH ACT OR ACTS."

                           "Until the Separation Time (as defined in the Rights
                           Agreement referred to below), this certificate also
                           evidences and entitles the holder hereof to certain
                           Rights as set forth in a Shareholder Protection
                           Rights Agreement, dated as of September 15, 1997 (as
                           such may be amended from time to time, the "Rights
                           Agreement"), between CollaGenex Pharmaceuticals, Inc.
                           (the "Company") and American Stock Transfer & Trust
                           Company, as Rights Agent, the terms of which are
                           hereby incorporated herein by reference and a copy of
                           which is on file at the principal executive offices
                           of the Company. Under certain circumstances, as set
                           forth in the Rights

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                           Agreement, such Rights may be redeemed, may become
                           exercisable for securities or assets of the Company
                           or securities of another entity, may be exchanged for
                           shares of Common Stock or other securities or assets
                           of the Company, may expire, may become void (if they
                           are "Beneficially Owned" by an "Acquiring Person" or
                           an Affiliate or Associate thereof, as such terms are
                           defined in the Rights Agreement, or by any transferee
                           of any of the foregoing) or may be evidenced by
                           separate certificates and may no longer be evidenced
                           by this certificate. The Company will mail or arrange
                           for the mailing of a copy of the Rights Agreement to
                           the holder of this certificate without charge after
                           the receipt of a written request therefor."

         3.6.     Removal of Legends

                  (a)      The first legend endorsed on a certificate pursuant
                           to Section 3.5 shall be removed (i) if the shares of
                           Common Stock represented by such certificate shall
                           have been resold under an effective registration
                           statement under the 1933 Act or otherwise lawfully
                           sold in a public transaction, (ii) if such shares are
                           transferred in compliance with Rule 144 promulgated
                           under the 1933 Act, or (iii) if the holder of such
                           shares shall have provided CGPI with an opinion of
                           counsel, in form and substance acceptable to CGPI and
                           its counsel, stating that a public sale, transfer or
                           assignment of such shares may be made without
                           registration.

                  (b)      Any legend endorsed on a certificate as required by
                           state securities laws pursuant to Section 3.5 shall
                           be removed if CGPI receives an order of the
                           appropriate state authority authorizing such removal
                           or if the holder of such shares provides CGPI with an
                           opinion of counsel, in form and substance acceptable
                           to CGPI and its counsel, stating that such state
                           legend may be removed.

         3.7.     Accredited Investor. Investor is an "accredited investor" (as
                  defined in Rule 501(a) under the 1933 Act) and has the
                  financial ability to bear the economic risks of its
                  investment, has adequate means for providing for its current
                  needs and contingencies and has no need for liquidity with
                  respect to its investment in CGPI.

         3.8.     Consents and Approvals. Except for Schedule 13D or 13G under
                  the Securities Exchange Act of 1934, no material consent,
                  approval, qualification, order or authorization of, or filing
                  with, any local, state or federal governmental authority or
                  any third party, including any approval under the
                  Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
                  amended, is required on the part of the Investor in connection
                  with the Investor's valid execution, delivery or performance
                  of this Agreement.

         3.9.     Legal Proceedings, Etc. There is no legal, administrative,
                  arbitration or other action or proceeding or governmental
                  investigations pending, or to the Investor's knowledge
                  threatened against the Investor which could reasonably be
                  expected to

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                  result in the issuance of an order restraining, enjoining or
                  otherwise prohibiting or making illegal the consummation of
                  any of the transactions contemplated by this Agreement.

         3.10.    Availability of Funds. Investor has or will have available at
                  Closing, sufficient funds to pay the Purchase Price for the
                  Shares.

4.       Covenant relating to Rule 144. CGPI will file reports in compliance
         with the 1934 Act, will comply with all rules and regulations of the
         Commission applicable in connection with the use of Rule 144 and take
         such other actions and furnish the Investor with such other information
         as the Investor may request in order to avail itself of such rule or
         any other rule or regulation of the Commission allowing Investor to
         sell the Shares without registration, and will, at its own expense,
         upon the request of the Investor, deliver to the Investor a
         certificate, signed by CGPI's principal financial officer, stating (a)
         CGPI's name, address and telephone number (including area code), (b)
         CGPI's Internal Revenue Service identification number, (c) CGPI's
         Commission file number, (d) the number of shares of each class of stock
         outstanding as shown by the most recent report or statement published
         by CGPI, and (e) whether CGPI has filed the reports required to be
         filed under the 1934 Act for a period of at least ninety (90) days
         prior to the date of such certificate and in addition has filed the
         most recent annual report required to be filed thereunder. If at any
         time CGPI is not required to file reports in compliance with either
         Section 13 or Section 15(d) of the 1934 Act, CGPI at its expense will,
         upon the written request of the Investor, make available adequate
         current public information with respect to CGPI within the meaning of
         paragraph (c)(2) of Rule 144. The covenants set forth in this Section 4
         shall survive the Closing.

5.       Piggyback Registration Rights.

         5.1.     Registration Rights. If (but without any obligation to do so)
                  CGPI proposes to register any of its stock or other securities
                  under the 1933 Act in connection with an underwritten public
                  offering of such securities (other than a registration
                  relating solely to the sale of securities to participants in a
                  CGPI stock plan, a registration relating to a corporate
                  reorganization or other transaction under Rule 145 of the 1933
                  Act, a registration on any form that does not include
                  substantially the same information as would be required to be
                  included in a registration statement covering the sale of the
                  Shares, a registration in which the only Common Stock being
                  registered is Common Stock issuable upon conversion of debt
                  securities that are also being registered, or Common Stock
                  issued or to be issued pursuant to an equity line financing),
                  CGPI shall, at such time, promptly give Atrix written notice
                  of such registration. Upon the written request of Atrix given
                  within twenty (20) days after mailing of such notice by CGPI,
                  CGPI shall, subject to the provisions of Section 5.2 and
                  Section 5.6 hereof, use commercially reasonable efforts to
                  cause to be registered under the 1933 Act all of the Shares
                  that Atrix has requested to be registered.

         5.2.     Right to Terminate Registration. CGPI shall have the right to
                  terminate or withdraw any registration initiated by it under
                  Section 5.1 prior to the

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                  effectiveness of such registration whether or not Atrix has
                  elected to include securities in such registration. The
                  expenses of such withdrawn registration shall be borne by
                  CGPI.

         5.3.     Atrix to Provide Information. It shall be a condition
                  precedent to the obligations of CGPI to take any action
                  pursuant to this Section 5 with respect to the registration of
                  the Shares that Atrix furnish to CGPI such information
                  regarding itself, the Shares, and the intended method of
                  distribution of such Shares as shall be reasonably required to
                  effect the registration of such Shares.

         5.4.     Payment of Expenses. All expenses other than underwriting
                  discounts and commissions incurred in connection with
                  registrations, filings or qualifications pursuant to this
                  Section 5, including, without limitation, all registration,
                  filing and qualification fees (including "blue sky" fees),
                  printers' and accounting fees, fees and disbursements of
                  counsel for CGPI shall be borne by CGPI.

         5.5.     Additional Agreements. In the event of an underwritten public
                  offering, the right of the Investor to registration pursuant
                  to this Section 5 is conditioned upon such Investor's
                  participation in such underwriting, the inclusion of such
                  securities in the underwriting to the extent provided herein
                  and Investor entering into an underwriting agreement with the
                  underwriter or underwriters selected for such underwriting by
                  the Company (together with the Company and the other holders
                  distributing their securities through such underwriting), and
                  such other documents, agreements and certificates as shall be
                  deemed necessary by the underwriter in connection with such
                  public offering.

         5.6.     Registration Priority. Notwithstanding any other provision of
                  this Section 5, if the underwriter advises the Company in
                  writing that in its good faith judgment the number of shares
                  requested to be registered exceeds the number of shares which
                  can be sold in such offering: (a) the number of shares so
                  requested to be included in the offering will be reduced to
                  that number of shares which in the good faith judgment of the
                  underwriter can be sold in such offering and (b) such reduced
                  number of shares will be allocated first to the securities
                  CGPI proposes to sell; second to those CGPI stockholders
                  having registration rights pursuant to the terms of that
                  certain Registration Rights Agreement dated September 29, 1995
                  and that certain Stockholders and Registration Rights
                  Agreement dated March 19, 1999 in accordance with the terms of
                  each such agreement; third, to those CGPI stockholders having
                  registration rights pursuant to the terms of those certain
                  Registration Rights Agreements dated March 12, 2001 in
                  accordance with the terms of each such agreement; and fourth,
                  to Atrix, with respect to the Shares.

         5.7.     Termination of Registration Rights. Atrix shall not be
                  entitled to exercise any right provided for in this Section 5
                  at such time as all of the Shares can be sold pursuant to Rule
                  144(k) of the 1933 Act.

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6.       Conditions to Closing.

         6.1.     Conditions of Investor to Closing; Deliveries to Investor. The
                  obligations of Investor to consummate the transactions
                  contemplated by this Agreement are subject to the
                  satisfaction, at or prior to the Closing, of each of the
                  following conditions:

                  (a)      A certificate from a duly authorized officer of CGPI
                           certifying that the representations and warranties of
                           CGPI set forth in this Agreement shall be true and
                           correct as of the Closing Date as if made on and as
                           of the Closing Date.

                  (b)      The Effective Date of the License Agreement shall
                           have occurred.

                  (c)      Investor shall have received the following documents
                           or deliveries at or before the Closing, each of which
                           shall be in full force and effect:

                           (i) evidence of the delivery of the letter to CGPI's
                  transfer agent pursuant to Section 1.2 above; and

                           (ii) a certificate signed by the chief executive
                  officer and the corporate secretary of CGPI certifying (x) to
                  resolutions duly and validly adopted by the Board of Directors
                  of CGPI evidencing its authorization of the execution and
                  delivery of this Agreement and the issuance of the Shares to
                  Investor, and the consummation of the transactions
                  contemplated hereby and that such resolutions have not been
                  amended and remain in full force and effect, and (y) to the
                  names and signatures of the persons authorized on behalf of
                  CGPI to execute and deliver this Agreement.

         6.2.     Conditions of CGPI to Closing; Deliveries to CGPI. The
                  obligations of CGPI to consummate the transactions
                  contemplated by this Agreement are subject to the
                  satisfaction, at or prior to the Closing, of each of the
                  following conditions:

                  (a)      A certificate from a duly authorized officer of
                           Investor certifying that the representations and
                           warranties of Investor set forth in this Agreement
                           shall be true and correct as of the Closing Date as
                           if made on and as of the Closing Date.

                  (b)      The Effective Date of the License Agreement shall
                           have occurred.

                  (c)      CGPI shall have received the following documents or
                           deliveries at or before the Closing, each of which
                           shall be in full force and effect:

                           (i) a certificate signed by the chief executive
                  officer and the corporate secretary of Investor certifying (x)
                  to resolutions duly and validly adopted by the Board of
                  Directors of Investor evidencing its authorization of the
                  execution and delivery of this Agreement and the consummation
                  of the transactions contemplated hereby and that such
                  resolutions have not been amended and remain

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                  in full force and effect, and (y) to the names and signatures
                  of the persons authorized on behalf of Investor to execute and
                  deliver this Agreement; and

                           (ii) the consideration payable by Investor at Closing
                  as provided in Section 1.3 in immediately available funds.

7.       Termination.

         7.1.     Termination. This Agreement may be terminated prior to the
                  Closing:

                  (a)      By mutual written consent of CGPI and Investor.

                  (b)      In the event that the Effective Date under the
                           License Agreement shall not have occurred on or prior
                           to August 24, 2001.

         7.2.     Effect of Termination. In the event of the termination of this
                  Agreement as provided in Section 7.1, this Agreement shall be
                  of no further force or effect; provided, however that the
                  termination of this Agreement shall not relieve any party from
                  any liability for any willful and knowing breach of this
                  Agreement.

8.       Miscellaneous.

         8.1.     Successors and Assigns. This Agreement may not be assigned
                  without the prior written consent of the non-assigning party;
                  provided, however, that without prior written approval,
                  Investor may assign any and all of its rights and interest
                  under this Agreement to one or more of its Affiliates and
                  designate one or more of its Affiliates to perform its
                  obligations under this Agreement; provided such Affiliate
                  expressly acknowledges and confirms the representations,
                  warranties and information set forth in Sections 3.4, 3.5 and
                  3.7 of this Agreement. Any purported assignment in violation
                  of this provision shall be null and void. The terms and
                  conditions of this Agreement shall inure to the benefit of and
                  be binding upon the respective permitted successors and
                  assigns of the parties. Nothing in this Agreement, express or
                  implied, is intended to confer upon any party other than the
                  parties hereto or their respective successors and assigns any
                  rights, remedies, obligations, or liabilities under or by
                  reason of this Agreement, except as expressly provided in this
                  Agreement.

         8.2.     Third Party Purchaser. A third-party purchaser of the Shares
                  from Investor will not be subject to any of the terms of this
                  Agreement other than those imposed by the federal and state
                  securities laws.

         8.3.     Governing Law. This Agreement shall be governed by and
                  construed under the laws of the State of Delaware
                  (irrespective of its choice of law principles).

         8.4.     Counterparts. This Agreement may be executed in two or more
                  counterparts, each of which shall be deemed an original, but
                  all of which together shall constitute one and the same
                  instrument.

                                       11
<PAGE>
         8.5.     Titles and Subtitles. The titles and subtitles used in this
                  Agreement are used for convenience only and are not to be
                  considered in construing or interpreting this Agreement.

         8.6.     Notices. All notices, requests and other communications to any
                  party hereunder shall be in writing (including facsimile
                  transmission) and shall be deemed to have been given if
                  delivered personally, mailed by certified mail (return receipt
                  requested) or sent by cable, telegram, telecopier or
                  recognized overnight delivery service to the parties at the
                  following addresses or at such other addresses as specified by
                  the parties by like notice:

                           If to Investor:
                           Atrix Laboratories, Inc.
                           2579 Midpoint Drive
                           Fort Collins, Colorado 80525
                           Attn:  Dr. Charles P. Cox, Senior Vice President of
                                  Corporate Development
                           Fax:   (970) 482-9765
                           Phone: (970) 482-5868

                           With a copy to:

                           Morrison & Foerster LLP
                           370 17th Street, Suite 5200
                           Denver, Colorado 80202
                           Attn:  Warren L. Troupe, Esq.
                           Fax:   (303) 592-1510
                           Phone: (303) 592-1500

                           If to CGPI:

                           CollaGenex Pharmaceuticals, Inc.
                           41 University Drive
                           Newtown, PA 18940
                           Attn:  Brian M. Gallagher, Ph.D.
                           Chairman, President and Chief Executive Officer
                           Telephone:  (215) 579-7388
                           Facsimile:  (215) 579-8577

                           With a copy to:

                           William J. Thomas, Esq.
                           Hale and Dorr LLP
                           650 College Road East
                           Princeton, New Jersey 08540

                                       12
<PAGE>
                  Notice so given shall be deemed given and received (i) if by
                  mail on the fourth calendar day after posting; (ii) by cable,
                  telegram, telecopier, telex of personal delivery on the date
                  of actual transmission or (as the case may be) personal or
                  other delivery or one business day after transmission (if
                  transmitted and received on a non-business day); and (iii) if
                  by overnight courier, on the next business day following the
                  day such notice is delivered to the courier service.

         8.7.     Finders Fee. Each party represents that it neither is nor will
                  be obligated for any finders' fee or commission in connection
                  with this transaction. Investor agrees to indemnify and hold
                  harmless CGPI from any liability for any commission or
                  compensation in the nature of a finders' fee (and costs and
                  expenses of defending against such liability or asserted
                  liability) for which Investor or any of its officers,
                  partners, employees or representatives is responsible. CGPI
                  agrees to indemnify and hold harmless Investor from any
                  liability for any commission or compensation in the nature of
                  a finders' fee (and the costs and expenses of defending
                  against such liability or asserted liability) for which CGPI
                  or any of its officers, employees or representatives is
                  responsible.

         8.8.     Expenses. CGPI and the Investor shall pay their own respective
                  costs and expenses incurred with respect to the negotiation,
                  execution, delivery and performance of this Agreement and the
                  transactions contemplated hereby.

         8.9.     Amendments and Waivers. Any term of this Agreement may be
                  amended and the observance of any term of this Agreement may
                  be waived (either generally or in a particular instance and
                  either retroactively or prospectively), only with the written
                  consent of CGPI and the Investor. Any amendment or waiver
                  effected in accordance with this paragraph shall be binding on
                  the Investor and CGPI.

         8.10.    Severability. If one or more provisions of this Agreement are
                  held to be unenforceable under applicable law, such provision
                  shall be excluded from this Agreement and the balance of this
                  Agreement shall be interpreted as if such provision were so
                  excluded and shall be enforceable in accordance with its
                  terms.

         8.11.    Entire Agreement. This Agreement constitutes the entire
                  agreement between the parties with respect to the subject
                  matter hereof and supersedes all prior agreements and
                  understandings, both oral and written, between the parties
                  with respect to the subject matter hereof. No representation,
                  inducement, promise, understanding, condition or warranty not
                  set forth herein has been made or relied upon by either party
                  intended to confer upon any person other than the parties
                  hereto any rights or remedies hereunder.

                                    * * * * *

                                       13
<PAGE>
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

ATRIX LABORATORIES, INC.                 COLLAGENEX PHARMACEUTICALS, INC.
a Delaware corporation                   a Delaware corporation

                                         By: /s/ Brian M. Gallagher
By: /s/ David R. Bethune                    ----------------------------
   -------------------------------           Brian M. Gallagher, Ph.D.
    David R. Bethune, Chairman and           Chairman, President and
    Chief Executive Officer                  Chief Executive Officer

                                       14
<PAGE>
                                    EXHIBIT A

                 LETTERHEAD OF COLLAGENEX PHARMACEUTICALS, INC.

                                 August 24, 2001

American Stock Transfer & Trust Company
Transfer Agent and Registrar
40 Wall Street
New York, New York 10005
Attention:  Craig Leibell

         Re: CollaGenex Pharmaceuticals, Inc. - Share Issuance Instructions

Ladies and Gentlemen:

         CollaGenex Pharmaceuticals, Inc., a Delaware corporation ("CGPI"),
proposes to issue three hundred thirty thousand five hundred fifty-six (330,556)
shares of its common stock, par value $.01 per share (the "Common Stock")
pursuant to a Stock Purchase Agreement between CGPI and Atrix Laboratories, Inc.

         1. You are hereby irrevocably authorized and directed, as CGPI's
Transfer Agent and Registrar, to register and countersign, as an original issue,
one certificate representing an aggregate of 330,556 shares of the Common Stock
in the name of Atrix Laboratories, Inc.

         2. You are further directed to deliver the above referenced share
certificate to the following address, by registered mail:

                      Atrix Laboratories, Inc.
                      2579 Midpoint Drive
                      Fort Collins, CO 80525-4417
                      Attn:  Brian G. Richmond
                      Chief Financial Officer

         3. The above-referenced certificate shall bear the legends
substantially similar to the following:

         "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES ACT
OF ANY STATE. THE SHARES MAY NOT BE SOLD, TRANSFERRED FOR VALUE, PLEDGED,
HYPOTHECATED OR OTHERWISE ENCUMBERED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
OF THEM UNDER THE ACT AND/OR THE SECURITIES ACT OF ANY STATE OR IN THE ABSENCE
OF AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR ACTS."

                                      A-1
<PAGE>
         "Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Protection Rights Agreement, dated
as of September 15, 1997 (as such may be amended from time to time, the "Rights
Agreement"), between CollaGenex Pharmaceuticals, Inc. (the "Company") and
American Stock Transfer & Trust Company, as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or securities of another
entity, may be exchanged for shares of Common Stock or other securities or
assets of the Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate thereof, as such
terms are defined in the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and may no longer be
evidenced by this certificate. The Company will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this certificate without
charge after the receipt of a written request therefor."

         Please acknowledge receipt of these instructions below.

                              Very truly yours,

                              By:    /s/ Brian M. Gallagher
                                  -------------------------------------------
                              Name:  Brian M. Gallagher, Ph.D.
                              Title: Chairman, President and Chief Executive
                                     Officer

American Stock Transfer & Trust Company
as Transfer Agent and Registrar

By:
   -------------------------
Name:
     -----------------------
Title:
      ----------------------

                                      A-2UBS AG
                                                           100 Liverpool Street
                                                                London EC2M 2HR
                                                         Tel. +44-207- 568 0687
                                                      Fax. +44 -207- 568 9895/6

Date:                              06 August 2001

To:                                IVAX Corporation ("Party B")
                                   4400 Biscayne Boulevard
                                   Miami, FL 33137

Attention:                         Timothy Burns
                                   Phone: (305) 575-6131

From:                              UBS AG, London Branch ("Party A")

Re:                                Equity Option Confirmation
                                   UBS Reference: 1323773
--------------------------------------------------------------------------------

The purpose of this communication is to confirm the terms and conditions of the
put option (the "Put Transaction") entered into between us on the Trade Date
specified below. This communication constitutes a "Confirmation" as referred to
in the Master Agreement specified below.

The definitions and provisions contained in the 1996 ISDA Equity Derivatives
Definitions (the "Equity Definitions"), as published by the International Swaps
and Derivatives Association, Inc. ("ISDA") are incorporated into this
Confirmation. In the event of any inconsistency between those definitions and
provisions and this Confirmation, this Confirmation will govern.

This Confirmation evidences a complete binding agreement between you and us as
to the terms of the Transaction to which this Confirmation relates. In addition,
you and we agree to use all reasonable efforts promptly to execute and deliver
an agreement in the form of the ISDA Master Agreement (Multicurrency-Cross
Border) (the "ISDA Form"), with such modifications as you and we will in good
faith agree. Upon the execution by you and us of such an agreement, this
Confirmation will supplement, form a part of, and be subject to that agreement.
All provisions contained or incorporated by reference in that agreement upon its
execution will govern this Confirmation except as expressly modified below.
Until we execute and deliver that agreement, this Confirmation, together with
all other documents referring to the ISDA Form (each a "Confirmation"), shall
supplement, form a part of, and be subject to an agreement in the form of the
ISDA Form as if we had executed an agreement in such form (but without any
Schedule except for the election of U.S. Dollars as the Termination Currency and
such other elections and modifications detailed herein referring to the ISDA
Form) on the Trade Date of the first such Transaction between us. In the event
of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.

The terms of the Transaction to which this Confirmation relates are as follows:

Trade Date:                        03 August 2001 (time of execution
                                   available on request)

Option Style:                      European Option

Option Type:                       Put

Seller:                            Party B

UBS Warburg is a business group of UBS AG UBS AG is registered as a branch in
England and Wales Branch No. BR004507 (A public company limited by shares,
incorporated in Switzerland whose registered offices are at Aeschenvorstadt 1,
CH-4051, Basel and Bahnhofstrasse 45, CH-8001 Zurich) Registered Address: 1
Finsbury Avenue London EC2M 2PP Regulated in the UK by the Securities and
Futures Authority. A member of the London Stock Exchange.

<PAGE>

Buyer:                             Party A

Shares:                            IVAX Corporation (the "Issuer") (Symbol: IVX)

Number of Options:                 200,000

Option Entitlement:                One Share per Option

Strike Price:                      USD 31.00

Premium:                           USD 622,000.00

Premium Payment
Date:                              Three Currency Business Days following the
                                   Trade Date

Exchange:                          American Stock Exchange

Related Exchange(s):               Any exchange on which futures or options
                                   referenced to the Shares are traded

Clearance System:                  Depository  Trust  Company,  or any successor
                                   to or transferee of such clearance system.

Calculation Agent:                 Party A

Procedure for Exercise
----------------------

Expiration Time:                   The close of trading on the Exchange without
                                   regard to extended or after hours trading
                                   (local time in New York)

Expiration Date:                   01 March 2002

Automatic Exercise:                Applicable

Party B's Contact
Details Notice:                    Timothy Burns
                                   Fax: (305) 575-6121

Reference Price:                   The last reported sale price (if the
                                   Exchange is The NASDAQ Stock Market) or the
                                   closing price (if the Exchange is other than
                                   The NASDAQ Stock Market) per Share at the
                                   Expiration Time on the Expiration Date, as
                                   reported by the Exchange, without regard to
                                   extended or after hours trading.

Settlement Terms
----------------

Physical Settlement:               Applicable; provided, however,
                                   that Party B may elect to make Cash
                                   Settlement or Net Share Settlement applicable
                                   by giving notice to Party A on a day (the
                                   "Election Date") no later than (in the case
                                   of Cash Settlement) five Exchange Business
                                   Days, or (in the case of Net Share
                                   Settlement) twenty Exchange Business Days,
                                   before the Expiration Date.

                                       2
<PAGE>

Cash Settlement:                   If Party B elects Cash Settlement, the
                                   Seller shall pay the Cash Settlement Amount
                                   to the Buyer on the Cash Settlement Payment
                                   Date.

Settlement Price:                  If Physical Settlement is applicable,
                                   the Settlement Price shall be the amount
                                   determined in accordance with Section
                                   2.1(g)(iii) of the Equity Definitions, or if
                                   Net Share Settlement or Cash Settlement is
                                   applicable, the Settlement Price shall be the
                                   price determined in accordance with Section
                                   4.4(b)(i) of the Equity Definitions.

Cash Settlement
Payment Date:                      Three Currency Business Days after the
                                   Valuation Date.

Net Share Settlement:              If Party B elects Net Share Settlement, the
                                   Seller shall deliver to the Buyer the number
                                   of whole Shares (the "Settlement Shares")
                                   equal to (i) the Cash Settlement Amount
                                   divided by (ii) the Closing Value, plus cash
                                   in lieu of any fractional Share. At any time
                                   following an election of Net Share
                                   Settlement by Party B (as the settlement
                                   method applicable to the exercise of this
                                   Transaction on the Expiration Date) but no
                                   later than five Exchange Business Days
                                   before the Expiration Date, Party B may
                                   elect Cash Settlement or Physical
                                   Settlement.

Closing Value                      The last reported sale price (if the
                                   Exchange is The NASDAQ Stock Market) or
                                   closing price (if the Exchange is other than
                                   The NASDAQ Stock Market) per Share on the
                                   Valuation Date, as reported by the Exchange,
                                   without regard to extended or after hours
                                   trading.

Settlement Date:                   If Physical Settlement is applicable, the
                                   Settlement Date shall be the date determined
                                   in accordance with Section 6.2 of the Equity
                                   Definitions, or if Net Share Settlement is
                                   applicable, the Settlement Date shall be the
                                   date determined in accordance with Section
                                   6.2 of the Equity Definitions provided that
                                   any reference to "Exercise Date" in that
                                   section shall be deemed to be a reference to
                                   "Valuation Date."

Valuation
---------

Valuation Time:                    At the close of trading on the  Exchange,
                                   without  regard to  extended or after
                                   hours trading.

Valuation Date:                    As determined in accordance with
                                   section 4.2 of the Equity Definitions

Averaging Dates:                   The  Expiration  Date and one Exchange
                                   Business Day  immediately  preceding the
                                   Expiration Date.

Averaging Date
Market Disruption:                 Modified Postponement

Relevant Price:                    The last reported sale price (if the
                                   Exchange is The NASDAQ Stock Market) or
                                   closing price (if the Exchange is other than
                                   The NASDAQ Stock Market) per Share at the
                                   Valuation Time on an Averaging Date, as
                                   reported by the Exchange.

Adjustment Events
-----------------

Method of Adjustment:              Calculation Agent Adjustment

                                       3
<PAGE>

Extraordinary Events
--------------------

Consequences of Merger Events:

(a)   Share-for-Share:             Cancellation and Payment

(b)   Share-for-Other:             Cancellation and Payment

(c)   Share-for-Combined:          Cancellation and Payment

For the purposes of this Confirmation, the second line of Section 9.3(b)(ii) of
the Equity Definitions is deleted and replaced with, "Share Basket Option
Transaction, the Option Transaction will be cancelled as of the earlier of (i)
the third Exchange Business Day following the Announcement Date and (ii) the
twentieth Exchange Business Day before the Merger Date".

Nationalization:                   Cancellation and Payment

Miscellaneous
-------------

Conditions on Net
Share Settlement:                  If Party B elects Net Share Settlement, the
                                   following conditions must be met: (i) Party
                                   B will enter into a Registration Rights
                                   Agreement with Party A in form and substance
                                   acceptable to Party A not later than the
                                   Election Date, which agreement will contain,
                                   among other things, the representations and
                                   warranties, indemnification and contribution
                                   provisions and the obligation of Party B to
                                   deliver customary opinions of counsel and
                                   accountants' comfort letters and officers'
                                   certificates, in each case, consistent with
                                   those that Party A would require in the case
                                   of a primary issuance of common stock, and
                                   obligations of Party A and Party B relating
                                   to the registration of the Settlement Shares
                                   and the Make-Whole Shares (the "Registered
                                   Shares"); (ii) the Shelf Registration (as
                                   hereinafter defined) shall have been
                                   declared effective by the Securities and
                                   Exchange Commission not less than five
                                   Exchange Business Days prior to the
                                   Expiration Date; and (iii) Party B shall
                                   maintain the effectiveness of the Shelf
                                   Registration until all Registered Shares
                                   have been sold by Party A, assuming Party A
                                   uses commercially reasonable efforts to sell
                                   the Registered Shares within one year.
                                   "Shelf Registration" means a registration
                                   statement in form and substance reasonably
                                   acceptable to Party A for an offering to be
                                   made on a continuous basis pursuant to Rule
                                   415 under the Securities Act of 1933, as
                                   amended, registering Party A's resale of all
                                   the Settlement Shares, plus any Make-whole
                                   Shares, in the manner or manners designated
                                   by Party A.

Make-Whole
Provision:                         If within sixty Exchange Business Days from
                                   (and including) the date Party B delivers
                                   Settlement Shares to Party A pursuant to Net
                                   Share Settlement of the Transaction, Party A
                                   resells all or any portion of the Settlement
                                   Shares and the net proceeds received by
                                   Party A upon resale of such Shares exceed
                                   the Cash Settlement Amount (or if less than

                                       4

<PAGE>

                                   all of the Shares are resold, the applicable
                                   pro rata portion of the Cash Settlement
                                   Amount), Party A shall promptly refund in
                                   cash such difference to Party B. In the
                                   event that such net proceeds are less than
                                   the Cash Settlement Amount (or if less than
                                   all of the Settlement Shares are resold, the
                                   applicable pro rata portion of the Cash
                                   Settlement Amount), Party B shall pay in
                                   cash or additional Shares such difference
                                   (the "Make-whole Amount") to Party A
                                   promptly after receipt of notice thereof. In
                                   the event that Party B elects to pay the
                                   Make-whole Amount in additional Shares, the
                                   requirements set forth above with respect to
                                   payment of the Cash Settlement Amount in
                                   Shares, including Make-whole requirements,
                                   shall apply, such that Party A shall pay to
                                   Party B any such excess and Party B shall
                                   pay to Party A in cash or additional
                                   Make-Whole Shares any additional Make-whole
                                   Amount. In calculating the net proceeds from
                                   the resale of any Settlement Shares there
                                   shall be deducted from such proceeds any
                                   amount equal to the underwriting discount or
                                   commission determined by the Calculation
                                   Agent multiplied by the total number of
                                   Shares sold pursuant to a Shelf Registration
                                   or (in the case of restricted Shares), the
                                   total number of Shares delivered by Party B
                                   to Party A pursuant to Net Share Settlement.

Title to Shares:                   If the Transaction is to be Physically
                                   Settled or Net Share Settled, the party
                                   obligated to deliver Shares represents,
                                   warrants and agrees that (a) (if not the
                                   issuer of the Shares), it is the legal and
                                   beneficial owner of the Shares it is
                                   required to deliver; (b) it has the right to
                                   transfer or, (if the issuer of the Shares)
                                   issue, those Shares; and (c) it will convey
                                   good title to the Shares it is required to
                                   deliver, free from all liens, charges,
                                   equities, rights of pre-emption or other
                                   security interests or encumbrances
                                   whatsoever.

Transfer:                          Neither party may transfer any rights nor
                                   delegate any obligations in respect of the
                                   Transaction, in whole or in part, without
                                   the prior written consent of the
                                   non-transferring party.

Additional Termination Events:     The following shall each
                                   be an Additional Termination Event with
                                   respect to Party B with Party B as the sole
                                   Affected Party and all Share Eligible
                                   Transactions as Affected Transactions:

                                   (a) At any time during the term of this
                                   Transaction, the Closing Price is at or below
                                   USD 15.00 (as adjusted for stock splits or
                                   similar events or as otherwise adjusted in
                                   accordance with this Confirmation, or as
                                   agreed between the parties) (the "Trigger
                                   Price"). For the purpose of this Additional
                                   Termination Event, "Closing Price" shall be
                                   defined as the last reported sale price (if
                                   the Exchange is The NASDAQ Stock Market) or
                                   closing price (if the Exchange is other than
                                   The NASDAQ Stock Market) per Share determined
                                   by the Calculation Agent at the close of
                                   trading on the Exchange on any Exchange
                                   Business Day during the term of the
                                   Transaction.

                                   (b) Provided no Event of Default has occurred
                                   and is continuing with respect to Party B, if
                                   Party B has elected Net Share Settlement, and
                                   Party B has used its best efforts to satisfy
                                   the Conditions on Net Share Settlement but
                                   has been unable to because the Registration
                                   Statement is not declared effective by the
                                   SEC within the time set out in the paragraph
                                   titled, "Conditions on Net Share Settlement".

                                       5
<PAGE>

                                   For the avoidance of doubt the occurrence of
                                   an Additional Termination Event, as defined
                                   in the immediately preceding paragraph,
                                   shall not, of itself, constitute an Event of
                                   Default.

                                   If an Additional Termination Event as defined
                                   in the second immediately preceding
                                   paragraph occurs, Section 6(b)(iv) of the
                                   Agreement will be deemed to be amended by
                                   adding the words, "and not less than 5
                                   Exchange Business Days notice" immediately
                                   after the word, "notice" where it appears in
                                   the third last line of Section 6(b)(iv).

Additional Modifications to and Elections under the ISDA Form
-------------------------------------------------------------

A. Governing Law and Consent to Jurisdiction

The Transaction will be governed by and construed in accordance with the laws of
New York (without reference to choice of law doctrine). Solely as between the
parties hereto, and relating solely to matters arising concerning this
Transaction, each party irrevocably submits to the exclusive jurisdiction of the
courts of the state of New York and the United States District Court located in
the Borough of Manhattan in the City of New York, and waives any objection which
it may have at any time to the laying of venue of any proceedings concerning
this transaction brought in such court, waives any claim that such proceedings
have been brought in an inconvenient forum and further waives the right to
object that such court does not have jurisdiction over any party.

B. Representations and Warranties

Party A and Party B each hereby represents, warrants and agrees as follows: (i)
it is an "accredited investor," as such term is defined in Regulation D
promulgated under the Securities Act of 1933, (ii) it has had access to such
information regarding the Transaction and the other party as it requested, (iii)
it has knowledge and experience in financial and business matters and is capable
of evaluating the merits and risks of the Transaction and is able to bear the
economic risk of its investment, including without limitation the risk of
complete loss on the investment, and (iv) it acquired its interest herein and in
the Transaction evidenced hereby for its own account for investment and not with
a view to, or in connection with, any distribution of such interests.

C.       "Specified Entity" means in relation to Party A for the purpose of:

         Section 5(a)(v),                            NONE
         Section 5(a)(vi),                           NONE
         Section 5(a)(vii),                          NONE
         Section 5(b)(iv),                           NONE

         and in relation to Party B for the purpose of:

         Section 5(a)(v),                            Any Affiliate of  Party B
         Section 5(a)(vi),                           Any Affiliate of  Party B
         Section 5(a)(vii),                         Any Affiliate of  Party B
         Section 5(b)(iv),                           NONE

D. The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form, as
modified below, will apply to Party A and to Party B. Section 5(a)(vi) of ISDA
Form is hereby amended by the addition of the following at the end thereof:

              "provided, however, that notwithstanding the foregoing, an Event
of Default shall not occur under either (1) or (2) above if, as demonstrated to
the reasonable satisfaction of the other party, (a) the event or condition
referred to in (1) or the failure to pay referred to in (2) is a failure to pay
caused by an error or omission of an administrative or operational nature; and
(b) funds were available to such party to enable it to make the relevant payment
when due; and (c) such relevant payment is made within three Business Days
following receipt of written notice from an interested party of such failure to
pay."

                                       6
<PAGE>

         "Specified Indebtedness" means any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise) for the
payment or repayment of any money.

         "Threshold Amount" means:

(i)               with respect to Party A an amount equal to 2% of shareholders'
                  equity (howsoever described) of Party A, or any Specified
                  Entity, as shown on the most recent annual audited financial
                  statements of Party A or the relevant Specified Entity and
(ii)              with respect to Party B, or any Specified Entity, the lesser
                  of USD 10 million (or the equivalent in any other currency or
                  currencies) or an amount equal to 2% of shareholders' equity
                  (howsoever described) of Party B or the relevant Specified
                  Entity as shown on the most recent annual audited financial
                  statements of Party B.

E. "Payments on Early Termination". For the purpose of Section 6(e) of the ISDA
Form:

(i)              Loss will apply.
(ii)             The Second Method will apply.

F. In consideration of the parties continuing obligations under this
Transaction, Party A and Party B amend Section 5(a)(ii) of the ISDA Form as of
the Trade Date such that, for the purpose of determining an Event of Default
with respect to Party B under Section 5(a)(ii), the penultimate and last lines
of Section 5(a)(ii) are deleted and replaced with, "with this ISDA Form if such
failure is not remedied on or before the second Exchange Business Day after
Party A has given notice of such failure to Party B (such notice may be given by
facsimile using the most recent facsimile number notified by Party B to Party A
and will be deemed given to Party B upon receipt by Party A of a positive
transmission report generated by Party A's facsimile machine)".

Notwithstanding any other provisions of this Confirmation or the ISDA Form, the
following provisions shall apply:

1.     Settlement on Extraordinary Event:
       ---------------------------------

(a) If payment is required of Party B in connection with a Merger Event, Party B
shall have the right, in its sole discretion, to elect (the "Extraordinary
Transaction Election") to satisfy any such payment obligation by Net Share
Settlement of this Transaction PROVIDED THAT, in connection with a
"Share-for-Combined" Merger Event or "Share-for-Other" Merger Event, the
Extraordinary Transaction Election is available to satisfy only the percentage
of such payment obligation equal to the percentage of the non-cash consideration
over the total Combined Consideration (in the case of a "Share-for-Combined"
Merger Event) or total Other Consideration (in the case of a "Share-for-Other"
Merger Event). The remaining percentage of such payment obligation must be
satisfied in cash. Party B shall make any election to Net Share Settle the
Transaction within two Exchange Business Days of the Announcement Date but in
any event not less than twenty Exchange Business Days prior to the effective
date of such Merger.

(b) For purposes of any such Net Share Settlement: (i) the "Shares" to be
registered and delivered to Party A shall be the Shares, (ii) the Cash
Settlement Amount shall be the amount determined in accordance with Section 9.7
of the Equity Definitions, provided that, for the purposes of this Confirmation,
the second and third lines of Section 9.7(b) of the Equity Definitions are
deleted and replaced with, "promptly by the parties after the Extraordinary
Transaction Election, failing which it will be determined by the Calculation
Agent and based on", (iii) the Closing Value shall be the last reported sale
price (if the Exchange is The NASDAQ Stock Market) or closing price (if the
Exchange is other than The NASDAQ Stock Market) per Share without regard to

                                       7
<PAGE>

extended or after hours trading on the third Exchange Business Day immediately
preceding the Settlement Date, (iv) the Settlement Date shall be the tenth
Clearance System Business Day following the Announcement Date, but in any event
not later than eight Exchange Business Days before the Merger Date, and (v) the
entity surviving, resulting from, or acquiring Party B in connection with the
Merger Event shall comply with all of the Conditions on Net Share Settlement set
forth in this confirmation.

2.     Calculations and Payment on Early Termination:
       ---------------------------------------------

(a) The obligations of Party B to make payments pursuant to Section 6(d) and (e)
of the ISDA Form are modified as follows: Party B shall have the right to make
any payment required pursuant to Section 6(e) of the ISDA Form following the
occurrence of an Early Termination Date in respect of this Transaction and any
other Transaction between the parties referenced to the Shares and to which this
modification of the ISDA Form is expressly made applicable and under which Party
B is required to make a payment pursuant to Section 6(d) or (e) of the ISDA Form
and which Party B's auditors confirm is eligible to be accounted for, and which
Party B does account for, as "permanent equity" within the meaning and for the
purposes of EITF 00-19 or any successor financial statement guidance ("Share
Eligible Transactions") by electing to Net Share Settle the Share Eligible
Transactions in accordance with the terms and conditions for Net Share
Settlement herein and in any other Share Eligible Transaction. Party B shall
elect to Net Share Settle the Share Eligible Transactions by giving notice to
Party A of such election (i) if Party B is the Defaulting or Affected Party,
within one Exchange Business Day after the notice fixing an Early Termination
Date is received by Party B or (ii) if Party A is the Defaulting or Affected
Party, in the notice fixing an Early Termination Date. If Party B elects Net
Share Settlement:

         (i)      The relevant parties shall determine pursuant to Section 6(e)
                  of the ISDA Form the Loss applicable to Share Eligible
                  Transactions and to Transactions that are not Share Eligible
                  Transactions ("Other Transactions") (for the avoidance of
                  doubt, Other Transactions includes Transactions referenced to
                  the Shares in respect of which Party A has a payment
                  obligation to Party B under Section 6(d) or (e) of the ISDA
                  Form) and the Cash Settlement Amount for purposes of Net Share
                  Settlement of Share Eligible Transactions shall be the amount,
                  if any, payable by Party B to Party A as the Loss in respect
                  of Share Eligible Transactions.

                  The last sentence of the first paragraph of Section 6(e) of
                  the ISDA Form shall not apply with respect to Share Eligible
                  Transactions. Nothing in the immediately preceding sentence
                  shall affect the obligations of the parties to pay the amount
                  determined in accordance with Section 6(e) in respect of Other
                  Transactions in cash in accordance with Section 6 of the ISDA
                  Form.

         (ii)     The Settlement Date for Net Share Settlement shall be the
                  later of:

                  (A)      the payment date determined pursuant to Section
                           6(d)(ii) of the ISDA Form; and

                  (B)      the earlier of (x) the second Exchange Business Day
                           following the date the Registration Statement is
                           declared effective by the Securities and Exchange
                           Commission ("SEC"); and (y) the date determined
                           pursuant to paragraph 2(a)(vi)(A)(4).

         (iii)    Deleted.

         (iv)     Party B shall comply with all of the Conditions on Net Share
                  Settlement applicable to Share Eligible Transactions, except
                  that the Registration Statement must be declared effective by
                  the Securities and Exchange Commission ("SEC") not later than
                  the close of business on the second Exchange Business Day
                  following the notice fixing an Early Termination Date.

         (v)      To the extent permitted under applicable law, interest (before
                  as well as after judgment) in the Termination Currency, shall
                  accrue on, and be added to, the Cash Settlement Amount from
                  (and including) the relevant Early Termination Date to (but
                  excluding) the date such amount is paid or otherwise settled
                  by the delivery of the necessary number of Shares as required
                  herein, at the Applicable Rate. Such interest will be
                  calculated on the basis of daily compounding and the actual
                  number of days elapsed.

         (vi)     If Party B has used its best efforts to satisfy the Conditions
                  on Net Share Settlement but has been unable to because the
                  Registration Statement is not declared effective by the SEC
                  within the time set out in paragraph 2(a)(iv) (or, where Party
                  A has previously made the election set out in paragraph
                  2(a)(vi)(B), within the time designated pursuant to paragraph
                  2(a)(vi)(B)), Party A, in its absolute discretion, may elect
                  to:

                                       8
<PAGE>

                  (A)      receive the relevant number of Shares from Party B in
                           which case:

                           (1)      the day on which Party A makes such an
                                    election to receive such Shares from Party B
                                    is the "Party A Election Date", and

                           (2)      Party B shall withdraw any Registration
                                    Statement filed with the SEC in connection
                                    with the Shares, and

                           (3)      Party B will enter into a Private Placement
                                    Purchase Agreement with Party A in form and
                                    substance acceptable to Party A no later
                                    than the next Exchange Business Day
                                    following the Party A Election Date, and

                           (4)      Party B shall deliver to Party A such Shares
                                    on the Settlement Date which, for the
                                    purposes of this paragraph 2(a)(vi)(A)(4),
                                    shall be the third Exchange Business Day
                                    following the Party A Election Date, and

                           (5)      in addition to any Make-whole Amount payable
                                    by Party B pursuant to the Make-Whole
                                    Provision herein, Party B shall deliver to
                                    Party A such additional Shares until Party A
                                    has realized actual net proceeds upon resale
                                    of such Shares equal to Party A's Loss. At
                                    its election, Party A may by a written
                                    notice to Party B retain a number of Shares
                                    delivered by Party B pursuant to this
                                    paragraph (2)(a)(vi). If Party A so elects,
                                    Party A shall be deemed to have sold each
                                    such retained Share for an amount equal to
                                    the price per Share obtained by Party A in
                                    the last Share sold by Party A prior to
                                    sending written notice of its intention to
                                    retain Shares to Party B. In no event will
                                    Party A be obligated to exercise its right
                                    to retain Shares; or

                  (B)      extend the period within which the Registration
                           Statement is to be declared effective by the SEC for
                           a further period specified in writing by Party A at
                           the time of such extension.

This section entitled Calculations and Payment on Early Termination shall be
applicable only to the extent and only for as long as necessary for Party B to
account for this Transaction as "permanent equity" within the meaning and for
the purposes of EITF 00-19 or any successor financial statement guidance. Party
B has made its own independent decision based upon its own judgment and upon
advice from such advisers as it has deemed necessary, as to whether the
Transaction may be accounted for as "permanent equity" within such meaning and
for such purposes and is not relying on any communication (written or oral) of
Party A in this regard.

3. Other Provisions
-------------------

(a) Determined Amount. Notwithstanding any other provision applicable to this
Transaction, if Party B exercises its right pursuant to section 2(a) above to
Net Share Settle this Transaction, Party B shall not be obliged to deliver, in
connection with this Transaction, in excess of 2,900,000 Shares, as recalculated
from time to time (the "Determined Amount"). The number of Shares (if any) equal
to (u)(i) the Cash Settlement Amount divided by (ii) the Closing Value (both
terms as defined in section 2(a) above), minus (v) the Determined Amount, are
the "Excess Shares". In the event that, but for this section 3, Party B would be
obliged to deliver a number of Shares equal to the Determined Amount plus the
Excess Shares, Party B agrees to (x) satisfy its remaining obligation by cash
payment or; (y) (i) use its best efforts to increase its number of Authorized
Shares, thereby increasing the Determined Amount, to the extent necessary so
that, but for this section 3, the number of Shares Party B would be obliged to
deliver does not exceed the (recalculated) Determined Amount and (ii) allocate
such newly Authorized Shares in satisfaction of Party B's delivery obligations
under this Transaction in priority to any other use of such Shares. For the
avoidance of doubt, the obligation of Party B to so use its best efforts is an
ongoing obligation.

         The Determined Amount will be recalculated at any time there is an
increase of 5% or more in Party B's number of Authorized Shares or Party B
repurchases in excess of 5% of its Issued Shares at any time on or after the
Trade Date and on or before the Settlement Date, with such recalculation to
apply immediately when such increase or repurchase (as applicable) is effective.

                                       9
<PAGE>

         If, at any time during the term of this Transaction, the trigger price
(howsoever described) referenced in any other equity derivatives transaction to
which Party B is a party and in respect of which Party B's equity securities
constitute (all or part of) the instruments underlying the transaction (the
"Other Trigger Price") is greater than the Trigger Price, the Trigger Price is
automatically increased to equal the Other Trigger Price.

(b) Party B hereby represents and warrants that it will:

         (i)      calculate the Determined Amount based on the maximum amount
                  able to be calculated in accordance with EITF 00-19 or any
                  successor financial statement guidance; and

         (ii)     in respect of all equity derivative transactions in respect of
                  which Party B's equity securities constitute (all or part of)
                  the instruments underlying such transactions (the "Derivative
                  Trades"), use the same methodology to derive the Determined
                  Amount (howsoever described) applicable to each Derivative
                  Trade as is used to derive the Determined Amount for this
                  Transaction.

(c) Rights in Bankruptcy. Notwithstanding anything in this Confirmation to the
contrary, Party A agrees that, in respect of any obligations Party B has duly
elected be satisfied by Net Share Settlement in accordance with this
Confirmation, in the event of Party B's bankruptcy, Party A shall not have
rights in bankruptcy that rank senior to the rights in bankruptcy of common
shareholders of Party B.

Account Details
---------------

Party A:                           Cash Payments for Physical Settlement
                                   -------------------------------------
                                   Citibank, New York
                                   ABA# 021 000 089
                                   AC# 4065 2556
                                   UBS Warburg LLC

                                   Cash Settlement Payments or USD Premium
                                   Payments
                                   -------------------------------------
                                   UBS AG Stamford
                                   f/a/o UBS AG London Branch
                                   ABA# 026-007-993
                                   AC# 101-WA-140007-000

                                   Delivery of Shares for Physical Settlement
                                   and Net Share Settlement
                                   -------------------------------------
                                   UBS Warburg LLC
                                   DTC 642
                                   Account of UBS Warburg, London

Party B:                           (please advise)

Relationship Between Parties
----------------------------

Each party will be deemed to represent to the other party on the date on which
it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):

                                       10
<PAGE>

(a) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.

(b) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts the terms, conditions and risks of that Transaction.
It is also capable of assuming, and assumes, the risks of that Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of that Transaction.

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us by facsimile (203 719 0538) at your earliest convenience.

Yours sincerely,
<TABLE>
<CAPTION>

UBS AG, LONDON BRANCH
<S>                                         <C>
By:      /s/ Erik Sorensen                  By:      /s/ Rupert Hilmi
         ---------------------------                 ---------------------------
Name:    Erik Sorensen                               Name:    Rupert Hilmi
Title:   Authorised Signatory                        Title:   Associate Director

Confirmed as of the 28th day
of September, 2001

IVAX Corporation

By:      /s/ Thomas E. Beier                         By:      /s/ Rao Uppaluri
         ---------------------------                          --------------------------
Name:    Thomas E. Beier                                      Name: Rao Uppaluri
Title:   Senior Vice President- Finance and                   Title:   VP Strategic Planning and
         Chief Financial Officer                                          Treasurer
</TABLE>

                                       11

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