Document:

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                                                                   EXHIBIT 10.20

                  CONFIDENTIAL TREATMENT REQUESTED BY QLT INC.

                  COLLABORATION, LICENSE AND SUPPLY AGREEMENT

                                    BETWEEN

                            ATRIX LABORATORIES, INC.

                                      AND

                          MEDIGENE AKTIENGESELLSCHAFT

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                                                 PAGE NO.
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<S>                                                                     <C>
ARTICLE I DEFINITIONS................................................        1

ARTICLE II COLLABORATION.............................................        9
   Section 2.01.  Objectives.........................................        9
   Section 2.02.  Prostate Cancer Development Program................        9
   Section 2.03.  Commercialization..................................       11
   Section 2.04.  Availability of Resources; Cooperation.............       11

ARTICLE III LICENSE..................................................       11
   Section 3.01.  License Fee........................................       11
   Section 3.02.  License Terms......................................       11
   Section 3.03.  Marks..............................................       13
   Section 3.04.  Ownership of Intellectual Property.................       13

ARTICLE IV ROYALTY AND MILESTONE PAYMENTS............................       13
   Section 4.01.  Research and Development Expenses..................       13
   Section 4.02.  Royalty Payments...................................       13
   Section 4.03.  Milestone Payments.................................       14
   Section 4.04.  Sales Milestone Payment............................       14
   Section 4.05.  Reports............................................       14

ARTICLE V NEW PRODUCT................................................       16
   Section 5.01.  New Product........................................       16
   Section 5.02.  Right of First Negotiation.........................       16

ARTICLE VI COMMERCIALIZATION.........................................       17
   Section 6.01.  Promotion And Marketing Obligations................       17

ARTICLE VII MANUFACTURE AND SUPPLY...................................       20
   Section 7.01.  Agreement to Supply Product........................       20
   Section 7.02.  Quality Assurance..................................       20
   Section 7.03.  Atrix's Duties.....................................       20
   Section 7.04.  Compliance with Applicable Laws....................       22
   Section 7.05.  Second Manufacturing Source........................       22
   Section 7.06.  Failure to Supply..................................       22
   Section 7.07.  Allocation.........................................       23

ARTICLE VIII PURCHASE AND SALE.......................................       23
   Section 8.01.  Purchase Price and Payment.........................       23
   Section 8.02.  Adjustment to Purchase Price/Audit.................       24
   Section 8.03.  Labeling and Artwork...............................       25
   Section 8.04.  Purchase Forms.....................................       26
   Section 8.05.  Confirmation.......................................       26
   Section 8.06.  Delivery...........................................       26
   Section 8.07.  Forecasts and Orders...............................       26
   Section 8.08.  Demonstration Samples..............................       28

ARTICLE IX WARRANTY, REJECTION AND INSPECTIONS.......................       28
   Section 9.01.  Atrix Warranty.....................................       28
</TABLE>

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<TABLE>
<S>                                                                     <C>
   Section 9.02.  Rejection of Product for Failure to Conform to
                  Specifications.....................................       28
   Section 9.03.  MediGene Inspections...............................       29

ARTICLE X REGULATORY COMPLIANCE......................................       30
   Section 10.01. Marketing Authorization Holder.....................       30
   Section 10.02. Maintenance Of Marketing Authorizations............       30
   Section 10.03. Interaction with Competent Authorities.............       30
   Section 10.04. Adverse Drug Event Reporting and Phase IV
                  Surveillance.......................................       30
   Section 10.05. Commercial Sale Testing And Reporting..............       31
   Section 10.06. Assistance.........................................       32
   Section 10.07. Compliance.........................................       32

ARTICLE XI PATENTS AND TRADEMARKS....................................       32
   Section 11.01. Maintenance of Patents or Marks....................       32
   Section 11.02. Prosecution of Infringement........................       33
   Section 11.03. Infringement Claimed by Third Parties..............       34

ARTICLE XII CONFIDENTIALITY..........................................       34
   Section 12.01. Confidentiality....................................       34
   Section 12.02. Disclosure of Agreement............................       35

ARTICLE XIII ATRIX'S OPTION TO MARKET THE PRODUCT UNDER CERTAIN
                  CIRCUMSTANCES......................................       35
   Section 13.01. Co-Marketing Rights................................       35

ARTICLE XIV REPRESENTATIONS AND WARRANTIES...........................       36
   Section 14.01. Corporate Power....................................       36
   Section 14.02. Due Authorization..................................       36
   Section 14.03. Binding Obligation.................................       36
   Section 14.04. Ownership of Atrigel(R) Patent Rights..............       36
   Section 14.05. Patent Proceedings.................................       36
   Section 14.06. Legal Proceedings..................................       37
   Section 14.07. Compliance With Applicable Laws....................       37
   Section 14.08. Limitation on Warranties...........................       37
   Section 14.09. Limitation of Liability............................       37

ARTICLE XV INDEMNIFICATION...........................................       37
   Section 15.01. MediGene Indemnified by Atrix......................       37
   Section 15.02. Atrix Indemnified by MediGene......................       38
   Section 15.03. Prompt Notice Required.............................       38
   Section 15.04. Indemnitor May Settle..............................       38

ARTICLE XVI COVENANTS................................................       39
   Section 16.01. Covenant Not To Launch Competitive Product.........       39
   Section 16.02. Limitation To The Territory........................       39
   Section 16.03. Access to Books and Records........................       40
   Section 16.04. A&S Spending Levels................................       40
   Section 16.05. Marketing Expenses.................................       40
   Section 16.06. Compliance.........................................       40
   Section 16.07. Reports............................................       40
   Section 16.08. Protection of the Marks............................       41
   Section 16.09. Launch Quantities..................................       41
   Section 16.10. Further Actions....................................       41
</TABLE>

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<TABLE>
<S>                                                                     <C>
   Section 16.11. Equitable Relief...................................       41

ARTICLE XVII PRODUCT RECALL..........................................       42
   Section 17.01. Product Recalls or Withdrawal......................       42
   Section 17.02. Recall Costs.......................................       42
   Section 17.03. Notification Of Complaints.........................       43
   Section 17.04. Notification Of Threatened Action..................       43

ARTICLE XVIII INSURANCE..............................................       43
   Section 18.01. Insurance..........................................       43

ARTICLE XIX TERM; DEFAULT AND TERMINATION............................       44
   Section 19.01. Term...............................................       44
   Section 19.02. Termination by Either Party for Cause..............       44
   Section 19.03. Termination by Atrix...............................       44
   Section 19.04. Termination by MediGene............................       45
   Section 19.05. Remedies...........................................       45
   Section 19.06. Effect of Termination..............................       45
   Section 19.07. License Following Expiration.......................       45

ARTICLE XX MISCELLANEOUS.............................................       47
   Section 20.01. No-Solicitation....................................       48
   Section 20.02. Commercially Reasonable Efforts....................       48
   Section 20.03. Assignment.........................................       48
   Section 20.04. Force Majeure......................................       48
   Section 20.05. Governing Law......................................       49
   Section 20.06. Waiver.............................................       49
   Section 20.07. Severability.......................................       49
   Section 20.08. Notices............................................       49
   Section 20.09. Independent Contractors............................       50
   Section 20.10. Rules of Construction..............................       50
   Section 20.11. Publicity..........................................       50
   Section 20.12. Entire Agreement; Amendment........................       52
   Section 20.13. Headings...........................................       53
   Section 20.14. Counterparts.......................................       53

Exhibit A - Atrigel(R) Patent Rights.................................      A-1
Exhibit B - Form of Certificate of Compliance........................      B-1
Exhibit C - [**].....................................................      C-1
Exhibit D - Form of Stock Purchase Agreement.........................      D-1
Exhibit E - [**].....................................................      E-1
Exhibit F - MediGene's SOP...........................................      F-1
Exhibit G - Drug Delivery Competitors................................      G-1
</TABLE>

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                   COLLABORATION, LICENSE AND SUPPLY AGREEMENT

     This Collaboration, License and Supply Agreement (the "Agreement") is made
as of April 4, 2001(the "Effective Date") by and between Atrix Laboratories,
Inc., a Delaware corporation having offices at 2579 Midpoint Drive, Fort
Collins, CO, 80525-4417 ("Atrix"), and MediGene Aktiengesellschaft, a German
corporation having offices at Lochhamer Strasse 11, Planegg/Martinsried, Germany
("MediGene"). Atrix and MediGene are sometimes referred to collectively herein
as the "Parties" or singly as a "Party."

                                    RECITALS

     WHEREAS, Atrix possesses proprietary drug delivery systems including
"Atrigel(R)" and has substantial experience and expertise in the discovery,
design and development of products based on these proprietary drug delivery
systems for medical, dental and veterinary applications;

     WHEREAS, MediGene possesses substantial resources and expertise in the
research and development of pharmaceutical products and intends to invest
substantial resources for the commercialization and marketing of pharmaceutical
products under this Agreement;

     WHEREAS, Atrix wishes to grant to MediGene, and MediGene wishes to obtain
from Atrix, an exclusive license under Atrix's Atrigel(R) Technology to market,
advertise, promote, distribute, offer for sale, sell and import the Product in
the Territory for use in the Field on the terms and subject to the conditions
set forth herein; and

     WHEREAS, MediGene wishes Atrix to manufacture and Atrix desires to
manufacture each of the Product to be sold in the Territory by MediGene.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements contained herein, the Parties hereto, intending to be
legally bound, do hereby agree as follows:

                                    AGREEMENT

                                    ARTICLE I

                                   DEFINITIONS

          (a) The following terms as used in this Agreement shall have the
     meaning set forth below:

     "Acceptance for Filing" means MediGene's receipt of a letter issued by the
EMEA or other Competent Authority indicating acceptance for filing of a
regulatory dossier pursuant to Applicable Laws in the Territory.

     "Affiliate" means an individual, trust, business trust, joint venture,
partnership, corporation, association or any other entity which owns, is owned
by or is under common ownership with, a Party. For the purposes of this
definition, the term "owns" (including, with correlative meanings, the terms
"owned by" and "under common ownership with") as used with

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respect to any Party, shall mean the possession (directly or indirectly) of more
than 50% of the outstanding voting securities of a corporation or comparable
equity interest in any other type of entity.

     "Applicable Laws" means all applicable laws, rules, regulations and
guidelines that may apply to the development, marketing, manufacturing,
packaging or sale of the Product in the Territory or the performance of either
Party's obligations under this Agreement including laws, regulations and
guidelines governing the import, export, development, marketing, distribution
and sale of the Product in the Territory, to the extent applicable and relevant,
and including all cGMP or Good Clinical Practices standards or guidelines
promulgated by the FDA or the Competent Authorities and including trade
association guidelines, where applicable, as well as United States' export
control laws and the United States' Foreign Corrupt Practices Act.

     "A&S" means MediGene's advertising and selling expenditures incurred in and
associated with the promotional support of the Product in the Territory,
including the respective overhead allocation costs for supporting and
warehousing the Product, physical and logistic distribution expenses, creation,
development and acquisition of advertising and selling materials, including, but
not limited to, expenditures for samples, detailing materials, journal
advertising, in-office waiting room materials, educational programs, including
Web-site programs for physicians and patients, convention booths, direct mail,
consumer support, third party support, managed care programs, post-marketing
Phase IV studies to support existing indications, market research, market
surveys, market analysis and the training and costs of the pharmaceutical detail
force, and the telesales staff used with regard to support of the Product.

     "Atrigel(R)" means Atrix's proprietary drug delivery system consisting of
flowable compositions (e.g., solutions, gels, pastes and putties) of
biodegradable polymers and biocompatible solvents.

     "Atrigel(R) Know-How" means all Know-How related to Atrix's proprietary
Atrigel(R) drug delivery system and which is under the Control of Atrix as of
the Effective Date, or is created during the term of this Agreement including,
but not limited to, data and documentation of clinical trials and useful for
clinical trials created outside the Territory as of the Effective Date and
during the term of this Agreement, which is not covered by the Atrigel(R) Patent
Rights, but is necessary or useful to develop, Manufacture and commercialize the
Product in the Territory for use in the Field.

     "Atrigel(R) Patent Rights" means all Patent Rights related to Atrix's
proprietary Atrigel(R) drug delivery system as of the Effective Date and at any
time during the Term of this Agreement, which are necessary or appropriate to
develop, Manufacture and commercialize the Product in the Territory for use in
the Field, which are under the Control of Atrix as of the Effective Date and
Improvements thereto developed during the Term. The Atrigel(R) Patent Rights as
of the Effective Date are set forth on Exhibit A.

     "Atrigel(R) Technology" means the Atrigel(R) Patent Rights and the
Atrigel(R) Know-How.

     "Atrix Manufacturing Cost" means the actual cost of the Manufacture by
Atrix of the Product under a Manufacturing Process, including the related
quality assurance and quality

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control activities as required by Applicable Laws (other than the costs set
forth in Section 2.03), which actual cost shall be comprised of the cost of
goods produced as determined in accordance with GAAP, and shall include direct
labor, direct material, including raw materials and packaging materials, and the
allocable portion of the manufacturing overhead of Atrix directly attributable
to the Manufacture of the Product. The allocable portion of the manufacturing
overhead shall be determined by taking the total facility cost for the period,
less an adjustment for idle capacity, and allocating the remaining facility cost
by labor usage to each of the products produced in the facility during the
period. For example: If the facility cost for the period was $1,000,000 and it
was operating at 80% capacity, the allocable facility cost would be $800,000. If
the Product represented 30% of labor usage during the period, the allocable
portion of the manufacturing overhead directly attributable to the Manufacture
of the Product would be $240,000. Atrix Manufacturing Cost shall exclude
selling, general and administrative, research and development, and interest
expenses and any and all debt service payments of Atrix.

     For a period of twelve (12) months from the date of First Commercial Sale
of each Product the Atrix Manufacturing Cost for each Product will be set as
follows for the [**] (the "Twelve Month Cost"):

                [**] Dosage Forms Cost:
                [**] One Month Product -   [**]
                [**] Three Month Product - [**]
                [**] Four Month Product -  [**]
                [**] Six Month Product -   [**]

     [**]

                [**] Dosage Forms Cost:

                [**] One Month Product -   [**]
                [**] Three Month Product - [**]
                [**] Four Month Product -  [**]
                [**] Six Month Product -   [**]

     [**]

     "Certificate of Compliance" means the certificate of compliance in the form
attached hereto as Exhibit B.

     "cGMP" means current good manufacturing practices as defined in 21 CFR
Section 110 et seq.

     "Collaboration" means the activities of the Parties carried out in
performance of, and the relationship between the Parties established by, this
Agreement.

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     "Competent Authorities" means collectively the governmental entities in
each country, or recognized regional authorities, in the Territory responsible
for the regulation of medicinal products intended for human use.

     "Competitive Product" means any leuteinizing hormone releasing hormone
(LHRH) or a structurally related derivative or structurally related analog
thereof, whether agonist or antagonist, whether naturally-occurring or
synthetic, used for the treatment of prostate cancer, endometriosis or uterine
fibroids.

     "Confidential Information" means any confidential or proprietary
information of a Party, whether in oral, written, graphic or electronic form,
confirmed in writing and marked as confidential within thirty (30) days of the
date of disclosure. Confidential Information shall not include any information
which the receiving Party can prove by competent evidence:

          (a) is now, or hereafter becomes, through no act or failure to act on
     the part of the receiving Party, generally known or available;

          (b) is known by the receiving Party at the time of receiving such
     information, as evidenced by its written records maintained in the ordinary
     course of business;

          (c) is hereafter furnished to the receiving Party by a Third Party, as
     a matter of right and without restriction on disclosure;

          (d) is independently developed by the receiving Party, as evidenced by
     its written records, without knowledge of, and without the aid, application
     or use of, the disclosing Party's Confidential Information; or

          (e) is the subject of a written permission to disclose provided by the
     disclosing Party.

     "Consumer Price Index" means the Consumer Price Index for all Urban
Consumers (Consumer Prices - All Urban Consumers, 1982-84 = 100) as published by
the Bureau of Labor Statistics of the Department of Labor of the United States
Department of Commerce.

     "Control" means the possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party.

     "Demonstration Samples" means Units, absent leuprolide acetate, used to
demonstrate the manner in which the Product is prepared and used, and labeled
"demonstration samples, for demonstration purposes only, not for human use."

     "EMEA" means the European Medicine Evaluation Agency.

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     [**]

     [**]

     [**]

     [**]

     [**]

     [**]

     "FDA" means the United States Food and Drug Administration.

     "Field" means the treatment of prostate cancer, endometriosis and uterine
fibroids.

     "First Commercial Sale" means (i) with respect to a country in the
Territory, the first sale for use, consumption or resale of each Product by
MediGene in such country and (ii) with respect to the Territory, the First
Commercial Sale in any country within the Territory. A sale to an Affiliate
shall not constitute a First Commercial Sale unless the Affiliate is the end
user of the Product.

     "GAAP" means United States generally accepted accounting principles
consistently applied on a basis consistent throughout the periods indicated and
consistent with each other.

     "Good Clinical Practices" means good clinical practices as defined in 21
CFR Section 50 et seq. and Section 312 et seq.

     "Governmental Approval" means all permits, licenses and authorizations,
including but not limited to, import permits, Marketing Authorizations required
by any Competent Authority as a prerequisite to the Manufacturing, packaging,
marketing or selling of the Product or the Units.

     "Improvements" means any and all developments, inventions or discoveries in
the Field relating to the Atrigel(R) Technology developed, or acquired by Atrix
at any time during the Term and shall include, but not be limited to,
developments intended to enhance the safety and/or efficacy of the Product.

     "Know-How" means all know-how, trade secrets, inventions, data, processes,
techniques, procedures, compositions, devices, methods, formulas, protocols and
information, whether or not patentable, which are not generally publicly known,
including, without limitation, all chemical, biochemical, toxicological, and
scientific research information, whether in written, graphic or video form or
any other form or format.

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     "Launch Quantity" means a quantity of Product adequate to meet the
requirements set forth for the first six (6) months in the Initial Forecast.

     "Major Countries" or "Major Country" means individually or collectively, as
the case may be, the countries of France, Germany, Italy, Spain and the United
Kingdom.

     "Manufacture" or "Manufacturing Process" means the storage, handling,
production, processing and packaging of a Product or a Demonstration Sample, in
accordance with this Agreement and Applicable Laws.

     "Marketing Authorization" means all necessary and appropriate regulatory
approvals, including but not limited to, variations thereto, and Pricing and
Reimbursement Approvals where applicable, to put the Product on the market in a
particular country in the Territory.

     "Marks" means "Atrigel(R)" or "Leuprogel(TM)" or any additional trademarks
selected by Atrix in either case, alone or accompanied by any logo or design and
any foreign language equivalents in figure, sound or meaning, whether registered
or not.

     "NDA" means a New Drug Application, and all amendments and supplements
thereto, filed or to be filed, with the FDA seeking authorization and approval
to manufacture, package, ship and sell a product in the United States as more
fully defined in 21 CFR Section 314.5 et seq.

     "Net Sales" means the [**]

     Components of Net Sales shall be determined in the ordinary course of
business in accordance with historical practice and using the accrual method of
accounting in accordance with GAAP.

     In the event MediGene transfers Product to a Third Party in a bona fide
arm's length transaction, for consideration, in whole or in part, other than
cash or to a Third Party in other than a bona fide arm's length transaction, the
Net Sales price for such Product shall be deemed to be the standard invoice
price then being invoiced by MediGene in an arms length transaction with similar
customers. In the event that MediGene includes one or more Product as part of a
bundle of products, MediGene agrees not to offer or sell any such Product as a
loss leader (i.e. sold at less than the invoice price at which any such Product
is sold when not part of a bundle of products) in determining the price of the
bundled products.

     "Net Selling Price" means with respect to a given time period and for a
given country on a product by product basis, Net Sales with respect to such
country divided by the number of Units for the [**] sold in such country during
such time period.

     "New Product" means a product containing a combination of leuprolide
acetate in the Atrigel(R) delivery system (other than the Product) or any other
product using any leuteinizing hormone releasing hormone (LHRH) or a
structurally related derivative or structurally related

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analog thereof, whether agonist or antagonist, whether naturally-occurring or
synthetic, for use in the Territory, outside of the Field.

     "Packaging Specifications" means the packaging specifications and the
labeling specifications for the Unit, as mutually determined by Atrix and
MediGene from time to time, and in compliance with Applicable Laws.

     "Patent Rights" means all rights under patents and patent applications, and
any and all patents issuing therefrom (including utility, model and design
patents and certificates of invention), together with any and all substitutions,
extensions (including supplemental protection certificates), registrations,
confirmations, reissues, divisionals, continuations, continuations-in-part,
re-examinations, renewals and foreign counterparts of the foregoing, and all
improvements, supplements, modifications or additions.

     "Phase IV" means, as applicable, a study or program designed to obtain
additional safety or efficacy data, detect new uses for or abuses of a drug, or
to determine effectiveness for labeled indications under conditions of
widespread usage, which is commenced after regulatory approval of a Product.

     "Pricing and Reimbursement Approvals" means any pricing and reimbursement
approvals which must be obtained before placing Product on the market in any
country in the Territory in which such approval is required.

     "Prime Rate of Interest" means the prime rate of interest published from
time to time in the Wall Street Journal as the prime rate; provided, however
that if the Wall Street Journal does not publish the Prime Rate of Interest,
then the term "Prime Rate of Interest" shall mean the rate of interest publicly
announced by Bank of America, N.A., as its Prime Rate, Base Rate, Reference Rate
or the equivalent of such rate, whether or not such bank makes loans to
customers at, above, or below said rate.

     "Product" means individually and collectively the [**] supplied in Unit
packages [**], supplied in Unit packages, for use in the Field.

     "Royalty" means the royalty to be paid by MediGene to Atrix as set forth in
Section 4.02.

     "Royalty Term" means the period of time commencing on the First Commercial
Sale of each Product in any country in the Territory and ending on the
expiration of the last to expire of the Atrigel(R) Patent Rights covering each
Product in such country.

     "Shipment" means each individual group of Product received by MediGene from
Atrix.

     "Specifications" means the specifications for the Product as may be amended
from time to time by the Parties and in compliance with Applicable Laws. The
Specifications for the [**] are attached hereto as Exhibit C.

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     "Stock Purchase Agreement" means that certain Stock Purchase Agreement
dated as of the same date as this Agreement between Atrix and MediGene attached
hereto as Exhibit D.

     "Territory" means Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus,
Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco,
Netherlands, Norway, Poland, Portugal, Republic of Moldova, Romania, Russian
Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, The former Yugoslav
Republic of Macedonia, Turkey, Ukraine, United Kingdom and Yugoslavia.

     "Third Party" means any entity other than: (a) Atrix, (b) MediGene or (c)
an Affiliate of Atrix or MediGene.

     "U.C.C." means the Uniform Commercial Code of Colorado.

     "Unit" means the Product, currently packaged in a two-part system
containing (a) one syringe of Atrigel(R) delivery system and a needle in a
moisture proof pouch and sterilized by gamma irradiation; (b) one syringe
containing sufficient leuprolide acetate for a [**], aseptically filled and
lyophilized in the syringe, and packaged in a moisture-proof pouch; (c)
instructions for use; and (d) a commercial trade or sample package. The trade or
sample package may be changed or reformulated by Atrix and MediGene from time to
time and the term "Unit" shall refer to the Product in such changed or
reformulated package.

     "United States" means the United States of America, its territories and
possessions, including the Commonwealth of Puerto Rico.

     [**]

     [**]

     [**]

     [**]

     [**]

          (b) Each of the following terms is defined in the Section set forth
     opposite such term below:

<TABLE>
<S>                                               <C>
ADE............................................                 Section 10.04(a)
Adjusted Atrix Manufacturing Cost..............                  Section 8.02(a)
Advisory Board.................................               Section 6.01(e)(i)
Agreement......................................                         Preamble
Atrix..........................................                         Preamble
</TABLE>

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<TABLE>
<S>                                               <C>
Atrix Sales Force..............................                  Section 6.01(f)
Clinical Documentation.........................                  Section 2.02(c)
Disputed Amount................................                 Section 19.03(a)
Documentation..................................                  Section 8.02(b)
Effective Date.................................                         Preamble
[**]
Force Majeure..................................                    Section 20.04
Indemnitee.....................................                    Section 15.03
Indemnitor.....................................                    Section 15.03
Initial Forecast...............................                  Section 8.07(a)
Initiating Group...............................                    Section 20.01
License........................................                     Section 3.02
Licensed Territory.............................                 Section 16.02(b)
Loss...........................................                    Section 15.01
MediGene.......................................                         Preamble
[**]
Other Group....................................                    Section 20.01
Parties........................................                         Preamble
Party..........................................                         Preamble
Program Technology.............................                  Section 3.04(a)
Purchase Price.................................                     Section 8.01
Recall.........................................                    Section 17.01
Results........................................                  Section 2.02(c)
Royalty Statement..............................                  Section 3.04(a)
Second Source..................................                     Section 7.05
SOP............................................                 Section 10.04(c)
Term...........................................                    Section 19.01
[**]
Twelve Month Cost..............................   See "Atrix Manufacturing Cost"
[**]
</TABLE>

                                   ARTICLE II

                                  COLLABORATION

     Section 2.01. OBJECTIVES. Pursuant to the [**] Development Program [**],
Atrix and MediGene shall conduct research and development activities using the
Atrigel(R) Technology to develop Product for use in the Field.

     Section 2.02. PROSTATE CANCER DEVELOPMENT PROGRAM.

          (a) U.S. Product. Atrix shall utilize the Atrigel(R) Technology to
     conduct research and development of the [**] for the palliative treatment
     of prostate cancer for the U.S.

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     market at its own cost and expense, pursuant to a written development
     program (the [**]), a copy of which is attached hereto as Exhibit E. [**]
     MediGene shall reimburse Atrix for all costs and expenses incurred by Atrix
     in supporting MediGene's registration of [**] for use in the Territory,
     promptly upon receipt of a reasonably detailed invoice setting forth such
     costs and expenses in accordance with a budget mutually agreed to by the
     Parties and approved by MediGene.

               (i) If additional clinical trials or additional tests are
          required by Competent Authorities to market [**] the Product in the
          Territory then the Parties shall discuss the design and budget of such
          clinical trials and tests and MediGene shall conduct and pay all costs
          and expenses associated with such clinical trials and tests. For the
          avoidance of any doubt, MediGene shall make the final determination as
          to the design of such clinical trials and tests; provided that
          MediGene will consider the effect of such designs on the marketing and
          sale of the Product outside the Territory. Atrix shall diligently
          assist and support MediGene in such clinical trials and tests and
          MediGene shall reimburse Atrix for all costs and expenses incurred by
          Atrix in supporting such clinical trials and tests promptly upon
          receipt of a reasonably detailed invoice setting forth such costs and
          expenses in accordance with the budget mutually agreed to by the
          Parties and approved by MediGene. Further, Atrix shall sell and supply
          to MediGene [**] necessary for such additional clinical trials and
          tests at Atrix's actual cost of goods, including overhead allocation
          but excluding any manufacturing profit.

               (ii) If Atrix's U.S. licensee elects not to fund the development,
          [**] in the field of endometriosis or uterine fibrosis and MediGene
          elects to fund the development of such Product for sale in the
          Territory, then the Parties shall discuss the design and budget of
          such development and MediGene shall conduct and pay all costs and
          expenses associated with the development of such Product with such
          indication in the Territory. For the avoidance of any doubt, MediGene
          shall make the final determination as to the design of such
          development program; provided that MediGene will consider the effect
          of such design on the marketing and sale of the Product outside the
          Territory. Atrix shall diligently assist and support MediGene in such
          development program and MediGene shall reimburse Atrix for all costs
          and expenses incurred by Atrix in supporting such development program,
          promptly upon receipt of a reasonably detailed invoice setting forth
          such costs and expenses in accordance with the budget mutually agreed
          to by the Parties and approved by MediGene.

          (b) [**]

          (c) Regulatory and Clinical Documents. Subject to Section 3.02,
     MediGene will own all documentation, including all notes, summaries and
     analyses related thereto, developed in connection with such clinical trials
     and regulatory submissions (the

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     "Clinical Documentation") and the results of such clinical testing (the
     "Results"); provided that MediGene shall provide Atrix with copies of all
     the Clinical Documentation and the Results; and further provided, that
     MediGene shall provide Atrix with reasonable access to and full use of the
     Clinical Documentation and the Results.

          (d) Audit of [**] Costs. MediGene shall have the right to cause an
     independent, certified public accountant reasonably acceptable to Atrix to
     audit those records of Atrix relating to the calculation of those costs and
     expenses of Atrix for which MediGene is responsible for under this Section
     2.02 for the sole purpose of verifying such costs and expenses. Such audits
     may be exercised during normal business hours no more than once in a twelve
     (12) month period upon at least ten (10) days prior written notice.

     Section 2.03. COMMERCIALIZATION. MediGene, at its own expense, will be
responsible for (a) conducting all market research related to the Product; and
(b) commercialization of the Product in the Territory (including all sales and
marketing activities related to the Product). MediGene will obtain Governmental
Approvals in the Territory and pay all duties, fees, tariffs and similar
obligations required to market the Product in each country in the Territory.

     Section 2.04. AVAILABILITY OF RESOURCES; COOPERATION. Each Party shall
maintain laboratories, offices and/or other facilities reasonably necessary to
carry out the activities to be performed by such Party pursuant to the [**].
Upon reasonable advance notice, each Party agrees to make its employees and
non-employee consultants reasonably available at their respective places of
employment to consult with the other Party on issues arising in connection with
any request from any regulatory agency, including, without limitation,
regulatory, scientific, technical and clinical testing issues.

                                   ARTICLE III

                                     LICENSE

     Section 3.01. LICENSE FEE. In partial consideration for the License granted
under Section 3.02(a), MediGene shall pay to Atrix an initial one-time
non-refundable license fee equal to Two Million Dollars ($2,000,000) on the
Effective Date by wire transfer of immediately available funds to an account to
be designated by Atrix to MediGene prior to the Effective Date. On the Effective
Date, MediGene shall also purchase from Atrix Four Million Dollars ($4,000,000)
of Atrix's common stock, as provided in the Stock Purchase Agreement.

     Section 3.02. LICENSE TERMS. The terms and conditions of the exclusive
license (the "License") granted by Atrix to MediGene shall be as follows:

          (a) License Grant. Subject to the terms of this Agreement, Atrix
     hereby grants to MediGene an exclusive license under the Atrigel(R)
     Technology to use, develop, market, advertise, promote, distribute, offer
     for sale, sell and import, but not Manufacture, the Product in the
     Territory for use in the Field, with a right to sublicense in accordance
     with

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     this Section 3.02, and agrees to transfer the Atrigel(R) Know-How to
     MediGene, only to the extent necessary and sufficient for MediGene to
     exercise its rights and perform its obligations hereunder. This exclusive
     license can only be transferred by MediGene on the basis set forth in
     Section 20.03.

          (b) Right to Sublicense without Manufacturing. Subject to the terms of
     this Agreement, MediGene shall have the right to grant, under the license
     granted by Atrix to MediGene under Section 3.02(a) and without the prior
     written consent of Atrix, a sublicense to a Third Party. MediGene will
     provide a copy of any such sublicense to Atrix promptly upon the execution
     of the same. The right to sublicense granted under this Section 3.02(b)
     shall be subject to the terms and conditions of the license itself, and
     MediGene shall be responsible for and shall guarantee the performance by
     the sublicensee of such obligations.

          (c) [**]

          (d) License Termination. If MediGene has not undertaken commercially
     reasonable efforts to begin distribution and marketing of [**], if
     applicable, in (i) each Major Country within ninety (90) days following
     receipt of written notice by MediGene that Governmental Approval has been
     received for each respective Product for each Major Country and (ii) each
     other country in the Territory within one hundred and eighty (180) days
     following receipt of written notice by MediGene that Governmental Approval
     has been received for each respective Product for each other country in the
     Territory and provided that Atrix has available Launch Quantities of the
     respective Product, then the following shall occur with respect to each
     Product not so distributed and marketed: (A) in each Major Country within
     such ninety (90) days and (B) in each other country in the Territory within
     such one hundred and eighty (180) days: (1) Atrix shall have the right to
     grant a license to a Third Party, to market, advertise, promote,
     distribute, offer for sale, sell or import [**], if applicable,
     respectively, on a country-by-country basis in the Major Countries;
     provided that the terms of such licenses are no less favorable to Atrix, in
     any material respect, than those set forth in this Agreement (excluding
     milestone payments and subject to adjustments to the dollar amount of Net
     Sales at which a higher royalty rate becomes payable (to reflect the fact
     that the licensee under such license will not have the right to market and
     sell the Product in the entire Territory)), (2) the licenses granted to
     MediGene under this Agreement shall automatically terminate with respect to
     that specific Product in that specific country in the Territory and such
     country shall no longer be included in the Territory for such Product and
     (3) MediGene shall grant to Atrix an irrevocable, non-exclusive,
     royalty-free license, with the right to sublicense, to use the Clinical
     Documentation, the Results and the Marketing Authorizations and make any
     required filings with Competent Authorities, only to the extent necessary
     and sufficient for Atrix or its licensee to market the Product in such
     country; provided, however, such rights shall not include any license or
     other right to use MediGene's trademarks or tradedress.

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     Section 3.03. MARKS. Subject to the terms and conditions of this Agreement,
Atrix hereby grants to MediGene an exclusive, royalty-free right to use the
Marks in the Territory in connection with the use, development, marketing,
advertising, promotion, distribution and sale of the Product in the Field.

     Section 3.04. OWNERSHIP OF INTELLECTUAL PROPERTY.

          (a) All right, title and interest in and to any developments,
     inventions or discoveries made in connection with any leuteinizing hormone
     releasing hormone (LHRH) or a structurally related derivative or
     structurally related analog thereof, whether agonist or antagonist, whether
     naturally-occurring or synthetic, used for treatments outside the Field,
     which do not relate to the Atrigel(R) Technology or the Product, made or
     conceived only during and as a direct result of either Party's work in
     connection with this Agreement, shall be jointly owned by the Parties,
     including any patentable inventions (the "Program Technology).

          For the avoidance of doubt, MediGene shall have no right, title or
     interest in or to the Atrigel(R) Technology or the Marks, except as
     specifically set forth in this Agreement.

          (b) Atrix and MediGene each grants to the other a nonexclusive,
     irrevocable, worldwide, royalty-free, perpetual license, including the
     right to grant sublicenses to Affiliates, to make and use the Program
     Technology for all research purposes (consistent with the purpose and
     intent of this Agreement) other than the sale or manufacture for sale of
     products or processes; provided that if any Party desires to make,
     manufacture, use, market or sell any product based upon the Program
     Technology or desires to provide to a Third Party a sublicense to make,
     manufacture, use, market or sell any product based on the Program
     Technology, then such Party shall grant to the other Party a right of first
     negotiation under substantially the same terms and procedures as MediGene's
     right of first negotiation as set forth in Section 5.02 with respect to
     such product.

                                   ARTICLE IV

                         ROYALTY AND MILESTONE PAYMENTS

     Section 4.01. RESEARCH AND DEVELOPMENT EXPENSES. Except as set forth in
Section 2.02, Atrix shall, at its sole expense, be responsible for all research
and development expenses pertaining to the Product.

     Section 4.02. ROYALTY PAYMENTS. MediGene shall pay to Atrix a royalty based
on [**] for a period equal to the Royalty Term for each Product in each country
in the Territory as follows:

               (I) [**]

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     All royalty payments due to Atrix under this Agreement shall be paid within
forty five (45) days of the end of each calendar quarter, unless otherwise
specifically provided herein.

     Section 4.03. MILESTONE PAYMENTS. MediGene shall pay to Atrix, as licensing
fees, the following milestone payments within thirty (30) days after Atrix gives
notice to MediGene of the occurrence of the specified milestone event:

          (a) [**]

          (b) [**]

          (c) [**]

          (d) [**]

          (e) [**] and

          (f) [**]

[**]. For the avoidance of doubt, the milestone payments referred to in this
Section 4.03 shall be paid only once by MediGene.

     Section 4.04. SALES MILESTONE PAYMENT. MediGene shall pay to Atrix as a
one-time payment the sum of [**]. For the avoidance of doubt, the milestone
payment referred to in this Section 4.04 shall be paid only once by MediGene.

     Section 4.05. REPORTS.

          (a) Reports. MediGene shall furnish to Atrix a quarterly written
     report showing in reasonably specific detail, on a Product by Product and
     country by country basis, (a) the calculation of Net Sales; (b) royalties
     payable in United States' Dollars, if any, which shall have accrued
     hereunder based upon Net Sales; (c) withholding taxes, if any, required by
     law to be deducted with respect to such sales; (d) the dates of the First
     Commercial Sales of any Product in any country in the Territory during the
     reporting period; and (e) the exchange rates used to determine the amount
     of United States' Dollars (collectively, the "Royalty Statement"). Royalty
     Statements shall be due as soon as possible, but in any event no later than
     sixty (60) days following the close of each calendar quarter.

          (b) Exchange Rate; Manner and Place of Payment. All payments hereunder
     shall be payable in United States dollars. With respect to each quarter,
     whenever conversion of payments from any foreign currency shall be
     required, such conversion shall be made at the rate of exchange reported in
     The Wall Street Journal on the last business day of the applicable calendar
     quarter. All payments owed under this Agreement shall be made by

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     wire transfer to a bank account designated by Atrix, unless otherwise
     specified in writing by Atrix.

          (c) Late Payments. In the event that any payment, including contingent
     payments, due hereunder is not made when due, each such payment shall
     accrue interest from the date due at Prime Rate of Interest. The payment of
     such interest shall not limit Atrix from exercising any other rights it may
     have under this Agreement as a consequence of the lateness of any payment.

          (d) Records and Audits. During the Term and for a period of two (2)
     years thereafter or as otherwise required in order for Atrix to comply with
     Applicable Law, MediGene shall keep complete and accurate records in
     sufficient detail to permit Atrix to confirm the completeness and accuracy
     of: (i) the information presented in each Royalty Statement and all
     payments due hereunder; (ii) the calculation of A&S and (iii) the
     calculation of Net Sales. MediGene shall permit an independent, certified
     public accountant reasonably acceptable to MediGene to audit and/or inspect
     those records of MediGene (including but not limited to financial records)
     that relate to Net Sales, Royalty Statements and A&S for the sole purpose
     of: (A) verifying the completeness and accuracy of the Royalty Statements;
     (B) verifying the calculation of the Net Selling Price, the calculation of
     Net Sales and the calculation of A&S and (C) to confirm Royalty payments
     and A&S expenditures for the Product for the previous year. Such inspection
     shall be conducted during MediGene's normal business hours, no more than
     once in any twelve (12) month period and upon at least ten (10) days prior
     written notice by Atrix to MediGene. If such accounting firm concludes that
     such payments were underpaid for the preceding year, MediGene shall pay
     Atrix the amount of any such underpayments for the preceding year, plus
     interest at a rate equal to the Prime Rate of Interest, within thirty (30)
     days of the date Atrix delivers to MediGene such accounting firm's report
     so concluding that such payments were underpaid for the preceding year. If
     such accounting firm concludes that such payments were overpaid for the
     preceding year, Atrix shall pay to MediGene the amount of any such
     overpayments for the preceding year, without interest, within thirty (30)
     days of the date Atrix delivers to MediGene such accounting firm's report
     so concluding that such payments were overpaid for the preceding year.
     Atrix shall bear the full cost of such audit unless such audit discloses an
     underpayment by more than five percent (5%) of the amount due for the
     preceding year. In such case, MediGene shall bear the full cost of such
     audit.

          (e) Taxes. All taxes levied on account of the payments accruing to
     Atrix under this Agreement shall be paid by Atrix for its own account,
     including taxes levied thereon as income to Atrix. If provision is made in
     law or regulation for withholding, such tax shall be deducted from the
     payment made by MediGene, paid to the proper taxing authority and a receipt
     of payment of the tax secured and promptly delivered to Atrix. Each Party
     agrees to assist the other Party in claiming exemption from such deductions
     or withholdings under any double taxation or similar agreement or treaty
     from time to time in force.

          (f) Prohibited Payments. Notwithstanding any other provision of this
     Agreement, if MediGene is prevented from paying any payments by virtue of
     the statutes,

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<PAGE>

     laws, codes or governmental regulations of the country from which the
     payment is to be made, then such payment may be paid by depositing funds in
     the currency in which it accrued to Atrix's account in a bank acceptable to
     Atrix in the country whose currency is involved.

                                    ARTICLE V

                                   NEW PRODUCT

     Section 5.01. NEW PRODUCT. Subject to MediGene's right of first negotiation
under Section 5.02 below, Atrix may or, at MediGene's request and at [**] will,
seek to develop and have the EMEA or other Competent Authority approve a New
Product.

     Section 5.02. RIGHT OF FIRST NEGOTIATION. For a period of thirty (30) days
following the receipt of notice from (i) Atrix of its intention to develop a New
Product or (ii) MediGene of its intention to have Atrix develop a New Product,
MediGene shall have the first right to negotiate binding material terms for a
definitive license agreement for the New Product. In the event (a) MediGene does
not determine within such thirty (30) day period to pursue a license for the New
Product, (b) the Parties are unable to reach agreement on binding material terms
of such a license within such thirty (30) day period, or (c) if the Parties have
reached agreement on binding material terms of such a license within such thirty
(30) day period, but are unable to enter into a definitive agreement within
ninety (90) days following the written notice from Atrix, which period may be
extended upon the mutual agreement of the Parties, Atrix shall have no further
obligation to MediGene under this Section 5.02. If MediGene and Atrix cannot
agree to the terms of such license, then Atrix may enter into an agreement with
a Third Party, provided that the terms of the agreement are no less favorable to
Atrix, in any material respect (individually or in the aggregate), than those
last proposed in writing by MediGene. The rights of MediGene under this Section
5.02 shall be limited to those countries in the Territory for which MediGene
retains a license under Sections 3.02 and 3.03 as of the date written notice is
received under this Section 5.02 by Atrix or MediGene, as applicable. If Atrix
enters into an agreement with a Third Party under this Section 5.02, Atrix shall
notify MediGene of this fact within four (4) weeks after the date the agreement
is entered into. MediGene shall then have the right to appoint an appropriate
independent person, reasonably acceptable to Atrix, having sufficient experience
in licensing matters, which person shall execute a confidentiality agreement in
such form as is reasonably satisfactory to Atrix, to examine the terms and
conditions of such agreement to determine that the terms thereof are no less
favorable to Atrix, in any material respect (individually or in the aggregate),
than those last proposed in writing by MediGene. Such determination shall be
made within six (6) weeks after the date Atrix provides notice to MediGene that
it has entered into such an agreement with a Third Party.

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                                   ARTICLE VI

                                COMMERCIALIZATION

     Section 6.01. PROMOTION AND MARKETING OBLIGATIONS.

          (a) Marketing Efforts. MediGene agrees to use commercially reasonable
     efforts to promote the sale, marketing and distribution of the Product in
     the Territory, consistent with accepted business practices devoting the
     same level of efforts as it devotes to its own products of comparable
     market potential. "Comparable market potential" shall be fairly determined
     by MediGene in good faith and shall be based upon market size, price,
     competition and general marketing parameters. Each Party shall promptly
     advise the other Party of any issues that materially and adversely affect
     its ability to market the Product in the Territory. In such event, senior
     executives of MediGene and Atrix shall meet and in good faith discuss what
     actions should be taken in light of such issues.

          (b) Trademarks. Subject to the terms and conditions of this Agreement,
     MediGene shall have the right to use any trademark, logo, design and/or
     tradedress for the Product in the Territory, provided such trademark, logo,
     design and/or tradedress complies with Applicable Laws.

          (c) Packaging. Atrix shall package and label the Product, the Units
     and the Demonstration Samples in compliance with the Packaging
     Specifications and Applicable Laws. Atrix, in consultation with MediGene,
     shall be responsible for assuring that such packaging and labeling conform
     with all Applicable Laws, if any, of the FDA for export of the Product and
     the Demonstration Samples into the Territory and that the Units comply with
     the Packaging Specifications. Atrix, in consultation with MediGene, shall
     also be responsible for assuring that packaging and labeling comply with
     all Applicable Laws where such Product is to be distributed for sale in the
     Territory. All additional incremental costs resulting from changes to the
     Packaging Specifications made at the request of MediGene that are not
     required to export or import the Product to countries in the Territory on a
     country by country basis under Applicable Laws shall be borne by MediGene.

          (d) Marketing Plans And Reports. Sixty (60) days prior to the expected
     date of First Commercial Sale in any Major Country and at the beginning of
     each calendar year thereafter, MediGene shall submit to the Advisory Board
     in writing the annual marketing, sales and distribution plan for each Major
     Country detailing MediGene's and its Affiliates' proposed marketing, sales
     and distribution strategy and tactics for the sale and distribution of
     Product during such calendar year, or portion thereof, including the
     expected selling price schedules for each Product in each Major Country
     (including any (i) prompt payment or other trade or quantity discounts
     which MediGene expects to offer and (ii) commission rates or rebates which
     MediGene expects to offer to distributors and agents). In addition, upon
     the request of Atrix, MediGene shall submit to the Advisory Board copies of
     any market research reports relating to Product sales and Product
     competition which MediGene or its Affiliates commission or otherwise obtain
     to the extent permissible by the agency preparing the report. To the extent
     the foregoing

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<PAGE>

     information is contained in plans or reports which contain information
     about other products or markets, MediGene may submit to the Advisory Board
     only those excerpts from such plans or reports which relate to the Product
     and Product competition.

          (e) Advisory Board.

               (i) Formation and Function. Promptly after the Effective Date,
          MediGene and Atrix will each appoint two (2) senior representatives to
          a committee (the "Advisory Board") that shall have oversight for any
          activity under this Agreement for the Territory. Atrix will select an
          individual to serve as chairman of the Advisory Board for the initial
          twelve (12) months. Thereafter, the chairmanship will rotate between a
          MediGene member and an Atrix member every twelve (12) months. Except
          as set forth in Section 13.01, the Advisory Board will be consulted by
          both Parties on all major decisions in the development and marketing
          of the Product in each country in the Territory, including, without
          limitation, in the following areas as they relate to the Product:

                    (A) Product positioning in the marketplace;

                    (B) quantity of direct selling efforts, including the number
               of sales details to be made;

                    (C) extent and degree of non-personal selling and
               promotional efforts;

                    (D) quantity and content of workshops and medical symposia;

                    (E) design and implementation of a Phase IV clinical study
               program to support the Product;

                    (F) design and implementation of a consumer awareness
               program;

                    (G) selection of physicians for a medical advisory board and
               speakers bureau;

                    (H) planning for international regulatory submissions;

                    (I) dispute resolution regarding sales, marketing and
               promotional activities related to the Product; and

                    (J) internet presence;

                    (K) design and performance of other clinical studies in any
               country of the Territory.

          MediGene, alone, will be responsible for making the final decisions on
          the development and marketing of the Product (subject to the
          provisions of Section 2.02) regardless of the action or inaction of
          the Advisory Board. MediGene

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<PAGE>

          agrees that in making such decisions and taking such actions that it
          will consider the effect of such decisions and actions on the
          marketing and sale of the Product outside the Territory.
          Notwithstanding the foregoing, for the avoidance of doubt, Atrix,
          alone, shall make the final decision on all matters concerning the
          Manufacture of the Product, except (a) Product labeling, as provided
          in Section 8.03, and (b) if MediGene exercises its Manufacturing
          rights, as provided in Sections 7.06 or 8.02(b).

               (ii) Meetings. The Advisory Board will meet every six (6) months
          and at such other times as a Party may request, alternating between
          Planegg/Martinsried, Germany and Fort Collins, Colorado and will
          otherwise communicate regularly by telephone, facsimile and/or video
          conference. The chairman of the Advisory Board shall prepare minutes
          of all meetings. Each Party recognizes the importance of the Advisory
          Board in the success of the Collaboration and will use diligent
          efforts to cause all of its representatives on the Advisory Board to
          attend all meetings of the Advisory Board. A Party may change any of
          its appointments to the Advisory Board at any time upon giving written
          notice to the other Party.

               (iii) Working Groups. The Advisory Board may establish
          appropriate working groups for the marketing and any other activities
          necessary for the development and marketing of the Product in the
          Territory. Each working group shall meet at least once every three (3)
          months and at such other times as a Party may request, alternating
          between Planegg/Martinsried, Germany and Fort Collins, Colorado and
          will otherwise communicate regularly by telephone, facsimile and/or
          video conference. All actions of a working group shall be by unanimous
          consent of its members and be reported to the Advisory Board in
          writing for approval by the Advisory Board. Any disputes or
          disagreements within a working group shall be resolved by the Advisory
          Board.

          (f) Co-Promotional Activities of Atrix. Beginning [**] following the
     launch of the first of any Product on a country-by-country basis within the
     Territory, Atrix shall have the right, [**] to participate in the sales,
     marketing and promotion of the Product. If Atrix so elects, [**] and
     MediGene will take all actions, including making any required filings with
     Competent Authorities, necessary to allow Atrix to use the applicable
     Marketing Authorizations in connection with Atrix's participation in such
     activities, as far as legally permissible. [**] Difficulties and
     differences arising from the co-promotional activities of Atrix, in
     particular the Atrix Sales Force, will be discussed within the Advisory
     Board. If these differences cannot be settled by the Advisory Board,
     MediGene is entitled to request that the Atrix Sales Force or individual
     members thereof are withdrawn.

          [**]

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                                   ARTICLE VII

                             MANUFACTURE AND SUPPLY

     Section 7.01. AGREEMENT TO SUPPLY PRODUCT. Subject to the terms hereof,
MediGene agrees to purchase exclusively from Atrix, and Atrix agrees to
Manufacture for, and sell exclusively to MediGene during the Term of this
Agreement, MediGene's total requirements for the Product and the Demonstration
Samples in the Territory on the terms and conditions set forth herein. Subject
to MediGene's prior written approval, such approval not to be unreasonably
withheld, conditioned or delayed by MediGene, Atrix may subcontract any part of
the Manufacturing Process for the Product and the Demonstration Samples to a
Third Party provided: (a) the Product, the Demonstration Samples and the
facilities continue to meet the requirements as defined in this Agreement, (b)
Atrix has obtained all required Governmental Approvals to subcontract any part
of the Manufacturing Process for the Product to be sold in the Territory and (c)
the Third Party has obtained all required Governmental Approvals for the
Manufacturing Process for the Product to be sold in the Territory. If
subcontracting is initiated by Atrix or requested by the Competent Authorities
for any Manufacturing Process for Product to be sold in the Territory, Atrix
will bear the cost of validation and necessary stability work, as well as any
other directly related costs.

     Section 7.02. QUALITY ASSURANCE. Atrix shall Manufacture the Product in
accordance with the Specifications. Atrix shall consult with MediGene as to any
proposed changes in the Specifications, Manufacturing Process, or in Atrix's
quality assurance procedures which might render Atrix unable to supply Product
in accordance with the terms of this Agreement, prior to making those changes,
and obtain MediGene's prior, written consent thereto, which consent will not be
unreasonably withheld, conditioned or delayed by MediGene. Atrix shall
immediately notify MediGene in writing of any changes required by a Competent
Authority in the Specifications or Atrix's quality assurance procedures that
would render Atrix unable to supply the Product and/or Demonstration Samples in
accordance with the terms of this Agreement. The Parties agree to develop and
execute an appropriate action plan in such situation. Any additional costs or
expenses shall be shared between the Parties in such proportion as is equal to
each Party's relative fault in causing such change or changes to occur;
provided, however, that if the Parties cannot reach an agreement in good faith
as to the relative fault of each Party or if neither Party is at fault, such
additional costs and expenses shall be born equally by the Parties.

     Section 7.03. ATRIX'S DUTIES. Atrix covenants to Manufacture the Product in
accordance with the Specifications and Applicable Laws, and to furnish to
MediGene with every Shipment a written certificate of analysis and Certificate
of Compliance that confirms conformity of the Product to the Specifications. The
Product may be subjected to testing by MediGene at its designated facility in
order to verify conformance of the Product with the Specifications. In addition,
Atrix shall:

          (a) provide MediGene with a copy of the written sampling and testing
     procedures used by Atrix to confirm conformity of the Product to the
     Specifications;

          (b) retain a sample of each batch of Product for a period equal to (i)
     five (5) years or (ii) such period as required by Applicable Laws or the
     Competent Authorities. Upon

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<PAGE>

     the written request of MediGene, Atrix shall make such samples available to
     MediGene for inspection. The retained sample shall be sufficient in size to
     allow MediGene and Atrix to perform tests to determine whether or not the
     Product conforms to the Specifications. The retained sample shall be kept
     under the same conditions as those under which the Product is stored at
     MediGene's facilities;

          (c) maintain records to ensure Atrix's ability to perform a complete
     lot history via lot tracing of the Product;

          (d) keep on file all manufacturing records and analytical results
     pertaining to the Manufacture of each batch of Product for a period equal
     to (i) five (5) years or (ii) such period as required by Applicable Laws or
     the Competent Authorities, with such period commencing on the expiration
     date of the last lot of the last batch of Product Manufactured and shipped
     to MediGene. Atrix shall make all such records available to MediGene upon
     request;

          (e) consult on an ongoing basis with the Advisory Board on all aspects
     of the manufacturing and development of the Product, including the use of
     any subcontractors to perform part of the Manufacturing Process and assist
     MediGene on an ongoing basis to obtain all necessary Marketing
     Authorizations, in accordance with Section 2.02;

          (f) provide to MediGene within twenty-four (24) hours of receipt by
     Atrix, complete copies of any and all inspection reports pertaining to the
     Manufacture and development of the Product which Atrix receives from any
     Competent Authority and the FDA, or which is obtained by Atrix from any
     Third Party agency, and promptly provide to MediGene any such report which
     is internally produced by Atrix's staff or that of any of its Affiliates;

          (g) provide MediGene with complete access to all existing and
     hereafter produced: (i) batch records of the Product; (ii) quality
     inspection reports of the Product, whether internally or externally
     generated; (iii) any and all investigation reports of the Product, whether
     internally or externally generated; and (iv) packaging records pertaining
     to the Product; and

          (h) provide MediGene with notice within forty-eight (48) hours of
     notification of any scheduled inspection by any Competent Authority of
     Atrix's facilities, books or records, or of the facilities, books or
     records of any subcontractor being utilized by Atrix to perform any portion
     or all of the Manufacture or development of the Product. Atrix shall inform
     such Competent Authority that MediGene may desire to be present at such
     inspection; provided that MediGene's right to be present is subject to
     approval by such Competent Authority and subject to MediGene being
     available at the time and date established by such Competent Authority.
     Atrix shall use reasonable efforts to secure a time and date for such
     inspection that is reasonably acceptable to MediGene; provided, however,
     that Atrix alone shall have the right to make the final decision on all
     such matters.

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     Section 7.04. COMPLIANCE WITH APPLICABLE LAWS. MediGene and Atrix (if Atrix
has exercised its co-promotion and/or co-marketing rights pursuant to Sections
6.01(f) and 13.01, respectively, but only in connection with Atrix's activities
thereunder) shall be responsible for compliance with Applicable Laws relating to
the promotion, marketing, sale and distribution of the Product, Units and the
Demonstration Samples, as applicable. Atrix shall be responsible for compliance
with Applicable Laws relating to the Manufacture, design and production of the
Product and the Demonstration Samples, as applicable, and with cGMP relating to
the Manufacture and testing of the Product.

     Section 7.05. SECOND MANUFACTURING SOURCE. Atrix, at its own cost and
expense, shall validate, qualify and obtain all Governmental Approvals for a
Third Party as a second source (the "Second Source") to Manufacture and label
the Product for sale in the Territory. No later than three (3) months after the
Marketing Authorization for each Product is approved, Atrix shall take all
necessary actions and provide all necessary information to enable MediGene to
file a variation to the Marketing Authorization for each Product in the
Territory with the Competent Authorities to request approval by such Competent
Authorities for such Second Source to Manufacture each such Product for sale in
the Territory. After such filing, MediGene, with the assistance of Atrix, shall
use reasonable efforts to obtain final approval by the Competent Authorities for
such Second Source to Manufacture each such Product including modifying the
variation to the Marketing Authorization if required by a Competent Authority.
Upon prior written notice to Atrix, MediGene shall have the right, at its sole
cost and expense, to inspect and audit the Second Source's facilities used to
Manufacture the Product to confirm that such facilities are in compliance with
Applicable Laws and the Governmental Approvals. Atrix, at its sole cost and
expense, may have a representative(s) accompany MediGene's representative(s) on
any such inspection or audit.

     Section 7.06. FAILURE TO SUPPLY.

          (a) Atrix shall immediately notify MediGene if Atrix is unable to fill
     any order placed by MediGene pursuant to Section 8.07. If Atrix is unable
     to cure such failure within fifteen (15) business days after such notice,
     Atrix shall, within five (5) business days after the expiration of such
     cure period, make arrangements with the Second Source for the Second Source
     to take commercially reasonable steps to commence the Manufacture of the
     Product and to sell to Atrix the Product until such time as Atrix is again
     able to Manufacture the Product; provided, however, any consequent
     incremental costs which result by reason of the use of the Second Source
     under this Section 7.06(a) shall be the sole cost and liability of Atrix.

          (b) Subject to Section 7.06(c), if Atrix is unable (including due to
     reasons of Force Majeure) to supply Product to MediGene for a period of
     forty-five (45) business days or more or if Atrix notifies MediGene that
     Atrix and the Second Source will be unable to perform under Section
     7.06(a), then upon such event, Atrix shall be deemed to have granted to
     MediGene and MediGene shall be deemed to have, without any further action
     by either Party, a non-exclusive royalty-free license under the Atrigel(R)
     Technology only to the extent necessary and sufficient to Manufacture the
     Product for sale or distribution in the Territory. At such time as Atrix or
     the Second Source is again able to Manufacture the Product, such license to
     MediGene will terminate and Atrix will

                                       22

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     regain its exclusive right to Manufacture and supply the Product to
     MediGene, subject to the terms and conditions of the manufacturing
     agreement between MediGene and a Third Party manufacturer. Atrix, upon
     MediGene's written request, shall provide MediGene or any Third Party
     manufacturer chosen by MediGene within two (2) weeks of the date of such
     request with all Atrigel(R) Know-How related to the Manufacturing Process,
     but only to the extent necessary and sufficient to exercise its rights
     hereunder. Atrix shall also provide MediGene with any additional
     documentation and materials, at MediGene's expense, reasonably necessary to
     Manufacture the Product in the Territory in accordance with the license
     granted hereunder. If MediGene, enters into an agreement with a Third Party
     to Manufacture the Product, MediGene shall use commercially reasonable
     efforts to limit any such agreement to as short of period of time as
     commercially reasonable after giving effect to the period of time Atrix or
     the Second Source is expected to be unable to supply the Product. Any Third
     Party manufacturer shall execute confidentiality agreements with Atrix in
     form and substance reasonably satisfactory to Atrix. If necessary, Atrix
     will support the implementation of its Atrigel Know-How for the Manufacture
     of the Product by providing appropriate employees giving the required
     advice at the premises of MediGene or such Third Party. The cost for these
     employees will be borne by MediGene.

          Except as set forth in this Section 7.06(b), any additional costs and
     expenses reasonably incurred by MediGene shall be borne by Atrix.

          (c) Notwithstanding the foregoing, Atrix shall not be deemed to be
     unable to fill any order for Products placed by MediGene if Atrix's
     inability to fill any order for Products arises as a result of [**]
     increase in MediGene's order for Products over MediGene's prior firm
     forecast for each such Product. [**]

     Section 7.07. ALLOCATION. If Atrix exercises its rights to co-market under
Article XIII and if Atrix is unable to supply all of the requirements of the
Product, and quantities ordered by MediGene in accordance with Section 8.07,
then Atrix shall allocate the resources available to it so that MediGene
receives at least its proportional share of available supplies as determined
based on reasonable forecasts (taking into consideration past sales and sales
performance against forecast) of MediGene and Atrix.

                                  ARTICLE VIII

                                PURCHASE AND SALE

     Section 8.01. PURCHASE PRICE AND PAYMENT. Atrix shall sell, and MediGene
shall purchase, each Product at a price equal to the Atrix Manufacturing Cost
for each such Product, including any adjustments pursuant to Section 8.02 (the
"Purchase Price"). Atrix shall invoice MediGene monthly for all Product and
Demonstration Samples shipped by Atrix to MediGene and payment shall be due
thirty (30) days from receipt of the invoice.

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     Section 8.02. ADJUSTMENT TO PURCHASE PRICE/AUDIT.

          (a) The Atrix Manufacturing Cost will be adjusted on a Product by
     Product and country by country basis annually commencing with the first day
     of the first calendar month twelve (12) months from the date of the First
     Commercial Sale of each Product (the "Adjusted Atrix Manufacturing Cost").
     [**]:

               (i) if MediGene in good faith disputes the amount of the Adjusted
          Atrix Manufacturing Cost, then MediGene shall notify Atrix of this
          fact and such dispute shall be resolved by the Parties within thirty
          (30) days from the date of notice to MediGene of the Adjusted Atrix
          Manufacturing Cost. If such dispute cannot be resolved to the mutual
          satisfaction of the Parties within such thirty (30) day period then
          either Party may request that the dispute be submitted to the Chief
          Executive Officers of Atrix and MediGene, respectively, for joint
          resolution. If the dispute is not jointly resolved by the Parties'
          respective Chief Executive Officers within ten (10) days from
          submission to the Parties' respective Chief Executive Officers then
          Atrix shall be entitled to pursue any and all remedies at law
          available to it. In no event will the dispute resolution period exceed
          a maximum of forty (40) days unless otherwise agreed in writing by the
          Parties; and

               (ii) MediGene shall pay for Product ordered during the dispute
          period at the Purchase Price in effect prior to Atrix's notice of the
          Adjusted Atrix Manufacturing Cost. If upon resolution of any dispute
          the Purchase Price is greater than the Purchase Price paid by MediGene
          during the dispute period, Atrix will invoice MediGene for the
          difference and MediGene shall pay the same promptly upon receipt of
          such invoice. If upon resolution of any dispute the Purchase Price is
          lower than the Purchase Price paid by MediGene during the dispute
          period, Atrix will reimburse MediGene for the difference paid during
          the dispute period, [**].

          (b) If at any time following twelve (12) months from the date of the
     First Commercial Sale of each Product, on a Product by Product basis, the
     Atrix Manufacturing Cost is in excess of the Twelve Month Cost then
     MediGene may request that the Parties meet to review and discuss the Atrix
     Manufacturing Cost. [**] Notwithstanding the foregoing, commencing twelve
     (12) months from the date of the First Commercial Sale of each Product, on
     a Product by Product basis, in the event that the total increase results in
     an increased Atrix Manufacturing Cost which becomes, in MediGene's sole
     judgment, commercially non-viable for a given Product in a given country in
     the Territory, MediGene shall have the right, in its sole discretion, to
     [**]:

               (i) [**];

               (ii) [**]; and

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               (iii) [**]

          (c) Commencing twelve (12) months from the date of First Commercial
     Sale of each Product MediGene shall have the right, at its sole cost and
     expense, to cause an independent, certified public accountant reasonably
     acceptable to Atrix to audit those records of Atrix relating to the
     calculation of the Atrix Manufacturing Cost and/or the Adjusted Atrix
     Manufacturing Cost for the sole purpose of verifying the Atrix
     Manufacturing Cost or the Adjusted Atrix Manufacturing Cost, respectively.
     Such audits may be exercised during normal business hours no more than once
     in a twelve (12) month period upon at least ten (10) days prior written
     notice. MediGene shall pay all of the costs of such audit unless such audit
     discloses an overstatement of the Atrix Manufacturing Cost or the Adjusted
     Atrix Manufacturing Cost by more than [**] of the amount claimed or stated
     as the Atrix Manufacturing Cost or the Adjusted Atrix Manufacturing Cost,
     respectively, for the preceding year. In such case, Atrix shall pay all of
     the costs of such audit.

     Section 8.03. LABELING AND ARTWORK.

          (a) After execution of this Agreement, Atrix shall have the right to
     review and comment upon any labeling and proposed changes to the labeling
     of the Product and to participate in discussions with the Competent
     Authorities concerning any labeling or proposed labeling change in
     accordance with Section 8.03(c). Notwithstanding the above, MediGene shall
     make the final decision with regard to any labeling or labeling revisions,
     provided that MediGene will consider, in making its decision, the effect
     such labeling or labeling revision will have on the marketing and sale of
     the Product outside the Territory.

          (b) MediGene will approve all artwork developed for inclusion in the
     Product packaging, including carton labels, package inserts, etc. If
     MediGene wishes to institute changes in labeling artwork, both Parties will
     develop a mutually acceptable implementation schedule. The actual cost of
     implementing such change will be at MediGene's sole cost and expense,
     including any materials made obsolete by MediGene's changes to the artwork.
     Atrix shall not alter, change or in any way modify the artwork, which has
     previously been approved, for any reason, without prior written
     authorization from MediGene, provided that such approved artwork shall
     conform to all Applicable Laws. Notwithstanding the foregoing, MediGene
     shall have the final say on any change in such artwork, provided that
     MediGene will consider, in making its decision, the effect any such change
     will have on the marketing and sale of the Product outside the Territory
     and provided further that such change is in compliance with all Applicable
     Laws in the Territory.

          (c) MediGene shall provide Atrix with notice within forty-eight (48)
     hours of notification of any scheduled meeting or conference with any
     Competent Authority with

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     respect to any labeling or proposed labeling change. MediGene shall inform
     such Competent Authority that Atrix may desire to be present at such
     meeting or conference; provided that Atrix's right to be present is subject
     to approval by such Competent Authority and subject to Atrix being
     available at the time and date established by such Competent Authority.
     MediGene shall use reasonable efforts to secure a time and date for such
     meeting or conference that is reasonably acceptable to Atrix; provided,
     however, that MediGene alone has the right to make the final decision on
     all such matters.

     Section 8.04. PURCHASE FORMS. Purchase orders, purchase order releases,
confirmations, acceptances and similar documents submitted by a Party in
conducting the activities contemplated under this Agreement are for
administrative purposes only and shall not add to or modify the terms of the
Agreement. To the extent of any conflict or inconsistency between this Agreement
and any such document, the terms of this Agreement shall govern.

     Section 8.05. CONFIRMATION. Atrix shall confirm each purchase order within
five (5) business days from the date of receipt of a purchase order and shall
supply the Product within a maximum of sixty (60) days from the date of
acceptance of a purchase order, or later if so specified in the purchase order
during the first twelve months after the First Commercial Sale of the Product.
[**] Failure of Atrix to confirm any purchase order shall not relieve Atrix of
its obligation to supply Product ordered by MediGene in conformity with this
Agreement.

     Section 8.06. DELIVERY. Delivery terms for Product and Demonstration
Samples shall be FOB Atrix's manufacturing facility at Fort Collins, Colorado,
or FOB the Second Source's manufacturing facility. Atrix shall ship Product and
Demonstration Samples in accordance with MediGene's purchase order form or as
otherwise directed by MediGene in writing. Title to any Product or Demonstration
Samples purchased by MediGene shall pass to MediGene upon the earlier of (i) a
common carrier accepting possession or control of such Product or Demonstration
Samples, as applicable, or (ii) passage of such Product or Demonstration
Samples, as applicable, from the loading dock of Atrix's facilities or the
loading dock of the Second Source's facilities, as applicable, to MediGene or
its agent.

     Section 8.07. FORECASTS AND ORDERS.

          (a) Not later than six (6) months following submission of the NDA or
     other applicable regulatory filing on a country by country basis, MediGene
     will provide Atrix with a twelve (12) month forecast of MediGene's
     requirement of each Product, on a Product by Product basis, including
     Demonstration Samples, and on a country by country basis as follows (the
     "Initial Forecast"):

               (i) For the first twelve (12) months of the forecast for each
          Product, the forecasts shall be provided quarterly, no less than
          forty-five (45) days prior to the beginning of each quarter. Said
          requirements will be based on standard production planning parameters
          including but not limited to sales forecasts, sales demand forecasts,
          promotional forecasts, inventory requirements, and the like.

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          The first two (2) quarters of the twelve (12) month forecast will be
          stated in monthly requirements. The second two (2) quarters of the
          twelve (12) month forecast will be total requirement by stock keeping
          unit and will be stated as quarterly requirements. The first three (3)
          months of the twelve (12) month forecast will be firm orders to
          purchase. The second three (3) months will be allowed to be flexed
          from the previous forecast by plus or minus [**] per month until fixed
          by the subsequent forecast; provided that the aggregate adjustment
          from the quantity set forth in the previous forecast for such three
          (3) month period shall not exceed [**] in aggregate during that three
          (3) month period. [**]

               (ii) After the first twelve (12) months MediGene will provide to
          Atrix a rolling twelve (12) month forecast for each Product with the
          first three (3) months of the rolling twelve (12) month forecast a
          firm order to purchase. Each order in the rolling twelve (12) month
          forecast shall be provided monthly, no less than twenty (20) days
          prior to the beginning of each month. All orders will be for full
          batch quantities.

          (b) It is understood that Atrix [**] will produce Product or
     Demonstration Sample upon receipt of that portion of MediGene's forecasts
     that constitute firm orders to purchase. The above periods whether fixed or
     flexible will be adjusted based upon existing lead times at time of start
     up.

          (c) MediGene agrees to purchase a sufficient amount of Product to
     enable MediGene to carry sufficient inventory to allow for fluctuations in
     sales demand so as to allow Atrix reasonable lead time to meet increased
     demand. Atrix will use commercially reasonable efforts to meet any increase
     in demand in excess of the allowed adjustment, but will not be obligated to
     do so; provided, however, notwithstanding anything to the contrary in this
     Section 8.07, Atrix shall be obligated to [**]. All forecasts will be made
     by MediGene to Atrix in good faith based upon standard commercial
     parameters. From time to time after the Effective Date, the Parties shall
     consider whether, in light of market demand, manufacturing capacity,
     inventory levels and other pertinent factors, to revise the schedule for
     delivery of forecasts and, if appropriate, negotiate in good faith to
     revise such schedule.

          (d) The Launch Quantity of the Product when delivered to the common
     carrier shall not have an expiration date of less than [**] from the date
     of such delivery, provided (a) Product other than the Launch Quantity shall
     not have an expiration date of less than [**] once real time stability data
     is submitted by Atrix to the respective Competent Authority, and/or (b) as
     the Parties may otherwise agree in writing on a case by case basis.

          (e) In the event MediGene does not receive a Marketing Authorization
     in a specified country in the Territory, but Atrix nevertheless has
     Manufactured the Launch

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     Quantity of the Product for sale in such country in the Territory, the
     Atrix Manufacturing Cost attributable to the Manufacture of the Launch
     Quantity for sale in such country shall be borne equally by the Parties
     after deducting the cost of any Product which MediGene can sell in another
     country in the Territory and the cost of direct materials Atrix could
     otherwise use in the manufacture of other products.

     Section 8.08. DEMONSTRATION SAMPLES. Pursuant to the provisions of Section
8.07 above, Atrix shall supply to MediGene such quantities of Demonstration
Samples as MediGene may reasonably request to be used solely for training
purposes (and not for sale), and not for human use, for so long as MediGene
retains a license pursuant to Sections 3.02 and 3.03 in the specific country in
the Territory where the Demonstration Samples are to be used for training
purposes. Demonstration Samples shall be sold by Atrix to MediGene at [**] for
such Demonstration Samples. MediGene shall not use the Demonstration Samples for
any purpose other than as set forth in this Section 8.08.

                                   ARTICLE IX

                       WARRANTY, REJECTION AND INSPECTIONS

     Section 9.01. ATRIX WARRANTY. Atrix represents and warrants to MediGene
that (i) the Product delivered pursuant to this Agreement shall comply with the
Specifications at the date of delivery; (ii) the Product to be sold in the
Territory is not adulterated or misbranded under Applicable Laws in the
Territory at the date of delivery; (iii) at the time of Manufacture and delivery
to MediGene the Product will be, and is, free from any defects, liens and
encumbrances and MediGene shall receive good and marketable title to the
Product, and (iv) at the date of Manufacture that Atrix has the right, and to
the best of its knowledge each Second Source has the right, to Manufacture and
label the Product, and (v) to its knowledge no restrictions for the import of
the Product into the Territory exist at the time of Manufacture and delivery to
MediGene.

     EXCEPT AS OTHERWISE SET FORTH HEREIN, ATRIX MAKES NO OTHER WARRANTIES OF
ANY OTHER KIND, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY (AS
DESCRIBED IN SECTION 4-2-314 OF THE U.C.C.) OR FITNESS OF THE PRODUCT AND
DEMONSTRATION SAMPLES FOR ANY PURPOSE (AS DESCRIBED IN SECTION 4-2-315 OF THE
U.C.C.), AND ATRIX EXPRESSLY DISCLAIMS ANY SUCH OTHER WARRANTIES WITH RESPECT TO
THE PRODUCT AND DEMONSTRATION SAMPLES, EITHER EXPRESS OR IMPLIED.

     Section 9.02. REJECTION OF PRODUCT FOR FAILURE TO CONFORM TO
SPECIFICATIONS. MediGene shall have forty-five (45) days after the receipt of
any Shipment to determine conformity of the Shipment to the Specifications
and/or Applicable Laws, except for hidden defects. A "hidden defect" shall mean
a defect in the Product not discovered by MediGene during its testing of the
Product in accordance with generally accepted industry

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testing procedures and which would not be a defect normally expected to be
discovered in accordance with such testing. If testing of such Shipment shows a
failure of the Shipment to meet the Specifications and/or Applicable Laws,
MediGene may return the entire Shipment, or any portion thereof, to Atrix at
Atrix's expense within a reasonable time following the above described testing,
provided that notice of non-conformity is received by Atrix from MediGene within
forty-five (45) days of MediGene's receipt of said Shipment except for hidden
defects. MediGene shall have the right to request that Atrix provide to
MediGene, within thirty (30) days after such notice is received by it, Product
that meets the Specifications and Applicable Laws or to promptly provide
MediGene with full credit for the Purchase Price paid by MediGene for the
returned Product. In case of a hidden defect, MediGene shall have the right to
request that Atrix provide to MediGene, within thirty (30) days after a notice
concerning a hidden defect is received by it, Product that meets the
Specifications and Applicable Laws or to promptly provide MediGene with full
credit for the Purchase Price paid by MediGene for the returned Product. In
either case the cost of freight and handling to return or replace the returned
Product shall be at the expense of Atrix. If MediGene does not notify Atrix of
the non-conformity of the Product within forty-five (45) days of receipt of said
Shipment, the Product shall be deemed to meet the Specifications, the Packaging
Specifications and Applicable Laws, except for hidden defects. Notwithstanding
anything in this Agreement to the contrary, the Parties may agree to a return of
the Product or an adjustment in the Purchase Price in the event of any failure
or defect in the Product. Should there be a discrepancy between MediGene's test
results and the results of testing performed by Atrix, such discrepancies shall
be finally resolved by testing performed by an independent Third Party mutually
agreed upon by MediGene and Atrix. The costs of such testing shall be borne by
the Party against whom the discrepancy is resolved. In the event Product has
been previously returned to Atrix and an independent Third Party determines that
the Product meets the Specifications, MediGene shall be responsible for all
costs associated with the return.

     Section 9.03. MEDIGENE INSPECTIONS. Atrix shall upon reasonable (but not
less than five (5) business days) prior written notice by MediGene and during
normal business hours, allow MediGene and cause any sub-contractors and the
Second Source to allow MediGene, to inspect and audit Atrix's facilities, the
facilities of Atrix's sub-contractors and the facilities of the Second Source
used to Manufacture the Product and the Demonstration Samples, twice annually,
to confirm that the facilities and the equipment, personnel and operating and
testing procedures used by Atrix, Atrix's subcontractor(s) and the Second Source
in the Manufacture, testing, storage and distribution of the Product are in
compliance with Applicable Laws and the Governmental Approvals; provided that
such inspection does not interfere with Atrix's, Atrix's sub-contractor(s)' and
the Second Source's normal operations or cause Atrix, Atrix's sub-contractor(s)
and the Second Source to violate or be in breach of any confidentiality
agreements with any Third Party pertaining to other products.

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                                    ARTICLE X

                              REGULATORY COMPLIANCE

     Section 10.01. MARKETING AUTHORIZATION HOLDER. Unless otherwise required by
Applicable Laws and subject to the provisions of Sections 3.02 and 19.06(e),
[**] shall be the holder of all Marketing Authorizations for each country in the
Territory. [**] will own and maintain the Marketing Authorizations during the
term of this Agreement. Each Party agrees that neither it nor its Affiliates and
any sublicensee will do anything to adversely affect a Marketing Authorization.

     Section 10.02. MAINTENANCE OF MARKETING AUTHORIZATIONS. [**] agrees, at its
sole cost and expense, to maintain the Marketing Authorizations throughout the
Term of this Agreement, including obtaining any variations or renewals thereof.

     Section 10.03. INTERACTION WITH COMPETENT AUTHORITIES.

          (a) After execution of this Agreement, each Party shall provide to the
     other Party a copy of any significant correspondence regarding the Product
     in the Territory that it submits to or receives from Competent Authorities
     and/or the FDA, within ten (10) days of submission or receipt, as the case
     may be.

          (b) In addition to the requirements set forth in Section 2.02(c),
     MediGene shall provide Atrix with a copy of any significant correspondence
     regarding the Product that it submits to or receives from the Competent
     Authorities, within ten (10) days prior to the date of submission or within
     ten (10) days from receipt, as the case may be.

     Section 10.04. ADVERSE DRUG EVENT REPORTING AND PHASE IV SURVEILLANCE.

          (a) Each Party, including its permitted sublicensees, shall advise the
     other Party, by telephone or facsimile, immediately but in no event later
     than twenty-four (24) hours after a Party, or its sublicensees, becomes
     aware of any potentially serious or unexpected adverse event (including
     adverse drug experiences, as defined in Applicable Laws) (an "ADE")
     involving the Product or the Demonstration Samples. Such advising Party
     shall provide the other Party with a written report delivered by confirmed
     facsimile of any adverse reaction, stating the full facts known to such
     Party, including but not limited to customer name, address, telephone
     number, batch, lot and serial numbers, and other information as required by
     Applicable Laws. For so long as MediGene has an exclusive license to
     market, promote and sell the Product in any country in the Territory for
     use in the Field, MediGene shall have full responsibility for (i)
     monitoring such adverse reactions; and (ii) data collection activities that
     occur between MediGene and the patient or medical professional, as
     appropriate, including any follow-up inquiries which MediGene deems
     necessary or appropriate.

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          If Atrix exercises its right to co-market as set forth in Section
     13.01 then upon the occurrence of an ADE the Parties shall promptly meet,
     in person or by telephone, as appropriate, to discuss and determine how to
     mutually handle and resolve any issues relating to or arising from any such
     ADE.

          (b) In the event either Party requires information regarding adverse
     drug events with respect to reports required to be filed by it in order to
     comply with Applicable Laws, including obligations to report ADEs to the
     Competent Authorities, each Party agrees to provide such information to the
     other on a timely basis.

          (c) The Parties agree to follow MediGene's standard operating
     procedure for reporting and identifying adverse drug reactions (the "SOP")
     a copy of which is attached hereto as Exhibit F. In the event the SOP is
     modified or amended during the term of this Agreement, MediGene shall
     provide Atrix with copies of any such modification or amendment to the SOP
     for Atrix's prior approval, which will not be unreasonably withheld,
     conditioned or delayed, at least five (5) business days prior to such
     amendment taking effect. MediGene shall designate a qualified person under
     Applicable Laws to be responsible for ADE reporting in each country in the
     Territory.

          (d) If the report of an ADE causes a Competent Authority to request
     labeling revision as a result of an ADE or that a Phase IV surveillance
     program be conducted, then the Parties shall promptly enter into
     discussions and shall mutually agree on all of the material terms and
     conditions of such labeling revision or Phase IV surveillance program;
     provided, however the costs of such labeling revision or Phase IV
     surveillance program shall be borne [**]. MediGene shall have the authority
     to make the final decision with regard to any labeling revisions provided
     that MediGene will consider, in making its decision, the effect any such
     labeling revisions will have on the marketing and sale of the Product
     outside the Territory. MediGene agrees that should Applicable Laws require
     that any such interim data and results from such Phase IV surveillance
     programs be prepared in written form, MediGene shall comply with such
     requirements and provide all such information in writing to MediGene and
     the Competent Authorities in accordance with Applicable Laws. MediGene
     further agrees that Atrix shall have the right to incorporate, refer to and
     cross-reference such results and underlying data in any regulatory filing
     or any other filing or requirement Atrix is required to undertake with
     respect to the Product. Atrix agrees that MediGene shall have the right to
     incorporate, refer to and cross-reference such results and underlying data
     in any regulatory filing or any other filing or requirement MediGene is
     required to undertake with respect to the Product in the Territory

     Section 10.05. COMMERCIAL SALE TESTING AND REPORTING. If, after the date of
First Commercial Sale in any country in the Territory, a Competent Authority
requires additional testing, modification or communication related to approved
indications of the Product, then the

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Parties shall design and MediGene shall implement any such testing,
modification or communication as shall be mutually agreed upon by the Parties,
and the costs shall be borne [**].

     Section 10.06. ASSISTANCE. Each Party shall provide reasonable assistance
to the other at the other's request, in connection with their obligations
pursuant to this Article X, subject to reimbursement of all of its out-of-pocket
costs by the requesting Party.

     Section 10.07. COMPLIANCE. MediGene and Atrix shall comply with all
Applicable Laws within the Territory as set forth in this Agreement, including
the provision of information by MediGene and Atrix to each other necessary for
Atrix and MediGene to comply with any applicable reporting requirements. Each
Party shall promptly notify the other Party of any comments, responses or
notices received from, or inspections by, the FDA, or other applicable Competent
Authorities, which relate to or may impact the Product or the Manufacture of the
Product or the sales and marketing of the Product, and shall promptly inform the
other Party of any responses to such comments, responses, notices or inspections
and the resolution of any issue raised by the FDA or other Competent
Authorities.

                                   ARTICLE XI

                             PATENTS AND TRADEMARKS

     Section 11.01. MAINTENANCE OF PATENTS OR MARKS.

          (a) Atrix shall, at Atrix's expense and to the extent commercially
     reasonable, maintain and protect the Atrigel(R) Patent Rights and the Marks
     in all countries in the Territory; provided however, that upon written
     request by Atrix, MediGene shall, at no cost or expense to MediGene,
     provide such assistance as may be necessary to enable Atrix to comply with
     the administrative formalities necessary to maintain the Atrigel(R) Patent
     Rights and the Marks and to prosecute and obtain new patents related to the
     Atrigel(R) Technology. MediGene shall, at MediGene's expense, maintain and
     protect any trademark, logo, design and/or tradedress for the Product in
     those countries in the Territory for which MediGene retains a license
     pursuant to Section 3.02 and to the extent commercially reasonable, other
     than the Marks.

          (b) MediGene, to the extent commercially reasonable, shall maintain
     and protect the Program Technology in all countries in the Territory and
     Atrix, to the extent commercially reasonable, shall maintain and protect
     the Program Technology outside the Territory; provided however, that each
     Party shall provide such assistance as may be necessary to enable the other
     Party to comply with the administrative formalities necessary to maintain
     the Program Technology. In the event that a Party responsible for the
     filing, prosecution and maintenance of any patent application or patent
     within the Program Technology desires to abandon such patent application or
     patent, or if such Party later declines responsibility for such patent
     application or patent, such Party shall provide reasonable prior written
     notice to the other Party of its intention to abandon or

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     decline responsibility, and the other Party shall have the right, but not
     the obligation, to prepare, file, prosecute, and maintain any such patent
     application or patent within the Program Technology. The Parties shall
     share equally the costs of filing, prosecuting and maintaining patents or
     patent applications within the Program Technology. In addition, each Party
     shall provide the other Party the opportunity to review, consult with and
     assist such Party in the preparation of filing, prosecuting and maintaining
     such patents and patent applications.

     Section 11.02. PROSECUTION OF INFRINGEMENT.

          (a) During the Term, each Party shall give prompt notice to the other
     of any Third Party act which may infringe the Atrigel(R) Patent Rights or
     the Marks in the Territory and shall cooperate with each other to terminate
     such infringement without litigation. Atrix shall, at its sole expense,
     prosecute the judicial or administrative proceedings against such Third
     Party infringement. MediGene shall provide such assistance and cooperation
     to Atrix as may be necessary to successfully prosecute any action against
     Third Party infringement at Atrix's expense and may deduct the expenses
     thereof from any amounts payable to Atrix under this Agreement.

          In the event Atrix fails to institute proceedings against any Third
     Party infringement of the Atrigel(R) Patent Rights and/or the Marks within
     forty-five (45) days after notice given by either Party to the other of
     said Third Party infringement, MediGene may take such action as it deems
     appropriate, including without limitation, the filing of a lawsuit against
     such Third Party. In such event Atrix will provide such assistance and
     cooperation to MediGene as may be necessary, at MediGene's expense, and
     MediGene may deduct all costs and expenses of such actions against any
     amount payable to Atrix under this Agreement and retain all amounts awarded
     in such action.

          (b) In the event any patent included in the Program Technology is
     infringed by a Third Party, the Party responsible for prosecution and
     maintenance of the applicable Program Technology under Section 11.01(b)
     shall have the right to bring and control such action or proceeding, using
     counsel reasonably acceptable to the Parties, and the other Party shall
     provide such assistance and cooperation to the Party bringing such action
     as may be necessary to successfully prosecute any action against such Third
     Party. The Parties shall share equally in the costs with respect thereto.

          In the event Atrix or MediGene, as the case may be, fails to institute
     proceedings against any Third Party infringement of the Program Technology
     within the earlier of (i) the time period required under Applicable Laws or
     (ii) forty-five (45) days after notice given by either Party to the other
     of said Third Party infringement, the other Party may take such action as
     it deems appropriate, including without limitation, the filing of a lawsuit
     against such Third Party. In such event Atrix or MediGene, as the case may
     be, will provide such assistance and cooperation to the other Party as may
     be necessary, at the other Party's expense, and such Party may deduct, in
     the case of MediGene, or add, in the case of Atrix, all costs and expenses
     of such actions against any amount payable to, in the case of MediGene, or
     receivable from, in the case of Atrix, the other Party under this Agreement
     and retain all amounts awarded in such action.

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<PAGE>

          (c) Neither Atrix nor MediGene may settle an action or proceeding
     against an infringer related to the Program Technology, and MediGene may
     not settle an action or proceeding against an infringer related to
     Atrigel(R) Technology, with respect to an infringement without the written
     consent of the other Party. Such consent shall not be unreasonably withheld
     or delayed, but may be withheld if such settlement would materially and
     adversely affect the interest of such Party, including Atrix's rights
     hereunder or Atrix's rights in the Atrigel(R) Technology.

     Section 11.03. INFRINGEMENT CLAIMED BY THIRD PARTIES. In the event a Third
Party commences, or threatens to commence, a judicial or administrative
proceeding against a Party to this Agreement and such proceeding pertains to the
Atrigel(R) Patent Rights or Marks, the Party against whom such proceeding is
threatened or commenced shall give prompt notice to the other Party. Atrix
shall, at its sole cost and expense, defend any and all such claims or
proceedings and shall indemnify and hold harmless MediGene from any and all
liabilities, costs and expenses, including, without limitation, attorneys' fees,
incurred with respect to any such claim or proceeding and MediGene shall provide
such assistance and cooperation to Atrix as may be necessary to successfully
defend any such claim or proceeding. In the event a Third Party commences, or
threatens to commence, a judicial or administrative proceeding against a Party
to this Agreement and such proceeding pertains to the Program Technology, the
Party responsible for prosecution and maintenance of the applicable Program
Technology under Section 11.01(a) shall have the right to defend any and all
such claims or proceeding, using counsel reasonably acceptable to the Parties,
and the Parties shall share equally the costs with respect thereto; provided,
however, if such Party elects not to defend such claim or fails to use
commercially reasonable efforts to defend such claim, the other Party shall have
the right to control the defense of such claims by counsel of its own choice at
the cost of the Party who initially had the right to defend such claim.

                                   ARTICLE XII

                                 CONFIDENTIALITY

     Section 12.01. CONFIDENTIALITY. During the Term and for a period of [**]
thereafter, each Party shall maintain all Confidential Information of the other
Party as confidential and shall not disclose any such Confidential Information
to any Third Party or use any such Confidential Information for any purpose,
except (a) as expressly authorized by this Agreement, (b) as required by law,
rule, regulation or court order (provided that the disclosing Party shall first
notify the other Party and shall use commercially reasonable efforts to obtain
confidential treatment of any such information required to be disclosed), or (c)
to its Affiliates, employees, agents, consultants and other representatives to
accomplish the purposes of this Agreement, so long as such persons are under an
obligation of confidentiality no less stringent than as set forth herein. Each
Party may use such Confidential Information only to the extent required to
accomplish the purposes of this Agreement. Each Party shall use at least the
same standard of care as it uses to protect its own Confidential Information to
ensure that its Affiliates, employees,

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agents, consultants and other representatives do not disclose or make any
unauthorized use of the other Party's Confidential Information. Each Party shall
promptly notify the other Party upon discovery of any unauthorized use or
disclosure of the other Party's Confidential Information.

     Section 12.02. DISCLOSURE OF AGREEMENT. Neither Party shall release to any
Third Party or publish in any way any non-public information with respect to the
terms of this Agreement without the prior written consent of the other Party,
which consent shall not be unreasonably withheld, except for the disclosure by a
Party of the terms of this Agreement to lenders, investment bankers and other
financial institutions of its choice solely for purposes of financing the
business operations of such Party; provided such Party uses reasonable efforts
to obtain a signed confidentiality agreement with any such financial institution
with respect to such information on terms substantially similar to those
contained in this Article XII and except as provided in Section 20.11. Nothing
contained in this paragraph shall prohibit either Party from filing this
Agreement as required by the rules and regulations of the Securities and
Exchange Commission, national securities exchanges (including those located in
countries outside of the United States) or the Nasdaq Stock Market; provided the
disclosing Party discloses only the minimum information required to be disclosed
in order to comply with such requirements, including requesting confidential
treatment of this Agreement (after consultation with the other Party) and filing
this Agreement in redacted form.

                                  ARTICLE XIII

                          ATRIX'S OPTION TO MARKET THE
                       PRODUCT UNDER CERTAIN CIRCUMSTANCES

     Section 13.01. CO-MARKETING RIGHTS. Subject to Section 7.07, if MediGene
should fail to achieve (through no fault of Atrix, including an act of Force
Majeure with respect to Atrix) at least a [**], then, and only if either of such
events occur, Atrix shall have the right and option, exercisable in its sole
discretion, by written notice to that effect delivered by Atrix to MediGene
within sixty (60) days after said event occurs, to co-market the Product in each
such country in the Territory that did not obtain a [**], either by itself,
using a Third Party or in conjunction with a Third Party. If Atrix exercises its
right to co-market the Product in such country in the Territory the following
shall occur, to the extent allowed by Applicable Laws: (i) MediGene shall grant
Atrix an irrevocable, exclusive, royalty free license, except as against
MediGene, with the right to sublicense, under the License granted to MediGene
under Section 3.02 of this Agreement (and no other MediGene proprietary or
intellectual property rights) to market, advertise, promote, distribute, offer
for sale, sell and import the Product in such country in the Territory; (ii)
MediGene shall grant to Atrix an irrevocable, non-exclusive, royalty-free
license, with the right to sublicense, to use the Clinical Documentation, the
Results and the Marketing Authorizations and make any required filings with the
Competent Authorities, to the extent legally permissible, in connection with
such activities; (iii) Atrix will be solely responsible for its expenses related
to marketing the Product in such country in the Territory and Atrix will retain
all revenues from Product that it or its sublicensees sell in such country in
the Territory; (iv)

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Atrix and/or its sub-licensee shall only be entitled to market one additional
brand of the Product and Atrix and/or its sub-licensee shall market the Product
using a different mark than the Mark associated with the Product in that country
in the Territory; (v) subject to and in compliance with all Applicable Laws,
Atrix will use commercially reasonable efforts to restrict the sale of such
Product by its sublicensee outside of said country in the Territory; and (vi)
the Advisory Board will be deemed to be automatically dissolved as of the date
Atrix exercises its right to co-market the Product.

                                   ARTICLE XIV

                         REPRESENTATIONS AND WARRANTIES

     Section 14.01. CORPORATE POWER. As of the Effective Date, each Party hereby
represents and warrants that such Party is duly organized and validly existing
under the laws of the jurisdiction of its incorporation and has full power and
authority to enter into this Agreement and the transactions contemplated hereby
and to carry out the provisions hereof.

     Section 14.02. DUE AUTHORIZATION. As of the Effective Date, each Party
hereby represents and warrants that such Party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.

     Section 14.03. BINDING OBLIGATION. As of the Effective Date, each Party
hereby represents and warrants that this Agreement is a legal and valid
obligation binding upon it and is enforceable in accordance with its terms,
except that the enforcement of the rights and remedies created hereby is subject
to bankruptcy, insolvency, reorganization and similar laws of general
application affecting the rights and remedies of creditors and that the
availability of the remedy of specific performance or of injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought. As of the Effective Date, the execution, delivery and performance of
this Agreement by such Party does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having authority over it.

     Section 14.04. OWNERSHIP OF ATRIGEL(R) PATENT RIGHTS. As of the Effective
Date, Atrix represents and warrants that (a) it is the sole owner of all right,
title and interest in and to the Atrigel(R) Patent Rights and the Marks, (b) it
has not granted any license under the Atrigel(R) Patent Rights or the Marks for
any Product in the Territory for use in the Field to any Third Party and is
under no obligation to grant any such license, except to MediGene, and (c) there
are no outstanding liens, encumbrances, agreements or understanding of any kind,
either written, oral or implied, regarding either the Atrigel(R) Patent Rights
or the Marks which are inconsistent or in conflict with this Agreement.

     Section 14.05. PATENT PROCEEDINGS. As of the Effective Date, Atrix
represents and warrants that, (a) no patent or patent application within the
Atrigel(R) Patent Rights is the subject of any pending interference, opposition,
cancellation or other protest proceeding, and (b) to the best of its knowledge,
the Atrigel(R) Technology does not infringe the published intellectual property
rights of any Third Party.

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<PAGE>

     Section 14.06. LEGAL PROCEEDINGS. As of the Effective Date, each Party
hereby represents and warrants to the other Party that there is no action, suit
or proceeding pending against or affecting, or, to the knowledge of either
Party, threatened against or affecting that Party, or any of its assets, before
any court or arbitrator or any governmental body, agency or official that would,
if decided against either Party, have a material adverse impact on the business,
properties, assets, liabilities or financial condition of that Party (that are
not already reflected in that Party's respective financial statements that, with
respect to Atrix, have been filed with the Securities and Exchange Commission
or, with respect to MediGene, have been disclosed to the relevant stock market
supervisory authority and/or the public) and which would have a material adverse
effect on that Party's ability to consummate the transactions contemplated by
this Agreement.

     Section 14.07. COMPLIANCE WITH APPLICABLE LAWS. Atrix represents and
warrants that it is in compliance with Applicable Laws with respect to the
development and Manufacture of Product for clinical trials including, without
limitation, that it owns or has access to manufacturing facilities approved by
the FDA and available for the Manufacture of Product for clinical trials and
that, as of the Effective Date, Atrix is not subject to any stop order from the
FDA or any Competent Authority that would effect Atrix's ability to Manufacture
the Product for clinical trials in the Territory. In addition, to its knowledge,
Atrix is not aware of any fact or circumstance that would cause it to become
subject to a stop order or which would prevent it from complying with Applicable
Laws with respect to the development and Manufacture of Product intended for
sale in the Territory at the time of First Commercial Sale.

     Section 14.08. LIMITATION ON WARRANTIES. Except as expressly set forth in
this Agreement, nothing herein shall be construed as a representation or
warranty by Atrix to MediGene that the Atrigel(R) Technology is not infringed by
any Third Party, or that the practice of such rights does not infringe any
published intellectual property rights of any Third Party. Neither Party makes
any warranties, express or implied, concerning the success of the [**]
Development Program [**], or the commercial utility of the Product.

     Section 14.09. LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE ENTITLED TO
RECOVER FROM THE OTHER PARTY ANY SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS SUCH
TERMS ARE DEFINED IN BLACK'S LAW DICTIONARY, SIXTH EDITION) IN CONNECTION WITH
THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER.

                                   ARTICLE XV

                                 INDEMNIFICATION

     Section 15.01. MEDIGENE INDEMNIFIED BY ATRIX. Atrix shall indemnify and
hold MediGene, its Affiliates, and their respective employees, directors and
officers, harmless from and against any liabilities or obligations, damages,
losses, claims, encumbrances, costs or

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expenses (including attorneys' fees) (any or all of the foregoing herein
referred to as "Loss") insofar as a Loss or actions in respect thereof arises
out of or is based upon (a) any misrepresentation (or alleged misrepresentation)
or breach (or alleged breach) of any of the warranties, covenants or agreements
made by Atrix in this Agreement; (b) the Manufacturing of any Product or
Demonstration Samples (Manufactured by Atrix or the Second Source); (c) any
claims that the Product (as a result of the use of Atrigel(R) Technology
therein) or its Manufacture (as a result of the use of Atrigel(R) Technology
therein), use or sale infringes the patent, trademark or proprietary right of a
Third Party; (d) if Atrix exercises its rights to co-market the Product under
Article XIII, Atrix's, or its sub-licensee's, marketing, sale, distribution or
promotion of the Product or (e) the Atrix Sales Force, except to the extent such
Loss arises out of, or results from, the negligence or actions of MediGene.

     Section 15.02. ATRIX INDEMNIFIED BY MEDIGENE. MediGene shall indemnify and
hold Atrix, its Affiliates, and their respective employees, directors and
officers, harmless from and against any Loss insofar as such Loss or actions in
respect thereof occurs subsequent to the Effective Date arises out of or is
based upon (a) any misrepresentation (or alleged misrepresentation) or breach
(or alleged breach) of any of the warranties, covenants or agreements made by
MediGene in this Agreement; (b) MediGene's or its sublicensee's use of the Marks
or the Marketing Authorizations in the marketing, use, handling, storage, sale,
distribution or promotion of the Product or the Demonstration Samples; (c)
MediGene's or its sublicensee's marketing, use, handling, storage, sale,
distribution or promotion of the Product or the Demonstration Samples; (d) the
Manufacture of any Product or Demonstration Samples by MediGene or its
sublicensee, which Loss was not the result of Atrix's breach of the terms and
provisions of this Agreement; or (e) the use of MediGene's name and trademark in
the packaging and labeling of the Product and in the marketing, sale,
distribution or promotion of the Product or the Demonstration Samples.

     Section 15.03. PROMPT NOTICE REQUIRED. No claim for indemnification
hereunder shall be valid unless notice of the matter which may give rise to such
claim is given in writing by the indemnitee (the "Indemnitee") to the persons
against whom indemnification may be sought (the "Indemnitor") as soon as
reasonably practicable after such Indemnitee becomes aware of such claim,
provided that the failure to notify the Indemnitor shall not relieve the
Indemnitor from any liability except to the extent that such failure to notify
actually adversely impacts the Indemnitor's ability to defend such claim. Such
notice shall state that the Indemnitor is required to indemnify the Indemnitee
for a Loss and shall specify the amount of Loss and relevant details thereof.
The Indemnitor shall notify Indemnitee no later than sixty (60) days from such
notice of its intention to assume the defense of any such claim. In the event
the Indemnitor fails to give such notice within that time the Indemnitor shall
no longer be entitled to assume such defense.

     Section 15.04. INDEMNITOR MAY SETTLE. The Indemnitor shall at its expense,
have the right to settle and defend, through counsel reasonably satisfactory to
the Indemnitee, any action which may be brought in connection with all matters
for which indemnification is available. In such event the Indemnitee of the Loss
in question and any successor thereto shall permit the Indemnitor full and free
access to its books and records and otherwise fully cooperate with the
Indemnitor in connection with such action; provided that this Indemnitee shall
have the right fully to participate in such defense at its own expense. The
defense by the Indemnitor of any such actions shall not be deemed a waiver by
the Indemnitor of its right to assert a claim with

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<PAGE>

respect to the responsibility of the Indemnitor with respect to the Loss in
question. The Indemnitor shall have the right to settle or compromise any claim
against the Indemnitee without the consent of the Indemnitee provided that the
terms thereof: (a) provide for the unconditional release of the Indemnitee; (b)
require the payment of compensatory monetary damages by Indemnitor only; and (c)
expressly state that neither the fact of settlement nor the settlement agreement
shall constitute, or be construed or interpreted as, an admission by the
Indemnitee of any issue, fact, allegation or any other aspect of the claim being
settled. No Indemnitee shall pay or voluntarily permit the determination of any
liability which is subject to any such action while the Indemnitor is
negotiating the settlement thereof or contesting the matter, except with the
prior written consent of the Indemnitor, which consent shall not be unreasonably
withheld or delayed. If the Indemnitor fails to give Indemnitee notice of its
intention to defend any such action as provided herein, the Indemnitee involved
shall have the right to assume the defense thereof with counsel of its choice,
at the Indemnitor's expense, and defend, settle or otherwise dispose of such
action. With respect to any such action which the Indemnitor shall fail to
promptly defend, the Indemnitor shall not thereafter question the liability of
the Indemnitor hereunder to the Indemnitee for any Loss (including counsel fees
and other expenses of defense).

                                   ARTICLE XVI

                                    COVENANTS

     Section 16.01. COVENANT NOT TO LAUNCH COMPETITIVE PRODUCT. MediGene hereby
covenants and shall cause its Affiliates to agree not to out-license,
commercialize, market, sell, distribute or have marketed, have sold or have
distributed any Competitive Product in any country in the Territory in which
MediGene retains a license granted by Atrix under Article III during the Term.
Notwithstanding the foregoing, if MediGene or any Affiliate acquires an entity
or all or substantially all of the assets of an entity and such entity
distributes a Competitive Product or such assets include a Competitive Product,
MediGene or such Affiliate shall have one hundred and eighty (180) days in which
to divest itself of such Competitive Product or to otherwise cease marketing,
sales and distribution of such Competitive Product, and MediGene shall not be in
breach of this Section 16.01 if it or the Affiliate, as the case may be, so
divests or ceases marketing, sales and distribution within such one hundred and
eighty (180) day period;

     Section 16.02. LIMITATION TO THE TERRITORY.

          (a) MediGene covenants and agrees that it will not, nor shall it
     permit its Affiliates, without the prior written authorization of Atrix, to
     the extent allowed by Applicable Laws: (i) promote or actively solicit sale
     of the Product or advertise the Product, in any country where MediGene does
     not have a necessary Marketing Authorization or in any country that is not
     part of the Territory; (ii) purchase or cause to be purchased Product which
     MediGene has represented, directly or indirectly, as being for the purpose
     of sale in a specific country in the Territory for sale in any other
     country in the Territory; (iii) with regard to the Product, contact any of
     Atrix's suppliers or vendors of the Product or components relating to the
     Product, except as necessary to exercise its right to Manufacture the
     Product and to conduct audits, each as set forth in this Agreement; (iv)
     contact the FDA or Competent Authorities or other entity located outside
     the Territory about the Product, except as required by Applicable Laws or
     as may

                                       39

<PAGE>

     be necessary or appropriate to exercise its Manufacturing rights or carry
     out its obligations as set forth in this Agreement; and (v) knowingly sell
     or distribute for resale the Product purchased hereunder to a Third Party
     who intends to sell such Product in a country where MediGene does not have
     a Marketing Authorization, if required, or in any country that is not part
     of the Territory.

          (b) To the extent Atrix exercises its rights to grant a license to a
     Third Party in accordance with Section 3.02(e), Atrix covenants and agrees
     that it will not, and shall use commercially reasonable efforts to ensure
     that such Third Party does not, without the prior written authorization of
     MediGene, to the extent allowed by Applicable Laws: (i) promote or actively
     solicit sale of the Product or advertise the Product, in any country where
     Atrix does not have the right to grant such license under Section 3.02(e)
     (the "Licensed Territory"); (ii) allow a Third Party to purchase or cause
     to be purchased Product which the Third Party has represented, directly or
     indirectly, as being for the purpose of sale in the Licensed Territory for
     sale in the Territory but outside the Licensed Territory; and (iii)
     knowingly sell or distribute for resale the Product to a Third Party who
     intends to sell such Product in the Territory but outside the Licensed
     Territory.

     Section 16.03. ACCESS TO BOOKS AND RECORDS. Each Party covenants and agrees
that it shall permit the other Party, at the other Party's expense and during
normal business hours, to exercise such Party's inspection rights as set forth
in this Agreement.

     Section 16.04. A&S SPENDING LEVELS. MediGene covenants and agrees that
during the first [**] months following the date of the First Commercial Sale of
the Product in the Territory [**], MediGene's annual A&S spending levels in the
Territory shall be at least [**] in the aggregate. MediGene further covenants
and agrees that after such [**] Period, MediGene shall maintain annual A&S
spending levels in the Territory [**].

     Section 16.05. MARKETING EXPENSES. MediGene covenants and agrees that,
except as otherwise specified in this Agreement, MediGene shall be solely
responsible for the cost and implementation of all marketing, sales, promotional
and related activities concerning the marketing, sale and promotion of the
Product.

     Section 16.06. COMPLIANCE. MediGene covenants and agrees that, except as
otherwise specified in this Agreement, it will assume all responsibility for
selling and distributing the Product and the Demonstration Samples, as
applicable, including obtaining all necessary Governmental Approvals, and any
other requirements relating to the import, sale and distribution of the Product
and the Demonstration Samples, as applicable, imposed by Applicable Law, and
MediGene shall comply with all Applicable Laws affecting the use, possession,
distribution, advertising and all forms of promotion in connection with the sale
and distribution of the Product and the Demonstration Samples in the Territory.

     Section 16.07. REPORTS. MediGene covenants and agrees that, except as
otherwise specified in this Agreement, MediGene shall have the obligation and
responsibility for and shall

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make any and all necessary reports to the Competent Authorities, including but
not limited to reports on an ADE, and shall provide Atrix with a complete copy
of any such report simultaneously with the submission of the report to the
Competent Authorities. Atrix covenants and agrees that it shall provide MediGene
with a complete copy of any and all necessary reports simultaneously with the
submission of such report to the Competent Authorities including the FDA.

     Section 16.08. PROTECTION OF THE MARKS. The Parties covenant and agree that
neither Party nor their Affiliates shall publish, employ nor cooperate in the
publication of, any misleading or deceptive advertising material with regard to
the Parties, or the Marks or MediGene's trademarks for the Product.

     Section 16.09. LAUNCH QUANTITIES. Each Party covenants and agrees to the
other as follows:

          (a) that Atrix will provide Launch Quantity of the Product;

          (b) that MediGene will timely provide to Atrix its forecast of
     MediGene's requirement of Product, on a Product by Product and country by
     country basis, including Demonstration Samples, in order to enable Atrix to
     timely provide Launch Quantity of the Product to MediGene.

     Section 16.10. FURTHER ACTIONS. Upon the terms and subject to the
conditions hereof, each of the Parties hereto shall use its commercially
reasonable efforts to (i) take, or cause to be taken, all appropriate action and
do, or cause to be done, all things necessary, proper or advisable under
Applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii) obtain from Competent Authorities any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by the Parties in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement and (iii) make all necessary
filings, and thereafter make any other required submissions, with respect to
this transaction under (A) the Securities Exchange Act of 1934, as amended and
the Securities Act of 1933, as amended, and the rules and regulations thereunder
and any other applicable federal or state securities laws and (B) any other
Applicable Law. The Parties hereto shall cooperate with each other in connection
with the making of all such filings, including by providing copies of all such
documents to the other Party's counsel (subject to appropriate confidentiality
restrictions) prior to filing and, if requested, by accepting all reasonable
additions, deletions or changes suggested in connection therewith. Without
limiting the generality of the foregoing, each Party shall take or omit to take
such action as the other Party shall reasonably request to cause the Parties to
obtain any material Governmental Approvals and/or the expiration of applicable
waiting periods, provided that the foregoing shall not obligate either Party to
take or to omit to take any action (including, without limitation, the
expenditure of funds or any holding separate and agreeing to sell or otherwise
dispose of assets, categories of assets or businesses) as in the good faith
opinion of such Party, would cause a material adverse effect on a Party.

     Section 16.11. EQUITABLE RELIEF. The Parties understand and agree that
because of the difficulty of measuring economic losses to the non-breaching
Party as a result of a breach of the

                                       41

<PAGE>

covenants set forth in this Article XVI, and because of the immediate and
irreparable damage that may be caused to the non-breaching Party for which
monetary damages would not be a sufficient remedy, the Parties agree that the
non-breaching Party will be entitled to seek specific performance, temporary and
permanent injunctive relief, and such other equitable remedies to which it may
then be entitled against the breaching Party. This Article XVI shall not limit
any other legal or equitable remedies that the non-breaching Party may have
against the breaching Party for violation of the covenants set forth in this
Article XVI. The Parties agree that the non-breaching Party shall have the right
to seek relief for any violation or threatened violation of this Article XVI by
the breaching Party from any court of competent jurisdiction in any jurisdiction
authorized to grant the relief necessary to prohibit the violation or threatened
violation of this Article XVI. This Article XVI shall apply with equal force to
the breaching Party's Affiliates.

                                  ARTICLE XVII

                                 PRODUCT RECALL

     Section 17.01. PRODUCT RECALLS OR WITHDRAWAL. If at any time or from time
to time any Competent Authority of any country requests a Party to recall the
Product or if a voluntary recall of the Product is contemplated by either Party
(collectively, a "Recall"), then the Party to whom such request is made or the
Party contemplating such Recall, as the case may be, shall immediately notify
the other Party. Neither Party shall carry out a voluntary Recall in the
Territory without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, conditioned or delayed by either Party. Any
Recall in the Territory shall be carried out by MediGene in as expeditious a
manner as reasonably possible to preserve the goodwill and reputation of the
Product and the goodwill and reputation of the Parties. MediGene shall in all
events be responsible for conducting any Recall in the Territory, market
withdrawals or corrections with respect to the Product in the Territory.
MediGene shall maintain records of all sales and distribution of Product and
customers sufficient to adequately administer a Recall, market withdrawal or
correction for the period required by Applicable Law. Atrix shall be
responsible, at its sole cost and expense, for conducting any Recall outside of
the Territory and agrees to notify MediGene immediately if a Competent Authority
outside of the Territory has requested a Recall or if Atrix is contemplating a
voluntary Recall outside of the Territory; provided, however, that any such
voluntary Recall shall be subject to Atrix's contractual obligations with Third
Parties outside the Territory and, if Atrix is permitted to exercise discretion
under such contractual obligations, Atrix shall consider the effect of such
voluntary recall on the marketing and sale of the Product in the Territory.

     Section 17.02. RECALL COSTS. MediGene shall be responsible for conducting
any Recall in the Territory and the cost and expense of a Recall shall be
allocated as follows:

          (a) if such Recall is a voluntary Recall or shall be due to tampering
     or other cause, other than a manufacturer's defect, but not due to the
     negligence or misconduct of the Parties, or the breach by a Party of its
     warranties or obligations hereunder, then MediGene and Atrix shall [**] of
     the costs and expenses incurred by MediGene in

----------
**   Confidential Treatment Requested.

                                       42

<PAGE>

     connection with such Recall, including, without limitation, all product
     credits and returns, freight and shipping costs and product disposal
     expenses. In such event, Atrix agrees to pay MediGene within ten (10) days
     after its receipt from MediGene of any invoice(s) assessing Atrix [**] of
     these said costs, as listed above;

          (b) if such Recall shall be due to manufacturer's defect or the
     negligence or the breach by Atrix of its warranties or obligations
     hereunder or the misconduct of Atrix, all such costs and expenses shall be
     borne and paid solely by Atrix and Atrix will reimburse MediGene for any
     such costs and expenses paid by MediGene within ten (10) days of receipt of
     an invoice for such costs and expenses from MediGene, and if not so paid
     MediGene shall have the right to offset such amounts against amounts
     otherwise due by MediGene to Atrix hereunder; and

          (c) if such Recall is due to the negligence or the breach by MediGene
     of its warranties or obligations hereunder or the misconduct of MediGene,
     all such costs and expenses shall be borne and paid solely by MediGene and
     MediGene will reimburse Atrix for any such costs and expenses paid by Atrix
     within thirty (30) days of receipt of an invoice and appropriate
     documentation for such costs and expenses from Atrix.

     Section 17.03. NOTIFICATION OF COMPLAINTS. Each Party agrees that
throughout the Term of this Agreement, and with respect to all Product or
Demonstration Samples supplied and purchased under this Agreement, after the
termination of this Agreement, it will (i) notify the other Party immediately of
all available information concerning any complaint, product defect reports, and
similar notices received by either Party with respect to the Product or
Demonstration Samples, whether or not determined to be attributable to the
Product or Demonstration Samples and (ii) with respect to an ADE, comply with
the provisions of Section 10.04. MediGene, in consultation with Atrix, shall
define and implement regulatory compliance procedures, including, without
limitation, action plans and an SOP for product defect reporting and will handle
all product complaints in the Territory. In connection with any such product
complaint Atrix shall cooperate as reasonably requested by MediGene including
performing any testing and follow-up investigations mutually agreed upon by the
Parties.

     Section 17.04. NOTIFICATION OF THREATENED ACTION. Throughout the duration
of this Agreement and with respect to all Product supplied and purchased under
this Agreement, after the termination of this Agreement, each Party shall
immediately notify the other Party of any information it receives regarding any
threatened or pending action, inspection or communication by or from a concerned
Competent Authority which may affect the safety or efficacy claims of the
Product or the continued marketing of the Product. Upon receipt of such
information, the Parties shall consult with each other in an effort to arrive at
a mutually acceptable procedure for taking appropriate action.

                                  ARTICLE XVIII

                                    INSURANCE

     Section 18.01. INSURANCE. Each Party shall, at its sole cost and expense,
obtain and keep in force sufficient comprehensive general liability insurance,
including any applicable self-

                                       43

<PAGE>

insurance coverage, with bodily injury, death and property damage including
contractual liability and product liability coverage.

                                   ARTICLE XIX

                          TERM; DEFAULT AND TERMINATION

     Section 19.01. TERM. This Agreement shall commence as of the Effective Date
and shall expire on a country-by-country basis on the expiration of the last
applicable Atrigel(R) Patent Right, or any other patents obtained by Atrix with
regard to the Product, in such country (the "Term").

     Section 19.02. TERMINATION BY EITHER PARTY FOR CAUSE. Either Party may
terminate this Agreement prior to the expiration of the Term upon the occurrence
of any of the following:

          (a) Upon or after the cessation of operations of the other Party or
     the bankruptcy, insolvency, dissolution or winding up of the other Party
     (other than dissolution or winding up for the purposes or reconstruction or
     amalgamation); or

          (b) Upon or after the breach of any material provision of this
     Agreement by the other Party if the breaching Party has not cured such
     breach within sixty (60) days after written notice thereof by the
     non-breaching Party; provided, however, if any such breach relates solely
     to one or more Products, then the non-breaching Party may only terminate
     this Agreement to the extent it applies to such Product or Products and
     this Agreement shall remain in effect as it applies to all other Products.

     Section 19.03. TERMINATION BY ATRIX. Atrix may terminate this Agreement
prior to the expiration of the Term with respect to any country in the Territory
upon the occurrence of any of the following:

          (a) Upon the failure by MediGene to pay for fifteen (15) days from
     receipt of notice thereof from Atrix, pursuant to the terms of Section
     20.08: (i) any Royalty payment, or portion thereof, pursuant to Section
     4.02; (ii) any milestone payments, or portion thereof, pursuant to Section
     4.03 or Section 4.04; or (iii) the Purchase Price due to Atrix under
     Section 8.01 of this Agreement; provided, however, that this subsection (a)
     shall not apply to any Royalty payment, or portion thereof, pursuant to
     Section 4.02, which is the subject of a good faith dispute (a "Disputed
     Amount") between MediGene and Atrix. Further, MediGene shall pay interest
     on any Disputed Amount at a rate equal to the Prime Rate of Interest to
     begin accruing on a daily basis from the date such payment was due and
     continuing until such payment is received by Atrix. Any Disputed Amount
     shall be resolved by the Parties within ninety (90) days from the date
     MediGene notifies Atrix of a good faith dispute; provided, however, if the
     Disputed Amount cannot be resolved to the mutual satisfaction of the
     Parties within such ninety (90) day period then either Party may request
     that the dispute be submitted to the Chief Executive Officers of Atrix and
     MediGene, respectively, for joint resolution. If the Disputed Amount is not
     jointly resolved by the Parties' respective Chief Executive Officers within
     ten (10) days from submission to the Parties' respective Chief Executive
     Officers then

                                       44

<PAGE>

     Atrix shall be entitled to pursue any and all remedies at law available to
     it. In no event will the dispute resolution period exceed a maximum of one
     hundred (100) days unless otherwise agreed in writing by the Parties.
     Further, MediGene may in its discretion determine to pay any such Disputed
     Amount and in the event amounts are finally determined not to be due by
     MediGene, Atrix shall repay, without interest, such excess amounts
     determined not to be due; or

          (b) Upon the occurrence of any material misrepresentation or omission
     in any Royalty Statement, which misrepresentation or omission is caused by
     MediGene's willful misconduct, gross negligence or bad faith.

     Section 19.04. TERMINATION BY MEDIGENE. MediGene may terminate its license
to the Product for a country in the Territory prior to the expiration of the
Term in the event that MediGene determines in good faith that the Purchase Price
for the Product is not commercially viable with respect to such country in the
Territory in accordance with Section 8.02(b).

     Section 19.05. REMEDIES. All of the non-breaching Party's remedies shall be
cumulative, and the exercise of one remedy hereunder by the non-defaulting Party
shall not be deemed to be an election of remedies. These remedies shall include
the non-breaching Party's right to sue for damages for such breach without
terminating this Agreement.

     Section 19.06. EFFECT OF TERMINATION.

          (a) Subject to Section 19.06(d), upon termination of this Agreement by
     Atrix pursuant to Sections 19.02 or 19.03, (i) MediGene shall have no right
     to practice within the Atrigel(R) Patent Rights or use any of the
     Atrigel(R) Technology, (ii) all rights, title or interest in, or other
     incidents of ownership under, the Atrigel(R) Technology and the Marks shall
     revert to and become the sole property of Atrix, (iii) MediGene shall
     reimburse Atrix for costs and expenses reasonably incurred or committed to
     by Atrix prior to the effective date of such termination and for which
     MediGene is otherwise obligated to reimburse Atrix pursuant to this
     Agreement in connection with the activities performed by Atrix prior to the
     effective date of such termination consistent with the budget mutually
     agreed to by the Parties and approved by MediGene in accordance with
     Section 2.02, provided that Atrix shall use commercially reasonable efforts
     to minimize the such costs and expenses between the termination notice date
     and the date of termination, and (iv) MediGene shall grant to Atrix an
     irrevocable, non-exclusive, royalty-free license, with the right to
     sublicense, to the Clinical Documentation, the Results and the Marketing
     Authorizations and make any required filings with the Competent Authorities
     to the extent necessary and sufficient to market and sell the Product in
     the Territory.

          (b) Upon termination of this Agreement by MediGene pursuant to Section
     19.02(a), MediGene shall receive an irrevocable, non-exclusive,
     royalty-free license, with the right to sublicense, to Manufacture, market,
     advertise, promote, distribute, offer for sale, sell and import the Product
     in the Territory. Upon termination of this Agreement by MediGene pursuant
     to Section 19.02(b), the following shall occur: (i) MediGene shall have no
     right to practice within the Atrigel(R) Patent Rights or use any of the
     Atrigel(R)

                                       45

<PAGE>

     Technology, and (ii) all rights, title or interest in, or other incidents
     of ownership under, the Atrigel(R) Technology and the Marks shall revert to
     and become the sole property of Atrix.

          (c) Upon termination by Atrix under Sections 19.02 or 19.03 or by
     MediGene under Sections 19.02(b) or 19.04, the following shall occur:

               (i) Except as otherwise provided in this Agreement, all
     applicable licenses granted to MediGene shall terminate immediately,
     including the rights granted to MediGene pursuant to Sections 3.02 and
     3.03, and MediGene shall have no further rights to the Product subject to
     MediGene's option to sell off existing inventory of Product and distribute
     existing inventory of Demonstration Samples for six (6) months after the
     termination date under subsection (ii) hereof, and MediGene shall not,
     either directly or indirectly, use or permit the use of the same or of the
     documentation relating to the Product, except to sell off existing
     inventory under subsection (ii) hereof;

               (ii) MediGene, at its option, may sell off any existing inventory
     of Product and utilize the Demonstration Samples during a period not to
     exceed six (6) months following such termination. If MediGene chooses this
     option, MediGene shall:

                    (A) within thirty (30) days of issuance of a notice of
               termination by any Party, notify Atrix that it intends to sell
               off existing inventory of Product and utilize the Demonstration
               Samples as provided in this Agreement;

                    (B) continue to comply with its payment obligations to Atrix
               under Article IV;

                    (C) continue to sell off existing inventory of Product and
               utilize the Demonstration Samples for six (6) months after the
               notice of termination but at the expiration of the six (6)
               months, at Atrix's election, either (1) sell all existing
               inventory of Product and Demonstration Samples to Atrix or (2)
               destroy all remaining inventory of Product and Demonstration
               Samples in accordance with Applicable Law, providing Atrix with
               proof of destruction in writing sufficient to comply with
               Applicable Laws; provided that in either case, Atrix shall pay to
               MediGene, the full amount of the actual cost paid by MediGene to
               Atrix for such remaining inventory of Product and Demonstration
               Samples. If MediGene sells any inventory of Product or
               Demonstration Samples to Atrix pursuant to this subsection, it
               shall warrant that such inventory of Product and Demonstration
               Samples has been stored in compliance with all Applicable Laws,
               has not been adulterated and has otherwise been maintained
               according to the requirements of Applicable Laws and Marketing
               Authorizations;

                    (D) if MediGene notifies Atrix that MediGene does not intend
               to sell off any existing inventory of Product and utilize the
               Demonstration Samples, MediGene shall, at Atrix's election,
               either (1) sell all existing

                                       46

<PAGE>

               inventory of Product and Demonstration Samples to Atrix or (2)
               destroy all remaining inventory of Product and Demonstration
               Samples in accordance with Applicable Law, providing Atrix with
               proof of destruction in writing sufficient to comply with
               Applicable Laws; provided that in either case, Atrix shall pay to
               MediGene, the full amount of the actual cost paid by MediGene to
               Atrix, for such remaining inventory of Product and Demonstration
               Samples. If MediGene sells any inventory of Product or
               Demonstration Samples to Atrix pursuant to this subsection, it
               shall warrant that such inventory of Product and Demonstration
               Samples has been stored in compliance with all Applicable Laws,
               has not been adulterated and has otherwise been maintained
               according to requirements of Applicable Laws and Competent
               Authorities; and

                    (E) any sales of Product or Demonstration Samples made by
               MediGene to Atrix pursuant to this Section 19.06 shall be made by
               MediGene within thirty (30) days of the end of the time period
               specified by Section 19.06(c)(ii) and shall be shipped to Atrix
               appropriately packaged and stored. All transportation costs in
               connection with such sale, including without limitation,
               insurance, freight and duties, shall be shared equally by
               MediGene and Atrix. Amounts owed by Atrix to MediGene pursuant to
               this Section 19.06(c) for the Product or Demonstration Samples
               shall be paid by Atrix within ten (10) days after receipt by
               Atrix of an appropriately detailed invoice from MediGene for the
               amount so owing to it by Atrix under this subsection.

          (d) Except as otherwise provided in this Agreement, expiration or
     termination of this Agreement shall not relieve the Parties of any
     obligation accruing prior to such expiration or termination. Except as set
     forth below or elsewhere in this Agreement, the obligations and rights of
     the Parties under Sections 3.04, 14.08, 14.09 and Articles XII, XV, XVII
     and XX and this Article IX shall survive expiration or termination of this
     Agreement.

          (e) Subject to the provision of Section 19.07, within thirty (30) days
     following the expiration or termination of this Agreement, each Party shall
     return to the other Party, or destroy, upon the written request of the
     other Party, any and all Confidential Information of the other Party in its
     possession and upon a Party's request, such destruction (or delivery) shall
     be confirmed in writing to such Party by a responsible officer of the other
     Party.

     Section 19.07. LICENSE FOLLOWING EXPIRATION. After expiration of the
Royalty Term, and upon request by MediGene, Atrix shall continue to sell the
Product to MediGene upon terms mutually agreeable to the Parties pursuant to a
separate supply agreement to be negotiated in good faith between the Parties.

                                       47

<PAGE>

                                   ARTICLE XX

                                  MISCELLANEOUS

     Section 20.01. NO-SOLICITATION. During the Term of this Agreement, neither
Party nor its Affiliates (collectively, the "Initiating Group") shall, directly
or through its representatives, solicit for employment or hire any officer,
director or employee of the other Party or its subsidiaries or controlled
Affiliates (collectively, the "Other Group") with whom the Initiating Group has
contact in connection with, or who otherwise is known by the Initiating Group to
participate in, the transactions contemplated by this Agreement. The Initiating
Group shall not be precluded from hiring any such person who has been terminated
by the Other Group prior to commencement of employment discussions between such
person and the Initiating Group or its representatives. "Solicitation" shall not
include any generalized public advertisement or any other solicitation by the
Initiating Group or its representatives that is not specifically directed toward
any such employee of the Other Group or toward any group of such employees of
the Other Group.

     Section 20.02. COMMERCIALLY REASONABLE EFFORTS. Unless another standard is
indicated in this Agreement, each Party shall use commercially reasonable
efforts to perform its responsibilities under this Agreement. As used herein,
the term "commercially reasonable efforts" means, unless the Parties agree
otherwise, those efforts consistent with the exercise of prudent scientific and
business judgment, as applied to other products of similar scientific and
commercial potential within the relevant product lines of the Parties.

     Section 20.03. ASSIGNMENT. Except as expressly provided hereunder, neither
this Agreement nor any rights or obligations hereunder may be assigned or
otherwise transferred by either Party without the prior written consent of the
other Party (which consent shall not be unreasonably withheld); provided,
however, that either Party may assign this Agreement and its rights and
obligations hereunder without the other Party's consent (a) in connection with
the transfer or sale of all or substantially all of the business of such Party
to which this Agreement relates to another Party, whether by merger, sale of
stock, sale of assets or otherwise, or (b) to any Affiliate. Notwithstanding the
foregoing, any such assignment to an Affiliate shall not relieve the assigning
Party of its responsibilities for performance of its obligations under this
Agreement. The rights and obligations of the Parties under this Agreement shall
be binding upon and inure to the benefit of the successors and permitted assigns
of the Parties. Any assignment not in accordance with this Agreement shall be
void.

     Section 20.04. FORCE MAJEURE. Neither Party shall be held liable or
responsible to the other Party nor be deemed to have defaulted under or breached
this Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected Party, including, but not limited to,
fire, floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other Party, or for any other reason which is
completely beyond the control of the Party (collectively a "Force Majeure");
provided that the Party whose performance is delayed or prevented shall continue
to

                                       48

<PAGE>

use good faith diligent efforts to mitigate, avoid or end such delay or failure
in performance as soon as practicable.

     Section 20.05. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
USA, except that no conflict of laws provision shall be applied to make the laws
of any other jurisdiction applicable to this Agreement.

     Section 20.06. WAIVER. Except as specifically provided for herein, the
waiver from time to time by either of the parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such Party's rights or remedies
provided in this Agreement.

     Section 20.07. SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby. Any provision of this Agreement held invalid or unenforceable in part
or degree will remain in full force and effect to the extent not held invalid or
unenforceable.

     Section 20.08. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing and shall be deemed to have been given
if delivered personally, mailed by certified mail (return receipt requested) or
sent by cable, telegram 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 ATRIX:      Atrix Laboratories, Inc.
                       2579 Midpoint Drive
                       Fort Collins, CO 80525
                       Attn: Charles P. Cox, Ph.D., M.B.A.
                       Vice President, New Business Development
                       Telephone: (970) 482-5868
                       Facsimile: (970) 482-9735

     COPIES TO:        Morrison & Foerster LLP
                       5200 Republic Plaza
                       370 17th Street
                       Denver, Colorado 80202-5638
                       Attn: Warren L. Troupe, Esq.
                       Telephone: (303) 592-2255
                       Facsimile: (303) 592-1510

                                       49
<PAGE>

     IF TO MEDIGENE:   MediGene Aktiengesellschaft
                       Lochhamer Strasse 11
                       D-82152 Planegg/Martinsried
                       Germany
                       Attn: Dr. Martin Poehlchen
                       Vice President of Business Development
                       Telephone: 011-49-89-8956-320
                       Facsimile: 011-49-89-8956-3220

     Notice so given shall be deemed given and received (i) if by international
mail on the seventh (7th) day after posting; (ii) by cable, telegram, telex or
personal delivery on the date of actual transmission, with evidence of
transmission acceptance, or (as the case may be) personal or other delivery; and
(iii) if by international courier, on the fourth (4th) business day following
the day such notice is delivered to the international courier service, or such
earlier delivery date as may be confirmed to the sender by such courier service.

     Section 20.09. INDEPENDENT CONTRACTORS. It is expressly agreed that Atrix
and MediGene shall be independent contractors and that the relationship between
the two Parties shall not constitute a partnership or agency of any kind.
Neither Atrix nor MediGene shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other Party, without the prior written consent of the other
Party.

     Section 20.10. RULES OF CONSTRUCTION. The Parties hereto agree that they
have been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the Party drafting such agreement or
document. Whenever the context hereof shall so require, the singular shall
include the plural, the male gender shall include the female gender and neuter,
and vice versa.

     Section 20.11. PUBLICITY. MediGene and Atrix shall consult with each other
before issuing any press release with respect to this Agreement or the
transactions contemplated hereby and neither shall issue any such press release
or make any such public statement without the prior consent of the other, which
consent shall not be unreasonably withheld; provided, however, (a) that a Party
may, without the prior consent of the other Party, issue such press release or
make such public statement as may upon the advice of counsel be required by law
or the rules and regulations of the Nasdaq or any other stock exchange, or (b)
if it has used reasonable efforts to consult with the other Party prior thereto,
(such consent shall be deemed to have been given if the recipient of the press
release or public statement fails to respond to the other Party within
forty-eight (48) hours after the recipient's receipt of such press release or
public statement). No such consent of the other Party shall be required to
release information which has previously been made public.

     Section 20.12. ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the
Exhibits attached hereto) sets forth all of the covenants, promises, agreements,
warranties, representations, conditions and understandings between the parties
hereto with respect to the subject matter hereof and supersedes and terminates
all prior agreements and understandings

                                       50

<PAGE>

between the Parties. There are no covenants, promises, agreements, warranties,
representations conditions or understandings, either oral or written, between
the parties other than as set forth herein. No subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the Parties hereto
unless reduced to writing and signed by the respective authorized officers of
the Parties.

     Section 20.13. HEADINGS. The captions contained in this Agreement are not a
part of this Agreement, but are merely guides or labels to assist in locating
and reading the several articles hereof.

     Section 20.14. 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.

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in duplicate by their duly authorized officers as of the Effective
Date.

ATRIX LABORATORIES, INC.,               MEDIGENE AKTIENGESELLSCHAFT
a Delaware corporation                  a German corporation

By: /s/ David R. Bethune                By: /s/ Peter Heinrich
    ---------------------------------       ------------------------------------
Name: David R. Bethune                  Name: Dr. Peter Heinrich
Title: Chairman and Chief Executive     Title: Vorstandsvorsitzender
       Officer

                                       51

<PAGE>

                                    EXHIBIT A

                            ATRIGEL(R) PATENT RIGHTS

                                      [**]

----------
**   Confidential Treatment Requested.

                                       A-1

<PAGE>

                                    EXHIBIT B

                        FORM OF CERTIFICATE OF COMPLIANCE

     Issue Date: ____________________

                            CERTIFICATE OF COMPLIANCE

FOR ____________________________________________________________________________

CUSTOMER _______________________________________________________________________

     LOT NUMBER ________________________________________________________________

FILL DATE ___________________________   PREP/EX DATE ___________________________

DOSAGE _________________________________________________________________________

QUANTITY OF RELEASABLE VIALS ___________________________________________________

The batch production record for this product has been reviewed for accuracy,
completeness, and compliance with established written standard procedures and in
accordance with cGMP requirements. Any deviations/abnormal occurrences from the
aforementioned requirements have been appropriately documented, reviewed, and
approved.

Reviewed By:
             ----------------------------------------
             Batch Record Auditor

Date:
      -------------------------------

Approved By:
             ----------------------------------------
             Acting Supervisor Manager, Documentation

Date:
      -------------------------------

cc: All Customers

                                      B-1

<PAGE>

                                    EXHIBIT C

                                      [**]

                                 (see attached)

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                                       C-1

<PAGE>

                                    EXHIBIT D

                        FORM OF STOCK PURCHASE AGREEMENT

    (See Exhibit 99.2 of Form 8-K filed with the SEC on June 19, 2001 by Atrix
                              Laboratories, Inc.)

                                       D-2

<PAGE>

                                    EXHIBIT E

                                      [**]

                                 (see attached)

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                                       E-1

<PAGE>

                                    EXHIBIT F

                                MEDIGENE'S SOP**

                                 (see attached)

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                                       F-1

<PAGE>

                                    EXHIBIT G

                            DRUG DELIVERY COMPETITORS

[**]

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                                        1
<PAGE>

                             CONFIDENTIAL TREATMENT
                              REQUESTED BY QLT INC.

 I. AMENDMENT OF THE COLLABORATION, LICENSE AND SUPPLY AGREEMENT EFFECTIVE APRIL
    4, 2001 (THE "AGREEMENT") BETWEEN ATRIX LABORATORIES, INC. ("ATRIX") AND
         MEDIGENE AKTIENGESELLSCHAFT ("MEDIGENE") CONCERNING AE EXCHANGE

As provided by Section 20.12 of the Agreement, Atrix and MediGene with effect as
of September 12, 2002 amend the Agreement as set out below:

Section 10.04 of the Agreement as currently in effect is deleted and replaced by
the following:

          "Section 10.04 ADVERSE EVENT REPORTING AND PHASE IV SURVEILLANCE.

     (a) In order to enable MediGene to meet its legal requirements regarding
adverse event reporting, Atrix shall collect from all of its license partners
other than MediGene having a license for the Product any safety information (the
"Safety Information"). The term "Safety Information" shall be including, but not
limited to (i) all serious adverse events (as defined by ICH E2A) ("SAE") known
from all sources (spontaneous reporting, clinical studies, literature,
regulatory authorities and compassionate use) and (ii) all non serious adverse
reactions from spontaneous reporting and literature.

     Any such Safety Information shall be submitted to MediGene in the form
developed by the Council for International Organizations of Medical Sciences
standard ("CIOMS Form") by fax. The Parties will, by separate mutual written
agreement, define further requirements for the data and information which shall
be given by Atrix in the CIOMS Form. The Safety Information provided in the
CIOMS Form shall be transmitted to MediGene (i) within [**] calendar days in
case of SAE, and (ii) in all other cases not regarding any SAE, within [**]
calendar days after first knowledge of the respective license partner about the
Safety Information. All Safety Information to be sent to MediGene shall be sent
attention to the pharmacovigilance officer of MediGene.

     MediGene shall have the right to ask Atrix for additional information about
these reports. The queries will be sent to Atrix by e-mail or fax; Atrix shall
answer within [**] calendar days. Atrix shall ensure, that the requested
information or any other follow-up information will be included into the CIOMS
Form by the respective license partner within [**] calendar days after first
knowledge of the additional information by the respective license partner.

     In case license partners conduct clinical trials with regard to the
Product, Atrix shall ensure that the respective license partner will without
delay provide Atrix with lists containing non serious adverse events from the
clinical studies every three months. Atrix will forward these lists to MediGene
within reasonable time.

     In case Atrix exercises its rights to co-market the Product within the
Territory pursuant to Section 13.01 of the Agreement, Atrix shall have the same
responsibility as the other license

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                                        1

<PAGE>

partners to provide Safety Information, including lists on non serious adverse
events from clinical studies with regard to the Product marketed by Atrix.

     If Atrix exercises its right to co-market as set forth in Section 13.01
then, upon the occurrence of any adverse event relevant for reporting as Safety
Information according this provision (an "AE"), the Parties shall promptly meet
in person or by telephone, as appropriate, to discuss and determine how to
mutually handle and resolve any issues relating to or arising from any such AE.

     (b) In order to enable Atrix to meet its legal requirements regarding
adverse event reporting, MediGene shall report to Atrix any Safety Information
related to the use of the Product in the Territory and known to MediGene,
including, but not limited to (i) all SAE known from all sources (spontaneous
reporting, clinical studies, literature, regulatory authorities and
compassionate use) and (ii) all non serious adverse reactions from spontaneous
reporting.

     Any such Safety Information shall be submitted by MediGene to Atrix in a
CIOMS Form by fax. The Safety Information provided in a CIOMS Form shall be
transmitted to Atrix (i) in case of SAE within [**] calendar days, and (ii) in
all other cases not regarding SAE, within [**] calendar days, after first
knowledge about the Safety Information. All Safety Information to be sent to
Atrix shall be sent attention to the pharmacovigilance officer of Atrix.

     Atrix will have the right to ask MediGene for additional information about
these reports. The queries will be sent to MediGene by e-mail; MediGene will
answer within [**] calendar days. MediGene shall ensure, that the requested
information or any other follow-up information will be included into the CIOMS
Form within [**] calendar days after first knowledge of the additional
information.

     (c) If the report of an AE causes a Competent Authority to request labeling
revision as a result of an AE or that a Phase IV surveillance program be
conducted, then the Parties shall promptly enter into discussions and shall
mutually agree on all of the material terms and conditions of such labeling
revision or Phase IV surveillance program; provided, however the costs of such
labeling revision or Phase IV surveillance program shall be borne [**] by
MediGene and [**] by Atrix. MediGene shall have the authority to make the final
decision with regard to any labeling revisions provided that MediGene will
consider, in making its decision, the effect any such labeling revisions will
have on the marketing and sale of the Product outside the Territory. MediGene
agrees that should Applicable Laws require that any such interim data and
results from such Phase IV surveillance programs be prepared in written form,
MediGene shall comply with such requirements and provide all such information in
writing to MediGene and the Competent Authorities in accordance with Applicable
Laws. MediGene further agrees that Atrix shall have the right to incorporate,
refer to and cross-reference such results and underlying data in any regulatory
filing or any other filing or requirement Atrix is required to undertake with
respect to the Product. Atrix agrees that MediGene shall have the right to
incorporate, refer to and cross-reference such results and underlying data in
any regulatory filing or any other filing or requirement MediGene is required to
undertake with respect to the Product in the Territory."

The Agreement remains otherwise unaltered.

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<PAGE>

     IN WITNESS WHEREOF, the parties have executed this amendment to the
Agreement as of the date first above written.

ATRIX LABORATORIES, INC.                MEDIGENE AG
a Delaware corporation                  a German corporation

By: /s/ Charles P. Cox                  By: /s/ Peter Heinrich
    ---------------------------------       ------------------------------------
Name: Charles P. Cox, Phd, MBA          Name: Dr. Peter Heinrich
Title: SVP, Corporate Development       Title: CEO

                                        MEDIGENE AG
                                        a German corporation

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

                                       3

<PAGE>

                  CONFIDENTIAL TREATMENT REQUESTED BY QLT INC.

         SECOND AMENDMENT TO COLLABORATION, LICENSE AND SUPPLY AGREEMENT

     This Second Amendment to Collaboration, License and Supply Agreement (this
"Second Amendment"), is made by and between Atrix Laboratories, Inc., a Delaware
corporation having offices at 2579 Midpoint Drive, Fort Collins, CO, 80525-4417
("Atrix"), and MediGene AG, a German corporation having offices at Lochhamer
Strasse 11, Planegg/Martinsried, Germany ("MediGene") as of this 22nd day of
December, 2003. Atrix and MediGene are sometimes referred to collectively herein
as the "Parties" or singly as a "Party."

     WHEREAS, the Parties entered into that certain Collaboration, License and
Supply Agreement dated as of April 4, 2001, as subsequently amended by that
certain First Amendment to Collaboration, License and Supply Agreement and Stock
Purchase Agreement effective as of September 12, 2002 (collectively, the
"Agreement"); and

     WHEREAS, MediGene intends to grant a sublicense under the Agreement to
YAMANOUCHI U.K. Limited and to enter into a Distribution, Sublicense and Supply
Agreement in connection therewith; and

     WHEREAS, the Parties therefore desire to further amend the Agreement as set
forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in the Agreement and as hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

     1. The definition of each of "cGMP", "First Commercial Sale", "Governmental
Approval", "Marketing Authorization", "Net Sales", "Royalty Term", and
"Territory" in Article I of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "cGMP" means according to and in compliance with each of the highest
standards contained within the Pharmaceutical Inspection Convention and those
issued by the EFTA Secretariat Geneva and GMP requirements defined in the EC
Rules Governing Medicinal Products in European Community Volume IV (as each of
these may be supplemented, amended, updated, revised or replaced from time to
time)."

     "First Commercial Sale" means (a) with respect to a country in the
Territory, the first sale for use, consumption or resale of each Product by
MediGene or YAMANOUCHI or its sublicensees in such country and (b) with respect
to the Territory, the First Commercial Sale in any country within the Territory.
A sale to an Affiliate shall not constitute a First Commercial Sale unless the
Affiliate is the end user of the Product."

     "Governmental Approval(s) " means all permits, licenses and authorizations,
including but not limited to, import permits, Marketing Authorizations, and
Pricing and Reimbursement Approvals required by any Competent Authority as a
prerequisite to the Manufacture, packaging, marketing or selling of the Product
or the Units."

                                        1

<PAGE>

     "Marketing Authorization" means all necessary and appropriate regulatory
approvals, including but not limited to, variations thereto, to put the Product
on the market in a particular country in the Territory."

     "Net Sales" means the [**].

     Components of Net Sales shall be determined in the ordinary course of
business in accordance with historical practice and using the accrual method of
accounting in accordance with GAAP.

     In the event MediGene or its Affiliates or YAMANOUCHI or its Affiliates,
subcontractors or sublicensees transfers Product to a Third Party in a bona fide
arm's length transaction, for consideration, in whole or in part, other than
cash or to a Third Party in other than a bona fide arm's length transaction, the
Net Sales price for such Product shall be deemed to be the standard invoice
price then being invoiced by MediGene or its Affiliates or YAMANOUCHI or its
Affiliates, subcontractors or sublicensees in an arm's length transaction with
similar customers. In the event that MediGene or its Affiliates or YAMANOUCHI or
its Affiliates, subcontractors or sublicensees includes one or more Product as
party of a bundle of products, MediGene agrees not to, and agrees to cause its
Affiliates, YAMANOUCHI and YAMANOUCHI's Affiliates, subcontractors and
sublicensees not to, offer or sell any such Product as a loss leader (i.e. sold
at less than the invoice price at which any such Product is sold when not part
of a bundle of products) in determining the price of the bundled products."

     "Royalty Term" means the period of time commencing on the First Commercial
Sale of each Product in any country in the Territory and [**]."

     "Territory" means Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus,
Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco,
Netherlands, Norway, Poland, Portugal, Republic of Moldova, Romania, Russian
Federation, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland, The
former Yugoslav Republic of Macedonia, Turkey, Ukraine, United Kingdom, the
Vatican City and Yugoslavia."

     2. The following new definitions are hereby inserted into Article I of the
Agreement in alphabetical order:

     "Financial Year" means the financial year being each twelve month period
commencing on April 1 and ending on March 31."

     "Non-Major Country" or "Non-Major Countries" means individually or
collectively, as the case may be, the countries in the Territory excluding the
Major Countries."

     "[**]

     ""Valid Claim" means a claim of an issued, unexpired patent which has not
been:

     (a) held invalid or unenforceable by a final decision of a court or
     governmental agency of competent jurisdiction within the Territory, which
     decision is unappealable or was not appealed within the time allowed, or

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<PAGE>

     (b) admitted in writing to be invalid or unenforceable by the holder(s) by
     disclaimer or otherwise provided that the holder(s) shall have thirty (30)
     days from notice by MediGene or its sublicensees of such admission and
     MediGene's reliance, or the sublicensees' reliance respectively, on this
     clause to remedy any effects caused by such admission."

     3. The following is hereby inserted as new Section 2.03:

     "Section 2.03 [**].

     4. Section 2.03 of the Agreement, as existing prior to this Second
Amendment, is hereby renumbered as Section 2.04, deleted in its entirety and
replaced with the following:

     "Section 2.04. COMMERCIALIZATION. Subject to the terms and conditions of
this Agreement, MediGene, at its own expense, will be responsible for (a)
conducting all market research related to the Product; and (b) commercialization
of the Product in the Territory (including all sales and marketing activities
related to the Product). Subject to Section 3.02(d), MediGene or its
sublicensees will obtain and maintain Governmental Approvals in the Territory
and pay all duties, fees, tariffs and similar obligations required to market the
Product in each country in the Territory, [**]. With respect to countries [**],
MediGene shall use its commercially reasonable efforts to obtain and maintain
Governmental Approvals for those Product(s) MediGene or its sublicensees elects
to market in such countries. Subject to Section 2.02(a), Atrix shall, at
MediGene's expense, provide MediGene and its sublicensees with commercially
reasonable assistance in respect of MediGene's and such sublicensee's
applications and maintenance of Governmental Approvals."

     5. Section 2.04 of the Agreement is hereby renumbered as Section 2.05.

     6. Section 3.02(d) of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "[**]".

     (i) With respect to countries that are part of the [**], MediGene shall be
     [**]. MediGene shall keep Atrix informed of all material activities
     regarding the launch, approval and Marketing of Product in such countries,
     notably of all applications for Marketing Authorizations, and of its intent
     to start Marketing and Distribution in such countries in order to allow
     Atrix sufficient time to reasonably comply with its obligations in respect
     of supply of Product under this Agreement.

     (ii) With respect to a country (A) that is part of [**], and (B) in which a
     Marketing Authorization is needed for launch of Product(s) but a Pricing
     and Reimbursement Approval is not reasonably required for the successful
     and financially sound launch as set out in Exhibit H (which Exhibit may be
     amended upon notice by MediGene if there is a change in Applicable Law),
     Section 3.02(d)(iv) shall apply, whereby the relevant date for

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<PAGE>

     the calculation of time in (iv) below ("Trigger") shall be [**].

     (iii) With respect to a country (A) that is part of the Territory [**], and
     (B) in which both a Marketing Authorization is needed and a Pricing and
     Reimbursement Approval is reasonably required for the successful and
     financially sound launch of Product(s) as set out in Exhibit H (which
     Exhibit may be amended upon notice by MediGene if there is a charge in
     Applicable Law), the following shall apply:

     (I) No later than [**] after notice of grant of the Marketing Authorization
and the Pricing and Reimbursement Approval in a country is received by MediGene,
MediGene shall in its sole discretion decide whether to launch (the "Positive
Launch Decision") or not to launch (the "Negative Launch Decision") such Product
in such country (the Positive Launch Decision and the Negative Launch Decision
hereinafter individually also being referred to as the "Launch Decision"), and
shall notify Atrix in writing of such Launch Decision. If Atrix has not received
a written notification of a Negative Launch Decision with respect to a Product
for a specific country within [**] after notice of grant of both the Marketing
Authorization and the Pricing and Reimbursement Approval in such country is
received by MediGene, MediGene shall be deemed to have notified Atrix of a
Positive Launch Decision with regard to such Product and such country on the
business day immediately following expiry of such [**] period. MediGene shall
make any Launch Decision by assessing, in good faith, the case for or against
launching the respective Product in the respective country, such assessment
taking into account the following: [**]. Where a Negative Launch Decision has
been notified to Atrix MediGene shall provide Atrix within [**] of the expiry of
the [**], and subject to obligations of confidentiality reasonably acceptable to
MediGene, copies of all relevant information and documents on which the Negative
Launch Decision was made.

     (II) In case of a Negative Launch Decision Atrix shall be entitled to
request that such Negative Launch Decision be assessed by an independent expert
Third Party appointed by MediGene and acceptable to Atrix (the "Independent
Assessor"), such request to be made in writing delivered to MediGene no later
than [**] after receipt of the respective Negative Launch Decision by Atrix. The
Independent Assessor shall assess the Negative Launch Decision of MediGene
within reasonable time and shall promptly and simultaneously notify Atrix and
MediGene of the result in writing of this assessment. The Independent Assessor
shall assess the Negative Launch Decision impartially having regard to and
considering the criteria referred to above under Section 3.02(d)(iii)(I).

     (III) If the Independent Assessor determines that the Negative Launch
Decision of MediGene is on balance correct, or if Atrix does not exercise its
right to request an assessment of the Negative Launch Decision by an Independent
Assessor within [**] after receipt of the Launch Decision by Atrix, then
MediGene shall no longer be obliged, but shall remain exclusively entitled, to
launch the respective Product in the respective country.

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<PAGE>

     (IV) In case of a Positive Launch Decision, Section 3.02(d)(iv) shall
apply, whereby the relevant date for the calculation of time in (iv) below
("Trigger") shall be the date the Positive Launch Decision is either made or
deemed to be made by MediGene.

     (V) If the Independent Assessor notifies MediGene of his determination that
the Negative Launch Decision of MediGene is not correct, Section 3.02(d)(iv)
shall apply, whereby the relevant date for the calculation of time in (iv) below
("Trigger") shall be the date of [**].

     (iv) If MediGene has not undertaken commercially reasonable efforts to
     begin Distribution and Marketing of the Product (A) in a Major Country
     within [**] following the Trigger, as defined above, for the Product in
     that Major Country and (B) in a Non-Major Country within [**] following the
     Trigger, as defined above, for the Product for that Non-Major Country;
     provided that in each case of (A) and (B) above Atrix and MediGene have
     available and have delivered (and YAMANOUCHI having ordered) Launch
     Quantities of the Product, then, and at any time such event occurs, and
     upon each such occurrence, the following shall occur with respect to that
     Product not so distributed and marketed, in that Major Country within such
     [**] or, as the case may be, in that Non-Major Country within such [**]:

     (I) Atrix shall have the right upon [**] written notice to MediGene to
terminate the Agreement with respect to that Product in that specific country
and, upon such termination, such country shall no longer be included in the
Territory for such Product, and

     (II) Atrix shall have the right to grant a license to a Third Party to
market and distribute that Product in such country, provided that the terms of
such license are no more favorable to the Third Party, in any material respect,
than those set forth in this Agreement, and subject to adjustments to reflect
the fact that the licensee under such licenses will not have the right to market
and distribute the Product in the entire Territory; and

     (III) MediGene shall, or shall procure that YAMANOUCHI and its sublicensees
will: (1) promptly transfer to Atrix the Marketing Authorizations, and other
Governmental Approvals where applicable, relating to such Product in such
country and (2) make any mandatory filings with Competent Authorities in respect
thereof, and (3) grant to Atrix an irrevocable, non-exclusive, royalty-free
license, with the right to sublicense, to use any Clinical Documentation to the
extent necessary and sufficient for Atrix, its Affiliates and sublicensees to
use the Governmental Approvals and to market and distribute such Product in such
country.

     (v) For the avoidance of doubt, notwithstanding the foregoing, MediGene
     shall in no event be entitled to unreasonably refrain from or delay any
     submission for any Marketing Authorization or Pricing and Reimbursement
     Approval for the Product(s).

     (vi) The rights and obligations under this Section 3.02(d) shall be
     cumulative with the other rights and obligations under this Agreement and
     shal1 not apply with respect to any

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<PAGE>

     country [**]."

     7. The following is hereby added to the Agreement as new Section 3.02(e):

     "(e) Sublicense to YAMANOUCHI. It is agreed that MediGene may grant a
sublicense under the Atrigel(R) Technology and the Atrix Marks to YAMANOUCHI
U.K. Limited ("YAMANOUCHI") in accordance with a Distribution, Sublicense and
Supply Agreement substantially in the form attached hereto as Exhibit I (the
"Sublicense"). Neither Party shall be entitled to terminate this Agreement under
Section 19.02(b) due to the other Party's failure to comply with the terms of
this Agreement if such failure is caused by a conflict between the terms and
conditions of the Sublicense and this Agreement that makes it impossible for
such Party to perform its obligations under this Agreement (the "Conflict");
provided that notwithstanding the foregoing, a Party's right to terminate this
Agreement pursuant to its terms and conditions if the other Party does not
comply with its financial obligations under this Agreement shall not be excluded
or otherwise affected by this provision. In the event that after the date of
execution of the Sublicense a Party determines that there is a Conflict, such
Party shall provide written notice of such occurrence to the other Party and the
Parties will attempt to negotiate in good faith an amendment to this Agreement
so that no such Conflict exists. If such amendment is not executed within thirty
(30) days following a Party's receipt of such notice the Parties will have all
of their respective rights and obligations under this Agreement, except for the
right to terminate this Agreement pursuant to Section 19.02(b); provided that
notwithstanding the foregoing, a Party's right to terminate this Agreement
pursuant to its terms and conditions if the other Party does not comply with its
financial obligations under this Agreement shall not be excluded or otherwise
affected by this provision.

     8. Section 3.03 of the Agreement is hereby renumbered as Section 3.03(a)
and the following is hereby added as a new Section 3.03(b):

     "(b) Without the prior written consent of Atrix, MediGene shall market and
distribute the Products in the Territory under the Atrix Marks. Notwithstanding
the foregoing, MediGene shall be entitled, without the consent of Atrix, to
market and distribute the Product under a YAMANOUCHI Trade Mark rather than an
Atrix Mark if an objection to the use of an Atrix Mark has been lawfully raised
by (i) a Competent Authority in the Territory; or (ii) a Third Party with
enforceable trade mark rights having seniority to those of the Atrix Marks."

     9. Section 3.04(b) of the Agreement is hereby deleted in its entirety and
the following are hereby added as Sections 3.04(b), 3.04(c), 3.04(d) and
3.04(e):

     "(b) All right, title and interest in and to any developments, inventions
or discoveries made in connection with any leuteinizing hormone releasing
hormone (LHRH) or a structurally related derivative or structurally related
analog thereof, whether agonist or antagonist, whether naturally-occurring or
synthetic, used for treatments outside the Field, which do not relate to the
Atrigel(R) Technology or the Product, but are specifically only made during and
as a direct result of either MediGene's or YAMANOUCHl's or other sublicensee's
work in connection with this

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<PAGE>

Agreement, shall be jointly owned by Atrix, MediGene, and YAMANOUCHI or the
applicable sublicensee, including any patentable inventions (the "Program
Technology").

     (c) Subject to Section 3.04(e), each of Atrix and MediGene grant to the
other and to YAMANOUCHI, and MediGene shall procure that YAMANOUCHI and any
other sublicensee, grants to Atrix a non-exclusive, irrevocable, worldwide,
royalty-free, perpetual license, including the right to grant sublicenses to
Affiliates, to make and use the Program Technology for all research purposes
(consistent with the purpose and intent of this Agreement) other than the sale
or manufacture for sale of products or processes; provided that if any Party
desires to provide a Third Party a sublicense to manufacture, use, market or
sell any product based on the Program Technology, then such Party shall grant to
the other Party a right of first negotiation according to Section 3.04(d) with
respect to such product.

     (d) For a period of thirty (30) days following the receipt of notice from
any Party (the "Notifying Party") of its intention to grant a sublicense as set
out in Section 3.04(c), the other Party(ies) (the "Notified Party") shall have
the first right to negotiate binding material terms for a definitive license
agreement for such a product. In the event (i) the Notified Party does not
determine within such thirty (30) day period to pursue a license for such a
product, or (ii) the Parties are unable to reach agreement on binding material
terms of such a license within such thirty (30) day period, or (iii) if the
Parties have reached agreement on binding material terms of such a license
within such thirty (30) day period, but are unable to enter into a definitive
agreement within ninety (90) days following the written notice from the
Notifying Party, which period may be extended upon the mutual agreement of the
Parties, the Notifying Party shall have no further obligation to the Notified
Party under this Section 3.04(d. If the Parties cannot agree to the terms of
such license, then the Notifying Party may enter into an agreement with a Third
Party, provided that the terms of the agreement are no more favorable to the
Notifying Party, in any material respect (individually or in the aggregate),
than those last proposed in writing by the Notified Party. The rights of
Notified Party under this Section 3.04(d) shall be limited to those countries in
the Territory for which Notified Party retains a license under this Agreement as
of the date written notice is received under this Section 3.04(d) by either
Party, as applicable. If Notifying Party enters into an agreement with a Third
Party under this Section 3.04(d), Notifying Party shall notify Notified Party of
this fact within four (4) weeks after the date the agreement is entered into.
Notified Party shall then have the right to appoint an appropriate independent
person, reasonably acceptable to Notifying Party, having sufficient experience
in licensing matters, which person shall execute a confidentiality agreement in
such form as is reasonably satisfactory to Notifying Party, to examine the terms
and conditions of such agreement to determine that the terms thereof are no more
favorable to Notifying Party, in any material respect (individually or in the
aggregate), than those last proposed in writing by Notified Party. Such
determination shall be made within six (6) weeks after the date Notifying Party
provides notice to Notified Party that it has entered into such an agreement
with a Third Party. In the event the terms are more favorable to Notifying Party
then the Notifying Party shall terminate the Third Party license immediately.

     (e) Any developments, inventions or discoveries made in connection with any
leutenizing hormone releasing hormone ("LHRH") or a structurally related
derivative or structurally related analog thereof, whether agonist or
antagonist, whether naturally-occurring or synthetic, used for treatments
outside the Field, which do not relate to the Atrigel@ Technology or the
Product, but which were made during and as a direct result of either MediGene's
or Atrix's work in

                                        7

<PAGE>

connection with the License ("Head-License Technology") shall be jointly owned
by Atrix, MediGene and YAMANOUCHI and will be subject to the obligations of
Sections 3.04, 11.01(c) and 11.02(b) as if it were included in the definition of
Program Technology and in respect of Sections 3.04, 11.0l(c) and 11.02(b),
subject to that certain Tripartite Agreement between Atrix, MediGene and
YAMANOUCHI dated as of the effective date of the Sublicense.

     (i) The definition of Party and Parties in this Section 3.04 shall include,
     where appropriate, Atrix, MediGene and YAMANOUCHI or other applicable
     sublicensee.

     (ii) Notified Party as defined under Section 3.04(d) shall be capable of
     being both singular and plural."

     10. Section 4.03 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "Section 4.03. MILESTONE PAYMENTS. MediGene shall pay to Atrix, as
licensing fees, the following milestone payments within thirty (30) days after
Atrix gives notice to MediGene of the occurrence of the specified milestone
event:

     (a) [**];

     (b) [**];

     (c) [**];

     (d) [**];

     (e) [**]; and

     (f) [**].

     (g) [**].

     (h) For the avoidance of doubt, the milestone payments referred to in this
Section 4.03 (a) to (g) shall be paid only once by MediGene."

     11. Sections 6.01(a) and 6.01(c) are hereby deleted in their entirety and
replaced with the following:

     "(a) MediGene agrees to use, and to procure that YAMANOUCHI or any other
sublicensees will use, commercially reasonable efforts to promote the sale,
marketing and distribution of the Product in the Territory, consistent with
accepted business practices devoting the same level of efforts as it devotes to
its own products of comparable market potential. "Comparable market potential"
shall be fairly determined by MediGene in good faith and shall be based upon
market size, price, present and future competition and general marketing
parameters. Each Party shall promptly advise the other Party, and MediGene will
ensure that YAMANOUCHI or any other sublicensees shall promptly advise the
Parties, of any issues that materially and adversely affect

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its ability to market the Product in the Territory. In such event, senior
executives of MediGene, YAMANOUCHI or any other sublicensees and Atrix shall
meet and in good faith discuss what actions should be taken in light of such
issues.

     (c) MediGene shall have the right to designate all packaging design and/or
trade dress for the marketing and distribution of the Product in the Territory.
Such packaging design and/or trade dress shall (i) for all Products name
MediGene, or its sublicensees if requested by MediGene, as the holder of the
Marketing Authorization, and shall (ii) be in compliance with the Packaging
Specifications and all Applicable Laws, and shall (iii) be subject to prior
approval by Atrix, such approval not being unreasonably withheld or delayed.
Atrix shall package and label the Product, the Units and the Demonstration
Samples in compliance with the Packaging Specifications and Applicable Laws.
Atrix, in consultation with MediGene, shall be responsible for assuring that
such packaging and labeling conform with all Applicable Laws, if any, of the FDA
for export of the Product and the Demonstration Samples into the Territory and
that the Units comply with the Packaging Specifications. Atrix, in consultation
with MediGene, shall also be responsible for assuring that packaging and
labeling comply with all Applicable Laws where such Product is to be distributed
for sale in the Territory. All additional incremental costs resulting from
changes to the Packaging Specifications made at the request of MediGene that are
not required to export or import the Product to countries in the Territory on a
country by country basis under Applicable Laws shall be borne by MediGene.

     Lead time to implementation of changes at Atrix's or Second Manufacturing
Source's manufacturing facility (as the case may be) shall not be more than four
(4) months after MediGene's approval of final designs."

     12. Section 6.01(f) of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "(f) Co-Promotional Activities of Atrix. When MediGene or YAMANOUCHI or any
other sublicensee for a Major Country decides to use a contract sales force to
promote Product on behalf of MediGene, YAMANOUCHI or any other sublicensee,
respectively, then MediGene will promptly inform Atrix of such decision. Atrix
will then have the right to bid within 20 days from receipt of MediGene's
decision, or YAMANOUCHl's or any other sub1icensee, respectively, decision to
provide the contract sales force support MediGene, or YAMANOUCHI or any other
sublicensee, wishes to use and Atrix and MediGene will, or MediGene shall
procure that YAMANOUCHI or any other sublicensee will, discuss such bid in good
faith. MediGene or YAMANOUCHI or any other sublicensee can decide in their sole
discretion whether or not to accept the bid."

     13. The following is inserted as new Section 6.02:

     "Section 6.02 A&S spending levels

     No later than [**] days prior to the expected date of the First Commercial
     Sale in any Major Country and prior to the commencement of each Financial
     Year thereafter, MediGene and Atrix shall agree on the Annual Performance
     Guidelines for the

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     succeeding Financial Year for the sale, marketing and distribution of the
     Product in the Territory. MediGene shall, and shall procure that YAMANOUCHI
     or any other sublicensee will, provide Atrix with a detailed proposal for
     the Annual Performance Guidelines no later than [**] days prior to the
     aforementioned expected date of First Commercial Sale. The Annual
     Performance Guidelines shall set forth the following on a
     Product-by-Product and country-by-country basis:

     (a) the required A&S spending levels for the year, which amounts shall be
determined in accordance with Section 16.04; and

     (b) the minimum sales targets for each Product in each country in the
Territory [**] with respect to each Major Country, or, with respect to non-Major
Countries in the Territory, on an aggregate basis for all such non-Major
Countries, both in number of Units and in aggregate Net Sales (the "Annual Sales
Targets") (collectively, the "Annual Performance Guidelines").

     MediGene agrees, and shall cause YAMANOUCHI or any other sublicensee to
     provide, that the Annual Performance Guidelines shall not be changed
     without the prior written consent of Atrix."

     14. Section 7.01 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "(a) Subject to the terms hereof and save as set out in Section 7.01(b),
     MediGene agrees to purchase exclusively from Atrix, and Atrix agrees to
     Manufacture for, and sell exclusively to MediGene during the Term of this
     Agreement, MediGene's total requirements for the Product and the
     Demonstration Samples in the Territory on the terms and conditions set
     forth herein. Subject to MediGene's prior written approval, such approval
     not to be unreasonably withheld, conditioned or delayed by MediGene, Atrix
     may subcontract any part of the Manufacturing Process for the Product and
     the Demonstration Samples to a Third Party provided: (i) the Product, the
     Demonstration Samples and the facilities continue to meet the requirements
     as defined in this Agreement, (ii) Atrix has obtained all required
     Governmental Approvals to subcontract any part of the Manufacturing Process
     for the Product to be sold in the Territory and (iii) the Third Party has
     obtained all required Governmental Approvals for the Manufacturing Process
     for the Product to be sold in the Territory. If subcontracting is initiated
     by Atrix or requested by the Competent Authorities for any Manufacturing
     Process for Product to be sold in the Territory, Atrix will bear the cost
     of validation and necessary stability work, as well as any other directly
     related costs.

     (b) Upon expiry of the [**]."

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     15. Section 7.02 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "Section 7.02. QUALITY ASSURANCE.

     (a) Atrix shall Manufacture the Product in accordance with the
     Specifications. Any modifications of the Specifications require Atrix's,
     MediGene's and YAMANOUCHI's written approval, which will not unreasonably
     be withheld or delayed. If MediGene or YAMANOUCHI should come to the
     conclusion that a modification is required, MediGene will, or will cause
     YAMANOUCHI to, submit a proposal for modification to Atrix. If Atrix or
     YAMANOUCHI, as applicable, disapproves, Atrix, MediGene and YAMANOUCHI will
     amicably determine the further measures to be taken and pending such
     determination provided that the amendment sought is mandatory pursuant to
     Applicable Laws or an order of a Competent Authority. Atrix shall consult
     with MediGene as to any proposed changes in the Specifications,
     Manufacturing Process, or in Atrix's quality assurance procedures which
     might render Atrix unable to supply Product in accordance with the terms of
     this Agreement, prior to making those changes, and obtain MediGene's prior,
     written consent thereto, which consent will not be unreasonably withheld,
     conditioned or delayed by MediGene. Atrix shall immediately notify MediGene
     in writing of any changes required by a Competent Authority in the
     Specifications or Atrix's quality assurance procedures that would render
     Atrix unable to supply the Product and/or Demonstration Samples in
     accordance with the terms of this Agreement. The Parties agree to develop
     and execute an appropriate action plan in such situation. Any additional
     costs or expenses shall be shared between the Parties in such proportion as
     is equal to each Party's relative fault in causing such change or changes
     to occur; provided, however, that if the Parties cannot reach an agreement
     in good faith as to the relative fault of each Party or if neither Party is
     at fault, such additional costs and expenses shall be borne equally by the
     Parties.

     (b) Notwithstanding the foregoing, the Parties have defined further
     responsibilities with regard to quality assurance in a separate Quality
     Assurance Manual effective as of May 28, 2003, which may be mutually
     amended by the Parties from time to time and which is attached to this
     Agreement as Exhibit J (the "Quality Assurances Manual")."

     16. The introductory paragraph of Section 7.03 of the Agreement is hereby
deleted in its entirety and replaced with the following:

     "Section 7.03. ATRIX'S DUTIES. Atrix covenants to Manufacture the Product
in accordance with the Specifications and Applicable Laws, and to furnish to
MediGene with every Shipment a written certificate of analysis and Certificate
of Compliance confirming that the Product conforms to the Specifications, and
was manufactured and tested in compliance with the Specifications, Applicable
Laws and recognized pharmaceutical rules. The Product may be subjected to
testing by MediGene at its designated facility in order to verify conformance of
the Product with the Specifications. In addition, Atrix shall:"

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<PAGE>

     17. The following is hereby added to the end of Section 7.06(a) as a new
sentence:

     "To the extent Atrix is unable to supply Product, [**]."

     18. Section 8.07 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "Section 8.07. FORECASTS AND ORDERS.

     (a) Not later than six (6) months following submission of the relevant NDA
     or other equivalent applicable regulatory filing on a country by country
     basis, MediGene will provide Atrix with a twelve (12) month forecast of
     MediGene's requirement of each Product, on a Product by Product basis,
     including Demonstration Samples, and on a country by country basis as
     follows (the "Initial Forecast"), unless agreed otherwise on a case by case
     basis in writing:

     (i) For the first twelve (12) month period covered by the Initial Forecast
for each Product, MediGene shall provide quarterly, no less than forty- five
(45) days prior to the beginning of each calendar quarter a further twelve month
forecast. Said requirements will be based on standard production planning
parameters including but not limited to sales forecasts, sales demand forecasts,
promotional forecasts, inventory requirements, and the like. The twelve (12)
month forecast will be stated in monthly requirements. The second two (2)
quarters of the twelve (12) month forecast will be total requirement by stock
keeping unit and will be stated as quarterly requirements. The first three (3)
months of the twelve (12) month forecast will be firm orders to purchase. The
second three (3) months will be allowed to be flexed from the previous forecast
by plus or minus [**] per month until fixed by the subsequent forecast; provided
that the aggregate adjustment from the quantity set forth in the previous
forecast for such three (3) month period shall not exceed [**] in aggregate
during that three (3) month period. [**].

     Notwithstanding the above, and in respect of the One Month Product and
Three Month Product in Germany only, MediGene will provide Atrix with the
Initial Forecast as soon as reasonably possible following the date of execution
of the Sublicense and Atrix will use reasonable efforts to fulfill purchase
orders contained in such Initial Forecast.

     (ii) After the first twelve (12) months MediGene will provide to Atrix a
rolling twelve (12) month forecast for each Product with the first three (3)
months of the rolling twelve (12) month forecast a firm order to purchase. Each
order in the rolling twelve (12) month forecast shall be provided monthly, no
less than twenty (20) days prior to the beginning of each month. All orders will
be for full batch quantities [**]. Notwithstanding the foregoing, for the first
twelve (12) months after launch of each Product the Parties agree to use
commercially reasonable efforts to cause each order to be for full batch
quantities, but acknowledge and accept that during such twelve (12) month period
orders may be for less than full batch quantities.

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     (b) It is understood that Atrix will not maintain Product or Demonstration
     Sample inventory in excess of the forecast, but will produce Product or
     Demonstration Sample upon receipt of that portion of MediGene's forecasts
     that constitute firm orders to purchase. The above periods whether fixed or
     flexible will be adjusted based upon existing lead times at time of start
     up.

     (c) MediGene agrees to purchase a sufficient amount of Product to enable
     MediGene to carry sufficient inventory to allow for fluctuations in sales
     demand so as to allow Atrix reasonable lead time to meet increased demand.
     Atrix will use commercially reasonable efforts to meet any increase in
     demand in excess of the allowed adjustment, but will not be obligated to do
     so beyond [**] of MediGene's forecast for the relevant twelve (12) month
     period subject to Section 7.06(c). All forecasts will be made by MediGene
     to Atrix in good faith based upon standard commercial parameters. From time
     to time after the Effective Date, the Parties shall consider whether, in
     light of market demand, manufacturing capacity, inventory levels and other
     pertinent factors, to revise the schedule for delivery of forecasts and, if
     appropriate, negotiate in good faith to revise such schedule.

     (d) The Launch Quantity of the Product when delivered to the common carrier
     shall not have an expiration date of less than [**] from the date of such
     delivery, provided (a) Product other than the Launch Quantity shall not
     have an expiration date of less than [**] once real time stability data is
     submitted by Atrix to the respective Competent Authority, and/or (b) as the
     Parties may otherwise agree in writing on a case by case basis.

     (e) In the event MediGene does not receive a Marketing Authorization in a
     specified country in the Territory, but Atrix nevertheless has Manufactured
     the Launch Quantity of the Product for sale in such country in the
     Territory, the Atrix Manufacturing Cost attributable to the Manufacture of
     the Launch Quantity for sale in such country shall be [**]."

     19. The following is hereby added to Section 10.04 of the Agreement as a
new Section 10.04(d):

     "(d) Notwithstanding the foregoing, the Parties have defined further
responsibilities with regard to pharmacovigilance in the Quality Assurance
Manual."

     20. Section 11.01 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "(a) Atrix shall, at Atrix's expense seek registration of, maintain,
enforce and protect the Atrix Marks in all countries in the Territory in respect
of the Product, and MediGene shall provide, and shall procure that its
sublicensees provide, at no cost or expense to MediGene and its sublicensees,
such assistance to Atrix as may be reasonably required in pursuance of such
protection by Atrix. In the event that Atrix desires to or does abandon one or
more of the Atrix

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Marks, or if Atrix declines responsibility for the maintenance of such rights,
Atrix shall provide reasonable prior written notice to MediGene in advance of
its intention to abandon or decline responsibility, and MediGene (or at request
of MediGene its sublicensees) shall have the right, but not the obligation, to
prepare, file, prosecute, and maintain any such rights and such rights shall be
transferred to MediGene (or its sublicensees if requested by MediGene).

     (b) Atrix shall, at Atrix's expense and to the extent commercially
reasonable, prosecute through to grant, maintain and protect the Atrigel Patent
Rights in full force and effect in all countries in the Territory where such
rights exist or could exist in the future. In the event that Atrix desires to or
does abandon one or more of the Atrigel Patent Rights, or if Atrix declines
responsibility for the maintenance of such rights, Atrix shall provide
reasonable prior written notice to MediGene in advance of its intention to
abandon or decline responsibility, and MediGene (or its sublicensees upon
request by MediGene) shall have the right, but not the obligation, to prepare,
file, prosecute, and maintain any such rights and such rights shall be
transferred to MediGene (or its sublicensees if requested by MediGene).

     (c) With regard to Section 3.04, Atrix, in its sole discretion, shall
determine whether or not to maintain and protect the Program Technology it
creates in accordance with Section 3.04, MediGene, in its sole discretion, shall
determine whether or not to maintain and protect the Program Technology it
creates in accordance with clause 3.04 and MediGene's sublicensees (if any) at
its sole discretion shall determine whether or not to maintain and protect the
Program Technology it creates in accordance with clause 3.04. Each Party, at the
reasonable expense of the creator, shall provide such assistance to the creator
as may be necessary to enable the creator of the Program Technology to maintain
the Program Technology. In the event that the creator of the Program Technology
does not wish to seek formal protection for or desires to or does abandon any
patent application or patent, or if such creator later declines responsibility
for such patent application or patent in respect of their Program Technology,
such creator shall provide reasonable prior written notice to the others of its
intention to abandon or decline responsibility, and the others shall have the
equal right at their own cost and expense, but not the obligation, to prepare,
file, prosecute, and maintain any such patent application or patent in respect
of such Program Technology and shall be entitled to the reasonable assistance
(at its own reasonable expense) of the creator. Notwithstanding who applies for
or maintains such protection the creator of the Program Technology shall not be
prevented from using such Program Technology pursuant to section 3.04(c).

     21. Section 11.02 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "(a) During the Term, each Party shall give prompt notice to the other of
any Third Party act which may infringe the Atrigel(R) Patent Rights or the Atrix
Marks in the Territory and shall cooperate with each other to terminate such
infringement without litigation. Atrix shall, at its sole expense, prosecute the
judicial or administrative proceedings against such Third Party infringement.
MediGene shall provide such assistance and cooperation to Atrix as may be
necessary to successfully prosecute any action against Third Party infringement
at Atrix's expense and may deduct the expenses thereof from any amounts payable
to Atrix under this Agreement.

     In the event Atrix fails to institute proceedings in the Territory against
any Third Party infringement of the Atrigel(R) Patent Rights and/or the Atrix
Marks within forty-five (45) days

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<PAGE>

after notice given by either Party to the other of said Third Party
infringement, MediGene (or with MediGene's consent its sublicensees) may take
such action as it deems appropriate, including without limitation, the filing of
a lawsuit against such Third Party. In such event Atrix will provide such
assistance and cooperation to MediGene and its sublicensees as may be necessary,
at MediGene's (respectively its sublicensees') expense, and MediGene may deduct
all costs and expenses of such actions incurred by MediGene against any amount
payable to Atrix under this Agreement, and MediGene and/or its sublicensees may
retain all amounts awarded in such action.

     (b) With respect to patented Program Technology and pursuant to Section
3.04(d), in the event any patent included in the Program Technology is infringed
by a Third Party, the Party (the "Enforcer") responsible for prosecution and
maintenance of the applicable Program Technology under Section 11.01(c) (subject
to Section 3.04) shall have the right to bring and control such action or
proceeding, using counsel reasonably acceptable to the Parties, and shall be
provided by the other Party(ies), at its own cost and expense, with such
assistance and cooperation as may be reasonably necessary to successfully
prosecute any action against such Third Party. In the event the Enforcer fails
to institute proceedings against any Third Party infringement of the Program
Technology within the earlier of (i) the time period required under Applicable
Laws or (ii) forty-five (45) days after notice given by either Party to the
other of said Third Party infringement, the other Party(s) may take such action
as it deems appropriate, including without limitation, the filing of a lawsuit
against such Third Party. In such event the Enforcer will provide such
assistance and cooperation to the other Party as may be necessary, at the other
Party's expense.

     (c) Neither Atrix nor MediGene may settle an action or proceeding against
an infringer related to the Program Technology, and MediGene may not settle an
action or proceeding against an infringer related to Atrigel(R) Technology, with
respect to an infringement without the written consent of the other Party. Such
consent shall not be unreasonably withheld or delayed, but may be withheld if
such settlement would materially and adversely affect the interest of such
Party, including Atrix's rights hereunder or Atrix's rights in the Atrigel(R)
Technology."

     22. Section 13.01 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "13.01 Atrix Co-Marketing Right Upon Failure to Achieve Sales Targets.
Subject always to Section 20.04 ("Force Majeure"), if during the [**] and in
each Financial Year thereafter, MediGene does not sell Units equal to at least
[**] of the Unit amount of the Annual Sales Targets in a country in the
Territory [**], the failure having been solely within MediGene's control, then
Atrix shall have the right and option, exercisable in its sole discretion, by
written notice to that effect delivered by Atrix to MediGene within sixty (60)
days after said event occurs, which written notice shall be forwarded by
MediGene to YAMANOUCHI without delay, to co-market the Product in each such
country in the Territory in which during the [**] and in each Financial Year
thereafter, MediGene does not sell Units equal to at least [**] of the Unit
amount of the Annual Sales Targets in that country.

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     If Atrix exercises its right to co-market the Product in such country in
the Territory the following shall occur, to the extent allowed by Applicable
Laws: (A) MediGene shall grant, and shall procure that YAMANOUCHI or any other
sublicensee grants subject to YAMANOUCHI's own rights under the Sublicense,
Atrix an irrevocable, exclusive, royalty free license, such that MediGene
retains its distribution and marketing rights under the Agreement and YAMANOUCHI
retains its distribution and marketing rights under the Sublicense, with the
right to sublicense, to market, advertise, promote, distribute, offer for sale,
sell and import the Product in such country in the Territory; (B) MediGene shall
grant, and shall procure that YAMANOUCHI and any other sublicensee grants, to
Atrix an irrevocable, non-exclusive, royalty-free license, with the right to
sublicense, to use the YAMANOUCHI Clinical Documentation (or similar
documentation of any other sublicensee), the YAMANOUCHI Results (or similar
documentation of any other sublicensee) the Marketing Authorizations and make
any required filings with the Competent Authorities, to the extent legally
permissible, in connection with such activities in that country; (C) Atrix will
be solely responsible for its expenses related to marketing of the Product in
such country in the Territory and Atrix will retain all revenues from Product
that it or its sublicensees sell in such country in the Territory; (D) Atrix
and/or its sublicensee shall only be entitled to market one additional brand of
the Product and Atrix and/or its sublicensee shall market the Product using a
different mark than the Atrix Marks used or associated with the Product in that
country in the Territory; (E) subject to and in compliance with all Applicable
Laws, Atrix will use commercially reasonable efforts to restrict the sale of
such Product by its sublicensees outside of said country in the Territory; and
(F) the powers of the Advisory Board will be deemed to be automatically
dissolved for the said country as of the date Atrix exercises its right to
co-market the Product in that said country.

     The rights and obligations under this Section 13.01 shall not apply with
respect to [**]"

     23. Sections 16.01 and 16.02 of the Agreement are hereby deleted in their
entirety and replaced with the following:

     "Section 16.01. Covenant Not To Launch Competitive Product. MediGene hereby
covenants and shall cause its Affiliates, and sublicensees to agree not to
out-license, commercialize, market, sell, distribute or have marketed, have sold
or have distributed any Competitive Product during the first [**] after the
effective date of the Sublicense in any country in the Territory in which
MediGene retains a license granted by Atrix under Article III. Notwithstanding
the foregoing, if during the first [**] after the effective date of the
Sublicense MediGene or any of its Affiliates or YAMANOUCHI or its sublicensees
acquires an entity or all or substantially all of the assets of an entity and
such entity distributes a Competitive Product or such assets include a
Competitive Product, MediGene or such Affiliate or YAMANOUCHI or such
sublicensee shall have [**] in which to divest itself of such Competitive
Product or to otherwise cease marketing, sales and distribution of such
Competitive Product, and MediGene shall not be in breach of this Section 16.01
if it or the Affiliate, YAMANOUCHI or sublicensee, as the case may be, so
divests or ceases marketing, sales and distribution within such [**] period.

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     Section 16.02. Limitation To The Territory.

     (a) MediGene covenants and agrees that during the Term of this Agreement it
will not, nor shall it permit its Affiliates or YAMANOUCHI or YAMANOUCHI's
Affiliate or its sublicensees, without the prior written authorization of Atrix,
to the extent allowed by Applicable Laws: (i) promote or actively solicit sale
of the Product or advertise the Product, in any country where MediGene or
YAMANOUCHI or its sublicensees does not have, or benefit from nor is entitled to
obtain pursuant to this Agreement a necessary Marketing Authorization or in any
country that is not part of the Territory; (ii) contact Competent Authorities
located outside the Territory about the Product, except as required by
Applicable Laws or as may be necessary or appropriate to exercise its
contractual rights or carry out its obligations as set forth in this Agreement.

     (b) To the extent Atrix exercises its rights to grant a license to a Third
Party in accordance with Section 3.02(d)(iv), Atrix covenants and agrees that it
will not, and shall use commercially reasonable efforts to ensure that such
Third Party does not, without the prior written authorization of MediGene, to
the extent allowed by Applicable Laws: (i) promote or actively solicit sale of
the Product or advertise the Product, in any country where Atrix does not have
the right to grant such license under Section 3.02(d)(iv) (the "Licensed
Territory"); (ii) allow a Third Party to purchase or cause to be purchased
Product which the Third Party has represented, directly or indirectly, as being
for the purpose of sale in the Licensed Territory for sale in the Territory but
outside the Licensed Territory; and (iii) knowingly sell or distribute for
resale the Product to a Third Party who intends to sell such Product in the
Territory but outside the Licensed Territory."

     24. Section 16.04 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "Section 16.04. A&S Spending Levels. MediGene covenants and agrees, and
shall procure that YAMANOUCHI and other sublicensees will covenant and agree,
that during the first [**] following the date of the First Commercial Sale of
the Product in a country in the Territory (the [**]), MediGene's, or
YAMANOUCHI's and other sublicensees annual A&S spending levels in that country
in the Territory (whereby in calculating such A&S spending levels of MediGene
the A&S expenditures of YAMANOUCHI and other sublicensees shall be included and
vice versa) shall be at least [**] portion of the Annual Sales Target of each
Product in a country in the Territory as set forth in the Annual Performance
Guidelines established each Financial Year in accordance with the Sublicense.
MediGene further covenants and agrees, and shall procure that YAMANOUCHI and
other sublicensees will covenant and agree, to maintain after such [**] annual
A&S spending levels in the Territory as set forth in the Annual Performance
Guidelines established each Financial Year in accordance with Section 5.06 of
the Sublicense.

     (a) MediGene shall provide that, and MediGene shall procure that YAMANOUCHI
and other sublicensees shall provide that if, in any given Financial Year, the
A&S spending levels are less than the minimum required A&S spending levels for
such year as set forth in the Annual Performance Guidelines, that MediGene shall
make up the difference by adding the amount of

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the shortfall for that year to the minimum A&S requirements for the current year
as set forth in the Annual Performance Guidelines and MediGene, shall satisfy
the revised minimum aggregate A&S expenditure amount in the current year.

     (b) If MediGene affirmatively determines to spend less than the A&S
commitment as set forth in this Section 16.04 during the current year or any
subsequent year as set forth in the Annual Performance Guidelines, MediGene
shall immediately notify, Atrix of such determination, whereupon Atrix shall
have the right, in its sole discretion, to elect whether to [**].

     (c) As an alternative to the obligations and liabilities under Sections
16.04(a) or (b), MediGene agrees, and shall procure that YAMANOUCHI and other
sublicensees shall agree, to use reasonable endeavours to make in each country
in the Territory [**]."

     25. Section 19.01 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "This Agreement shall commence as of the Effective Date and (i) in respect
of countries within the Territory, [**] shall expire on a country-by-country
basis on the date that the last applicable Atrigel(R) Patent Right with a Valid
Claim expires in such country in the Territory [**]. The period from the
Effective Date until expiration of this Agreement in accordance with the
foregoing provisions of this Section 19.01 is the "Term". In the event that
patent application number [**] has not been granted [**], this Agreement shall,
on MediGene's written notice, expire on [**]."

     26. Section 20.05 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "Section 20.05. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
USA, except that no conflicts of laws provision shall be applied to make the
laws of any other jurisdiction applicable to this Agreement. The Parties hereby
irrevocably submit to the exclusive jurisdiction of the courts located in New
York City, New York with respect to any dispute, claim or controversy regarding
this Agreement, the interpretation of this Agreement or the rights or
obligations of the Parties under this Agreement.

     27. Section 20.08 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     "Section 20.08. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be deemed to have been given
if delivered personally, mailed by certified mail (return receipt requested) or
sent by cable, telegram 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:

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<PAGE>

        If to Atrix:      Atrix Laboratories, Inc.
                          2579 Midpoint Drive
                          Fort Collins, CO 80525
                          Attn: Sean Moriarty
                                Vice President, Business Development and Counsel
                          Telephone: (970) 482-5868
                          Facsimile: (970) 482-9735

        Copies to:        Morrison & Foerster LLP
                          5200 Republic Plaza
                          370 17th Street
                          Denver, Colorado 80202-5638
                          Attn: Warren L. Troupe, Esq.
                          Telephone: (303) 592-2255
                          Facsimile: (303) 592-1510

        If to MediGene:   MediGene Aktiengesellschaft
                          Lochhamer Strasse 11
                          D-82152 Planegg/Martinsried
                          Germany
                          Attn: Dr. Claudius Wamlek
                          Vice President of Business Development
                          Telephone: 011-49-89-8565-2900
                          Facsimile: 011-49-89-8565-2920

     Notice so given shall be deemed given and received (i) if by international
mail on the seventh (7th) day after posting; (ii) by cable, telegram, telex or
personal delivery on the date of actual transmission, with evidence of
transmission acceptance, or (as the case may be) personal or other delivery; and
(iii) if by international courier, on the fourth (4th) business day following
the day such notice is delivered to the international courier service, or such
earlier delivery date as may be confirmed to the sender by such courier
service."

     28. Exhibits H, I and J attached to this Second Amendment are hereby added
to the Agreement as Exhibits H, I and J.

     29. Notwithstanding Section 6.01(e) of the Agreement or any other provision
to the contrary, during the term of the Sublicense the Advisory Board shall not
meet with respect to and shall not have the power to consider any issue for
which [**].

     30. Notwithstanding Sections 10.01 and 10.02 of the Agreement, during the
term of the Sublicense, Marketing Authorizations shall be governed by the
provisions of Section 9.01 of the Sublicense."

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<PAGE>

     31. MediGene agrees to provide to Atrix all notices or other information
that the Sublicense requires MediGene to provide to Atrix.

     32. This Second Amendment is expressly subject to and conditioned upon the
execution by YAMANOUCHI and MediGene of the Sublicense. The effective date of
this Second Amendment (the "Effective Date") shall be the effective date of the
Sublicense. The provisions of this Second Amendment shall automatically
terminate and become null and void, without any action by either Party,
effective upon the termination of the Sublicense. Upon such termination and
thereafter the provisions of the Agreement as in effect prior to this Second
Amendment shall be in full force and effect.

     33. Miscellaneous.

          (a) This Second Amendment and all rights under this Second Amendment
may not be assigned or transferred by either Party without the prior written
consent of the other Party.

          (b) All capitalized terms used and not otherwise defined in this
Second Amendment shall have the same meanings as set forth in the Agreement, or,
to the extent not defined in the Agreement or this Second Amendment, the
Sublicense.

          (c) Except as expressly modified by the terms of this Second
Amendment, the terms and provisions of the Agreement shall remain in full force
and effect as originally written.

          (d) This Second Amendment may be executed by the Parties in
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall constitute one and the same instrument, and all signatures
need not appear on any one counterpart. The Parties may execute this Second
Amendment by facsimile signature.

          (e) The Parties shall each perform such acts, execute and deliver such
instruments and documents and do all such other things as may be reasonably
necessary to accomplish the transactions contemplated by this Second Amendment.

          (f) Nothing in this Second Amendment shall be construed to make the
relationship of MediGene and Atrix herein a joint venture, association or
partnership or make the Parties agents of one another. The Parties are not
authorized to act as agents of one another as to any matter or to make any
representations to any third parties indicating or implying the existence of any
such agency relationship.

          (g) The Agreement and this Second Amendment constitutes the entire
agreement between the Parties relating to the subject matter hereof and
supersedes any and all previous agreements and understandings, whether written
or oral. No terms or provision of this Second Amendment shall be varied or
modified by any prior or subsequent statement, conduct or act of either of the
Parties, except only in the event that the Parties amend this Second Amendment
by written instruments specifically referring to and executed in the same manner
as this Second Amendment.

                                       20

<PAGE>

          (h) Each of MediGene and Atrix acknowledges that it has been
represented by counsel in the negotiation of the terms of this Second Amendment,
and that it has reviewed the terms of this Second Amendment with said counsel,
and that its decision to enter into this Second Amendment is based on the advice
of said counsel. Each of MediGene and Atrix further acknowledges that it is
executing this Second Amendment on a voluntary basis, and that it fully
understands its final and binding effect.

                                       21

<PAGE>

     IN WITNESS WHEREOF, the Parties have caused this Second Amendment to be
executed by their respective duly authorized representatives as of the Effective
Date,

                                      ATRIX LABORATORIES, INC.

                                      By: /s/ Michael R. Duncan
                                          ------------------------------------
                                      Name: Michael R. Duncan
                                      Title: Vice President and General Manager

                                      MEDIGENE AG

                                      By: /s/ Peter Heinrich
                                          ------------------------------------
                                      Name: Dr. Peter Heinrich
                                      Title: CEO

                                       22

<PAGE>

                  CONFIDENTIAL TREATMENT REQUESTED BY QLT INC.

                               THIRD AMENDMENT TO
                   COLLABORATION, LICENSE AND SUPPLY AGREEMENT

THIS THIRD AMENDMENT (the "Amendment") dated the 17th day of May, 2006 (the
"Effective Date").

BETWEEN:

          QLT USA, INC., a Delaware corporation having offices at 2579 Midpoint
          Drive, Fort Collins, Colorado, U.S.A., 80525

          ("QLT USA")

AND:

          MEDIGENE AG, a German corporation having offices at Lochhamer Strasse
          11, Planegg/Martinsried, Germany

          ("MEDIGENE")

WHEREAS:

A.   MediGene and QLT USA (formerly Atrix Laboratories, Inc.) entered into a
     Collaboration, License and Supply Agreement dated April 4, 2001 as amended
     by the First Amendment dated September 12, 2002 and by the Second Amendment
     dated December 22, 2003 (the "Agreement"), wherein QLT USA has licensed to
     MediGene certain rights to the Product (which includes the U.S. One Month
     Product, the U.S. Three Month Product, the U.S. Four Month Product and the
     U.S. Six Month Product (each as defined in the Agreement)) in the Territory
     (as defined in the Agreement); and

B.   The parties wish to amend the Agreement to simplify the transfer pricing of
     the Products, and to provide that MediGene retain and store the retention
     samples of the Product (as defined in the Agreement), rather than QLT USA,
     as currently provided, all on the terms and conditions set out in this
     Amendment.

NOW THEREFORE in consideration of the foregoing recitals and the mutual
covenants and agreements set out in this Amendment and other good and valuable
consideration, the sufficiency of which are acknowledged, the parties to this
Amendment agree as follows:

1.   INTERPRETATION

1.1  All capitalized terms used in this Amendment and not otherwise defined will
     have the meaning given to them in the Agreement.

1.2  Except as expressly amended by this Amendment, all other terms and
     conditions of the Agreement remain unchanged and in full force and effect.

                                        1

<PAGE>

2.   AMENDMENT

2.1  Effective as of the Effective Date, the Agreement is hereby amended as
     follows:

2.1.1 The definition of "Atrix", as used throughout the Agreement, shall refer
     to QLT U.S.A., Inc., a Delaware corporation having offices at 2579 Midpoint
     Drive, Fort Collins, Colorado, U.S.A., 80525

2.1.2 The definition of "Atrix Manufacturing Cost" is deleted in entirety and
     replaced with the following:

"Atrix Manufacturing Cost" means, with respect of each Unit of Product and with
respect to a given point in time, the actual cost of the Manufacture by Atrix of
such Product which have been incurred during Atrix's preceding fiscal year
(twelve months' period from January 1 through December 31) under a Manufacturing
Process, divided by the number of Units of such Product produced during such
twelve months' period. The actual cost of the Manufacture shall include the
related quality assurance and quality control activities as required by
Applicable Laws for the manufacture or sale of such Product in the respective
jurisdictions in the Territory (other than the costs set forth in Section 2.03),
which cost shall be comprised of the cost of goods produced as determined in
accordance with GAAP, and shall include direct labor, direct material, including
raw materials and packaging materials, and the allocable portion of the
manufacturing overhead of Atrix directly attributable to the Manufacture of such
Product, including the cost of those samples that is required to be retained by
Atrix, at its expense, under Applicable Laws for quality control to the extent
required in accordance with Section 7.03(b), but not including the cost of
samples shipped to and purchased by MediGene for retention in Europe for quality
control in accordance with Section 7.08. The allocable portion of the
manufacturing overhead shall be determined by taking the [**]. Atrix
Manufacturing Cost shall exclude selling, general and administrative, research
and development, and interest expenses and any and all debt service payments of
Atrix.

2.1.3 The following definition of "Fixed Price Period" is added to the
     definitions under Article I in alphabetical order:

"Fixed Price Period" means a fixed [**] time period. The first Fixed Price
Period for all Products shall commence on [**] followed by consecutive Fixed
Price Periods each commencing on the [**] of the commencing date of the
preceding Fixed Price Period.

2.1.4 Section 7.03(b) of the Agreement is deleted in entirety and replaced with
     the following:

"(b) if and only to the extent required by the applicable regulatory authorities
in the United States and/or Applicable Laws applicable to Atrix in the United
States, [**] a sample of each batch of Product for such period as required by
such Applicable Laws and such regulatory authorities;"

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<PAGE>

2.1.5 A new Section 7.08 is added and shall read as follows:

"Section 7.08 Sample Retention by MediGene. MediGene shall retain at its expense
a sample of each batch of Product for a period equal to such period as required
by Applicable Laws and Competent Authorities in the Territory. Atrix shall ship
to MediGene such retention samples of each batch of Product together with the
commercial lot that they were obtained from, and the retention samples shall be
clearly marked so as to identify them. Atrix shall include the retention samples
on the invoice for the shipment, and MediGene shall purchase such shipped
retention samples at the Atrix Manufacturing Price. The retained sample shall be
sufficient in size as required by Applicable Laws and to allow MediGene to
perform tests to determine whether or not the Product conforms to the
Specifications. The retained samples shall be kept under the same conditions as
those under which the Product is stored at MediGene's facilities."

2.1.6 Section 8.01 is deleted in its entirety and replaced with the following:

"Section 8.01. PURCHASE PRICE AND PAYMENT.

(a) Purchase Price. Atrix shall sell, and MediGene shall purchase, each Product
or Demonstration Sample at the following purchase prices, which prices shall be
fixed for the Fixed Price Period, and which may be adjusted at the end of each
Fixed Price Period pursuant to Section 8.02 (a) (each price referred to as
"Purchase Price"). Commencing effective [**] up to and including [**] the
Parties agree that the Purchase Prices for all Product ordered by MediGene
within such time period are set as follows:

U.S. One Month Product - [**] per Unit

U.S. Three Month Product - [**] per Unit

U.S. Four Month Product - [**] per Unit

U.S. Six Month Product - [**] per Unit

Demonstration Samples - [**] per Unit

(b) Payment. Atrix shall invoice MediGene at the time of each shipment for all
Product and Demonstration Samples shipped by Atrix to MediGene and payment shall
be due ten (10) days from the release of such shipment by MediGene's Qualified
Person, but in no event later than thirty (30) days from receipt of the
invoice."

2.1.7 Section 8.02(a) is deleted in its entirety and replaced with the
     following:

"(a) In the event that upon the last day of any Fixed Price Period for a Product
(the "Adjustment Date") the Atrix Manufacturing Cost for such Product determined
at such Adjustment Date differs from the last applicable Purchase Price for such
Product effective prior

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<PAGE>

to the Adjustment Date, the Purchase Price shall be adjusted as follows with
effect as of the date following the Adjustment Date: If the Atrix Manufacturing
Cost at the Adjustment Date is lower than the last effective Purchase Price, the
Purchase Price shall be decreased [**] of the difference between the Atrix
Manufacturing Cost and the last applicable Purchase Price. If the Atrix
Manufacturing Cost at the Adjustment Date is higher than the last effective
Purchase Price, the Purchase Price shall be increased by [**] of the difference
between the Atrix Manufacturing Cost and the last applicable Purchase Price. For
Example: If on [**] the Purchase Price for the U.S. One Month Product shall be
[**] and the Atrix Manufacturing Cost for such Product on [**] shall be [**] the
Purchase Price for such Product for the next Fixed Price Period from [**] shall
be [**]. If on [**] the Purchase Price for the U.S. One Month Product shall be
[**] and the Atrix Manufacturing Cost for such Product on such date shall be
[**] the Purchase Price for such Product for the next Fixed Price Period from
[**]. Atrix shall provide MediGene with such documentation as MediGene shall
reasonably request to verify the Atrix Manufacturing Cost for any Product
determined in connection with an adjustment of the Purchase Price pursuant to
this Section 8.02(a) and with a statement verifying the information and
certifying that the documentation and the information contained in the
documentation is true and correct."

2.1.8 Sections 8.02(b) is deleted in its entirety and replaced with the
     following:

          "(b) In the event of any dispute between the Parties related to the
     adjustment of the Purchase Price for a Product the dispute will be referred
     to the Chief Executive Officers of Atrix and MediGene for joint resolution,
     provided that if the Chief Executive Officers are unable to mutually agree
     within thirty (30) days from referral after good faith discussions, the
     dispute will be finally settled by a single arbitrator appointed pursuant
     to the rules of the American Arbitration Association in accordance with the
     provisions of its Commercial Arbitration Rules. The place of arbitration
     will be mutually agreed by the parties, acting reasonably. Each party will
     bear its own legal and travel costs, with administrative fees to be shared
     equally by the parties. The language to be used in the arbitration
     proceedings will be English.

          Until the dispute on the adjustment of the Purchase Price for a
     Product is resolved as set out above, MediGene shall pay for Product
     ordered from and after the end of the last expired Fixed Price Period the
     Purchase Price in effect for such Product prior to the disputed adjustment.
     If an adjusted Purchase Price is mutually agreed by the Parties or
     determined by the arbitrator, and such agreed or determined Purchase Price
     is greater or less than the Purchase Price actually paid by MediGene for
     such Product pursuant to the foregoing sentence, MediGene shall promptly
     pay to Atrix the difference upon receipt of an invoice from Atrix for such
     amount, or Atrix shall promptly reimburse MediGene for such difference, as
     the case may be.

          Notwithstanding the foregoing, commencing twelve (12) months from the
     date of the First Commercial Sale of each Product, on a Product by Product
     basis, in the event that the total increase results in an increased
     Purchase Price which becomes, in

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<PAGE>

     MediGene's sole judgment, commercially non-viable for a given Product in a
     given country in the Territory, MediGene shall have the right, in its sole
     discretion, to [**]:

               (i) [**];

               (ii) [**]; and

               (iii) [**].

3.   GENERAL

3.1  Marginal headings as used in this Amendment are for the convenience of
     reference only and do not form a part of this Amendment and are not to be
     used in the interpretation hereof.

3.2  This Agreement will enure to the benefit of and be binding upon the parties
     and their respective successors and permitted assigns.

3.3  This Agreement may be executed in counterparts with the same effect as if
     both parties had signed the same document. Both counterparts will be
     construed together and will constitute one and the same agreement. This
     Agreement may be executed by the parties and transmitted by facsimile
     transmission and if so executed and transmitted this Agreement will be for
     all purposes as effective as if the parties had delivered an executed
     original Agreement.

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<PAGE>

IN WITNESS WHEREOF, QLT USA and MediGene hereto have caused this Amendment to be
executed in duplicate by their duly authorized officers as of the Effective
Date.

QLT USA, INC.                           MEDIGENE AG

By: /s/ Michael Duncan                  By: /s/ Peter Heinrich
    ---------------------------------       ------------------------------------
Name: Michael Duncan                    Name: Dr. Peter Heinrich
Title: President                        Title: CEO

By: /s/ David Speights
    ---------------------------------
Name: David Speights
Title: Controller

By: /s/ Sean Moriarty
    ---------------------------------
Name: Sean Moriarty
Title: Corporate Counsel

                                        6<PAGE>

                                                                   EXHIBIT 10.35

                     SETTLEMENT, RELEASE AND PATENT LICENSE

     This Settlement, Release and Patent License Agreement (this "AGREEMENT") is
made as of February 9, 2007 ("EFFECTIVE DATE"), by and among Takeda
Pharmaceutical Company Limited, a Japanese corporation with its principal place
of business at 1-1 Doshomachi 4-Chome, Chuo-ku, Osaka, Japan 540-8645
("TAKEDA"), Wako Pure Chemical Industries, Ltd., a Japanese corporation with its
principal place of business at 1-2 Doshomachi 3-Chome, Chuo-ku, Osaka, Japan
540-8605 ("WAKO"), TAP Pharmaceutical Products Inc., a Delaware corporation with
its principal place of business at 675 N. Field Drive, Lake Forest, Illinois
("TAP"), and Abbott Laboratories, Limited - Laboratories Abbott, Limitee, a
corporation organized and existing under the Canadian Business Corporations Act
and having its principal place of business at Montreal, Quebec
("ABBOTT-CANADA"), on the one hand, and QLT USA, Inc., a Delaware corporation
with its principal place of business at 2579 Midpoint Drive, Fort Collins,
Colorado 80525 ("ATRIX") and Sanofi-Synthelabo, Inc., a Delaware corporation
with a principal place of business at 55 Corporate Boulevard, Bridgewater, NJ
08807 ("SANOFI"), on the other hand (collectively, the "PARTIES").

     WHEREAS, the Parties deem it to be in their best interests and to their
mutual advantage to settle their disputes on the terms and conditions set forth
in this Agreement, without admitting liability, in order to achieve certainty in
their business dealings and avoid the expense of litigation.

     NOW, THEREFORE, in view of the foregoing and for other good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

1. DEFINITIONS.

     1.1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:

          (a) "AFFILIATE" shall mean any Person that controls, is controlled by,
or is under common control with a Party to this Agreement. For purposes of this
definition, "control" shall mean (i) in the case of a corporate entity, direct
or indirect ownership of more than fifty percent (50%) of the securities having
the right to vote for the election of directors, and (ii) in the case of a
non-corporate entity, direct or indirect ownership of a majority of the equity
interests with the power to direct the management and policies of such
non-corporate entity. Notwithstanding the foregoing, in no event shall Abbott
Laboratories be considered an Affiliate of any of the Parties.

          (b) "CLAIMS" shall mean any and all claims, actions, causes of action,
demands, suits, proceedings, administrative proceedings, losses, damages, costs,
expenses, liabilities, charges, interest, penalties, fines and charges of
whatever nature (including costs of collection, attorneys' fees and other costs
of defense, costs of enforcing indemnification provisions, and expenses of
investigation), whether known or unknown.

          (c) "CONTROL" or "CONTROLLED," as to patent rights, shall mean
ownership of such patent right or the ability of a Person to grant a license, or
sublicense, or covenant not to sue under any such patent rights.

<PAGE>

          (d) "GOVERNMENTAL AUTHORITY" shall mean any nation, territory or
government (or union thereof), foreign, domestic or multinational, any state,
local or other political subdivision thereof, and any bureau, court, tribunal,
board, commission, department, agency or other Person exercising executive,
legislative, judicial, regulatory or administrative functions of government.

          (e) "LICENSOR" or "LICENSORS" shall mean any and each of Takeda, Wako,
TAP, and Abbott-Canada, collectively and individually.

          (f) "LITIGATION" shall mean, collectively, that certain lawsuit
captioned "TAP Pharmaceutical Products Inc., Takeda Chemical Industries, Ltd.
and Wako Pure Chemical Industries, Ltd. v. Atrix Laboratories, Inc. and
Sanofi-Synthelabo Inc.," No. 03-C-7822, United States District Court for the
Northern District of Illinois and the appeal pending therefrom captioned "TAP
Pharmaceutical Products Inc., Takeda Chemical Industries, Ltd. and Wako Pure
Chemical Industries, Ltd. v. Atrix Laboratories, Inc. and Sanofi-Synthelabo
Inc.," No. 2006-1258, United States Court of Appeals for the Federal Circuit.

          (g) "LITIGATION PARTY" or "LITIGATION PARTIES" shall mean any and each
of Atrix, Sanofi, Takeda, Wako, and TAP, collectively and individually.

          (h) "PARTY" shall mean any and each of Atrix, Sanofi, Takeda, Wako,
TAP, and Abbott-Canada, collectively and individually.

          (i) "PERSON" shall mean an individual, corporation, partnership,
limited partnership, limited liability company, unincorporated association,
trust, joint venture, union or other organization or entity, including a
Governmental Authority.

          (j) "RELEASED PARTY" OR "RELEASED PARTIES" shall mean any and each of
Atrix and Sanofi, collectively and individually.

          (k) "RELEASING PARTY" or "RELEASING PARTIES" shall mean any and each
of Takeda, Wako, TAP, and Abbott-Canada, collectively and individually.

          (l) "SUBJECT PRODUCT" or "SUBJECT PRODUCTS" shall mean (i) the
following products marketed or sold on or prior to the Effective Date by Atrix
or licensed by Atrix and sold by its Affiliates or licensees in the Territory on
or prior to the Effective Date: the Eligard(R) products (which contain
leuprolide acetate in 7.5 mg, 22.5 mg, 30 mg, and 45 mg dosages) and dental
products called Atridox(TM), Atrisorb Free Flow(TM), Atrisorb-D(TM) and
Doxyrobe(TM); and (ii) products that are the same as or have only non-colorable
(i.e. insubstantial or immaterial) differences from any of the foregoing
products.

          (m) "SUBJECT PRODUCT PATENT RIGHTS" shall mean any and all rights in
the following that are owned, licensed or Controlled by any of the Releasing
Parties, and that claim or cover the Subject Products (or the manufacture, use
or sale thereof), whether the following are existing as of the Effective Date or
thereafter: (i) patents in the Territory; (ii) patent applications in the
Territory, including provisional applications, and (iii) any patents issuing
therefrom and any divisionals, continuations, continuations-in-part, reissues,
re-examinations, extensions, and term extensions (under applicable patent law or
regulation or other law or regulation) in the Territory of any of the
above-described patents or patent applications.

                                       -2-

<PAGE>

          (n) "SUBLICENSEE" shall mean any Person, and their respective
sublicensees, to whom a sublicense is granted pursuant to Section 5.2.

          (o) "TERRITORY" shall mean the United States of America, its
territories and possessions including the Commonwealth of Puerto Rico, and
Canada.

     1.2. ADDITIONAL DEFINITIONS. Certain additional capitalized terms are
defined below in the body of this Agreement.

2. RELATIONSHIP OF AGREEMENT WITH MOTION TO DISMISS; STIPULATED ORDER OF
DISMISSAL.

     Forthwith after execution of this Agreement, the Litigation Parties will
jointly file a motion to dismiss (the "MOTION TO DISMISS") the appeal in the
case entitled "TAP Pharmaceutical Products Inc., Takeda Chemical Industries,
Ltd. and Wako Pure Chemical Industries, Ltd. v. Atrix Laboratories, Inc. and
Sanofi-Synthelabo Inc.," No. 2006-1258 in the U.S. Court of Appeals for the
Federal Circuit (the "Appeals Court") in the form of Exhibit A attached to this
Agreement. If the Appeals Court grants the Motion to Dismiss prior to issuing
any opinions on the merits of the appeal (including a ruling pursuant to Federal
Rule of Appellate Procedure 36), then the Litigation Parties shall, within three
business days after the Appeals Court grants the Motion to Dismiss, file a
Stipulated Order of Dismissal in the case captioned "TAP Pharmaceutical Products
Inc., Takeda Chemical Industries, Ltd. and Wako Pure Chemical Industries, Ltd.
v. Atrix Laboratories, Inc. and Sanofi-Synthelabo Inc.," No. 03-C-7822 in the
United States District Court for the Northern District of Illinois (the
"District Court"), in the form of Exhibit B attached to this Agreement, and make
other appropriate filings requesting the District Court -- and take all other
actions reasonably required -- to dismiss with prejudice all claims for relief
asserted by any Party against any other Party in the Litigation. If the District
Court dismisses case no. 03-C-7822 in accordance with the Stipulated Order of
Dismissal, (a) Atrix shall and the Releasing Parties shall instruct Patterson,
Belknap, Webb & Tyler to instruct the Escrow Agent (as that term is defined in
the Escrow Agreement dated June 8, 2006 between Atrix and JPMorgan Chase Bank,
N.V. (the "JP Morgan Escrow Agreement")) to deliver the Escrow Funds (as that
term is defined in the JP Morgan Escrow Agreement) to Atrix in accordance the
terms of the JP Morgan Escrow Agreement; and (b) Atrix and Sanofi shall pay
their respective shares of the Settlement Amount in accordance with Section 3.1.
If the Appellate Court denies the Motion to Dismiss or issues an opinion on the
merits of the appeal prior to granting the Motion to Dismiss, then this
Agreement shall automatically and immediately terminate, cease to have any force
and effect, and shall be deemed null and void and of no effect on a retroactive
basis.

3. MONETARY CONSIDERATION.

     3.1. PAYMENT BY ATRIX AND SANOFI. Subject to the conditions set forth in
Section 2, which are for the benefit of and may be waived by Atrix and Sanofi
jointly, (a) Atrix shall pay to TAP the amount of $112.5 million, and (b) Sanofi
shall pay to TAP the amount of $45 million (the amounts in (a) and (b), in the
aggregate being the "SETTLEMENT AMOUNT"), in each case, within three business
days after both of the following events occur: the Appeals Court grants the
Motion to Dismiss and the District Court dismisses case no. 03-C-7822 in
accordance with the Stipulated Order of Dismissal. All payments shall be made in
United States Dollars. Atrix and Sanofi shall deposit their respective share of
the Settlement Amount with their respective legal counsel on the Effective Date
to be held in escrow on behalf of such Parties for payment to TAP in accordance

                                       -3-

<PAGE>

with this Agreement. The Settlement Amount shall be paid to TAP by wire transfer
of immediately available funds to an account previously designated by TAP to
Atrix and Sanofi in writing and TAP shall apportion the Settlement Amount among
the other Releasing Parties, if any apportionment is to be made. Payment of the
Settlement Amount to TAP shall constitute full payment of any portion of the
Settlement Amount to the other Releasing Parties entitled thereto. TAP
represents that it will comply with any applicable United States federal, state
or local withholding tax obligations with respect to such payments, if any, that
TAP makes to the other Releasing Parties. TAP acknowledges that, as between TAP
on the one hand and Atrix and Sanofi on the other hand, TAP assumes full
responsibility to fulfill any withholding tax obligations with respect to the
Settlement Amount. The Settlement Amount, once paid, is not refundable.

     3.2. NO OTHER FUNDS TRANSFER. The Settlement Amount represents full and
complete payment for all of the rights and releases granted to Atrix, Sanofi and
any Atrix and Sanofi Releasees (as defined in Section 4.1) under this Agreement,
and neither Atrix, Sanofi nor any Atrix and Sanofi Releasee shall be under any
obligation to pay any additional or further amounts to any Releasing Party under
this Agreement.

     3.3. TAXES. If the United States Internal Revenue Service or any state or
local taxing authority within the United States imposes on Atrix or Sanofi any
withholding tax on any portion of the Settlement Amount under the Internal
Revenue Code of 1986, as amended or the Treasury regulations thereunder, TAP
shall indemnify and hold harmless Atrix and Sanofi for the amount of such
withholding tax, plus any interest, penalties or additions to tax related
thereto.

4. RELEASES, COVENANTS NOT TO SUE, AND DISMISSALS.

     4.1. RELEASES BY EACH RELEASING PARTY. Upon full payment of the Settlement
Amount, each Releasing Party, each acting on behalf of itself and its respective
predecessors, successors, and assigns, does hereby now and shall forever release
and discharge Atrix and Sanofi, and their predecessors, successors, assigns and
Affiliates, and each of their respective current and former officers, directors,
employees, agents, attorneys, representatives, distributors, resellers,
licensees, direct or indirect customers and contract manufacturers (collectively
and individually, "ATRIX RELEASEES" and "SANOFI RELEASEES"), from and against
(a) any and all Claims arising under, related to, or connected with any Subject
Product Patent Rights in the Territory with respect to the period before the
Effective Date, (b) any and all Claims raised in the Litigation, including but
not limited to any requests in the Litigation to recover damages, fees or
expenses due for alleged infringement of the Subject Product Patent Rights, or
any requests to recover attorneys' fees or costs in connection with the
Litigation, (c) any and all Claims arising out of or related to actions taken or
statements made concerning or in connection with the Litigation in the
Territory, (d) any and all matters which could have been raised (whether or not
due to compulsory counterclaim requirements) in, or as a result of, the
Litigation in the Territory; and (e) any and all Claims, arising during the
period before the Effective Date, related to allegations that the Subject
Products (or any aspect thereof for use in the Subject Products) infringe any
Subject Product Patent Rights Controlled by a Releasing Party in the Territory.
Releasing Parties, acting jointly and severally, represent and warrant, as of
the Effective Date, to Atrix and Sanofi that they possess and Control (and have
always possessed and Controlled) the exclusive right to sue for infringement or
misappropriation of the Subject Product Patent Rights in the Territory and that
no other Person has ever had the right to recover damages for infringement or
misappropriation of any Subject Product Patent Rights in the Territory.

                                       -4-

<PAGE>

     4.2. RELEASES BY ATRIX AND SANOFI. Upon full payment of the Settlement
Amount, Atrix and Sanofi, each acting on behalf of itself and its respective
predecessors, successors and assigns, does hereby now and shall forever release
and discharge the Releasing Parties, and each of their respective predecessors,
successors, assigns and Affiliates, and each of their respective current and
former officers, directors, employees, agents, attorneys, representatives,
distributors, resellers, licensees, and direct or indirect customers
(collectively and individually, "COLLECTIVE TAP RELEASEES"), from and against
(a) any and all Claims raised in the Litigation, including but not limited to
any Claim that U.S. Patent No. 4,728,721 is invalid or unenforceable in the
Territory or should be reexamined or revoked, any Claim that any Releasing Party
wrongfully enforced or committed patent misuse with respect to U.S. Patent No.
4,728,721 in the Territory or any claim to recover attorneys' fees or costs in
connection with the Litigation, (b) any and all Claims arising out of or related
to actions taken or statements made concerning or in connection with the
Litigation in the Territory, (c) any and all matters which could have been
raised (whether or not due to compulsory counterclaim requirements) in, or as a
result of, the Litigation in the Territory, and (d) any and all Claims arising
during the period before the Effective Date that U.S. Patent No. 4,728,721 is
invalid or unenforceable or should be re-examined, opposed, or revoked in the
Territory and/or any and all Claims arising during the period before the
Effective Date that any Releasing Party wrongfully enforced or committed patent
misuse with respect to U.S. Patent No. 4,728,721 in the Territory.

     4.3. COVENANTS NOT TO SUE. No Atrix Releasee or Sanofi Releasee shall now
or at any time in the future initiate any arbitration, lawsuit or other
proceeding asserting (or otherwise assert, directly or through any third party)
any Claim released pursuant to this Agreement. No Collective TAP Releasee shall
now or at any time in the future initiate any arbitration, lawsuit or other
proceeding asserting (or otherwise assert, directly or through any third party)
(a) any Claim released pursuant to this Agreement, or (b) that the Subject
Products infringe any Subject Product Patent Rights Controlled by any Collective
TAP Releasee in the Territory, provided that nothing shall be construed to
release Atrix and Sanofi from their respective obligations to pay their
respective share of the Settlement Amount in accordance with Section 3.1 hereof.
If any Collective TAP Releasee shall breach any obligation set forth in this
Section 4.3, the breaching Party (on behalf of itself and/or its respective
Collective TAP Releasee) shall indemnify each Atrix and Sanofi Releasee, and
defend and hold each such Atrix and Sanofi Releasee harmless, from and against
Claims arising out of or related to such breach. If any Atrix Releasee shall
breach any obligation set forth in this Section 4.3, Atrix shall indemnify each
such Collective TAP Releasee, and defend and hold each such Collective TAP
Releasee harmless, from and against any Claims arising out of or related to such
breach. If any Sanofi Releasee shall breach any obligation set forth in this
Section 4.3, Sanofi shall indemnify each such Collective TAP Releasee, and
defend and hold each such Collective TAP Releasee harmless, from and against any
Claims arising out of or related to such breach. This Section 4.3 will be fully
enforceable in every respect, at law or in equity, by any non-Party Collective
TAP Releasee or non-Party Atrix or Sanofi Releasee as an intended third party
beneficiary hereunder. For purposes of clarification, nothing in this Section 4
shall prohibit a Party in any way from bringing claims or counterclaims or
instituting judicial, administrative or other legal proceedings outside the
Territory, including but not limited to patent opposition or other proceedings
in patent offices outside of the Territory.

     4.4. RETAINED RIGHTS. Notwithstanding anything to the contrary herein,
nothing in Sections 4.2 and 4.3 shall prohibit or restrict any Atrix Releasee or
Sanofi Releasee from (a)

                                       -5-

<PAGE>

raising any defenses or counterclaims (including claims of invalidity or
non-enforceability) in connection with any action, suit or proceeding brought
against such Atrix or Sanofi Releasee for infringement of any Subject Product
Patent Rights (or any other patent rights), or (b) instituting judicial,
administrative or other legal proceedings within the Territory or outside the
Territory challenging the validity or enforceability of, or asserting the
noninfringement of, any Subject Product Patent Rights (or any other patent
rights) or otherwise claiming that any such patent rights should be re-examined,
opposed, or revoked in the Territory.

5. LICENSES.

     5.1. LICENSE GRANT TO ATRIX AND SANOFI. Upon full payment of the Settlement
Amount, each Licensor hereby grants to Atrix and its Affiliates and Sanofi and
its Affiliates a non-exclusive, perpetual, irrevocable, fully paid-up,
royalty-free license under the Subject Product Patent Rights to use, make, have
made, sell, have sold, offer for sale, import and export, the Subject Products
in the Territory, and such license shall be effective retroactive to the
Effective Date. Such license shall be sublicensable by Atrix, Sanofi, or their
Affiliates and their respective Sublicensees in accordance with Section 5.2. For
the avoidance of doubt, the foregoing license includes the right in the
Territory to make, have made, import and use components or ingredients of the
Subject Products for inclusion in the Subject Products. By way of clarification,
Licensors do not grant any express or implied licenses or other rights to Atrix
and its Affiliates or Sanofi and its Affiliates outside of the Territory;
provided, however, that, for the avoidance of doubt, the manufacture, use,
import and/or sale of any Subject Products (or any aspect thereof for use in the
Subject Products) by or for Atrix, Sanofi or any of their Affiliates outside the
Territory would not constitute a breach or violation of this Agreement (even
though such activity is not authorized or licensed by this Agreement either),
and therefore, for example, the act of exporting Subject Products from the
Territory is not restricted by this Agreement (even though corresponding import,
use and/or sale of such products in countries outside the Territory following
such export is not licensed or otherwise authorized hereunder), and the
Releasing Parties are not waiving any rights they may have, if any, to assert
their rights (including but not limited to any patent rights outside the
Territory) against import, use and/or sale of such products in countries outside
the Territory.

     5.2. SUBLICENSES. Each Licensor hereby grants to Atrix, Sanofi, their
Affiliates and Sublicensees, the right to sublicense, through multiple levels,
in whole or in part, the rights set forth in Section 5.1 to any licensee of the
Subject Products in the Territory. Each such sublicense shall be subject to
Atrix's and Sanofi's rights and obligations under the terms of this Agreement.
Each Licensor acknowledges and agrees that Sanofi is acting as authorized
Sublicensee of Atrix under the license granted pursuant to this Section 5.2 and
is entitled to all the benefits of such license.

6. COMPROMISE AGREEMENT. This Agreement is a compromise and settlement of
disputed Claims and is not intended to be, nor shall it be construed as, an
admission of liability or wrongdoing by any Party, or of the validity or
invalidity, enforceability or unenforceability, or infringement or
non-infringement, of any Subject Product Patent Rights in the Territory.
Accordingly, neither this Agreement, nor anything contained in this Agreement,
or done or omitted in connection with this Agreement (whether or not this
Agreement expires or is terminated), is intended as, or shall be construed as,
or may be offered or used, either within the Territory or outside the Territory,
by any Collective TAP Releasee, Atrix Releasee or Sanofi

                                       -6-

<PAGE>

Releasee as, an admission, acknowledgement, implication or evidence of
infringement or the need for a license by any Party or its Affiliates, or an
admission, acknowledgement, implication or evidence of fault, liability or
wrongdoing by any Party or its Affiliates or an admission, acknowledgement,
implication or evidence, directly or indirectly, against any Party or its
Affiliates in any way or for any purpose in any judicial, administrative or
other legal proceedings, except solely for the purpose of enforcing this
Agreement.

7. PRESS RELEASE/PUBLIC FILINGS.

     7.1. PRESS RELEASE. One or more of the Parties may issue press releases
regarding this Agreement in the form attached as Exhibit C. Each Party agrees
that it will not make public statements regarding this Agreement that are
inconsistent with its press release.

     7.2. REQUIRED BY LAW. The Parties acknowledge that the terms of this
Agreement may be disclosed as required by law, including but not limited to the
Securities and Exchange Commission, listing requirements of any securities
exchange, or other such regulatory authorities.

8. MATTERS CONCERNING THE LICENSE AND THE AGREEMENT.

     8.1. TERM OF LICENSE GRANT. Upon the District Court signing and entering
the Stipulated Order of Dismissal and upon full payment of the Settlement
Amount, the rights granted in Section 5 shall take effect as of the Effective
Date and shall continue until the last to expire of the Subject Product Patent
Rights.

     8.2. SECTION 365(n). All licenses and rights granted under or pursuant to
this Agreement by Licensors to Atrix, its Affiliates, Sanofi, its Affiliates,
and their Sublicensees are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of Title 11, U.S. Code (the "BANKRUPTCY CODE"), licenses of
rights to "intellectual property" as defined in the Bankruptcy Code. The Parties
agree that Atrix and its Affiliates, Sanofi and its Affiliates, and their
Sublicensees shall retain and may fully exercise all of their rights and
elections under the Bankruptcy Code. Licensors agree during the term of this
Agreement to create and maintain current copies or, if not amenable to copying,
detailed descriptions or other appropriate embodiments, of all such intellectual
property. All rights, powers and remedies of Atrix and Sanofi provided under
this Section 8.2 are in addition to and not in substitution for any and all
other rights, powers and remedies now or hereafter existing at law or in equity
in the event of any such commencement of a bankruptcy proceeding by or against
any of the Licensors.

     8.3. FINAL AND BINDING AGREEMENT. This Agreement constitutes the entire
agreement among the Parties to this Agreement with respect to the subject matter
of this Agreement and supersedes all prior agreements and understandings,
whether written or oral, between or among the Parties, or any of the Parties, in
connection with such subject matter. Each Party agrees that it is not relying in
any manner on any statement, promise, representation or omission, whether oral
or written, express or implied, made by any Person, not specifically set forth
in this Agreement. Each Party agrees that it has made such investigation of all
matters pertaining to this Agreement that such Party deems necessary, including
but not limited to the Subject Products and any other products made, sold,
offered for sale, used, exported or imported by Atrix and Sanofi and their
Affiliates. Each Party acknowledges that, after execution of this Agreement,
such Party may discover facts different from or in addition to those which it
now knows or believes to be true.

                                       -7-

<PAGE>

Nevertheless, each Party agrees that this Agreement shall be and remain in full
force and effect in all respects, notwithstanding such different or additional
facts.

9. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. The Parties make the
representations and warranties set forth in this Section 9. In making the
representations and warranties that apply to any or all Parties, each Party is
making such representations and warranties as to itself and is not making such
representations and warranties jointly with any other Party.

     9.1. CORPORATE POWER. Each Party represents and warrants that (a) it has
the full legal right and power to enter into and perform the transactions
contemplated by this Agreement, without need for any consent, approval,
authorization, license or order of, or notice to or filing with, any
Governmental Authority or other Person; (b) the execution, delivery and
performance by such Party of this Agreement and the consummation by such Party
of the transactions contemplated hereby have been duly and validly authorized
and approved by all necessary corporate action of such Party, including approval
of this Agreement by the board of directors and stockholders of such Party, if
required; (c) this Agreement evidences the legal, valid and binding obligations
of such Party, enforceable against such Party in accordance with its terms; and
(d) this Agreement has been duly executed and delivered by such Party.

     9.2. DUE ORGANIZATION. Each Party represents and warrants that it is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is incorporated and that it has corporate power
to own its properties, to conduct its business as currently owned and conducted,
and to carry out the transactions contemplated by this Agreement.

     9.3. NO ASSIGNMENT OF CLAIMS. Each Party represents and warrants that (a)
it has not sold, assigned, conveyed, pledged, encumbered, or otherwise in any
way transferred to any Person any Claim released by such Party pursuant to this
Agreement and (b) it has not agreed to do any of the foregoing.

     9.4. NO OTHER LAWSUITS. Each Releasing Party represents and warrants that
as of the Effective Date it has not filed (or caused to be filed through a third
party), any legal or administrative proceeding of any kind or nature in the
Territory against Atrix, Sanofi or any other Atrix and Sanofi Releasee relating
to any Subject Product Patent Rights, except for the Litigation. Atrix and
Sanofi each represents and warrants that as of the Effective Date it has not
filed (or caused to be filed through a third party), any legal or administrative
proceeding of any kind or nature in the Territory against any Collective TAP
Releasee relating to any Subject Product Patent Rights, except for the
Litigation.

     9.5. RIGHT TO GRANT LICENSES. Each Licensor represents, warrants and
covenants to Atrix and Sanofi that (a) the Subject Product Patent Rights include
any and all rights of any kind in any and all issued or pending patents and/or
patent applications that are Controlled, as of the Effective Date, by the
Releasing Parties, their Affiliates, or any of them, in the Territory that claim
or cover any Subject Product (or any aspect thereof for use in the Subject
Products), or the manufacture, use or sale thereof; (b) Licensors own the
Subject Product Patent Rights that exist as of the Effective Date and have the
right to grant the rights, licenses and covenants set forth in this Agreement,
without the need for any licenses, releases, consents, approvals or immunities
not yet granted or obtained; and (c) Licensor has not previously granted and
shall not grant any rights in the Subject Product Patent Rights that are
inconsistent with the rights, licenses and covenants

                                       -8-

<PAGE>

granted to Atrix and Sanofi in this Agreement. Each of TAP and Abbott-Canada
represent, warrant and covenant to Atrix and Sanofi that Abbott Laboratories and
its affiliates (excluding Abbott-Canada) do not Control as of the Effective Date
any rights of any kind in any issued or pending patents and/or patent
applications in the Territory that claim or cover any aspect of the Subject
Products or for use in the Subject Products.

     9.6. INDEPENDENT ADVICE. Each Party represents and warrants that it has
received or had the opportunity to obtain independent legal advice from such
Party's attorney with respect to the rights and obligations arising from, and
the advisability of executing, this Agreement.

     9.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and covenants set forth in this Agreement shall survive the execution
and delivery of this Agreement indefinitely.

     9.8. NO OTHER REPRESENTATIONS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
THIS AGREEMENT, NONE OF THE PARTIES, EITHER INDIVIDUALLY OR COLLECTIVELY, MAKES
ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR
IMPLIED, TO ANY OTHER PARTY, AND EACH PARTY HEREBY DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

10. GENERAL PROVISIONS.

     10.1. AMENDMENTS. This Agreement may be amended, modified or supplemented
only by a written instrument executed by all of the Parties to this Agreement.

     10.2. SEVERABILITY. If any provision of this Agreement is found invalid or
unenforceable by a court of competent jurisdiction, the invalid or unenforceable
provision shall either be modified to make it legal and enforceable while
retaining as far as possible the original intent of the provision or, if that is
not possible, it shall be stricken. In either case, the remainder of the
Agreement shall continue in full force and effect.

     10.3. RELATIONSHIP OF THE PARTIES. This Agreement shall not constitute any
Releasing Party as the agent or legal representative of any Released Party for
any purpose whatsoever, and vice versa, and no Releasing Party shall hold itself
out as an agent of any Released Party, and vice versa. Except as provided in
Section 3.1, this Agreement creates no relationship of joint venturers,
partners, associates, employment or principal and agent between or among any
Parties, and all Parties are acting as independent contractors. Except as
provided in Section 3.1, neither any Releasing Party nor any Released Party is
granted herein any right or authority to, and no Party shall attempt to assume
or create any obligation or responsibility for or on behalf of any other Party.
Neither any Releasing Party nor any Released Party shall have any authority to
bind any other Party to any contract, whether of employment or otherwise.

     10.4. NO ELECTION OF REMEDIES. Except as otherwise specifically provided
herein, the rights and remedies accorded herein to Releasing Parties and Atrix
and Sanofi are cumulative and in addition to those provided by law, and may be
exercised separately, concurrently, or successively.

                                       -9-

<PAGE>

     10.5. NOTICES. Any notice, request, demand or other communication required
or permitted hereunder shall be in writing, shall reference this Agreement and
shall be: (a) delivered personally; (b) sent by facsimile, with written
confirmation of receipt; (c) sent by registered or certified mail, return
receipt requested, postage prepaid; or (d) sent by a private industry express
courier, with written confirmation of receipt. No notice shall be effective
until actually received. In each case notices shall be addressed to the intended
recipient as set forth below:

          (a)  if to Releasing Parties, to:

                    TAP Pharmaceutical Products Inc.
                    675 N. Field Drive
                    Lake Forest, IL 60045
                    Attention: Vice President and Chief Legal Counsel
                    Telephone No.: (847) 582-2704
                    Facsimile No.: (847) 582-5007

                    And with a required copy to:

                    Patterson Belknap Webb & Tyler
                    1333 Avenue of the Americas
                    New York, NY 10036
                    Attention: William F. Cavanaugh, Jr.
                    Telephone No: (212) 336-2793
                    Facsimile No.: (212) 336-2222

                    Takeda Pharmaceutical Company Limited
                    1-1 Doshomachi 4-Chome, Chuo-ku
                    Osaka, Japan, 540-8645
                    Attention: General Manager, Legal Department

                    With a required copy to:

                    Foley & Lardner
                    3000 K Street, NW
                    Suite 500
                    Washington, D.C. 20007
                    Attention: Michael Kaminski
                    Telephone No.: 202.672.5490
                    Facsimile No.: 202.672.5399

                    Wako Pure Chemical Industries, Ltd.
                    1-2 Doshomachi 3-Chome, Chuo-ku
                    Osaka, Japan, 540-8605
                    Attention: General Manager, Legal Department

                                      -10-

<PAGE>

                    With a required copy to:

                    Foley & Lardner
                    3000 K Street, NW
                    Suite 500
                    Washington, D.C. 20007
                    Attention: Michael Kaminski
                    Telephone No.: 202.672.5490
                    Facsimile No.: 202.672.5399

                    Abbott Laboratories Ltd.
                    8401 Trans Canada Highway
                    St. Laurent, Quebec CN H4S 1z1
                    Attention: President
                    Telephone: (514) 832-7000

          (b)  if to Atrix, to:

                    QLT USA, Inc.
                    2579 Midpoint Drive
                    Fort Collins, Colorado 80525
                    Attention: President
                    Telephone No.: (970) 482-5868
                    Facsimile No.: (970) 482-9735

               With a required copy to:

                    Morrison & Foerster LLP
                    5200 Republic Plaza
                    370 Seventeenth Street
                    Denver, CO 80202-5638
                    Attention: Warren L. Troupe, Esq.
                    Telephone No.: (303) 592-2255
                    Facsimile No.: (303) 592-1510

          (c)  if to Sanofi:

                    sanofi-aventis
                    55 Corporate Boulevard
                    Bridgewater, NJ 08807
                    Attention: John Spinnato
                    Vice President and General Counsel
                    Telephone No.: (908) 981-6800
                    Facsimile No.: (908) 981-6801

                                      -11-

<PAGE>

               with a required copy to:

                    Proskauer Rose LLP
                    1585 Broadway
                    New York, NY 10036-8299
                    Attention: Bruce E. Fader, Esq.
                    Telephone No.: (212) 969-3415
                    Facsimile No.: (212) 969-2900

               or at such other address for a Party as shall be specified by
               like notice.

     10.6. GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would result in the
application of laws of any jurisdiction other than those of the State of New
York. All claims or disputes arising under or with respect to this Agreement, or
with respect to the interpretation, performance, enforcement, or breach of this
Agreement, shall be resolved exclusively in the courts of the State of New York,
the courts of the United States in the Southern District of New York, and
appellate courts from any thereof and the Parties agree that the exclusive
jurisdiction and venue for resolving such claims and disputes shall reside in
such courts. Each Party consents that any such action or proceeding may be
brought in, and hereby submits to the jurisdiction of, such courts and waives
any objection or defense (including, without limitation any defense of
inconvenient forum or absence of jurisdiction) that it may now or hereafter have
to the venue of any such action or proceeding in any such court.

     10.7. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed
and delivered in any number of counterparts. When each Party has signed and
delivered at least one counterpart to all other Parties, all counterparts, taken
together, shall constitute one and the same agreement, which shall be binding
and effective on the Parties to this Agreement. Each counterpart shall be deemed
an original. Facsimile execution and delivery of this Agreement and any Exhibits
by any of the Parties shall be legal, valid and binding execution and delivery
of such document for all purposes.

     10.8. ASSIGNMENT. Without the consent of Atrix or Sanofi, Releasing Parties
may assign this Agreement to an Affiliate or in connection with any merger,
acquisition, reorganization, sale or transfer of substantially all of the assets
to which this Agreement relates. Notwithstanding the foregoing, any assignment
of this Agreement shall not relieve the Releasing Parties from the performance
of their obligations under this Agreement and for the avoidance of doubt, any
Subject Product Patent Rights that are assigned shall remain subject to the
applicable terms of this Agreement. Without the consent of Releasing Parties,
Atrix or Sanofi may assign this Agreement to an Affiliate or in connection with
any merger, acquisition, reorganization, sale or transfer of substantially all
of the assets to which this Agreement relates. Notwithstanding the foregoing,
any assignment of this Agreement shall not relieve Atrix or Sanofi from the
performance of their obligations under this Agreement. Subject to the foregoing,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and permitted assigns.

                                      -12-

<PAGE>

     10.9. INTERPRETATION. The recitals to this Agreement constitute an integral
part of this Agreement. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement. Because all Parties have participated in
drafting, reviewing, and editing the language of this Agreement, no presumption
for or against any Party arising out of drafting all or any part of this
contract shall be applied in any action whatsoever. Whenever the context may
require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural, and vice versa.

     10.10. LICENSE REGISTRATION AND RECORDAL. Atrix and Sanofi shall have the
right, at their sole cost and expense, to register, record and otherwise
document the license granted under this Agreement in any country in the
Territory. Licensors agree to take, at Atrix's or Sanofi's sole cost and
expense, all steps reasonably requested by Atrix or Sanofi, respectively,
including but not limited to executing a "short form" license, to effect the
foregoing registration, recordal or other documentation in any such country in
the Territory, and may record such short form license, but no short form license
shall in any way alter or otherwise affect the rights and obligations of the
Parties hereunder.

     10.11. COSTS. Each Party shall bear its own costs and expenses incurred in
connection with the Litigation and the negotiation and preparation of this
Agreement.

     10.12. WAIVER OF JURY TRIAL. The Parties each hereby irrevocably and
unconditionally waives all rights to trial by jury in any legal action,
proceeding or counterclaim with respect to any matter whatsoever arising out of
or in connection with or related to this Agreement or the enforcement thereof.

     IN WITNESS WHEREOF, the Parties have executed, or caused their duly
authorized representatives to execute, this Agreement under seal as of the date
first written above.

                                          TAKEDA PHARMACEUTICAL COMPANY LIMITED

                                          By: /s/ Hiroshi Akimoto
                                              ----------------------------------
                                              Hiroshi Akimoto, Ph. D.
                                          Title: Managing Director, Member of
                                                 the Board

                                          WAKO PURE CHEMICAL INDUSTRIES, LTD.

                                          By: /s/ Kazuo Kamisugi
                                              ----------------------------------
                                          Title: Director, Member of the Board
                                                 General Manager, Licensing and
                                                 I.P. Dept.

                                      -13-

<PAGE>

                                        TAP PHARMACEUTICAL PRODUCTS INC.

                                        By: /s/ Alan MacKenzie
                                            ----------------------------------
                                            Alan MacKenzie

                                        Title: President

                                        ABBOTT LABORATORIES, LIMITED -
                                        LABORATORIES ABBOTT, LIMITEE

                                        By: /s/ [ILLEGIBLE]
                                            ----------------------------------
                                        Title: President, General Manager

                                        QLT USA, INC.

                                        By: /s/ Sean F. Moriarty
                                            ----------------------------------
                                            Sean F. Moriarty, President

                                        SANOFI-SYNTHELABO INC.

                                        By: /s/ John M. Spinnato
                                            ----------------------------------
                                               John M. Spinnato
                                        Title: Vice President & General Counsel

                                    -14-

<PAGE>

                                    EXHIBIT A

                         FORM OF JOINT MOTION TO DISMISS

<PAGE>

                                    EXHIBIT B

             FORM OF STIPULATED ORDER OF DISMISSAL AND OTHER FILING

<PAGE>

                                    EXHIBIT C

                             Form of Press Releases

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