Document:

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                                                                    Exhibit 10.6

                             AVANIR PHARMACEUTICALS

                          RESTRICTED STOCK GRANT NOTICE

                          (2003 EQUITY INCENTIVE PLAN)

Avanir Pharmaceuticals (the "Company"), pursuant to its 2003 Equity Incentive
Plan (the "Plan"), hereby grants to the participant under the Plan (the
"Participant") the right to purchase such number of shares (the "Shares") of the
Company's Class A Common Stock, no par value (the "Common Stock"), set forth
below (the "Award"). This Award is subject to all of the terms and conditions as
set forth in this Restricted Stock Grant Notice (the "Grant Notice"), and in the
Restricted Stock Agreement, the Plan, the form of Assignment Separate from
Certificate and the form of Joint Escrow Instructions, all of which are attached
hereto and incorporated herein in their entirety.

Participant:

Date of Grant:

Vesting Commencement Date:

Number of Shares Subject to Award:

Purchase Price per Share:

Total Purchase Price:

Vesting Schedule:

Payment:

Additional Terms/Acknowledgements: The undersigned Participant acknowledges
receipt of, and understands and agrees to the terms and conditions of this Grant
Notice, the Restricted Stock Agreement, the Plan, the form of Assignment
Separate from Certificate and the form of Joint Escrow Instructions. Participant
further acknowledges that as of the Date of Grant, this Grant Notice, the
Restricted Stock Agreement, the Joint Escrow Instructions and the Plan set forth
the entire understanding between Participant and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements relating thereto, with the exception of other awards previously
granted and delivered to Participant under the Plan.

AVANIR PHARMACEUTICALS                      PARTICIPANT:

By: _____________________________           By: _____________________________
           Signature                                    Signature

Title:                                      Date:

_________________________________           _________________________________

Date:

_________________________________

<PAGE>

Attachment I: Restricted Stock Agreement

Attachment II: 2003 Equity Incentive Plan

Attachment III: Form of Assignment Separate from Certificate

Attachment IV: Form of Joint Escrow Instructions

Attachment V: Election under Section 83(b) of the Code

Attachment VI: Spousal Consent

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                                  ATTACHMENT I

                             AVANIR PHARMACEUTICALS
                           2003 EQUITY INCENTIVE PLAN
                           RESTRICTED STOCK AGREEMENT

      RESTRICTED STOCK AGREEMENT (the "Agreement"), dated ____________, 200_, by
and between [Name] ("Participant") and Avanir Pharmaceuticals, a California
corporation (the "Company").

                                    RECITALS

      WHEREAS, the Company has adopted the Avanir Pharmaceuticals 2003 Equity
Incentive Plan (the "Plan"), which provides for awards of restricted stock to
the Company's employees, Consultants and Directors; and

      WHEREAS, Participant is currently serving as an employee or Director of,
or Consultant to, the Company; and

      WHEREAS, the Company desires to issue to Participant, and Participant
desires to acquire from the Company, shares of Class A Common Stock, no par
value, of the Company (the "Common Stock"), pursuant to the provisions of the
Plan.

      NOW THEREFORE, in consideration of the foregoing, and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:

1.    DEFINITIONS.

      Capitalized terms not explicitly defined in this Agreement but defined in
the Plan shall have the same meanings ascribed to them in the Plan.

2.    GRANT OF AWARD.

      Pursuant to the terms of the Restricted Stock Grant Notice ("Grant
Notice") and this Agreement (collectively, the "Award"), the Company hereby
grants to Participant the right to acquire the number of shares of Common Stock
indicated in the Grant Notice (the "Shares").

3.    AGREEMENT TO PURCHASE.

      Participant hereby agrees to purchase from the Company, and the Company
hereby agrees to sell to Participant, the aggregate number of Shares of Common
Stock, at the specified Purchase Price per Share, each as set forth in the Grant
Notice. Participant may not purchase less than the aggregate number of Shares
specified in the Grant Notice.

4.    PAYMENT.

      Payment of the Total Purchase Price shall be made as follows:

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<TABLE>
<S>                                                            <C>
               Cash or check...............................    $__________
</TABLE>

5.    DELIVERY OF TOTAL PURCHASE PRICE AND DOCUMENTS.

      The purchase and sale of the Shares shall be consummated as follows:

      5.1 Participant may purchase the Shares by delivering the cash for the
Total Purchase Price referenced in the Grant Notice to the Secretary of the
Company, or to such other person as the Company may designate, during regular
business hours, on the date Participant executes the Grant Notice (or at such
other time and place as Participant and the Company may mutually agree upon in
writing), along with such additional documents as the Company may then require.

      5.2 Participant agrees to execute three copies of a blank Assignment
Separate from Certificate substantially in the form attached to the Grant Notice
as Attachment III and Joint Escrow Instructions substantially in the form
attached to the Grant Notice as Attachment IV and to deliver the same in
accordance with Section 9 below. Participant shall also deliver to the Company a
signed spousal consent substantially in the form attached hereto as Attachment
VI if he or she is married on the Date of the Grant set forth in the Grant
Notice.

6.    VESTING.

      Subject to the limitations contained herein, the Shares purchased by
Participant shall vest as provided in the Grant Notice, provided, however, that
vesting shall cease upon the Termination of Participant's service as an
employee, Director or Consultant.

7.    SECURITIES LAW COMPLIANCE.

      Notwithstanding anything to the contrary contained herein, Participant may
not purchase any Shares unless they are registered under the Securities Act and
approved for listing on the principal stock exchange on which the Common Stock
trades.

8.    RIGHT OF REACQUISITION.

      In the event of the Termination of Participant's service as an employee or
Director of, or a Consultant to, the Company, the Company shall have a right to
reacquire (the "Reacquisition Rights") the Shares received pursuant to an Award
that have not yet vested in accordance with the Vesting Schedule on the Grant
Notice (the "Unvested Shares"). The Company shall, simultaneously with
Participant's Termination of service, as an employee, Director or Consultant,
automatically reacquire all of the Unvested Shares for the original purchase
price thereof paid by the Participant unless the Company agrees to waive its
Reacquisition Rights to any or all of the Unvested Shares. Any such waiver shall
be exercised by the Company by written notice to Participant or his or her
representative (with a copy to the Escrow Agent) within 30 days after
Participant's Termination. If the Company does not waive its Reacquisition
Rights to any or all of the Unvested Shares, the Escrow Agent shall be notified
accordingly and instructed to return the Unvested Shares to the Company for
cancellation.

9.    ESCROW OF UNVESTED COMMON STOCK.

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      As security for the faithful performance of the terms of this Agreement
and to insure the availability for delivery of Participant's Common Stock upon
execution of the Reacquisition Rights herein provided for, Participant agrees,
concurrently herewith, to deliver to and deposit with the Secretary of the
Company or the Secretary's designee (the "Escrow Agent"), as Escrow Agent in
this transaction, the certificate or certificates evidencing the Shares and
three executed blank forms of Assignment Separate from Certificate in the form
attached to the Grant Notice as Attachment III. Such documents will be held by
the Escrow Agent and delivered by the Escrow Agent pursuant to the Joint Escrow
Instructions delivered to the Escrow Agent concurrently herewith.

10.   RIGHTS AS SHAREHOLDER.

      Subject to the provisions of this Agreement, Participant shall exercise
all rights and privileges of a shareholder of the Company with respect to the
Shares deposited in escrow. Participant shall be deemed to be the holder of the
Shares for purposes of receiving any dividends that may be paid with respect to
such Shares and for purposes of exercising any voting rights relating to such
Shares, even if some or all of the Shares have not yet vested and been released
from the Company's Reacquisition Rights.

11.   LIMITATIONS ON TRANSFER.

      In addition to any other limitation on transfer created by applicable
securities laws, Participant agrees not to sell, assign, hypothecate, donate,
encumber or otherwise dispose of any interest in the Shares except by will or by
the laws of descent and distribution while the Shares are subject to the
Reacquisition Rights.

12.   RESTRICTIVE LEGENDS.

      The stock certificates evidencing the Shares issued under the Award shall
bear appropriate legends determined by the Company.

13.   AWARD NOT A SERVICE CONTRACT.

      The Award is not an employment or service contract, and nothing in the
Award shall be deemed to create in any way whatsoever any obligation on the
Company or an Affiliate to continue Participant's employment or service. In
addition, nothing in the Award shall obligate the Company or an Affiliate, their
respective shareholders, Boards of Directors, officers or employees to continue
any relationship that Participant may have as an employee or Director of, or
Consultant to, the Company or an Affiliate.

14.   WITHHOLDING OBLIGATIONS.

      14.1 At the time the Award is granted, or at any time thereafter as
requested by the Company, Participant authorizes withholding from payroll and
any other amounts payable to him or her, and otherwise agrees to make adequate
provision for, any sums required to satisfy the federal, state, local and
foreign tax withholding obligations of the Company or an affiliate, if any,
which arise in connection with the Award.

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      14.2 Unless the tax withholding obligations of the Company or any
affiliate are satisfied, the Company shall have no obligation to issue a
certificate for any of the Shares or release any of the Shares from any escrow
provided for herein.

15.   SECTION 83(B) ELECTION.

      Participant hereby acknowledges that he or she has been informed that,
with respect to the grant of the Shares, an election may be filed by Participant
with the Internal Revenue Service, within 30 days of the Date of Grant, electing
pursuant to Section 83(b) of the Code to be taxed currently on the fair market
value of the unvested Shares on the Date of Grant. A form of such election is
attached hereto as Attachment V.

PARTICIPANT ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY AND NOT
THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN
IF PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON
PARTICIPANT'S BEHALF.

16.   REPRESENTATIONS.

      Participant has reviewed with his or her own tax advisors the federal,
state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Participant is relying solely on
such advisors and not on any statements or representations of the Company or any
of its agents. Participant understands that he or she (and not the Company)
shall be responsible for any tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.

17.   NOTICES.

      Any notices provided for in the Award or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by mail by the Company to Participant, five days after deposit
in the United States mail, postage prepaid, addressed to Participant at the last
address provided by Participant to the Company.

18.   SURVIVAL OF TERMS.

      This Agreement shall apply to and bind Participant and the Company and
their respective permitted assignees and transferees, heirs, legatees,
executors, administrators and legal successors.

19.   FAILURE TO ENFORCE NOT A WAIVER.

      The failure of the Company to enforce at any time any provision of this
Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.

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20.   AMENDMENTS.

      This Agreement may be amended or modified at any time only by an
instrument in writing signed by each of the parties hereto.

21.   AUTHORITY OF THE COMMITTEE.

      The Committee shall have full authority to interpret and construe the
terms of this Agreement. The determination of the Committee as to any such
matter of interpretation or construction shall be final, binding and conclusive

22.   MISCELLANEOUS.

      22.1 The rights and obligations of the Company under the Award shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns.

      22.2 Participant agrees upon request to execute any further documents or
instruments necessary or desirable in the sole determination of the Company to
carry out the purposes or intent of the Award.

      22.3 Participant acknowledges and agrees that he or she has reviewed the
Award in its entirety, has had an opportunity to obtain the advice of counsel
prior to executing and accepting the Award and fully understands all provisions
of the Award.

23.   GOVERNING PLAN DOCUMENT.

      The Award is subject to all the provisions of the Plan, the provisions of
which are hereby made a part of Participant's Award, and is further subject to
all interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. In the event of any
conflict between the provisions of the Award and those of the Plan, the
provisions of the Plan shall control.

      Participant represents that he or she has read this Agreement, the Grant
Notice and the Plan and is familiar with their terms and provisions. Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under this
Agreement.

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.

AVANIR PHARMACEUTICALS                           [PARTICIPANT'S NAME]

By: _____________________________                By: ___________________________
             Signature                                         Signature

Name: ___________________________

Title: __________________________

                 [SIGNATURE PAGE TO RESTRICTED STOCK AGREEMENT]

                                       6
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                                  ATTACHMENT II
                           2003 EQUITY INCENTIVE PLAN

<PAGE>

                                 ATTACHMENT III
                      ASSIGNMENT SEPARATE FROM CERTIFICATE

      For Value Received and pursuant to that certain Restricted Stock Grant
Notice and Restricted Stock Agreement (the "Award"), _____________ hereby sells,
assigns and transfers unto Avanir Pharmaceuticals, a California corporation
("Assignee") ________________________ (__________) shares of the Common Stock of
the Assignee, standing in the undersigned's name on the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint the Company's Secretary as attorney-in-fact
to transfer the said stock on the books of the within named Company with full
power of substitution in the premises. This Assignment may be used only in
accordance with and subject to the terms and conditions of the Award, in
connection with the reacquisition of shares of Common Stock of the Corporation
issued to the undersigned pursuant to the Award, and only to the extent that
such shares remain subject to the Corporation's Reacquisition Rights under the
Award.

Dated:_________________________

      Signature:________________

      __________________, Recipient

[Instruction: Please do not fill in any blanks other than the signature line.
The purpose of this Assignment is to enable execution of the Company's
Reacquisition Rights set forth in the Award without requiring additional
signatures on your part.]

<PAGE>

                                  ATTACHMENT IV
                            JOINT ESCROW INSTRUCTIONS

Date:_________________

Secretary
Avanir Pharmaceuticals
11388 Sorrento Valley Road
San Diego, CA 92121

Dear Sir/Madam:

      As Escrow Agent for both Avanir Pharmaceuticals, a California corporation
(the "Company"), and the undersigned recipient of stock of the Company
("Recipient"), you are hereby authorized and directed to hold the certificate or
certificates evidencing the shares (the "Shares") of the Company's Class A
Common Stock, no par value ("Common Stock"), granted under an Award issued
pursuant to the Company's 2003 Equity Inventive Plan (the "Plan") and the
documents delivered to you pursuant to that certain Restricted Stock Grant
Notice (the "Grant Notice"), dated _______________, 20___, and Restricted Stock
Agreement (the "Agreement") of the same date, in accordance with the following
instructions:

1. In the event Recipient's service as an employee or director of, or consultant
to, the Company is terminated, under circumstances set forth in Section 8 of the
Agreement, the Company or its assignee will deliver to Recipient and you a
written notice specifying that the certificate or certificates evidencing the
Shares shall be transferred to the Company for cancellation or further transfer
pursuant to any waiver of Reacquisition Rights pursuant to Section 8 of the
Agreement. Recipient and the Company hereby irrevocably authorize and direct you
to complete such transfer in accordance with the terms of such notice.

2. In order to complete the share transfer, you are specifically directed (a) to
date any forms of Assignments Separate from Certificate in your possession
necessary for the transfer, (b) to insert the number of Shares being transferred
in such forms, and (c) to deliver same, together with the certificate or
certificates evidencing the Shares to the Company.

3. Recipient irrevocably authorizes the Company to deposit with you any
certificates registered in his or her name evidencing the Shares and any
additions to and substitutions for the Shares as specified in the Grant Notice.
Recipient hereby irrevocably constitutes and appoints you as Recipient's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction herein contemplated.

4. This escrow shall terminate upon vesting of the Shares or upon the earlier
return of the Shares to the Company.

5. If at the time of termination of this escrow you have in your possession any
documents, securities, or other property belonging to Recipient, you shall
deliver all of same to Recipient or

<PAGE>

his/her permitted assigns or representatives and shall be discharged of all
further obligations hereunder.

6. Your duties hereunder may be altered, amended, modified or revoked only by a
writing signed by all of the parties hereto.

7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties or
their assignees. You shall not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while
acting in good faith and any act done or omitted by you pursuant to the advice
of your own attorneys shall be conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all warnings given
by any of the parties hereto or by any other person or corporation, excepting
only orders or process of courts of law, and are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case you obey
or comply with any such order, judgment or decree of any court, you shall not be
liable to any of the parties hereto or to any other person, firm or corporation
by reason of such compliance, notwithstanding any such order, judgment or decree
being subsequently reversed, modified, annulled, set aside, vacated or found to
have been entered without jurisdiction.

9. You shall not be liable in any respect on account of the identity, authority
or rights of the parties executing or delivering or purporting to execute or
deliver the Grant Notice or any documents or papers deposited or called for
hereunder.

10. You shall not be liable for the loss of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.

11. You shall be entitled to employ such legal counsel, including but not
limited to the Company's counsel, and other experts as you may deem necessary to
advise you in connection with your obligations hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation
therefor.

12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall
cease to be an employee of the Company or if you shall resign by written notice
to each party. In the event of any such termination, the Company may appoint any
officer or assistant officer of the Company as successor Escrow Agent and
Recipient hereby confirms the appointment of such successor or successors as his
attorney-in-fact and agent to the full extent of your appointment.

13. If you reasonably require other or further instruments in connection with
these Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

14. It is understood and agreed that should any dispute arise with respect to
the delivery and/or ownership or right of possession of the Shares, you may (but
are not obligated to) retain in

                                       2
<PAGE>

your possession without liability to anyone all or any part of such securities
until such dispute shall have been settled either by mutual written agreement of
the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

15. All of your costs and expenses, including without limitation attorneys fees
and disbursements and the fees and expenses of other advisors, incurred in
performing your duties as Escrow Agent hereunder shall be promptly paid by the
Company upon submission of appropriate documentation.

16. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in any
United States Post Box, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties hereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
(10) days' written notice to each of the other parties hereto:

  Company:         Avanir Pharmaceuticals
                   11388 Sorrento Valley Road
                   Suite 200
                   San Diego, CA 92121
                   Attn: Chief Financial Officer

  Recipient:       [Insert Recipient's Name]
                   Insert Address
                   Insert Address

  Escrow Agent:    Avanir Pharmaceuticals
                   11388 Sorrento Valley Road
                   Suite 200
                   San Diego, CA 92121
                   Attn: Secretary

17. By signing these Joint Escrow Instructions you become a party hereto only
for the purpose of said Joint Escrow Instructions; you do not become a party to
the Grant Notice.

18. All of your costs and expenses, including without limitation attorneys fees
and disbursements and the fees and expenses of other advisors, incurred in
performing your duties as Escrow Agent hereunder shall be promptly paid by the
Company upon submission of appropriate documentation.

                                       3
<PAGE>

19. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Grant Notice and these Joint Escrow Instructions in
whole or in part.

Very truly yours,

  AVANIR PHARMACEUTICALS                       RECIPIENT ______________________

  By: ____________________________             By: ____________________________

  Print Name:_____________________             Print Name:_____________________

  Title: _________________________             Title: _________________________

  ESCROW AGENT:___________________

  By:_____________________________

  Print Name:_____________________

  Title:__________________________

                                  ATTACHMENT V

                          ELECTION UNDER SECTION 83(B)
                      OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with taxpayer's receipt of the property described below:

1. The name address, taxpayer identification number and taxable year of the
undersigned are as follows:

NAME OF TAXPAYER: ________________________________________________________

NAME OF SPOUSE: __________________________________________________________

ADDRESS: _________________________________________________________________

IDENTIFICATION NO. OF TAXPAYER: __________________________________________

                                       4
<PAGE>

IDENTIFICATION NO. OF SPOUSE: ____________________________________________

TAXABLE YEAR: _______________________

2. The property with respect to which the election is made is described as
follows: _______ shares (the "Shares") of the Class A Common Stock, no par
value, of Avanir Pharmaceuticals (the "Company").

3. The date on which the property was transferred is: __________, 200_.

4. The property is subject to the following restrictions:

The Shares may not be transferred and are subject to forfeiture under the terms
of an agreement between the taxpayer and the Company. These restrictions lapse
upon the satisfaction of certain conditions in such agreement.

5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never lapse, of
such property is: $ ______________.

6. The amount paid for such property is: $ ______________.

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.

Dated: _________________, 200_ _______________________________
                                       Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated: _________________, 200_ _______________________________
                                      Spouse of Taxpayer

                                       5
<PAGE>

                                  ATTACHMENT VI
                                 SPOUSAL CONSENT

                                CONSENT OF SPOUSE

        I, _____________________, spouse of ____________________, have read and
hereby approve the Avanir Pharmaceuticals (the "Company") Restricted Stock Grant
Notice, dated _____________, and all attachments thereto (the "Agreement"). In
consideration of the granting of securities to my spouse as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement,
or any securities issued thereunder, under the community property laws or
similar laws relating to marital property in effect in our state of residence as
of the date of execution of the Agreement.

Dated:                                      Signature:
      _________________________________               __________________________<PAGE>
                                                                   EXHIBIT 10.81

(QLT INC. LOGO)               EMPLOYMENT AGREEMENT

       This Employment Agreement is entered into as of February 20, 2003

BETWEEN:

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

     ("QLT" or the "COMPANY")

AND:

     DR. MOHAMMAD AZAB, having an address of Suite 800, 1863 Alberni Street,
     Vancouver, British Columbia, V6G 3H8

     ("DR. AZAB").

WHEREAS:

A.   QLT is a world leader in the development and commercialization of
     proprietary pharmaceutical products for use in photodynamic therapy and has
     other active development programs ongoing in areas outside of photodynamic
     therapy;

B.   Dr. Azab is a senior executive officer of QLT;

C.   QLT has offered to Dr. Azab, and Dr. Azab has accepted, promotion to the
     position of Senior Vice President and Chief Medical Officer; and

D.   QLT and Dr. Azab wish to enter into this Agreement to set out the current
     terms and conditions of Dr. Azab's employment with QLT.

     NOW THEREFORE in consideration of $10.00, the promises made by each party
to the other as set out in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge and
agree, QLT and Dr. Azab agree as follows:

1.   POSITION AND DUTIES

1.1  POSITION - QLT will employ Dr. Azab in the position of Senior Vice
     President & Chief Medical Officer and Dr. Azab agrees to be employed by QLT
     in this position, subject to the terms and conditions of this Agreement.

1.2  DUTIES, REPORTING AND EFFORTS - In the performance of his duties as Senior
     Vice President & Chief Medical Officer, Dr. Azab shall:

     (a)  OVERALL RESPONSIBILITIES - Have overall responsibility for the
          development, implementation and coordination of the Company's Clinical
          drug development strategies, activities and programs, in accordance
          with the Company's business strategies and objectives, and serve as a
          member of the

                                       1
<PAGE>

          Company's Executive Committee to provide leadership and direction in
          respect of the implementation and development of the Company's overall
          business strategies and objectives;

     (b)  REPORT - Report, as and when required, to the President;

     (c)  BEST EFFORTS - Use his best efforts, industry and knowledge to improve
          and increase QLT's business and to ensure that QLT is at all times in
          compliance with applicable provincial, state, federal and other
          governing statutes, policies and regulations pertaining to QLT
          business, and its drug development activities in particular;

all as is more specifically set out in his Accountability Statement, as may be
amended from time to time by the Company acting reasonably.

2.   COMPENSATION

2.1  ANNUAL COMPENSATION - In return for his services under this Agreement, the
     Company agrees to pay or otherwise provide the following total annual
     compensation to Dr. Azab:

     (a)  BASE SALARY - A base salary in the amount of $290,000.00 (U.S.) in 24
          equal installments payable semi-monthly in arrears, subject to
          periodic increases at the discretion of the President and the Board.

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

          I.   Each plan's terms for eligibility,
          II.  Dr. Azab taking the necessary steps to ensure effective
               enrollment or registration under each plan, and
          III. Customary deductions of employee contributions for the premiums
               of each plan.

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

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

     (d)  VACATION - twenty-five days of paid vacation per year, as may be
          increased from time to time in accordance with QLT's standard vacation
          policy. As per the Company's Policy and Procedures Manual (as amended
          from time to time), unless agreed to in writing by the Company:

          I.   All vacation must be taken within one year of the year in which
               it is earned by Dr. Azab, and
          II.  Vacation entitlement shall not be cumulative from year to year.

          I.   RRSP CONTRIBUTIONS - If Dr. Azab makes a contribution to his
               registered retirement savings plan (the "RRSP"), QLT will make a
               matching contribution to the RRSP of up to 7% of Dr. Azab's
               annual base salary in effect for the tax year in respect of which
               the contribution has been

                                       2
<PAGE>

               made by Dr. Azab, to a maximum of 50% of the annual limit for
               Registered Retirement Savings Plans then in effect as established
               by Revenue Canada.

     (e)  CASH INCENTIVE COMPENSATION PLAN - Participation in the Cash Incentive
          Compensation Plan offered by QLT to its senior executives in
          accordance with the terms of such Plan, as amended from time to time
          by the Board. The amount of the payment granted, if any, is at the
          discretion of the Executive Compensation Committee of the Board. For
          2003 the target cash incentive compensation opportunity for Dr. Azab
          is 45% of Dr. Azab's annual base salary, the entitlement to which will
          be evaluated as to 80% based on the achievement by the Company of its
          corporate goals, and as to 20% based on the achievement by Dr. Azab of
          his individual goals.

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

3.   RESIGNATION

3.1  RESIGNATION - Dr. Azab may resign from his employment with QLT by giving
     QLT 60 days prior written notice (the "RESIGNATION NOTICE") of the
     effective date of his resignation. On receiving a Resignation Notice, QLT
     may elect to provide the following payments in lieu of notice to Dr. Azab
     and require him to leave the premises forthwith:

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

     (b)  BENEFITS - Except as set out below in this subparagraph 3.1(b), for
          the 60-day notice period, all employee benefit plan coverage enjoyed
          by Dr. Azab and his eligible dependents prior to the date of his
          Resignation Notice. Dr. Azab acknowledges and agrees that pension and
          short and long term disability plans provided through the Company will
          not be continued beyond the last day that Dr. Azab works at the
          Company's premises (the "LAST ACTIVE DAY").

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

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

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

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

     (a)  NO BONUS - Dr. Azab will have no entitlement to participate in the
          Company's Cash Incentive Compensation Plan for the year in which he
          resigns his employment with QLT. Any Cash Incentive Compensation in
          respect of the previous calendar year which has not been paid to Dr.
          Azab will become due and payable; and

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

                                       3
<PAGE>

     (c)  RRSP MATCHING CONTRIBUTION - Any matching RRSP contribution in respect
          of the previous tax year not yet paid to Dr. Azab will become due and
          payable upon his tendering evidence of his contribution, subject to
          the limits set out in subparagraph 2.1(e).

4.   RETIREMENT

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

     (a)  THIS AGREEMENT - Subject to the provisions of paragraph 10.5, both
          parties' rights and obligations under this Agreement will terminate
          without further notice or action by either party.

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

5.   TERMINATION

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

     TERMINATION OTHER THAN FOR CAUSE - QLT reserves the right to terminate Dr.
     Azab's employment at any time without reason. However, if QLT terminates
     Dr. Azab's employment for any reason other than for cause, then, except in
     the case of Dr. Azab becoming completely disabled (which is provided for in
     paragraph 5.7) and subject to the provisions set forth below, Dr. Azab
     shall be entitled to receive notice, pay and/or benefits (or any
     combination of notice, pay and/or benefits) as more particularly set out in
     paragraph 5.3.

5.2  SEVERANCE NOTICE AND PAY - In the event QLT terminates Dr. Azab's
     employment as set out in paragraph 5.2, Dr. Azab shall be entitled to:

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

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

          II.  One additional month's Severance Notice for each complete year of
               continuous employment after February 15, 1997;

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

     (b)  BENEFITS - Except as set out below, for 30 days after Dr. Azab's Last
          Active Day, all employee benefit plan coverage enjoyed by Dr. Azab and
          his dependents prior to the date of termination. Thereafter, and in
          lieu of employee benefit plan coverage, Dr. Azab shall receive
          compensation ("BENEFITS COMPENSATION") in the amount of 10% of his
          base salary for the balance of his Severance

                                       4
<PAGE>

          Notice period. Dr. Azab acknowledges and agrees that pension and short
          and long term disability plans provided through the Company will not
          be continued beyond Dr. Azab's Last Active Day.

     (c)  OUT PLACEMENT COUNSELING - In the event QLT terminates Dr. Azab's
          employment as set out in paragraph 5.2, in the year following
          termination, QLT will pay to an out placement counseling service (to
          be agreed to by Dr. Azab and QLT) a maximum of Cdn $5,000 for
          assistance rendered to Dr. Azab in seeking alternative employment.

     (d)  OTHER COMPENSATION - In the event QLT terminates Dr. Azab's employment
          as set out in paragraph 5.2, the parties further agree as follows:

          I.   The Company will reimburse (in accordance with the Company's
               Policy and Procedures Manual, as amended from time to time) Dr.
               Azab for all reasonable business related promotion, entertainment
               and/or travel expenses incurred by Dr. Azab prior to the date of
               termination, subject to the expense reimbursement provisions set
               out in subparagraph 2.1(c).

          II.  The Company will make a payment to Dr. Azab in respect of his
               accrued but unpaid vacation pay to the date of termination.

          The Company will make a prorated matching contribution to Dr. Azab's
          RRSP, the pro-ration to be with respect to the portion of the current
          calendar year worked by Dr. Azab and the contribution to be subject to
          the limits set out in subparagraph 2.1(e). Any matching RRSP
          contribution in respect of the previous tax year not yet paid to Dr.
          Azab will become due and payable upon his tendering evidence of his
          contribution, subject to the limits set out in subparagraph 2.1(e).

          III. The Company will make a prorated payment to Dr. Azab in respect
               of his entitlement to participate in the Company's Cash Incentive
               Compensation Plan, the pro-ration to be with respect to the
               portion of the current calendar year worked by Dr. Azab and the
               entitlement to be at the maximum level Dr. Azab would have
               otherwise been eligible to receive in the current calendar year.
               Any Cash Incentive Compensation in respect of the previous
               calendar year which has not been paid to Dr. Azab will become
               immediately due and payable.

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

5.3  ACKNOWLEDGEMENT - Dr. Azab acknowledges and agrees that in the event QLT
     terminates Dr. Azab's employment as set out in paragraph 5.2, in providing:

     (a) The Severance Notice or Severance Pay, or any combination thereof;
     (b) The Benefits Compensation;
     (c) Out placement counseling service as more particularly set out in
         subparagraph 5.3(c); and
     (d) The other compensation set out in subparagraph 5.3(d);

     The Company shall have no further obligations, statutory or otherwise, to
     Dr. Azab in respect of this Agreement and Dr. Azab's employment under this
     Agreement.

5.4  NO DUPLICATION - In the event that the Severance Pay provisions of this
     Agreement and the payment provisions of the Change in Control Agreement are
     both applicable, Dr. Azab agrees that he will give written notice to the
     Company with respect to which agreement he wishes to be paid out under and
     that he is not entitled to severance pay under both agreements.

5.5  TERMINATION DUE TO INABILITY TO ACT

                                       5
<PAGE>

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

          I.   For a period exceeding six consecutive months, or

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

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

     (b)  PAYMENTS - In the event of termination of Dr. Azab's employment with
          the Company pursuant to the provisions of this paragraph 5.6, the
          Company agrees to pay to Dr. Azab Severance Pay and Benefits
          Compensation as set out in paragraph 5.3 and in this situation:

          I.   While he is completely disabled Dr. Azab shall have no duty to
               mitigate the payments owing to him by looking for and accepting
               suitable alternative employment or contract(s) for service, and

          II.  If Dr. Azab ceases to be completely disabled, then the provisions
               of paragraph 5.3(c) (out placement counseling) shall apply.

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

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

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

     (b)  PAYMENT IN LIEU OF BENEFITS - In lieu of employee benefit coverage for
          his eligible dependents after his Date of Death, a payment in the
          amount of 10% of his annual base salary in effect at his Date of
          Death, which payment will be in addition to any payment due to Dr.
          Azab's beneficiary(ies) under the terms of any life insurance benefit
          provided by the Company.

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

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

     (e)  RRSP CONTRIBUTION - A prorated contribution to Dr. Azab's RRSP, the
          pro-ration to be with respect

                                       6
<PAGE>
          to the portion of the current calendar year worked by Dr. Azab and the
          contribution to be subject to the conditions set out in subparagraph
          2.1(e). Any matching RRSP contribution in respect of the previous tax
          year not yet paid to Dr. Azab will become due and payable upon his
          tendering evidence of his contribution, subject to the limits set out
          in subparagraph 2.1(e).

          (f) BONUS - A prorated payment to Dr. Azab in respect of his
          entitlement to participate in the Company's Cash Incentive
          Compensation Plan, the pro-ration to be with respect to the portion of
          the current calendar year worked by Dr. Azab and the entitlement to be
          at the maximum level Dr. Azab would have otherwise been eligible to
          receive in the current calendar year. Any Cash Incentive Compensation
          earned by Dr. Azab in respect of the previous calendar year which has
          not been paid will become immediately due and payable.

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

6.   CONFLICT OF INTEREST

6.1  AVOID CONFLICT OF INTEREST - Except as set out below, during the term of
     his employment with QLT, Dr. Azab agrees to conduct himself in accordance
     with the Company's Code of Ethics.

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

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

7.   CONFIDENTIALITY

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

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

     (a)  DISCLOSE - Except as required by law, disclose to any company, firm or
          person, other than QLT and its directors and officers, any of the
          private affairs of QLT or any Confidential Information of QLT; or

     (b)  USE - Use any Confidential Information that he may acquire with
          respect to QLT's affairs for his own purposes or for any purposes,
          other than those of the Company.

7.3  INTELLECTUAL PROPERTY RIGHTS

                                       7
<PAGE>

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

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

(c)  ADDITIONAL REQUIREMENTS - Dr. Azab agrees to:

     I.   Treat all information with respect to Inventions as Confidential
          Information.
     II.  Keep complete and accurate records of Inventions, which records shall
          be the property of QLT and copies of which records shall be maintained
          at the premises of QLT.
     III. Execute all assignments and other documents required to assign and
          transfer to QLT (or such other persons as QLT may direct) all right,
          title and interest in and to the Inventions and all other work of Dr.
          Azab in the course of his employment with the Company, and all
          writings, drawings, diagrams, photographs, pictures, plans, manuals,
          software and other materials, goodwill and ideas relating thereto,
          including, but not limited to, all rights to acquire in the name of
          QLT or its nominee(s) patents, registration of copyrights, design
          patents and registrations, trade marks and other forms of protection
          that may be available.
     IV.  Execute all documents and do all acts reasonably requested by QLT to
          give effect to this provision.

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

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

8.   POST-EMPLOYMENT RESTRICTIONS

8.1 NON-COMPETE - Dr. Azab agrees that, without the prior written consent of
QLT, which consent will not be unreasonably withheld, for a period of one year
following termination of his employment with the Company for any reason (by
resignation or otherwise), as measured from his Last Active Day, Dr. Azab shall
not directly or indirectly, own, manage, operate, join, control or participate
in the ownership, management, operation or control of, or be a director or an
employee of, or a consultant to, any business, firm or corporation that, as a
part of conducting its business, is in any way competitive with QLT with respect
to the development and/or commercialization and/or marketing of light-activated
pharmaceutical products for photodynamic therapy in the treatment of cancer,
opthalmic, or auto-immune disease anywhere in Canada, the United States or
Europe.

8.2 ADDITIONAL RESTRICTIONS - Dr. Azab agrees that, for a period of two years
following termination of his employment with the Company for any reason (by
resignation or otherwise), as measured from his Last

                                       8
<PAGE>

Active Day, he will not:

     (a) SOLICIT EMPLOYEES -
     (i)  directly or indirectly solicit any individual to leave QLT's
          employment for any reason or interfere in any other manner with the
          employment relationship existing between QLT and its current or
          prospective employees;
     (ii) directly or indirectly solicit for employment any employee that, to
          Dr. Azab's knowledge, QLT is, as at the Last Active Day, contractually
          restrained from soliciting for employment; nor

     (b) INTERFERE WITH BUSINESS RELATIONSHIPS - directly or indirectly induce
     or attempt to induce any supplier, consultant, distributor, licensee or
     other entity having a business relationship with QLT, or any of the
     employees of such entities, to cease doing business with QLT or in any way
     interfere with the existing business relationship between any such
     supplier, distributor, licensee or other business relation and QLT.

8.3 MINORITY SHARE INTERESTS ALLOWED - The parties agree that nothing contained
in paragraph 8.1 is intended to prohibit Dr. Azab from owning any minority
interest in any company where stock or shares are traded publicly.

9.   REMEDIES

9.1  IRREPARABLE DAMAGE - Dr. Azab acknowledges and agrees that:

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

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

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

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

10.  GENERAL MATTERS

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

10.2 INDEPENDENT LEGAL ADVICE - Dr. Azab acknowledges that he has obtained or
     had the opportunity to

                                       9
<PAGE>

     obtain independent legal advice with respect to this Agreement and all of
     its terms and conditions.

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

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

10.5 NOTICE - The parties agree that any notice or other communication required
     to be given under this Agreement shall be in writing and shall be delivered
     personally to the addresses set forth on page 1 of this Agreement, and in
     the case of notice to the Company, shall be addressed to the attention of
     the President.

     or to such other addresses and persons as may from time to time be notified
     in writing by the parties. Any notice delivered personally shall be deemed
     to have been given and received at the time of delivery.

10.6 SURVIVAL OF TERMS

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

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

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

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

10.8 ENTIRE AGREEMENT - The parties agree that the provisions contained in this
Agreement, Dr. Azab's Change in Control Letter Agreement and any Stock Option
Agreements between the Company and Dr. Azab constitute the entire agreement
between QLT and Dr. Azab with respect to the subject matters hereof, and
supersede all previous communications, understandings and agreements (whether
verbal or written) between QLT and Dr. Azab regarding the subject matters
hereof. To the extent that there is any conflict between the provisions of this
Agreement, Dr. Azab's Change in Control Letter Agreement and any Stock Option
Agreements between the Company and Dr. Azab, the following provisions shall
apply:

     (a)  CHANGE IN CONTROL - If the conflict is with respect to an event,
          entitlement or obligation in the case of a Change in Control of the
          Company (as defined in the Change in Control Letter Agreement), the
          provisions of the Change in Control Letter Agreement will govern
          (unless the parties otherwise

                                       10
<PAGE>

          mutually agree), but not so as to prevail over paragraph 5.4 of this
          Agreement.

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

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

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

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

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

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

     If any provision of this Agreement becomes or is deemed invalid, illegal or
     unenforceable in any jurisdiction by reason of the scope, extent or
     duration of its coverage, then the provision shall be deemed amended to the
     extent necessary to conform to applicable law so as to be valid and
     enforceable or, if the provision cannot be so amended without materially
     altering the intention of the parties, then such provision shall be
     stricken and the remainder of this Agreement will continue in full force
     and effect.

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

10.11 AMENDMENTS - Any amendment to this Agreement shall only be effective if
the amendment is in writing and is signed by the Company and Dr. Azab.

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

QLT INC.

BY: ________________________________          ______________________________
    LINDA LUPINI                              DR. MOHAMMAD AZAB
    SENIOR VICE PRESIDENT,
    HUMAN RESOURCES & ADMINISTRATION

                                       11

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