Document:

exv10w8

 

EXHIBIT 10.8

September 10, 2003

Anthony Ibarguen

Safeguard Scientifics, Inc.

435 Devon Park Drive

Wayne, PA 19087

Dear Mr. Ibarguen:

     You previously entered into an employment letter agreement with Safeguard
Scientifics, Inc. (“Safeguard”) on January 2, 2002 (the “Prior Agreement”).
Safeguard considers it essential to the best interests of its stockholders to
foster your continued employment with Safeguard and to offer you protection in
the event of your severance, including following a change of control.
Accordingly, the Board of Directors of Safeguard (the “Board”) believes it is
now appropriate to modify your Prior Agreement in certain respects and to
reaffirm its obligation to you in this letter (the “New Agreement”).
Accordingly, this New Agreement serves to amend and restate in its entirety
Section 6 of the Prior Agreement. Consequently the Prior Agreement shall
remain in full force and effect except that the provisions of Section 6 thereof
shall be replaced in their entirety and shall be superseded by the New
Agreement.

     Subject to the terms and conditions set forth below, in the event that (A)
your employment with Safeguard is terminated by Safeguard without cause or by
you for good reason within eighteen (18) months following a change of control
of Safeguard (“Change of Control Termination”) or (B) you are terminated for
any reason other than for cause or resignation without good reason (such a
termination, a “Severance Termination”), Safeguard shall provide you with the
following benefits, which together with any benefits provided under the
applicable terms of any other plan or program sponsored by the Safeguard, and
applicable to you, shall be the only severance benefits or other payments in
respect of your employment with Safeguard to which you shall be entitled. The
benefits you receive under this New Agreement will be in respect of all salary,
accrued vacation and other rights that you may have against Safeguard or its
affiliates.

• You will receive a payment in respect of your current year’s bonus
equal to the average bonus percentage of annual base salary paid to other
members of Safeguard’s Managing Directors Committee as determined at the
end of

 

 

Safeguard’s fiscal year multiplied by a fraction, the numerator of which
is the number of days in Safeguard’s fiscal year elapsed at the time of
the termination and the denominator of which is 365. Payment under this
provision will be made within a reasonable period of time after the end
of Safeguard’s fiscal year for which the payment is being made.

• If (A) there is a Change of Control Termination or (B) a Severance
Termination occurs after the later of (1) the third anniversary of your
date of employment or (2) October 12, 2003 (collectively the “Service
Requirements”), you will receive a lump sum payment equal to the product
of (i) 2 multiplied by (ii) the sum of your annual base salary (of at
least $310,000) plus the average of your actual bonus as received for the
last three completed fiscal years during which you were a Managing
Director (taking into account the value of any equity grants received by
you during such period in lieu of cash bonuses). If there has been no
Change of Control termination but there has been a Severance Termination
before the Service Requirements are met, you will receive a lump sum
payment equal to the product of (i) 1.5 multiplied by (ii) the sum of
your annual base salary (of at least $310,000) plus the average of your
actual bonus as received for the last three completed fiscal years during
which you held your current position on the date of this letter (taking
into account the value of any equity grants received by you during such
period in lieu of cash bonuses)

• Except as provided below, you will only vest in your interests under
and you will receive benefits in accordance with the terms and conditions
set forth in Safeguard’s various long term incentive plans.

• You will receive up to twenty four (24) months continued coverage under
Safeguard’s medical and health plans and life insurance plans, which
coverage shall run concurrent with the coverage provided under section
4980B of the Code; or as an alternative, at the discretion of the Board,
the Board may elect to pay you in lieu of such coverage an amount equal
to your cost of continuing such coverage. You should consult with
Safeguard’s Manager of Human Resources concerning the process for
assuming ownership of and continued premium payments for any whole life
policy at end of such twenty four (24) month period.

• You will receive up to $20,000 as a reimbursement for documented
outplacement services or office space which you secure.

• You will be reimbursed promptly for all your reasonable and necessary
business expenses incurred on behalf of Safeguard prior to your
termination date in accordance with Safeguard’s customary policies.

• If you experience a Change of Control Termination as described above,
you will become fully vested in all of your outstanding stock options and
you may exercise those stock options during the thirty six (36) month
period following

2

 

your termination of employment (unless any of the options would by their
terms expire sooner, in which case you may exercise such options at any
time before their expiration) and you will become fully vested in all of
your outstanding restricted stock awards and deferred stock units, if
any.

• If your employment with Safeguard is terminated, for any reason, other
than cause or your resignation without good reason, you will become fully
vested in your outstanding stock options and you may exercise those stock
options during the 36 month period following your termination of
employment (unless any of the options would by their terms expire sooner,
in which case you may exercise such options at any time before their
expiration). In addition, upon such a termination, your restricted stock
grants made before October, 2002 will become fully vested and the Board,
in its discretion may accelerate the vesting of any restricted stock
grants and deferred stock units, if any, made or credited after October,
2002.

     All compensation and benefits described in this New Agreement will be
offered in return for and contingent on your execution and non-revocation of a
release and non-competition agreement substantially in the forms attached to
this letter.

     Upon your termination of employment with Safeguard in connection with a
change of control, as discussed above, if it is determined that any payment or
distribution by Safeguard of benefits provided under this New Agreement or any
other benefits due upon a change of control (the “Change of Control Benefits”)
would constitute an “excess parachute payment” within the meaning of section
280G of the Code that would be subject to an excise tax under section 4999 of
the Code (the “Excise Tax”) the following provisions shall apply, unless
provided otherwise in the applicable plan, program or agreement that provides
change of control payments that are not paid pursuant to this New Agreement.
If the aggregate present value to you of receiving the Change of Control
Benefits and paying the Excise Tax is not greater than the aggregate present
value to you of the Change of Control Benefits reduced to the safe harbor
amount (as defined below), then Safeguard shall reduce the Change of Control
Benefits such that the aggregate present value to you of receiving the Change
of Control Benefits is equal to the safe harbor amount. Otherwise you shall
receive the full amount of the Change of Control Benefits and you shall be
responsible for payment of the Excise Tax. For purposes of this paragraph
“present value” shall be determined in accordance with Section 280G(d)(4) of
the Code and the term “safe harbor amount” shall mean an amount expressed in
the present value that maximizes the aggregate present value of the Change of
Control Benefits without causing any of the Change of Control Benefits to be
subject to the deduction limitations set forth in Section 280G of the Code.

     All determinations made pursuant to the foregoing paragraph shall be made
by Safeguard’s independent public accountant immediately prior to the change of
control (the “Accounting Firm”), which firm shall provide its determinations
and any supporting calculations both to Safeguard and to you within ten days of
the termination date. Any

3

 

such determination by the Accounting Firm shall be binding upon you and
Safeguard. You shall then, in your sole discretion, determine which and how
much of the Change of Control Benefits shall be eliminated or reduced
consistent with the requirements of the foregoing paragraph. All of the fees
and expenses of the Accounting Firm in performing the determinations referred
to above shall be borne solely by Safeguard.

     Safeguard will pay you the lump sum payments described above within five
business days of the date on which you have signed the release and
non-competition agreement and such agreements have become effective and
following any determination required by the preceding paragraph. Safeguard
will prepare the final release (which will be substantially in the form
attached as Exhibit A to this letter, but with such changes, if any, as
recommended by Safeguard’s counsel) and the final non-competition agreement
(which will be substantially in the form attached as Exhibit B to this letter,
but with such changes, if any, as recommended by Safeguard’s counsel) within
five business days of your termination of employment. You will have 21 days in
which to consider the release although you may execute it sooner. Please note
that the release has a rescission period of seven days after which it becomes
effective if not revoked. All other payments will be made to you within five
business days of the date on which they become due or, in the case of payments
payable on notice from you, within five business days of such notice.

     Safeguard will pay interest on late payments at the prime rate at
Safeguard’s agent bank plus 2 percent compounded monthly. In addition,
Safeguard will pay all reasonable costs and expenses (including reasonable
attorney’s fees and all costs of arbitration) incurred by you to enforce the
agreement set forth in this New Agreement or any obligation hereunder.

     In this letter, the term “cause” means (a) your failure to adhere to any
written Safeguard policy if you have been given a reasonable opportunity to
comply with such policy or cure your failure to comply (which reasonable
opportunity must be granted during the ten-day period preceding termination of
this New Agreement); (b) your appropriation (or attempted appropriation) of a
material business opportunity of Safeguard, including attempting to secure or
securing any personal profit in connection with any transaction entered into on
behalf of Safeguard; (c) your misappropriation (or attempted misappropriation)
of any Safeguard fund or property; or (d) your conviction of, or your entering
a guilty plea or plea of no contest with respect to, a felony, the equivalent
thereof, or any other crime with respect to which imprisonment is a possible
punishment.

     In this letter, the term “good reason” means (i) your assignment (without
your consent) to a position, title, responsibilities, or duties of a materially
lesser status or degree of responsibility than your current position,
responsibilities, or duties; provided, however, that a mere change in your area
of responsibilities shall not constitute a material change if you are
reasonably suited by your education and training for such responsibilities and
you remain a member of the Safeguard Managing Directors Committee; (ii) a
reduction of your base salary or target bonus opportunity (acknowledging that
the payment of any bonus is subject to the discretion of the

4

 

Compensation Committee of the Board); (iii) the relocation of Safeguard’s
principal executive offices to a location which is more than 30 miles away from
the location of Safeguard’s principal executive offices on the date of this New
Agreement; or (iv) your assignment (without your consent) to be based anywhere
other than Safeguard’s principal executive offices. Notwithstanding the
foregoing, good reason shall not exist if Safeguard cures such action or
failure to act that constitutes good reason within a reasonable period of time
(which reasonable period of time shall not be longer than 10 days) following
the date you provide Safeguard with notice of your intended resignation for
good reason.

     A “change of control” shall be deemed to have occurred if (i) any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
any Safeguard employee stock ownership plan or an equivalent retirement plan,
becomes the beneficial owner (as such term is used in Section 13(d) of the
Exchange Act), directly or indirectly, of securities of Safeguard representing
50% or more of the combined voting power of Safeguard’s then outstanding voting
securities, (ii) the Board ceases to consist of a majority of Continuing
Directors (as defined below), (iii) the consummation of a sale of all or
substantially all of Safeguard’s assets or a liquidation (as measured by the
fair value of the assets being sold compared to the fair value of all of
Safeguard’s assets), or (iv) a merger or other combination occurs such that a
majority of the equity securities of the resultant entity after the transaction
are not owned by those who owned a majority of the equity securities of
Safeguard prior to the transaction. A “Continuing Director” shall mean a
member of the Board of Directors who either (i) is a member of the board of
Directors at the date of this New Agreement or (ii) is nominated or appointed
to serve as a Director by a majority of the then Continuing Directors.

     The provisions set forth in this New Agreement will inure to the benefit
of your personal representative, executors and heirs. In the event you die
while any amount payable under the New Agreement remains unpaid, all such
amounts will be paid in accordance with the terms and conditions of this
letter.

     No term or condition set forth in this letter may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and the Board of Safeguard or a duly authorized
officer of Safeguard.

     You will not be required to mitigate the amount of any payment provided
for in this letter by seeking other employment or otherwise.

     You acknowledge that the arrangements described in this New Agreement will
be the only obligations of Safeguard or its affiliates in connection with any
determination by Safeguard to terminate your employment with Safeguard. This
New Agreement does not terminate, alter or affect your rights under any plan or
program of Safeguard in which you may participate or under which you are due a
benefit, except as explicitly set forth herein.

5

 

Your participation in such plans or programs will be governed by the terms
of such plans and programs.

     The provisions set forth in this New Agreement will be construed and
enforced in accordance with the law of the Commonwealth of Pennsylvania without
regard to the conflicts of laws rules of any state.

     Any controversy or claim arising out of or relating to this New Agreement,
or the breach thereof, will be settled by arbitration in Philadelphia,
Pennsylvania, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, using one
arbitrator, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction.

     The obligations of Safeguard set forth herein are absolute and
unconditional and will not be subject to any right of set-off, counterclaim,
recoupment, defense or other right which Safeguard may have against you,
subject to, in the event of your termination of employment, your execution of
the relevant release and the non-competition agreement set forth in the forms
attached to this New Agreement.

     Safeguard may withhold applicable taxes and other legally required
deductions from all payments to be made hereunder.

     Safeguard’s obligations to make payments under this letter are unfunded
and unsecured and will be paid out of the general assets of Safeguard.

     The New Agreement, together with the Prior Agreement, where applicable, as
discussed in the first paragraph of this letter, constitute the entire
agreement and understanding with respect to your severance arrangements, and
supersede any and all prior agreements and understandings whether oral or
written, relating thereto. If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to us the enclosed copy of this letter which will then
constitute our legally binding agreement on this subject.

	 	 	 
	

	 	Sincerely,
	 
	 	 
	

	 	Safeguard Scientifics, Inc.
	

	 	By: ANTHONY L. CRAIG
	

	 	
 
	

	 	Title:

I agree to the terms and conditions of this letter.

ANTHONY IBARGUEN

Anthony Ibarguen

6

 

EXHIBIT A

GENERAL RELEASE AND AGREEMENT

NOTICE:

     Various state and federal laws, including the Civil Rights Act of 1964 and
1991 and the Age Discrimination in Employment Act, prohibit employment
discrimination based on age, sex, race, color, national origin, religion,
disability and veteran status. These laws are enforced through the Equal
Employment Opportunity Commission (EEOC), the Department of Labor and state
civil rights agencies.

     If you sign this General Release and Agreement and accept the agreed-upon
special severance allowance and other termination benefits described in the
letter addressed to you which accompanies this release, you are giving up your
right to file a lawsuit pursuant to the aforementioned federal, state and local
laws in local, state or federal courts against Safeguard Scientifics, Inc. and
its affiliates (the “Releasees”) with respect to any claims relating to your
employment or termination therefrom which arise up to the date this Agreement
is executed.

     By signing this General Release and Agreement you waive your right to
recover any damages or other relief in any claim or suit brought by or though
the Equal Employment Opportunity Commission or any other state or local agency
on your behalf under and federal or state discrimination law, except where
prohibited by law. You agree to release and discharge each Releasee not only
from any and all claims which you could make on your own behalf, but also
specifically waive any right to become, and promise not to become, a member of
any class in any proceeding or case in which a claim or claims against a
Releasee may arise, in whole or in part, from any event which occurred as of
the date of this Agreement. You agree to pay for any legal fees or cost
incurred by any Releasee as a result of any breach of the promises in this
paragraph. The parties agree that if you, by no action of your own, become a
mandatory member of any class from which you cannot, by operation of law or
order of court, opt out, you shall not be required to pay for any legal fees or
costs incurred by a Releasee as a result.

     We encourage you to discuss the following release language with an
attorney prior to executing this Agreement. In any event, you should
thoroughly review and understand the effect of the agreement set forth below
before acting on it. Therefore, please take this release home and consider it
for up to twenty-one (21) days before you decide to sign it.

 

 

GENERAL RELEASE AND AGREEMENT

     This GENERAL RELEASE AND AGREEMENT (hereinafter the “Agreement”) is made
and entered into as of this                    day of                    , 200_, by and between
SAFEGUARD SCIENTIFICS, INC. (“Safeguard”) and [Name of Managing Director]
(“Employee”).

1. Background. The parties hereto acknowledge that this Agreement is being
entered into pursuant to the terms of the Letter Agreement, dated                    
between Safeguard and Employee (the “Letter Agreement”). As used in this
Agreement, any reference to Safeguard shall include its predecessors and
successors and, in their capacities as such, all of its present, past, and
future directors, officers, employees, attorneys, insurers, agents and assigns,
as well as all Safeguard affiliates, subdivisions and subsidiaries; and any
reference to Employee shall include, in their capacities as such, his or her
attorneys, heirs, administrators, representatives, agents and assigns.

2. Resignation from Boards. Employee shall, and hereby does resign from such
Boards and officer positions with Safeguard and all affiliates and partner
companies of Safeguard as such employee holds on the date hereof. In this
regard, Employee agrees to pre-sign and deliver to Safeguard resignation
letters acceptable to Safeguard in order to affect Employee’s resignation from
certain companies and entities, and Safeguard may submit other such letters
from time to time, although nothing contained herein shall prohibit Employee
from resigning from such boards and officer positions at an earlier time.

3. General Release.

     (a) Employee, for and in consideration of the special severance allowance
and other termination benefits offered to him by Safeguard specified in the
Letter Agreement and intending to be legally bound, does hereby REMISE, RELEASE
AND FOREVER DISCHARGE Safeguard, of and from any and all causes of actions,
suits, debts, claims and demands whatsoever in law or in equity, which Employee
ever had, now has, or hereafter may have or which Employee’s heirs, executors
or administrators may have, by reason of any matter, cause or thing whatsoever,
from the beginning of Employee’s employment with Safeguard to the date of this
Agreement, and particularly, but without limitation, any claims arising from or
relating in any way to Employee’s employment or the termination of Employee’s
employment relationship with Safeguard, including, but not limited to, any
claims arising under any federal, state, or local laws, including Title VII of
the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., (“Title
VII”), the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (“the
ADEA”), the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (“ADA”),
Employee Retirement Income Security Act of 1974, as amended 29 U.S.C. § 301, et
seq., as amended (“ERISA”), the Pennsylvania Wage Payment and Collection Law,
Pa. Stat. Ann. tit. 43 §§ 260.1-260.11a (“WPCL”), the Pennsylvania Human
Relations Act, 43 P.S. § 951 et seq. (the “PHRA”), and any and all other
federal, state or local laws, regulations, ordinances or public policies and
any common law claims now or hereafter recognized,

2

 

including claims for wrongful discharge, slander and defamation, as well
as all claims for counsel fees and costs.

     (b) By signing this Agreement, Employee represents that Employee has not
commenced any proceeding against Safeguard in any forum (administrative or
judicial) concerning Employee’s employment or the termination thereof.
Employee further acknowledges that Employee was given sufficient notice under
the Worker Adjustment and Retraining Notification Act (the “WARN Act”) and that
the termination of Employee’s employment does not give rise to any claim or
right to notice, or pay or benefits in lieu of notice under the WARN Act. In
the event any WARN Act issue does exist or arises in the future, Employee
agrees and acknowledges that the payments and benefits set forth in this
Agreement shall be applied to any compensation or benefits in lieu of notice
required by the WARN Act, provided that any such offset shall not impair or
affect the validity of any provision of this Agreement or the Letter Agreement.

     (c) Employee agrees that in the event of a breach of any of the terms of
this Agreement, Safeguard shall be entitled to recover attorneys’ fees and
costs in an action to prosecute such breach, in addition to compensatory
damages, and may cease to make any payments then due under the Letter
Agreement.

     (d) Anything herein to the contrary notwithstanding, neither party is
released from any obligations under the Letter Agreement and Employee
acknowledges that Safeguard’s obligations under the Letter Agreement and this
Agreement are the only obligations of Safeguard or its affiliates in connection
with the severance of Employee’s service with Safeguard. This Agreement does
not terminate, alter or affect Employee’s rights under any plan or program of
Safeguard in which Employee may participate and under which Employee is due a
benefit, except as explicitly set forth herein. Employee’s participation in
such plans or programs will be governed by the terms of such plans and
programs.

     (e) Employee agrees and acknowledges that this Agreement is not and shall
not be construed to be an admission by Safeguard of any violation of any
federal, state or local statue, ordinance, regulation or of any duty owed by
Safeguard to Employee.

4. Confidentiality; Non-Disparagement.

     (a) Except to the extent required by law, including SEC disclosure
requirements, Safeguard and Employee agree that the terms of this Agreement
will be kept confidential by both parties, except that Employee may advise his
family and confidential advisors, and Safeguard may advise those people needing
to know to implement the above terms.

     (b) Employee will not at any time knowingly reveal to any person or entity
any of the trade secrets or confidential information of Safeguard or of any
third party which Safeguard is under an obligation to keep confidential
(including but not limited to trade secrets or confidential information
respecting inventions, products, designs,

3

 

methods, know-how, techniques, systems, processes, software programs,
works of authorship, customer lists, projects, plans and proposals), and
Employee shall keep secret all confidential matters relating to Safeguard and
shall not use or attempt to use any such confidential information in any manner
which injures or causes loss or may reasonably be calculated to injure or cause
loss whether directly or indirectly to Safeguard. These restrictions contained
in this sub-paragraph (b) shall not apply to: (i) information that at the time
of disclosure is in the public domain through no fault of Employee’s; (ii)
information received from a third party outside of Safeguard that was disclosed
without a breach of any confidentiality obligation; (iii) information approved
for release by written authorization of Safeguard; or (iv) information that may
be required by law or an order of the court, agency or proceeding to be
disclosed; provided, that Employee shall provide Safeguard notice of any such
required disclosure once Employee has knowledge of it and will help Safeguard
at Safeguard’s expense to the extent reasonable to obtain an appropriate
protective order.

     (c) Employee represents that Employee has not taken, used or knowingly
permitted to be used any notes, memorandum, reports, list, records, drawings,
sketches, specifications, software programs, data, documentation or other
materials of any nature relating to any matter within the scope of the business
of Safeguard or its partner companies or concerning any of its dealings or
affairs otherwise than for the benefit of Safeguard. Employee shall not, after
the termination of Employee’s employment, use or knowingly permit to be used
any such notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation or other materials, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of Safeguard and that immediately upon the termination of
Employee’s employment, Employee shall deliver all of the foregoing, and all
copies thereof, to Safeguard, at its main office.

     (d) In accordance with normal ethical and professional standards,
Safeguard and Employee agree that they shall not in any way engage in any
conduct or make any statement that would defame or disparage the other, or make
to, or solicit for, the media or others, any comments, statements (whether
written or oral), and the like that may be considered to be derogatory or
detrimental to the good name or business reputation of either party. It is
understood and agreed that Safeguard’s obligation under this paragraph extends
only to the conduct of Safeguard’s senior officers. The only exception to the
foregoing shall be in those circumstances in which Employee or Safeguard is
obligated to provide information in response to an investigation by a duly
authorized governmental entity or in connection with legal proceedings.

5. Indemnity.

     (a) This Agreement shall not release Safeguard or any of its insurance
carriers from any obligation it or they might otherwise have to defend and/or
indemnify Employee and hold harmless any other director or officer and
Safeguard affirms its obligation to provide indemnification to Employee as a
director, officer or former director or officer of

4

 

Safeguard, as set forth in Safeguard’s bylaws and charter documents in
effect on January 1, 2003.

     (b) Employee agrees that Employee will personally provide reasonable
assistance and cooperation to Safeguard in activities related to the
prosecution or defense of any pending or future lawsuits or claims involving
Safeguard.

6. General.

     (a) Employee acknowledges and agrees that he has twenty-one (21) days to
consider this Agreement, and that Employee has been advised by Safeguard, in
writing, to consult with his attorney before signing this Agreement, and that
Employee had discussed this matter with his attorney before signing it.
Employee further acknowledges that Safeguard has advised him that he may revoke
this Agreement for a period of seven (7) calendar days after it has been
executed, with the understanding that Safeguard has no obligations under this
Agreement until the seven (7) day period has passed. If the seventh day is a
weekend or national holiday, Employee will have until the next business day to
revoke. Any revocation must be in writing and received by Safeguard at its
facility located at 800 The Safeguard Building, 435 Devon Park Drive, Wayne, PA
19087.

     (b) Employee has carefully read and fully understands all of the
provisions of the Notice and the Agreement which set forth the entire agreement
between him and Safeguard, and he acknowledges that he has not relied upon any
representation or statement, written or oral, not set forth in this document.

     (c) This Agreement is made in the Commonwealth of Pennsylvania and shall
be interpreted under the laws thereof. Its language shall be construed as a
whole, to give effect to its fair meaning and to preserve its enforceability.

     (d) Employee agrees that any breach of this Agreement by Employee will
cause irreparable damage to Safeguard and that in the event of such breach
Safeguard shall have, in addition to any and all remedies of law, the right to
an injunction, specific performance or other equitable relief to prevent the
violation of Employee’s obligations hereunder.

     (e) No term or condition set forth in this letter may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Employee and the Chief Executive Officer of Safeguard or
another duly authorized officer of Safeguard.

     (f) Any waiver by Safeguard of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach of such
provision or any other provision hereof.

     (g) Each covenant, paragraph and division of this Agreement is intended to
be severable and distinct, and if any paragraph, subparagraph, provision or
term of this

5

 

Agreement is deemed to be unlawful or unenforceable, such a determination
will not impair the legitimacy or enforceability of any other aspect of the
Agreement.

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

	 	 	 	 	 	 	 
	Date:	 	
	 	

	 	 	 	 	[Name of Employee]
	 
	 	 	 	 	 	 
	 	 	 	 	SAFEGUARD SCIENTIFICS, INC.
	Date:

	 	
	 	 	 	 
	

	 	 	 	By:
	 	

	 	 	 	 	Title

6

 

EXHIBIT B

NON-COMPETITION AGREEMENT

     This NON-COMPETITION AGREEMENT (hereinafter the “Agreement”) is made and
entered into as of this                    day of                    , 200_, by and between SAFEGUARD
SCIENTIFICS, INC. (the “Company”) and [Name of Managing Director] (“Employee”).

     1. Background. The parties hereto acknowledge that this Agreement is
being entered into pursuant to the terms of the Letter Agreement, dated
                    between the Company and Employee (the “Letter Agreement”). As used
in this Agreement, any reference to “Majority Subsidiary” shall mean any person
or entity that at the date of this Agreement has a majority of its outstanding
voting securities owned directly or indirectly by the Company; “Partner
Company” shall mean any person or entity in which, at the date hereof, the
Company has made, or is actively considering making, an equity or debt
investment or acquisition.

     2. Confidentiality and Non-Disclosure. (a) I will not reveal to any
person or entity any of the trade secrets or confidential information of the
Company or of any Partner Company (including but not limited to trade secrets
or confidential information respecting inventions, products, designs, methods,
know-how, techniques, systems, processes, software programs, works of
authorship, customer lists, employee lists, customer lists, projects, plans and
proposals) and I shall keep secret all matters entrusted to me and shall not
use or attempt to use any such information in any manner which may injure or
cause loss or may be calculated to injure or cause loss, whether directly or
indirectly, to the Company. The above restrictions shall not apply to: (i)
information that at the time of disclosure is in the public domain through no
fault of mine; (ii) information received from a third party outside of the
Company that was disclosed without a breach of any confidentiality obligation;
(iii) information approved for release by written authorization of the Company;
or (iv) information that may be required by law or an order of any court,
agency or proceeding to be disclosed; provided, I shall provide the Company
notice of any such required disclosure once I have knowledge of it and will
help the Company to the extent reasonable to obtain an appropriate protective
order.

          (b) Upon termination of my employment, I shall not take, use or permit to
be used any notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation or other materials of
any nature relating to any matter within the scope of the business of the
Company or any Partner Company concerning any of its dealings or affairs, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of the Company or the Partner Company, as appropriate, and
that immediately upon the termination of my employment I shall deliver all of
the foregoing, and all copies thereof, to the Company, at its main office.

7

 

     3. Ownership of Inventions and Ideas. I acknowledge that the Company
shall be the sole owner of all patents, patent applications, patent rights,
formulas, copyrights, inventions, developments, discoveries, other
improvements, data, documentation, drawings, charts, and other written, audio
and/or visual materials relating to equipment, methods, products, processes, or
programs in connection with or useful to the business of the Company or a
Partner Company (collectively, the “Developments”) which I, by myself or in
conjunction with any other person, conceived, made, acquired, acquired
knowledge of, developed or created during the term of my employment with the
Company, free and clear of any claims by me (or any successor or assignee of
mine) of any kind or character whatsoever other than my rights under the Letter
Agreement. I acknowledge that all copyrightable Developments shall be
considered works made for hire under the Federal Copyright Act. I hereby
assign and transfer my right, title and interest in and to all such
Developments, and agree that I shall, at the request of the Company, execute or
cooperate with the Company in any patent applications, execute such
assignments, certificates or other instruments, and do any and all other acts,
as the Company from time to time reasonably deems necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend the
Company’s right, title and interest in or to any such Developments.

     4. Non-Compete. Until the first anniversary of the date hereof (the
“Restricted Period”), I agree that I will not:

          (i) directly or indirectly solicit, entice or induce any customer of the
Company or a Majority Subsidiary to become a customer of any other person, firm
or corporation with respect to products and/or services then sold by the
Company or to cease doing business with the Company, and I shall not approach
any such person, firm or corporation for such purpose or authorize or knowingly
approve the taking of such actions by any other person;

          (ii) directly or indirectly solicit, recruit or hire any person who was an
employee of the Company or a Majority Subsidiary on the date of my termination
of employment to work for a third party other than the Company or such Majority
Subsidiary or engage in any activity that would cause any employee to violate
any agreement with the Company or such Majority Subsidiary; provided that I
shall not be prohibited from soliciting any person who, at the time of
solicitation, is no longer employed by the Company or a Majority Subsidiary and
who was not induced to leave employment in violation of this sub-paragraph
(ii); or

          (iii) whether alone or as a partner, officer, director, consultant, agent,
employee or stockholder of any company or other commercial enterprise, directly
or indirectly engage in any business or other activity which is competitive in
the same service areas with the products or services being manufactured,
marketed, distributed, or provided by the Company or a Majority Subsidiary at
the time of termination of my employment (“Competitive Activities”). The
foregoing prohibition shall not prevent (i) my ownership of securities of a
public company not in excess of five percent (5%) of any

8

 

class of such securities, or (ii) my employment or engagement by a company or
business organization which during the previous 12 months did not generate, or
during the next 12 months does not seek to generate, more than 5% of its
consolidated revenues from Competitive Activities, provided that my
responsibilities for such company or business organization do not require me to
engage in Competitive Activities or to violate sub-paragraphs (i) or (ii) of
this Section.

     5. Reasonable Restrictions. I agree that any breach of this Agreement by
me will cause irreparable damage to the Company and that in the event of such
breach the Company shall have, in addition to any and all remedies of law, the
right to an injunction, specific performance or other equitable relief to
prevent the violation of my obligations hereunder. I hereby acknowledge that
the type and periods of restriction imposed in the provisions of this Agreement
are fair and reasonable and are reasonably required for the protection of the
Company and the goodwill associated with the business of the Company. I
represent that my experience and capabilities are such that the restrictions
contained herein will not prevent me from obtaining employment or otherwise
earning a living at the same general economic benefit as reasonably required by
me. I further agree that each provision herein shall be treated as a separate
and independent clause, and the unenforceability of any one clause shall in no
way impair the enforceability of any of the other clauses herein. Moreover, if
one or more of the provisions contained in this Agreement shall for any reason
be held to be excessively broad as to scope, activity or subject so as to be
unenforceable at law, such provision or provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the maximum extent compatible with the applicable law as it
shall then appear.

     6. General. Any waiver by the Company of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach of such provision or any other provision hereof. No term or condition
set forth in this letter may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by me and
an officer of the Company authorized to sign such writing by the Board of
Directors of Safeguard. My obligations under this Agreement shall survive the
termination of my employment regardless of the manner of such termination and
shall be binding upon my heirs, executors, administrators and legal
representatives. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania. Any controversy
or claim arising out of or relating to this agreement, or the breach thereof
(other than a request for equitable relief) will be settled by arbitration in
Philadelphia, Pennsylvania, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association,
using one arbitrator, and judgment upon the award rendered by the arbitrator
may be entered in any court of competent jurisdiction.

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

9

 

	 	 	 	 	 	 	 
	Date:	 	
	 	

	 	 	 	 	[Name of Employee]
	 
	 	 	 	 	 	 
	 	 	 	 	SAFEGUARD SCIENTIFICS, INC.
	Date:

	 	
	 	 	 	 
	

	 	 	 	By:
	 	

	 	 	 	 	Title

10<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                                                    EXHIBIT 10.1

                                                                  EXECUTION COPY

                       DISTRIBUTION AND LICENSE AGREEMENT

                                  BY AND AMONG

                           BARRIER THERAPEUTICS, INC.,

                           BARRIER THERAPEUTICS, N.V.

                                       AND

                        GRUPO FERRER INTERNACIONAL, S.A.

                                NOVEMBER 4, 2004

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

DISTRIBUTION AND LICENSE AGREEMENT

THIS DISTRIBUTION AND LICENSE AGREEMENT (this "Agreement") is made and entered
into as of this 4th day of November, 2004 (the "Effective Date"),

BY AND AMONG:

                                   BARRIER THERAPEUTICS, INC., a company
                                   incorporated under the laws of the State of
                                   Delaware, having its principal place of
                                   business at 600 College Road East, Suite
                                   3200, Princeton, New Jersey 08540

                                   (hereinafter referred to as: "BARRIER");

                                   BARRIER THERAPEUTICS, N.V., a company duly
                                   constituted under the laws of Belgium, having
                                   its principal place of business at Cipalstr
                                   3, B-2440, Geel, Belgium and wholly-owned
                                   subsidiary of BARRIER

                                   (hereinafter referred to as: "BARRIER NV");

AND:

                                   GRUPO FERRER INTERNACIONAL, S.A., a
                                   corporation duly constituted under the laws
                                   of Spain, having its principal place of
                                   business at Gran Via Carlos III, 98, 08028,
                                   Barcelona, Spain

                                   (hereinafter referred to as: "FERRER").

BARRIER NV is a party to this Agreement for the sole purpose of granting to
FERRER certain rights as described herein to (i) the Products in Belgium and
(ii) the Regulatory Approvals held in the name of BARRIER NV pursuant to the
provisions of Sections 2.2.1, 8.2 and 8.3.

PREAMBLE

WHEREAS BARRIER controls, through ownership or license, the rights to the
Products, the Trademarks, the Know-how and the Patents in the Territory;

WHEREAS FERRER and BARRIER desire to enter into an Agreement pursuant to which
(i) FERRER will undertake responsibility for the marketing, distribution and
sale of the Products on an exclusive basis throughout the Territory, and (ii)
FERRER will obtain, in the name, or for the benefit, of BARRIER, or assist
BARRIER to obtain, the Regulatory Approvals required to market, distribute and
sell the Products within the Territory; and

WHEREAS FERRER, to the extent necessary to carry out the provisions of this
Agreement, needs to become a licensee of certain Product IP Rights.

                                       2
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

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

1.    DEFINITION AND SCHEDULES

      1.1 DEFINITIONS

      As used in this Agreement, the following terms shall have the following
      respective meanings:

      1.1.1 "AFRICAN REGION" means the following countries: Benin, Burkina Faso,
      Burundi, Cameroon, Central African Republic, Chad, Comoros, Morocco,
      Algeria, Congo, Gabon, Togo, Ghana, Senegal, Gambia, Guinea Bissau,
      Guinea, Egypt, Madagascar, Ivory Coast, Djibouti, Niger, Rwanda, Mali,
      Tunisia, Reunion, Zaire, and Nigeria.

      1.1.2 "AFFILIATE" means, with respect to any Party, any Person that at
      such time directly or indirectly, through one or more intermediaries,
      controls or is controlled by or under common control with such Party. As
      used in this definition, "control" means (i) in the case of a Person that
      is a corporate entity, direct or indirect ownership of fifty percent (50%)
      or more of the stock or shares having the right to vote (or such lesser
      percentage which is the maximum allowed to be owned by a foreign
      corporation in a particular jurisdiction) for the election of directors of
      such Person or (ii) in the case of a Person that is an entity, but is not
      a corporate entity, the possession, directly or indirectly, of the power
      to direct, or cause the direction of, the management or policies of such
      Person, whether through the ownership of voting securities, by contract or
      otherwise.

      1.1.3 "APPLICABLE PERCENTAGE" with respect to a Product has the meaning
      set forth in Section 4.2 for such Product.

      1.1.4 "BARRIER HOUSEMARKS" mean the trade/service mark(s), logo(s), trade
      dress, trade names or other symbols or designations exclusively identified
      with Barrier or its products.

      1.1.5 "COMMERCIALLY REASONABLE EFFORTS" mean, with respect to a Party,
      [**].

      1.1.6 "COMPETING PRODUCT" has the meaning set forth in Section 2.3.4.

      1.1.7 "COUNTRY GROUP" means any two or more countries within a Region
      which FERRER and BARRIER have combined for purposes of determining a
      Minimum Purchase Quota pursuant to Section 8.1 below. For clarity, no
      individual country for which FERRER and BARRIER have agreed upon a Minimum
      Purchase Quota shall be included in any Country Group.

      1.1.8 "EFFECTIVE DATE" has the meaning set forth in the introduction of
      this Agreement.

      1.1.9 "EUROPEAN REGION" means the following countries: Austria, Belgium,
      France, Germany, Greece, Italy, Luxemburg, the Netherlands, Portugal and
      Spain.

                                        3
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      1.1.10 "EXCLUDED COUNTRIES" means with respect to the Ketanserin Product
      only: Mexico, Central America (i.e., Belize, Costa Rica, El Salvador,
      Guatemala, Honduras, Nicaragua and Panama) and Dominica, Dominican
      Republic, and Haiti.

      1.1.11 "EXW" has the meaning set out in the Incoterms of 2000 published by
      the International Chamber of Commerce ("ICC") as modified from time to
      time.

      1.1.12 "FIELD OF USE" means the use of Products for applications for
      treatment or prevention of diseases of the human skin, hair, nails and /or
      the oral or genital mucosa customarily diagnosed and treated by
      dermatologists, excluding skin cancer, but including without limitation,
      actinic keratosis. With respect to the Ketanserin Product in the Latin
      American Region, the Field of Use shall not include anal fissures.

      1.1.13 "FIRST COMMERCIAL SALE" means with respect to any country in the
      Territory, the first bona fide commercial sale of the Product to a Third
      Party by FERRER or an Affiliate or other permitted sub-distributor of
      FERRER in such country.

      1.1.14 "GOVERNMENTAL BODY" means any national, supra-national (e.g., the
      European Commission or the European Medicines Agency), regional, state or
      local regulatory agency, department, bureau, commission, council or other
      governmental entity involved in the granting of Regulatory Approval.

      1.1.15 "IMPROVEMENTS" means, with respect to a particular Product, any new
      formulation, way of administration, dosage, of such Product and also any
      new indication for such Product to which BARRIER may obtain rights during
      the Term of this Agreement, including any of the foregoing that constitute
      a Distributor Invention.

      1.1.16 "INTELLECTUAL PROPERTY" means, any intellectual property rights
      including, without limitation, any rights under any patent, Trademark,
      trade secret, copyright or Know-How.

      1.1.17 "J&J AGREEMENTS" means collectively (i) that certain Intellectual
      Property Transfer and License Agreement, dated as of May 6, 2002, by and
      between BARRIER and Johnson and Johnson Consumer Companies, Inc., and (ii)
      that certain Intellectual Property Transfer and License Agreement, dated
      as of May 6, 2002, by and among BARRIER, Janssen Pharmaceutica Products,
      L.P., and Ortho-McNeil Pharmaceutical, Inc., each as amended.

      1.1.18 "KETANSERIN PRODUCT" means the pharmaceutical product currently
      identified as "Ketanserin" containing a serotonin 2 antagonist and all
      Improvements thereto.

      1.1.19 "KNOW-HOW" means the skill or ingenuity based upon the body of
      knowledge which comprises all of the methods, processes, designs,
      information, data, formulas, manuals, guidelines and trade secrets
      relating to the Product including, without limitation, all information
      necessary for obtaining the Regulatory Approvals.

      1.1.20 "LATIN AMERICAN REGION" means the following countries, except to
      the extent any such country constitutes an "Excluded Country" for the
      Ketanserin Product: Argentina, Belize, Bolivia, Brazil, Chile, Colombia,
      Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala,
      Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and
      Venezuela.

                                       4
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      1.1.21 "LIABILITIES" means losses, damages, fines, costs, liabilities and
      expenses (including the reasonable fees, costs and expenses of attorneys
      and other professionals and court costs), awarded to or otherwise required
      to be paid to Third Parties in connection with any civil, criminal,
      statutory or regulatory claims of liability.

      1.1.22 "LIAROZOLE PRODUCT" means the pharmaceutical product currently
      identified as "Liarozole" containing a retinoic acid metabolism blocking
      agent and all Improvements thereto. For clarity, "Liarozole Product" shall
      not include the pharmaceutical product currently identified as Rambazole
      or any other product with asole active ingredient other than Liarozole.

      1.1.23 "MAA" means an application filed with the relevant Governmental
      Body seeking Regulatory Approval to market and sell a Product in the
      Territory.

      1.1.24 "MINIMUM PURCHASE QUOTA" has the meaning set forth in Section 8.1

      1.1.25 "MINIMUM SUPPLY PRICE" means (i) for the Zimycan Product, [**]
      Euros per [**] gram unit, (ii) for the Sebazole Product, [**] Euros per
      [**] gram unit, (iii) with respect to the Ketanserin Product and the
      Liarozole Product [a price equal to BARRIER's cost of manufacturing plus
      10% of Net Sales], provided that such amount does not exceed the amount
      that would have occurred by applying the corresponding Applicable
      Percentage listed under clause 4.2.1, and (iv) with respect to the other
      unit sizes for the Zimycan Product and the Sebazole Product, the price
      established in good faith by mutual agreement by the Joint Steering
      Committee within thirty (30) days following the first submission of the
      first MAA for such Product, or, in the case of a different unit size,
      within thirty (30) days following the first submission for Regulatory
      Approval for such unit size.

      1.1.26 "NET SALES" means with respect to each Product sold in the
      Territory, the gross amounts invoiced by FERRER, its Affiliates and
      sub-distributors, on account of sales of each Product to Third Parties,
      less the following:

            1.1.26.1 trade, quantity and cash discounts, rebates and allowances
            actually allowed or given, which are not already reflected in the
            amount invoiced;

            1.1.26.2 freight, postage, shipping insurance and other
            transportation expenses incurred in transporting the Products in
            final form to such customers to the extent included in the invoice
            price and separately identified on the invoice;

            1.1.26.3 credits, or refunds actually allowed for recalls of
            Products;;

            1.1.26.4 sales, excise and other consumption taxes, and tariffs and
            duties directly related to the sale (including VAT) to the extent
            included in the invoice price and to the extent such taxes are
            remitted to the applicable taxing authority (but not including taxes
            assessed against the income derived from such sale); and

            1.1.26.5 any mandatory discounts or rebates to the competent
            governmental authorities and/or social security systems pursuant to
            governmental regulations.

                                       5
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      1.1.27 "NET SELLING PRICE" means, with respect to each Product sold in the
      Territory, the Net Sales for the applicable period divided by the quantity
      of such Product sold.

      1.1.28 "PARTY" means BARRIER or FERRER, and "PARTIES" means BARRIER and
      FERRER.

      1.1.29 "PATENTS" mean the patents listed in Schedule 1.1.29 as well as all
      continuations, continuations-in-parts, divisions, and renewals thereof,
      all patents which may be granted thereon, and all reissues,
      reexaminations, extensions, patents of additions, and patents of
      importation thereof, together with any foreign counterparts of any of the
      foregoing.

      1.1.30 "PERSON" means and includes any individual, corporation,
      partnership, firm, joint venture, syndicate, association, trust,
      Government Body, and any other form of entity or organization.

      1.1.31 "PHARMACOVIGILENCE AGREEMENT" has the meaning set forth in Section
      11.1.

      1.1.32 "PRODUCTS" mean the Zimycan Product, the Sebazole Product, the
      Ketanserin Product and the Liarozole Product.

      1.1.33 "PRODUCT IP RIGHTS" means to the extent necessary to carry out the
      provisions of this Agreement, the Intellectual Property rights used in or
      related to the Products and including, without limitation, registration
      dossiers for the Products, Regulatory Approvals, Trademarks, BARRIER
      Housemarks, Know-How and patents owned or controlled by BARRIER whether by
      license or otherwise and licensed to FERRER as of the date hereof and
      during the term of this Agreement, and shall mean all or each such IP
      Rights individually as the case may be.

      1.1.34 "QUOTA COMMENCEMENT DATE" means, with respect to a Product in a
      given country, the first day of the first full calendar year following the
      calendar year in which the First Commercial Sales occurs for such Product
      in such country.

      1.1.35 "REGION" means any of the European Region, African Region or Latin
      American Region, as applicable.

      1.1.36 "REGULATORY APPROVAL(S)" means the technical, medical and
      scientific licenses, registrations, authorizations and approvals
      (including, without limitation, approvals of MAAs, supplements, variations
      and amendments, pre- and post- approvals, pricing and Third Party
      reimbursement approvals, and labelling approvals) of a Governmental Body
      necessary for the distribution, marketing, promotion, offer for sale,
      supply use, import, export or sale of a Product in a regulatory
      jurisdiction in the Territory.

      1.1.37 "SEBAZOLE PRODUCT" means the pharmaceutical product currently
      identified as "Sebazole" containing ketoconazole in an anhydrous gel and
      all Improvements thereto.

      1.1.38 "SEMI-EXCLUSIVE" means the right of BARRIER to sell or supply a
      Product by itself or to appoint a second distributor in a Region of the
      Territory to distribute a Product, including in each case, the right to
      use the Trademark, on a co-exclusive basis along with FERRER, at BARRIER's
      sole discretion according to clause 2.3, where such use is not prohibited
      by law.

                                       6
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      1.1.39 "SPECIFICATIONS" means, with respect to a Product, the quality
      assurance and quality release specifications for the Product set forth in
      the Regulatory Approval for the Product, as may be modified from time to
      time in the discretion of Barrier.

      1.1.40 "TERM" means the period set forth under Section 13.1.

      1.1.41 "TERRITORY" means the European Region, African Region and Latin
      American Region.

      1.1.42 "THIRD PARTY" means any Person that is not a Party or an Affiliate
      of a Party.

      1.1.43 "TPM" means any Third Party manufacturer of a Product.

      1.1.44 "TRADEMARKS" means any trademarks, trade names or trade dress used
      and/or selected by BARRIER to designate a Product.

      1.1.45 "TRANSFER PRICE" has the meaning set forth in Section 4.2.1.

      1.1.46 "VALID CLAIM" means a claim in any unexpired, issued patent within
      the Patents which has not been held invalid or unenforceable by a
      non-appealed or unappealable decision by a court or other appropriate body
      of competent jurisdiction, and which is not admitted to be invalid through
      disclaimer or dedication to the public.

      1.1.47 "ZIMYCAN PRODUCT" means the pharmaceutical product containing .25%
      miconazole in a zinc oxide and petrolatum base, currently identified as
      "Zimycan", and all Improvements thereto.

      1.2 SCHEDULES

      The Schedules which are attached to this Agreement are incorporated into
      this Agreement by reference and are deemed to be part hereof.

      1.3 CURRENCY

      Unless otherwise indicated, all amounts payable under this Agreement shall
      be in Euros.

      1.4 CHOICE OF LAW

      This Agreement shall be governed by and construed in accordance with the
      laws of the United Kingdom without regard to principles of conflicts of
      law.

      1.5 INTERPRETATION NOT AFFECTED BY HEADINGS OR PARTY DRAFTING

      1.5.1 The division of this Agreement into articles, sections, paragraphs,
      subsections and clauses and the insertion of headings are for convenience
      of reference only and shall not affect the construction or interpretation
      of this Agreement. The terms "this Agreement", "hereof", "herein",
      "hereunder" and similar expressions refer to this Agreement and the
      schedules hereto and not to any particular article, section, paragraph,
      clause or other portion hereof and include any Agreement or instrument
      supplementary or ancillary hereto. Each Party acknowledges that it and its
      legal counsel have reviewed and participated in drafting the terms of this
      Agreement, and the Parties

                                       7
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      agree that any rule of construction to the effect that any ambiguity is to
      be resolved against the drafting Party shall not be applicable in the
      interpretation of this Agreement.

      1.5.2 The phrase "country by country basis" or "for a given country" or
      words to similar effect, shall include "Country Group by Country Group
      basis" and "for a given Country Group," as applicable.

      1.6 NUMBER AND GENDER

      In this Agreement, unless there is something in the subject-matter or
      context inconsistent therewith, (i) words in the singular number include
      the plural and such words shall be construed as if the plural had been
      used, (ii) words in the plural include the singular and such words shall
      be construed as if the singular had been used, and (iii) words importing
      the use of any gender shall include all genders where the context or Party
      referred to so requires, and the rest of the sentence shall be construed
      as if the necessary grammatical and terminological changes had been made.

2.    SUPPLY AND DISTRIBUTION OF PRODUCTS

      2.1 SUPPLY OF THE PRODUCTS

      Subject to the terms and conditions of this Agreement, during the Term,
      BARRIER shall sell the Products ready for sale as finished, packaged,
      labeled units to FERRER for the Transfer Prices set forth in Article 4.

      2.2 DISTRIBUTION OF THE PRODUCTS

      2.2.1 Subject to the terms and conditions of this Agreement, BARRIER
      hereby grants to FERRER the exclusive right, within the Field of Use, to
      market, distribute and sell the Products for its own account in the
      Territory.

      2.2.2 FERRER shall have the right to appoint its Affiliates as
      sub-distributors; provided, however, that (i) FERRER shall notify BARRIER
      thereof in writing and (ii) FERRER shall remain responsible to BARRIER for
      the performance of its Affiliates.

      2.2.3 FERRER may appoint as a sub-distributor any Third Party that is not
      an Affiliate provided that (i) it obtains BARRIER's prior written consent,
      which shall not be unreasonably withheld, and (ii) FERRER shall remain
      responsible to BARRIER for the performance of such Third Party.

      2.2.4 FERRER shall ensure that all Affiliates and other Third Party
      sub-distributors appointed by FERRER shall abide by the terms and
      conditions of this Agreement.

      2.2.5 FERRER acknowledges and understands that with respect to the Zimycan
      Product in Argentina, Belgium, Germany, Luxemborg, Mexico, Peru and
      Venezuela, and with respect to the Ketanserin Product in the Latin
      American Region, Barrier's rights under the J&J Agreements are
      non-exclusive.

      2.3 EXCLUSIVITY

                                       8
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      2.3.1 This Agreement is exclusive on a Product by Product, Region by
      Region and country by country basis for the Term, so long as FERRER
      continues to satisfy the Minimum Purchase Quota for such Product (i) in
      the Territory in the aggregate, (ii) in each Region in the aggregate, and
      (iii) in each country, in each case, pursuant to the provisions of Section
      8.1.

      2.3.2 Following the Quota Commencement Date for a given Product, BARRIER
      shall have the right, as its sole remedy, upon simple notice to transform
      the exclusivity of this Agreement into a Semi-exclusive agreement for that
      Product on a country by country basis if FERRER is in default of the
      conditions set forth in Section 2.3.1. If FERRER is in default of the
      Minimum Purchase Quota with respect to a Product in the Territory in the
      aggregate, [**]. BARRIER will have the right upon simple notice to
      transform the exclusivity of this Agreement for that country or countries
      in the Region for which the Minimum Purchase Quota is not met into a
      Semi-exclusive Agreement for that Product in that country. For clarity,
      BARRIER shall [**].

      2.3.3 The exclusivity as referred to in this Agreement means that BARRIER,
      provided all conditions are met by FERRER, will not enter into other
      agreements for the distribution and sale of the Products in the Territory
      nor sale the Products by itself in the Territory.

      2.3.4 (A) During the term of this Agreement, on a Product by product
      basis, in each country in the Territory in which FERRER has exclusive
      rights to such Product under this Agreement, except as necessary to
      perform its obligations under this Agreement and except as set forth in
      subsection (B) below, FERRER shall not, and shall not permit its
      Affiliates, to directly or indirectly, alone or in conjunction with a
      Third Party market, promote, distribute, offer for sale or sell a
      Competing Product. For purposes of this Agreement, each of the following
      shall be considered a "Competing Product":

            (i)   [**], and

            (ii)  [**]; and

            (iii) [**].

            (B)   [**].

            2.3.5 Solely for the purpose of enabling FERRER to exercise its
            rights pursuant to Sections 5.1.6 and 13.4(i), BARRIER hereby grants
            FERRER a non-exclusive, royalty-free license under the Product IP
            Rights to make and have made the Products for sale in the Field of
            Use in the Territory.

            2.3.6 Nothing in this Agreement shall be construed to grant FERRER
            any rights or license (i) with respect to any Product outside of the
            Territory or (ii) with respect to any other products of BARRIER, or
            (iii) to manufacture any Product, except as provided in Section
            2.3.5 above.

            2.4 SAMPLES

            Provided Barrier can obtain sample sizes of the Products from its
            manufacturer, sample sizes of the Products may be purchased by
            FERRER from BARRIER at BARRIER's cost

                                       9
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      of goods for such samples. In any event, FERRER may obtain trade size
      samples of Products from BARRIER at BARRIER's cost of goods. All samples
      must be labeled "Sample, Not for Resale."

      2.5 RESTRICTION ON PURCHASE AND SALE OF PRODUCTS

      2.5.1 FERRER shall not actively promote the distribution or sale of the
      Products for delivery at any location outside the Territory. FERRER shall
      refer to BARRIER any order or inquiry from outside the Territory.

      2.5.2 FERRER shall not actively promote the distribution or sale of the
      Products outside of the Field of Use or otherwise than in accordance with
      their Regulatory Approvals.

      2.5.3 Unless otherwise authorized in writing by BARRIER, FERRER shall not
      purchase any Products from any person other than BARRIER.

3.    FORECASTS AND ORDERS

      3.1 ESTIMATED REQUIREMENTS; FIRM ORDERS

      3.1.1 Within thirty (30) days following the Effective Date, FERRER shall
      provide BARRIER with a forecast showing FERRER's estimated requirements of
      Products, within the Territory and identified for each Region, for the
      first twelve (12) months following the Effective Date. Such forecast shall
      be a non-binding forecast of FERRER's purchases of Products for the first
      twelve (12) months of sales within the Territory.

      3.1.2 On the first day of every calendar quarter during the Term, FERRER
      shall provide BARRIER with a good faith, forecast update of its estimated
      requirements by month and for each Region, of Products for the twelve (12)
      month period commencing on the first day of the immediately following
      calendar month (each a "Forecast Update").

      3.1.3 FERRER's specified requirements for Product for the first three (3)
      calendar months of each Forecast Update shall constitute a binding order
      for the purchase of Products (each, a "Firm Order"). The remainder of any
      Forecast Update shall be non-binding.

      3.2 PURCHASE ORDERS

      3.2.1 Each Forecast Update shall be accompanied by one or more purchase
      orders for Products covered by that portion of the Forecast Update
      constituting a Firm Order (each, a "Purchase Order"). For each Product,
      FERRER shall specify, on a Purchase Order, the requested quantity of
      Product, required delivery dates, shipment method and destination. All
      Purchase Orders must be received by BARRIER at least ninety (90) days
      prior to the delivery date specified in each respective order. All such
      orders shall be in full lot quantities. Each Purchase Order shall be in a
      form and contain terms previously agreed to by the Parties. The delivery
      of Products shall be made within a maximum of twenty (20) days from the
      delivery date specified on the Purchase Order.

      3.2.2 Purchase Orders under Section 3.2.1, up to one hundred and twenty
      per cent (120%) of the quantities ordered in the Forecast Updates, shall
      be deemed accepted by

                                       10
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      BARRIER. BARRIER shall use Commercially Reasonable Efforts to comply with
      unplanned increases in Purchase Orders in excess of FERRER's Forecast
      Updates.

      3.2.3 In the event of any conflict between the terms and conditions of
      this Agreement and the terms and conditions of any Purchase Order or any
      other document, the terms and conditions of this Agreement shall prevail.

4.    ECONOMIC TERMS

      4.1 UPFRONT AND MILESTONE PAYMENTS

      In consideration for the rights granted, within five (5) working days
      following the event or date specified below, FERRER will pay BARRIER the
      following non-refundable, non-creditable amounts:

      4.1.1 (euro)500,000 upon the Effective Date of this Agreement.

      4.1.2 A one time payment of (euro) [**] upon receipt of the first
      Regulatory Approval of the Liarozole Product in any of the following
      countries in the European Region: [**].

      4.1.3 A one time payment of (euro) [**] upon the First Commercial Sale of
      the Liarozole Product in any of the following countries in the European
      Region: [**].

      4.2 SUPPLY PRICES

      4.2.1 FERRER shall purchase all of the Products for which a Purchase Order
      has been submitted to BARRIER at a "Transfer Price" (which includes
      BARRIER's cost of goods) equal to the Applicable Percentage of FERRER's
      Net Selling Price for such Product [**].

      The "Applicable Percentage" for each Product is as follows:

<TABLE>
<CAPTION>
 Product                      Applicable Percentage
----------             -----------------------------------
<S>                    <C>
Zimycan                [**]% of Ferrer's Net Selling Price
Ketanserin             [**]% of Ferrer's Net Selling Price
Sebazole               [**]% of Ferrer's Net Selling Price
Liarozole              [**]% of Ferrer's Net Selling Price
</TABLE>

      4.2.2 BARRIER shall invoice FERRER for Products upon shipment at the
      Forecasted Supply Price determined in accordance with Section 4.3.

      4.2.3 The Transfer Price for the Product shall be calculated and set each
      year in accordance with the methods set forth below. The Parties shall
      establish a Forecasted Supply Price in accordance with Section 4.3. During
      such year, the Transfer Price shall be the Forecasted Supply Price. At the
      end of each year, the Transfer Price shall be calculated and reconciled
      with the Forecasted Supply Price for the same time period in accordance
      with Section 4.4.

      4.2.4 In addition to the Transfer Prices and any [**] payable pursuant to
      Section 4.2.5, within sixty (60) days following each calendar quarter,
      FERRER shall pay to BARRIER

                                       11
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      [**] percent ([**]%) of FERRER's aggregate Net Sales of all Products sold
      during such quarter, until such time as FERRER has paid an aggregate of
      (euro) [**] pursuant to this Section 4.2.4.

      4.2.5 [**].

      4.2.6 The [**] shall be in addition to any amounts payable under Section
      4.2.4.

      4.3 FORECASTED SUPPLY PRICE

      For each Product in each Region, for the year in which the First
      Commercial Sale occurs, the Forecasted Supply Price shall be calculated
      according to the Applicable Percentage taking into account the Minimum
      Supply Prices as specified under clauses 1.1.25 and 4.2.1, and mutually
      agreed upon by the Joint Steering committee at least sixty (60) days prior
      to the anticipated date of the First Commercial Sale. At least sixty (60)
      days prior to the beginning of each subsequent calendar year, the
      Forecasted Supply Price shall be calculated for each unit of Product and
      shall be equal to the Transfer Price for the immediately three (3)
      preceding calendar quarters. All of the foregoing shall be referred to as
      the "Forecasted Supply Price".

      4.4 ANNUAL RECONCILIATION OF SUPPLY PRICE

      Within forty-five (45) days following (i) the end of each calendar year
      during the Term of this Agreement, and (ii) the expiration or earlier
      termination of this Agreement, FERRER shall deliver to BARRIER a report
      and calculation of the Net Selling Price for each of the Products sold in
      the Territory during such calendar year. BARRIER shall then calculate an
      amount determined by multiplying for each Product (a) the Net Selling
      Price for the preceding calendar year less the Forecasted Supply Price for
      the preceding calendar year by (b) the number of Products sold during the
      preceding calendar year. If the result of the calculation in this Section
      4.4 is positive, FERRER shall pay such amount to BARRIER. If the result of
      the calculation in this Section 4.4 is negative, FERRER shall be entitled
      to a credit for such amount which it may apply to future invoices.

      4.5 PAYMENT METHOD

      All payments under this Agreement shall be made by bank wire transfer in
      immediately available funds to an account designated by the Party to which
      such payments are due. Any payments due under this Agreement which are not
      paid by the date such payments are due under this Agreement shall bear
      interest to the extent permitted by applicable law at a rate equal to the
      thirty (30) day London inter-bank offering rate U.S. dollars as quoted in
      The Financial Times on the first business day of the month on which the
      payment was due. This Section 4.5 shall in no way limit any other remedies
      available to the Parties.

      4.6 EURO; CURRENCY EXCHANGE

      All sums due under this Agreement shall be payable in Euros. With respect
      to Net Sales invoiced in a currency other than Euros, the Net Sales shall
      be expressed in the domestic currency of the entity making the sale or
      incurring the expense, together with the Euro equivalent, calculated using
      the arithmetic average of the spot rates on the last working day of each
      month of the calendar quarter in which the Net Sales were made.

                                       12
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      The "closing mid-point rates" published by The Financial Times, or any
      other publication as agreed to by the Parties, shall be used as the source
      of spot rates to calculate the average as defined in the preceding
      sentence.

      4.7 INVOICES; TIMING OF PAYMENTS

      Barrier shall invoice FERRER for all Products supplied hereunder at the
      Forecasted Supply Price on the date of shipment, which invoice shall
      include any Shipping Costs paid by BARRIER and any applicable taxes, for
      all amounts due to BARRIER hereunder monthly in arrears. Payment for the
      Products shall be made by FERRER to BARRIER in Euros within sixty (60)
      days of FERRER's receipt of invoicing. Unless otherwise specified in this
      Agreement, all other amounts due to BARRIER hereunder shall be paid by
      FERRER within sixty (60) days following the date of FERRER's receipt of
      invoice.

      4.8 TAXES

      Where any sum due to be paid to a Party under this Article 4 is subject to
      any withholding or similar tax, the Parties shall use their reasonable
      efforts to do all such acts and to sign all such documents as will enable
      them to take advantage of any applicable double taxation agreement or
      treaty. In the event there is no applicable double taxation agreement or
      treaty, or if an applicable double taxation agreement or treaty reduces
      but does not eliminate such withholding or similar tax, the Party making a
      payment shall pay such withholding or similar tax to the appropriate
      government authority, deduct the amount paid from the amount due to the
      other Party, and secure and send to the other Party the best available
      evidence of such payment.

      4.9 AUDIT RIGHTS

      FERRER shall keep, and require its Affiliates and any Third Party
      sub-distributors to keep, complete and accurate books of accounts and
      records for the purpose of determining the amounts payable pursuant to
      this Agreement. Such books and records shall be kept at the principal
      place(s) of business of FERRER and its Affiliates for at least three (3)
      years following the end of the calendar year to which they pertain. Such
      records will be open for inspection during such three (3) year period by
      an independent auditor chosen by BARRIER and reasonably acceptable to
      FERRER for the purpose of verifying the amounts payable hereunder. Such
      inspections may be made no more than once each calendar year, at
      reasonable times and on reasonable notice and once the records for a
      period are audited they shall not be subject to re-audit. Inspections
      conducted under this Section 4.9 shall be at the expense of BARRIER,
      unless a variation or error producing an underpayment in amounts payable
      exceeding five percent (5%) of the amount paid for the entire period
      covered by the inspection is established in the course of any such
      inspection, whereupon all reasonable documented out-of-pocket costs
      relating to the inspection for such period and any unpaid amounts that are
      discovered shall be paid by FERRER, together with interest on such unpaid
      amounts at the rate set forth in Section 4.5 above.

5.    TERMS OF SALE

      5.1 DELIVERY OF PRODUCTS, TRANSFER OF RISKS AND PROPERTY

                                       13
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      5.1.1 The Products shall be sold and delivered EXW from BARRIER's
      manufacturer's plant or BARRIER's warehouse prior to or within twenty (20)
      days of the date specified in the applicable Purchase Order. In accordance
      with EXW terms, FERRER shall bear all risk of loss and damage to the
      Products from the time they have been placed at FERRER's disposal. BARRIER
      shall ship the Products on a carrier specified by FERRER at FERRER's
      expense.

      5.1.2 Delivery of eighty percent (80%) or more of any Purchase Order shall
      be considered a complete order, provided that the remaining quantities of
      any Purchase Order are delivered within the ninety (90) day period
      following the requested delivery date.

      5.1.3 Products will be delivered ready for sale in the Territory.

      5.1.4 FERRER shall pay all costs, expenses, taxes (including VAT), levies,
      tariffs, brokerage fees, insurance premiums and other costs and charges
      assessed or levied in connection with the transportation of Products from
      the manufacturing facility at which final packaging of such Product is
      completed (the "Shipping Costs"). If BARRIER pays any of the Shipping
      Costs on behalf of FERRER, then BARRIER shall invoice such Shipping Costs
      to FERRER and FERRER shall pay such costs in accordance with the
      provisions of Section 4.7 above.

      5.1.5 BARRIER shall use all Commercially Reasonable Efforts to supply
      FERRER's requirements of Products. If BARRIER is temporarily unable to
      supply FERRER's requirements for a particular Product, [**].

      5.1.6 [**].

      5.2 COMPLIANCE OF PRODUCTS

      5.2.1 FERRER shall have the right to ensure that all Products comply with
      the Specifications during the period of fifteen (15) working days
      following the date of BARRIER's delivery of such Products. In the event
      FERRER finds that the Products do not conform to the Specifications,
      FERRER shall send a notice to BARRIER within the fifteen (15) working day
      period following delivery. If BARRIER has not received any notice from
      FERRER within such fifteen (15) working days following delivery, FERRER
      shall be deemed to have accepted the Products as is. Such limitations
      shall not apply as per latent defects. For clarity, FERRER shall not have
      the right to return Products which conform to the applicable
      Specifications .

      5.2.2 If FERRER receives Products from BARRIER that do not comply with the
      Specifications ("non-conforming"), BARRIER shall replace such
      non-conforming Products with an equal quantity of Product that conforms to
      the Specifications at no additional cost to FERRER. If a shortage exists
      with respect to a shipment of Products, FERRER shall so inform BARRIER,
      and BARRIER shall make-up such shortage at no additional cost to FERRER.
      The remedies set forth in this Section 5.2.2 shall be the sole and
      exclusive remedies of FERRER with regard to a shortage or non-conforming
      Products.

      5.2.3 If the analysis or assay of a sample of the Products performed by or
      for FERRER indicates that the batch of Products does not meet
      Specifications and

                                       14
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      BARRIER's analysis or assay of its sample from the same batch indicates
      that the batch does meet Specifications, BARRIER will so advise FERRER and
      a joint investigation will be conducted to determine the cause of the
      failure.

      5.2.4 If the Products are proven to meet Specifications, then FERRER shall
      be responsible for the cost of the joint investigation and any independent
      Third Party testing of Products.

      5.2.5 If the Products are proven not to meet Specifications in a material
      way that is likely to affect the Products, BARRIER shall be responsible
      for the cost of the joint investigation and any independent Third Party
      testing of Products, and shall replace such Products at its own cost.

6.    REPRESENTATIONS AND WARRANTIES

      6.1 REPRESENTATIONS AND WARRANTIES OF BARRIER

      BARRIER represents and warrants the following:

      6.1.1 it has full power and authority to enter into and perform its
      obligations pursuant to this Agreement and to consummate the transactions
      contemplated herein;

      6.1.2 the execution, delivery and performance of this Agreement have been
      duly authorized by all necessary corporate action and constitute a legal,
      valid and binding obligation of BARRIER;

      6.1.3 it shall comply with the material Specifications and the applicable
      current Good Manufacturing Practices (cGMPs) of Europe and each Region, as
      applicable, and shall comply, with the assistance of FERRER in informing
      BARRIER, with local, state, and federal laws and regulations applicable in
      the Territory. BARRIER may however make modifications to the
      Specifications if approved by the applicable Governmental Body and shall
      thereafter inform FERRER of any such modifications and, other than with
      respect to the Zimycan Product in the European Region, provide FERRER with
      the corresponding documentation to be submitted to the Governmental Body;

      6.1.4 its obligations under this Agreement are valid and binding and
      enforceable against it in accordance with their terms, except as
      enforcement may be affected by bankruptcy, insolvency, or other similar
      laws and by general principles of equity; and

      6.1.5 it has not previously granted any rights that are inconsistent with
      the rights and licenses granted herein.

      6.2 REPRESENTATION AND WARRANTIES OF FERRER

      FERRER represents and warrants the following:

      6.2.1 it has full power and authority to enter into and perform its
      obligations pursuant to this Agreement and to consummate the transactions
      contemplated herein;

                                       15
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      6.2.2 the execution, delivery and performance of this Agreement have been
      duly authorized by all necessary corporate action and constitute a legal,
      valid and binding obligation of FERRER;

      6.2.3 its obligations under this Agreement are valid and binding and
      enforceable against it in accordance with their terms, except as
      enforcement may be affected by bankruptcy, insolvency, or other similar
      laws and by general principles of equity;

      6.2.4 it shall perform its obligations hereunder in compliance with all
      applicable laws and regulations whether it be local or otherwise;

      6.2.5 it has the commercial capacity to distribute and sell the Product in
      the Territory; and

      6.2.6 there are no agreements or commitments to which it or any of its
      Affiliates is a party that conflicts with its obligations hereunder.

      6.2.7 It has provided in writing to BARRIER a description of all products
      as of the Effective Date [**], to which FERRER has obtained the rights to
      market and/or distribute such products from a Third Party.

7.    OBLIGATIONS OF BARRIER

      7.1 FORM AND PROMOTION

      7.1.1 During the Term of this Agreement, BARRIER shall use Commercially
      Reasonable Efforts to assist FERRER in the preparation of sales promotion
      material and shall, from time to time, provide FERRER with its sales
      promotional material relating to the Products in order to facilitate
      advertising of the Products, together with such information as BARRIER
      deems appropriate in connection with any warranties relating to the
      Products.

      7.1.2 Prior to using any promotional materials for the Products for the
      first time, FERRER shall submit a sample of such materials to BARRIER for
      approval. BARRIER shall use Commercially Reasonable Efforts to approve
      such materials within ten (10) days for materials in English and fifteen
      (15) days for materials in a language other than English. Should FERRER
      receive no response from BARRIER within that period the materials shall be
      deemed approved.

      7.1.3 FERRER shall provide to BARRIER with samples of all marketing and
      promotion materials that FERRER uses for the Products for use by BARRIER
      and BARRIER's other partners outside of the Territory, at BARRIER's cost
      and expenses.

8.    OBLIGATIONS OF FERRER

      8.1 MINIMUM PURCHASE QUOTA

      8.1.1 During the Term, FERRER covenants and agrees to purchase from
      BARRIER for distribution within the Territory and independently for each
      Region and each country or Country Group not less than the Minimum
      Purchase Quota, as more specifically provided under clauses 2.3.1 and
      2.3.2

                                       16
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      8.1.2 On a Product by Product basis in the Territory, Region by Region and
      country by country, FERRER shall not be deemed to be in default of the
      requirement in Section 8.1.1 in any [**] for the year in question.

      8.1.3 For purposes of this Agreement, the term "Minimum Purchase Quota"
      with respect to each of the Zimycan Product and the Sebazole Product has
      the meaning set forth on Schedule 8.1.3 with respect to each Region and
      each country or Country Group therein. Upon the Effective Date, the
      Minimum Purchase Quota for each Region set forth on Schedule 8.1.3 for the
      Zimycan Product and the Sebazole Product shall be binding. During the
      sixty (60) day period following the Effective Date, FERRER shall have an
      opportunity to finalize the Minimum Purchase Quotas for each country or
      Country Group. Within sixty (60) days following the Effective Date FERRER
      shall deliver to BARRIER a revised Scheudule 8.1.3 containing the Minimum
      Purchase Quotas for the Zimycan Product and the Sebazole Product for each
      Region and each country or Country Group therein, which such revised
      schedule shall be binding. For clarity, the Minimum Purchase Quota for
      each Region on the revised schedule must be equal to the Minimum Purchase
      Quota for each Region set forth on Schedule 8.1.3 on the Effective Date.

      8.1.4 For purposes of this Agreement, the term "Minimum Purchase Quota"
      with respect to the Liarozole Product [**] and the Ketanserin Product
      [**], shall be those set forth of Schedule 8.1.4. The Minimum Purchase
      Quotas set forth on Schedule 8.1.4 shall become binding unless, at least
      ninety (90) days prior to the anticipated date of the first submission of
      the first MAA for the applicable Product in such Region, FERRER shall
      notify BARRIER in writing that due to the then proposed labeling or then
      existing market conditions in the Region, FERRER believes in good faith
      that such Minimum Purchase Quotas are commercially unfeasible. If FERRER
      so notifies BARRIER, then the parties shall negotiate in good faith
      revised Minimum Purchase Quotas for the applicable Product and Region and
      for each country or Country Group in such Region. If FERRER does not so
      notify BARRIER, then the Minimum Purchase Quotas on Schedule 8.1.4 shall
      become binding and the Minimum Purchase Quota for each country or Country
      Group within such Region shall be provided by FERRER during the thirty
      (30) day period following the first submission of the first MAA for the
      applicable Product in such Region. [**].

      8.2 REGISTRATION OF PRODUCTS

      Except for the Mutual Recognition Procedure which is in process as of the
      Effective Date for the Zimycan Product in the European Region, FERRER,
      based on the information provided by BARRIER, will use Commercially
      Reasonable Efforts to obtain the necessary permits, licenses,
      authorizations, registrations or approvals that may be required in
      accordance with each Region's regulations, or under any other Governmental
      Body, as may be required for the sale, distribution and promotion of the
      Products in the Territory, unless BARRIER notifies FERRER that BARRIER
      desires to take any such action. To this end, BARRIER shall provide all
      reasonable assistance as FERRER shall request. With respect to such Mutual
      Recognition Procedure and any other such regulatory action with respect to
      Products in the Territory that BARRIER undertakes, FERRER shall provide
      all reasonable assistance as BARRIER shall request.

                                       17
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      8.3 REGULATORY APPROVALS

      8.3.1 FERRER will seek such Regulatory Approval according to local
      regulations on behalf of BARRIER and obtain and maintain any requisite
      Regulatory Approval in the Territory in such name as BARRIER may require.
      If the Products and the Regulatory Approvals are registered in the name of
      FERRER, FERRER shall hold such Regulatory Approvals in trust for the
      benefit of BARRIER. At BARRIER's request, whether or not this Agreement is
      then in effect, FERRER shall take such action, including transferring the
      Regulatory Approvals or assisting in the procuring of a new registration,
      as BARRIER may request in order to vest the Regulatory Approvals of the
      Products in BARRIER or its designee; provided however that no such
      transfer shall be required prior to the valid termination of this
      Agreement pursuant to provisions set forth in Section 13 if the rights of
      FERRER are materially adversely affected thereby.

      8.3.2 Each Party shall bear all costs and expenses actually incurred by it
      in obtaining Regulatory Approvals and conducting its regulatory and
      commercialization activities hereunder.

      8.4 LABELLING

      8.4.1 The inventory shall be shipped with appropriate labelling as
      approved by the Governmental Body as per all standards, laws and
      regulations applicable to each country of the Territory as notified by
      FERRER to BARRIER from time to time.

      8.4.2 Consistent and in accordance with Section 12.3.3, FERRER shall cause
      BARRIER to be identified on the labels of the Products and on promotional
      and educational materials as the manufacturer and holder of IP Rights
      thereof, unless prohibited by applicable law or otherwise instructed by
      BARRIER. FERRER shall represent itself as the distributor of the Products.

      8.5 OTHER OBLIGATIONS

      FERRER shall:

      8.5.1 use Commercially Reasonable Efforts to promote, distribute, market
      and sell the Product in the Territory;

      8.5.2 properly carry out its obligations under this Agreement;

      8.5.3 honor any warranty offered by BARRIER on the Products;

      8.5.4 manage any consumers' complaints in a diligent and expeditious
      manner, and inform BARRIER without delay of any abnormal increase in the
      number of complaints in association with Products all pursuant to the
      Pharmacovigilance Agreement; and

      8.5.5 be responsible for complying with all local laws and regulations
      including, without limitation, laws and regulations relating to the
      importation and sale of the Products.

9.    MUTUAL UNDERTAKINGS

                                       18
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      9.1 MARKETING STRATEGY AND JOINT COMMERCIALIZATION COMMITTEE

      As soon as practicable following the date of the Agreement, the Parties
      will establish a Joint Commercialization Committee (JCC) to monitor [**].
      BARRIER and FERRER shall each designate at least two (2) members to serve
      on the JCC, one of whom must be the person [**]. The JCC shall meet at
      least quarterly and at such other times as agreed to by the committee
      members.

      [**].

      [**].

      [**].

      9.2 [**].

      9.3 JOINT STEERING COMMITTEE

      As soon as practicable following the Effective Date, the Parties shall
      form a Joint Steering Committee. BARRIER and FERRER shall each designate
      two (2) members to serve on the Joint Steering Committee and such members
      shall be senior executives of the designating Party. Each member shall
      serve until removed by the Party appointing the member. The initial
      members of the Joint Steering Committee shall be Geert Cauwenbergh and Al
      Altomari for BARRIER and Jorge Ramentol and Carlos De Lecea for FERRER.
      The Joint Steering Committee shall exist to (i) review the efforts of the
      Joint Commercialization Committee, (ii) resolve disputes of the Joint
      Commercialization Committee, (iii) establish the Minimum Supply Price and
      the Forecasted Supply Price, and (iv) to perform such other duties to
      facilitate the collaboration as the Parties deem necessary. Each Party
      shall have one vote and both Parties must agree on all decisions of the
      Joint Steering Committee.

10.   INDEMNIFICATION

      10.1 INDEMNIFICATION BY BARRIER

      BARRIER shall indemnify, protect and hold FERRER and FERRER's directors,
      officers, and employees (the "FERRER Indemnified Parties") harmless from
      and against any and all Liabilities, asserted at any time arising out of
      (i) any breach or misstatement by BARRIER of its representations and
      warranties made in this Agreement, or (ii) the Products themselves
      (characteristics inherent to the Products), the manufacture, sale or use
      of the Products produced by or for BARRIER or its designees (whether under
      defective Product liability or otherwise) or (iii) any negligent act or
      omission or gross negligence, recklessness or willful misconduct of
      Barrier or any of its Affiliates; or (iv) any other breach by BARRIER of
      its obligations under this Agreement except in each case, to the extent
      caused by any negligent act or omission or gross negligence, recklessness
      or willful misconduct of any of the FERRER Indemnified Parties.

      10.2 INDEMNIFICATION BY FERRER

      FERRER shall indemnify, protect and hold BARRIER and BARRIER's directors,
      officers, employees and agents harmless from and against any and all
      Liabilities, asserted at any

                                       19
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      time arising out of or involving (i) any breach or misstatement by FERRER
      of its representations and warranties made in this Agreement or (ii) the
      promotion, storage, sale and distribution of the Products by FERRER or its
      designees, or (iii) any negligent act or omission or gross negligence,
      recklessness or willful misconduct of FERRER or any of its Affiliates; or
      (iv) any other breach by FERRER of its obligations under this Agreement
      except in each case, to the extent caused by any negligent act or omission
      or gross negligence, recklessness or willful misconduct of any of the
      Barrier Indemnified Parties.

      10.3 PROCEDURE

      10.3.1 If any claim or action is asserted against a Party, or the
      Affiliate of a Party, to this Agreement that would entitle such Party to
      indemnification pursuant to either of the foregoing Sections 10.1 or 10.2
      (a "Third Party Claim"), such Party who seeks indemnification (the
      "Indemnitee") will give written notice thereof to the Party to this
      Agreement from whom indemnification is sought (the "Indemnitor") promptly,
      provided, however, that failure to give such notification will not affect
      the indemnification provided hereunder except to the extent the Indemnitor
      shall have been actually prejudiced as a result of such failure.

      10.3.2 If a Third Party Claim is made against an Indemnitee and the
      Indemnitor acknowledges in writing its obligation to indemnify the
      Indemnitee therefore, the Indemnitor will be entitled, within one hundred
      twenty (120) days after receipt of written notice from the Indemnitee of
      the commencement or assertion of any such Third Party Claim to assume the
      defense thereof (at the expense of the Indemnitor) with counsel selected
      by the Indemnitor and reasonably satisfactory to the Indemnitee, for so
      long as the Indemnitor is conducting a good faith and diligent defense.
      Should the Indemnitor so elect to assume the defense of a Third Party
      Claim, the Indemnitor will not be liable to the Indemnitee for any legal
      or other expenses subsequently incurred by the Indemnitee in connection
      with the defense thereof. If the Indemnitor assumes the defense of any
      Third Party Claim, the Indemnitee shall have the right to participate in
      the defense thereof and to employ counsel, at its own expense, separate
      from the counsel employed by the Indemnitor. If the Indemnitor assumes the
      defense of any Third Party Claim, the Indemnitor will promptly supply to
      the Indemnitee copies of all correspondence and documents relating to or
      in connection with such Third Party Claim and keep the Indemnitee informed
      of developments relating to or in connection with such Third Party Claim,
      as may be reasonably requested by the Indemnitee (including, without
      limitation, providing to the Indemnitee on reasonable request updates and
      summaries as to the status thereof). If the Indemnitor chooses to defend a
      Third Party Claim, all Indemnitees shall reasonably cooperate with the
      Indemnitor in the defense thereof (such cooperation to be at the expense,
      including reasonable legal fees and expenses, of the Indemnitor). If the
      Indemnitor does not elect to assume control of the defense of any Third
      Party Claim within the 120-day period set forth above, or if such good
      faith and diligent defense is not being or ceases to be conducted by the
      Indemnitor, the Indemnitee shall have the right, at the expense of the
      Indemnitor, after three (3) Business Days notice to the Indemnitor of its
      intent to do so, to undertake the defense of the Third Party Claim for the
      account of the Indemnitor (with counsel selected by the Indemnitee), and
      to compromise or settle such Third Party Claim, exercising reasonable
      business judgment.

      10.3.3 If the Indemnitor acknowledges in writing its obligation to
      indemnify the Indemnitee for a Third Party Claim, the Indemnitee will
      agree to any settlement,

                                       20
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      compromise or discharge of such Third Party Claim that the Indemnitor may
      recommend that by its terms obligates the Indemnitor to pay the full
      amount of losses (whether through settlement or otherwise) in connection
      with such Third Party Claim and unconditionally and irrevocably releases
      the Indemnitee completely from all liability in connection with such Third
      Party Claim; provided, however, that, without the Indemnitee's prior
      written consent, the Indemnitor shall not consent to any settlement,
      compromise or discharge (including the consent to entry of any judgment),
      and the Indemnitee may refuse to agree to any such settlement, compromise
      or discharge, that provides for injunctive or other nonmonetary relief
      affecting the Indemnitee. If the Indemnitor acknowledges in writing its
      obligation to indemnify the Indemnitee for a Third Party Claim, the
      Indemnitee shall not (unless required by law) admit any liability with
      respect to, or settle, compromise or discharge, such Third Party Claim
      without the Indemnitor's prior written consent (which consent shall not be
      unreasonably withheld).

      10.4 CONSEQUENTIAL DAMAGES

      Other than amounts payable with respect to a Third Party Claim pursuant to
      an indemnification obligation, neither Party hereto will be liable for
      special, incidental or consequential damages arising out of this agreement
      or the exercise of its rights hereunder, including without limitation lost
      profits arising from or relating to any breach of this Agreement,
      regardless of any notice of such damages.

      10.5 INSURANCE

      The Parties shall maintain, during the Term, commercial general liability
      insurance, (including products liability, contractual liability, bodily
      injury, property damage and personal injury) adequate enough to cover its
      indemnification obligations under this Article 10. During the Term, the
      Parties shall not permit such insurance to be expired or canceled without
      reasonable prior written notice to the other Party. A Party's liability to
      the other is in no way limited to the extent of the insurance coverage.

11.   REGULATORY MATTERS

      11.1 ADVERSE DRUG REACTIONS

         Promptly following the Effective Date, but in no event later than 30
         days prior to the anticipated First Commercial Sale of a Product, the
         Parties shall negotiate in good faith and execute a pharmacovigilence
         agreement containing terms customary for similar agreements (the
         "Pharmacovigilence Agreement").

      11.2 COMMUNICATIONS WITH GOVERNMENT BODIES; INQUIRIES

      11.2.1 The Party to whom the MAA is granted shall be responsible for
      communicating with Government Bodies on regulatory matters. Unless
      otherwise determined pursuant to Section 8.3.1, it is anticipated that
      BARRIER shall be responsible for communicating with Government Bodies in
      the European Region and FERRER will be responsible for communicating with
      Government Bodies in the African and Latin American Regions.

      11.2.2 Upon being contacted by any Governmental Body in the Territory in
      connection with a Product or any other matter which might reasonably be
      expected to affect the rights or obligations of the other Party under this
      Agreement, the Party so contacted

                                       21
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      shall immediately notify the other Party. Each Party, as appropriate,
      shall respond to all inquiries regarding the Products, from Governmental
      Bodies throughout the Territory and the Parties shall provide one another
      with reasonable assistance in this regard.

      11.3 RECALLS

      In the event that either Party determines that an event, incident or
      circumstance has occurred which may result in the need for a recall or
      other removal of the Products from the market, such Party shall advise and
      consult with the other Party with respect thereto as to the appropriate
      measures to be taken, as jointly agreed through the Joint
      Commercialization Committee.

      11.4 RECALL PROCEDURE

      Prior to commencing any recall, the Parties shall review with one another
      the manner in which the recall is to be carried out and any instructions
      or suggestions of the applicable Regulatory Authority. BARRIER may decide
      to assume control of any recall procedure and in such case FERRER shall
      assist at BARRIER's reasonable cost in any action taken pursuant to such
      recall.

      11.5 COST OF RECALLS

      Except as expressly otherwise provided below in this section 11.5, the
      Parties shall share equally all costs of a recall, market withdrawal or
      other corrective action with respect to any Product in the Territory.
      Notwithstanding the foregoing, a Party shall bear any and all costs of a
      recall, market withdrawal or other corrective action with respect to a
      Product in the Territory to the extent such recall, market withdrawal or
      other corrective action is attributable predominantly to the fault of such
      Party and results from:

            (A) in the case of BARRIER: (i) a grossly negligent or reckless act
      or omission or intentional misconduct on the part of BARRIER or its
      Affiliates, and not from a grossly negligent or reckless act or omission
      or intentional misconduct on the part of FERRER or its Affiliates or
      sub-distributors, (ii) characteristics inherent to the Products, (iii) the
      failure of Product to be manufactured by BARRIER in compliance in all
      material respects with all applicable laws, rules and regulations, and in
      accordance with the Specifications; or (iv) material breach by BARRIER of
      applicable laws, rules or regulations, or the provisions of this
      Agreement; and

            (B) in the case of FERRER: (i) a grossly negligent or reckless act
      or omission or intentional misconduct on the part of FERRER or its
      Affiliates or sub-distributors, and not from a grossly negligent or
      reckless act or omission or intentional misconduct on the part of BARRIER
      or its Affiliates; (ii) the failure of FERRER to handle, store or
      distribute Product in compliance with all applicable laws, rules and
      regulations from and after delivery of Product to FERRER; or (iii)
      material breach by FERRER of applicable laws, rules or regulations, or the
      provisions of this Agreement.

      Notwithstanding the foregoing, neither Party shall have any obligation to
      reimburse or otherwise compensate the other Party or its Affiliates for
      any lost profits or income that may arise in connection with any recall,
      market withdrawal or corrective action with respect to a Product.

                                       22
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

12.   INTELLECTUAL PROPERTY

      12.1 LIMITED KNOW-HOW AND PATENTS LICENSE

      12.1.1 Subject to the terms and conditions of this Agreement, and only to
      the extent required to perform its obligations and undertakings pursuant
      to this Agreement, BARRIER hereby grants to FERRER an exclusive,
      non-transferable license throughout the Territory to use the Know-How and
      the Patents owned by BARRIER for the sole purpose of: (i) obtaining the
      Regulatory Approvals in the Territory, and (ii) the sale, marketing and
      distribution of the Product in the Territory in the Field of Use, as
      provided herein.

      12.1.2 BARRIER also grants to FERRER for the purpose provided for pursuant
      to the provisions of sub-section 12.1.1, (i) an exclusive,
      non-transferable right and license throughout the Territory to use such
      Know-How and Patents of which BARRIER is an exclusive licensee, and (ii) a
      non-exclusive, non-transferable right and license throughout the Territory
      to use such Know-How and Patents of which BARRIER is a non-exclusive
      licensee.

      12.2 INVENTIONS

      BARRIER shall retain sole ownership of and exclusive title in the Product
      IP Rights. Any and all inventions relating to the Products resulting from
      the activities conducted by FERRER's directors, employees or agents under
      this Agreement (each, a "Distributor Invention") shall be promptly
      disclosed in writing to BARRIER. FERRER agrees to assign (or cause to be
      assigned), and hereby does assign, to BARRIER all of FERRER's right, title
      and interest in and to any Distributor Invention (whether made solely by
      employees and contractors of Distributor or jointly by employees or
      contractors of BARRIER and employees or contractors of FERRER.

      12.3 LIMITED LICENSE GRANT OF TRADEMARKS

      12.3.1 Selection of Trademarks for the Product shall be at BARRIER's sole
      discretion and BARRIER shall own all right, title and interest in and to
      any and all such Trademarks.

      12.3.2 BARRIER shall be responsible for maintaining and registering any
      Trademarks. BARRIER shall be responsible for all costs relating to the
      filing and renewal of Trademark applications for the Trademarks.

      12.3.3 All packaging materials, package inserts, labels and promotional
      materials relating to a Product distributed in the Territory shall display
      the Trademark and such BARRIER Housemark(s) as may be determined by
      BARRIER, in a form and style to be determined by BARRIER and in accordance
      with local regulations. FERRER shall not use any other Trademark in
      connection with the Product without obtaining BARRIER's prior consent in
      writing; provided, however, this provision shall not be construed to
      prohibit the continued use of FERRER's company name and logo in connection
      with its activities under this Agreement. In addition, if FERRER
      reasonably believes that, in any given country, business conditions
      justify that a Product should also be marketed as a generic, BARRIER shall
      not unreasonably withhold its consent.

                                       23
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      12.3.4 BARRIER hereby grants to FERRER a non-exclusive, royalty-free
      license to use the Trademarks and the BARRIER Housemark(s) on and in
      connection with the promotion, sale and distribution of Products in the
      Territory during the Term of this Agreement. FERRER acknowledges that the
      ownership and all goodwill from the use of the Trademarks and the BARRIER
      Housemark(s) shall vest in and inure to the benefit of BARRIER. This
      Agreement confers on FERRER no right or authority to use the Trademarks or
      the BARRIER Housemark other than in connection with the Product marketed
      pursuant to this Agreement. FERRER will not, at any time during the
      continuance of this Agreement or thereafter, directly or indirectly, by
      itself or through its employees, agents or related companies, contest or
      assist any other company or person in contesting the validity of any of
      the Trademarks of the BARRIER Housemark or the right, title and interest
      of BARRIER to such Trademarks or the BARRIER Housemark.

      12.3.5 FERRER agrees to notify BARRIER promptly in writing if it becomes
      aware of any conflicting use of or application for registration of the
      Trademarks, or of any trademark confusingly similar thereto, or of any
      known or alleged infringements as well as of unfair competition involving
      the Trademarks which shall come to its attention.

      12.3.6 BARRIER shall be responsible for the defense of the Trademarks and
      shall determine in its sole discretion as to whether it will bring any
      actions in connection therewith. If BARRIER decides to do so, FERRER shall
      cooperate with BARRIER and render BARRIER its reasonable assistance in the
      defense of the Trademarks at BARRIER's expense. Any damages and costs
      recovered shall be for BARRIER's sole benefit.

      12.3.7 Other than as provided herein, FERRER shall not use or register at
      any time, whether during the continuance of this Agreement or thereafter,
      any business or tradename, company name, trademark, labeling or packaging
      design that incorporates, is substantially identical with or is
      deceptively or confusingly similar to any of the Trademarks or BARRIER
      Housemark.

      12.4 OTHER RIGHTS

      During the term of this Agreement, BARRIER retains all rights not granted
      or licensed hereunder including without limitation, the right to use the
      IP Rights in connection with the manufacturing, labeling, marketing, sale
      and distribution of the Products and the right to commercially exploit the
      IP Rights and expand its activities in any way and in any country of the
      world outside the Territory.

      12.5 CONFIDENTIAL INFORMATION

      The Parties shall not, at any time or under any circumstances, without the
      consent of the other Party, directly or indirectly communicate or disclose
      to any Person any confidential knowledge or information howsoever acquired
      including without limitation information received by a Party relating to
      or concerning the customers, Products, technology, Know-how, Patents,
      Intellectual Property, trade secrets, systems, operations or other
      confidential information regarding the other Party's business or that of
      any of its Affiliates ("Confidential Information"), nor shall it utilize
      or make available any such knowledge directly or indirectly in connection
      with any business or activity in which it is or proposes to be involved,
      or in connection with the solicitation or acceptance of employment with

                                       24
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      any Person. For the purposes of this Article, shall be excluded from the
      obligations of non-disclosure hereunder the confidential information
      which:

      12.5.1 is a part of the public domain through no act or omission of the
      receiving Party or its officers, employees, agents, advisor or other
      representatives;

      12.5.2 was lawfully within its possession prior to its receipt thereof
      from the other Party;

      12.5.3 was received in good faith by the receiving Party from a Third
      Party, who was lawfully in possession of, and had the right to disclose,
      the same; or

      12.5.4 is information which the receiving Party is required by law to
      disclose, provided that the receiving Party first notifies the other Party
      that it believes it is required to disclose such information and it allows
      that Party a reasonable period of time to contest the disclosure of such
      information.

13.   TERM AND TERMINATION

      13.1 TERM

      Subject to termination as hereinafter provided, the term of this Agreement
      shall commence on the Effective Date and shall expire on a Product by
      Product basis and country by country basis on the later of (i) ten (10)
      years from the date of the First Commercial Sale of such Product for each
      country of the Territory and (ii) the date of expiration of the last Valid
      Claim to expire of the Patents in such country.

      13.2 RENEWAL

      This Agreement shall be automatically renewed at the end of the Term for
      consecutive periods of one (1) year upon the same terms and conditions,
      unless the Parties mutually agree to modify such terms and conditions and
      unless either Party gives a notice to the other Party, three months prior
      to the expiry of the Agreement, that it does not intend to renew the
      Agreement.

      13.3 EARLIER TERMINATION

      This Agreement may be terminated, prior to the expiration of the term
      hereof by mutual written Agreement of the Parties or upon any of the
      following:

      13.3.1 TERMINATION UPON BUSINESS FAILURE. To the extent permitted by
      applicable law, either Party shall have the option to terminate this
      Agreement immediately upon notice to the other Party in the event that (i)
      the other Party becomes insolvent, or subject to proceedings for its
      adjudication as a bankrupt, (ii) a receiver, trustee, or custodian is
      appointed for the other Party, or (iii) the other Party makes an
      assignment for the benefit of creditors, or is liquidated or dissolved,
      and (iv) in the event of the occurrence of any action or event which is,
      the equivalent in law of one or more of the events described in this
      subsection 13.3.1;

      13.3.2 EITHER PARTY FOR CAUSE. This Agreement may be terminated by either
      Party on a Product by Product and country by country basis in the event
      that the other Party is in default of any of the material provisions,
      terms and conditions herein with respect to

                                       25
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      such Product in such country and fails to remedy (including payment of any
      alleged damages) such default within sixty (60) days of a notice thereof
      from the other Party.;

      13.3.3 DEFAULT OF PAYMENT. This Agreement may be terminated in the event
      that FERRER is in default of payment and FERRER fails to remedy such
      default within ninety (90) days of a notice thereof from BARRIER;

      13.3.4 TERMINATION BY FERRER. FERRER shall have the right to terminate
      this Agreement on a Product by Product and country by country basis if:

            (i) After [**] following the first submission of an MAA for a given
      Product in a given country such Product is not approved by the
      Governmental Body through no fault of FERRER, or

            (ii) If for any other reason beyond the reasonable control of
      FERRER, FERRER reasonably determines in good faith that commercialization
      of a given Product is not feasible or is economically unreasonable in a
      given country or countries of the Territory. Notwithstanding the above,
      before FERRER exercises such right, both Parties shall meet and discuss in
      good faith in order to try to find an alternative solution. In addition,
      if FERRER and BARRIER are unable to arrive at an alternative solution with
      respect to a country and FERRER has previously exercised its right to
      terminate this Agreement with respect to another country in the same
      Region, then BARRIER shall have the option, in its sole discretion, to
      terminate this Agreement as to such Product for the entire Region, or

            (iii) If a Product is withdrawn from the market due to safety
      reasons by BARRIER.

      13.3.5 TERMINATION BY BARRIER. BARRIER may terminate this Agreement on a
      Product by Product and country by country basis if:

            (i) FERRER fails to use Commercially Reasonable Efforts to fulfill
      its objectives to register the Products.

            (ii) through fault of FERRER, FERRER fails to launch and actively
      sell and promote a given Product in a given country of the Territory
      within [**] after obtaining the Marketing Authorization, or

            (iii) FERRER permanently ceases to sell a given Product in a given
      country of the Territory for a period of [**], except in circumstances
      where the Product has been withdrawn for safety reasons, or

            (iv) During the Term of this Agreement, FERRER experiences a Change
      of Control, or enters into any Agreement with respect to any such Change
      of Control transaction, and as of the date of the closing of the Change of
      Control transaction the surviving entity would be promoting, distributing,
      marketing or selling a Competing Product in any country in the Territory.
      However, before BARRIER exercises its right of Termination under this
      clause 13.3.5 (iii), BARRIER shall allow FERRER and/or the surviving
      entity a period of [**] to either divest or discontinue selling such
      Competing Product. For purposes of this Agreement "Change of Control"
      shall mean with respect to a Party (a) the merger or consolidation of such
      Party and any Third Party which results

                                       26
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      in the voting securities of such Party outstanding immediately prior
      thereto ceasing to represent more than fifty percent (50%) of the combined
      voting power of the surviving entity immediately after such merger or
      consolidation, or (b) any Third Party, together with its affiliates,
      becoming the beneficial owner of fifty percent (50%) or more of the
      combined voting power of the outstanding securities of the Party, or (c)
      the sale or other transfer to a Third Party of all or substantially all of
      such Party's assets, or

            (v) Ferrer contests the property rights of BARRIER in the IP Rights
      or executes or causes to be executed at any time any act capable of
      infringing the rights of BARRIER and/or the IP Rights.

      13.4 RESULTS OF EXPIRY

      Upon the scheduled expiration of the Term on a Product by Product and
      country by country basis:

            (i) FERRER's license under Section 2.2.1 would become non-exclusive
      and royalty free and would include the right to manufacture and have
      manufactured the applicable Product for sale in the applicable country;

            (ii) FERRER would transfer to BARRIER any marketing authorizations
      or other regulatory approvals for Products held in FERRER's name and
      BARRIER would grant to FERRER the right of cross-reference in order to
      enable FERRER to obtain a new marketing authorization in its own name;

            (iii) BARRIER's obligation to supply the applicable Product shall
      terminate; and

            (iv) BARRIER shall grant to FERRER an exclusive license to continue
      using the Trademarks in the applicable country in exchange for a royalty
      equal to [**] percent ([**]%) of FERRER's Net Sales, of Products bearing
      such Trademark payable on a quarterly basis pursuant to the provisions of
      Article 4 and FERRER and BARRIER shall execute and deliver any necessary
      trademark license agreement that BARRIER reasonably believes to be
      necessary in this regard.

      13.5 RESULTS OF TERMINATION

      13.5.1 Upon termination of this Agreement on a Product by Product and
      country by country basis as applicable, by BARRIER pursuant to clauses
      13.3.1 and 13.3.2 and/or 13.3.3, 13.3.4 and 13.3.5 all the rights, titles,
      interests and privileges resulting from this Agreement shall automatically
      revert to BARRIER, and subsequently:

            13.5.1.1 FERRER shall cease all use, sale, distribution and
            marketing of the Products and shall cease representing itself as the
            authorized distributor of BARRIER;

            13.5.1.2 FERRER shall return to BARRIER all information or materials
            given to FERRER by BARRIER in whatever form or medium;

            13.5.1.3 if requested by BARRIER, FERRER shall sell to BARRIER, at
            the original net price paid by FERRER plus actual freight charges
            for delivery to

                                       27
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      BARRIER, all of the Products sold by BARRIER to FERRER and on hand in
      FERRER's place of business or in the possession or the control of FERRER
      at the time of termination of this Agreement and deliver same to BARRIER
      forthwith upon request;

      13.5.1.4 in case BARRIER decides not to buy back all of the Products sold
      by BARRIER to FERRER and on hand in FERRER's place of business or in the
      possession or the control of FERRER at the time of Termination of this
      Agreement, then FERRER shall be entitled to sell it during a period of six
      (6) months following termination;

      13.5.1.5 FERRER shall transfer back to BARRIER the Regulatory Approvals in
      accordance with the provisions of Section 8.3.

      13.5.2 In the event that BARRIER commits a partial or total material
      breach of this Agreement, FERRER shall give written notice to BARRIER and
      BARRIER shall have ninety (90) days to cure each breach. If such breach
      cannot reasonably be cured within such ninety (90) day period following
      written notification from FERRER, then the Parties agree to negotiate in
      good faith and/or follow the provisions provided under clause 14.1,
      provided that, until a final decision is taken, this Agreement shall
      continue in full force and effect allowing FERRER to continue its
      commercial activities with the Products.

14.   GENERAL

      14.1 DISPUTE RESOLUTION; ARBITRATION

      The Parties recognize that disputes may from time to time arise which
      relate to either Party's rights and obligations hereunder. It is the
      objective of the Parties to comply with the procedures set forth in this
      Agreement to use all reasonable efforts to facilitate the resolution of
      such disputes in an expedient manner by mutual agreement. The Parties
      agree that, in the first instance, all disputes should be submitted to the
      Joint Steering Committee for resolution. In the event the Joint Steering
      Committee is unable to resolve any such dispute within thirty (30) days
      after the matter is first submitted to the Joint Steering Committee,
      either Party may submit the matter to arbitration pursuant to this Section
      14.1.

      Any dispute, controversy or claim between BARRIER and FERRER relating to
      the breach, termination, construction, interpretation, application of (or
      at the occasion of) this Agreement, which cannot be settled by the Joint
      Steering Committee shall be settled, when permitted by law, by binding
      arbitration under the following terms and conditions:

      14.1.1 either BARRIER or FERRER may demand that a dispute, controversy, or
      claim be submitted to arbitration. Such demand shall be made in writing to
      the other Party at the notification address set forth in this Agreement;

      14.1.2 all matters submitted by BARRIER and FERRER for settlement by
      binding arbitration shall be decided by a single arbitrator agreeable to
      both BARRIER and FERRER. If BARRIER and FERRER are unable to agree upon a
      single arbitrator within a period of fifteen (15) business days following
      the transmission by either Party of the notice referred to in section
      14.1.1, an arbitrator shall be appointed in accordance with the then
      existing Rules of Conciliation and Arbitration of the International
      Chamber of

                                       28
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      Commerce (the "Rules"), if for any reason an arbitrator cannot be
      appointed in this manner, this section 14.1.2 shall cease to apply to the
      dispute, controversy or claim in question and any Party may apply to a
      court of competent jurisdiction for the settlement thereof;

      14.1.3 all arbitration authorized by this Agreement shall be conducted in
      accordance with the Rules, that are not inconsistent with the terms of
      this Agreement;

      14.1.4 decisions and awards rendered by arbitration authorized by this
      Agreement may be entered and enforced by either BARRIER and FERRER in any
      court having jurisdiction. BARRIER and FERRER hereby irrevocably consent
      and submit to the jurisdiction of such court for purposes of such
      enforcement;

      14.1.5 in the event either BARRIER or FERRER does not reasonably comply
      with a final decision or award made by the arbitrator, such non-complying
      Party shall bear all costs and expenses, including attorney's fees,
      incurred by the other Party in obtaining enforcement of the decision or
      award;

      14.1.6 during any period of arbitration concerning this Agreement or any
      part thereof, this Agreement shall remain in full force and effect and all
      terms shall be complied with by both BARRIER and FERRER;

      14.1.7 the arbitrator shall not add to, subtract from, or modify any of
      the terms or conditions of the Agreement;

      14.1.8 the arbitrator shall use its best efforts (i) to complete the
      process of arbitration including the arbitration hearing within one
      hundred and twenty (120) days of his nomination and (ii) to render a
      decision or an award within thirty (30) days after the close of
      arbitration hearings;

      14.1.9 the arbitrator, in his discretion, shall allocate all costs of the
      arbitration between BARRIER and FERRER. However, neither BARRIER nor
      FERRER shall be required to pay the costs of the other Party;

      14.1.10 all arbitration proceedings authorized by this Agreement shall be
      held in London, England and shall be conducted in the English language and
      all documents referred to shall be in English;

      14.1.11 this section 14.1 shall not apply in cases where a Party is
      seeking, as a remedy to a dispute, controversy or claim, the issue of an
      interlocutory injunction or another similar remedy and except for the
      purpose of filing the award or obtaining an order of enforcement, as the
      case may be, for the purpose of rendering the award executory;

      14.1.12 EACH PARTY WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY;

      14.1.13 EACH PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE, EXEMPLARY OR
      MULTIPLIED DAMAGES FROM THE OTHER; AND

      14.1.14 EACH PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIAL DAMAGES FROM
      THE OTHER.

                                       29
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      14.2 ASSIGNABILITY

      14.2.1 Except as expressly provided herein, neither this Agreement nor any
      interest or rights hereunder shall be assignable by a Party without the
      prior written consent of the other;

      14.2.2 BARRIER may assign this Agreement to an Affiliate or the purchaser
      of all or substantially all its business as it relates to the Products,
      without the consent of FERRER; in such cases, such assignee shall have and
      may exercise all the rights, and shall assume all the obligations of the
      assignor pursuant to this Agreement and any reference to the assignor in
      this Agreement shall be deemed to refer to such assignee;

      14.2.3 FERRER may assign this Agreement to an Affiliate or the purchaser
      of all or substantially all its business as it relates to the Products,
      without the consent of BARRIER if (i) FERRER remains jointly and severally
      responsible of the Agreement and (ii) the Affiliate remains controlled by
      FERRER at all time. In such cases, the assignee shall have and may
      exercise all the rights, and shall assume all the obligations of the
      assignor pursuant to this Agreement and any reference to the assignor in
      this Agreement shall be deemed to refer to such assignee;

      14.2.4 In the case of any permitted transfer the Parties hereto and the
      assignee shall execute an Agreement confirming such assignment and such
      assumption of obligations.

      14.3 INUREMENT

      This Agreement shall inure to the benefit of and be binding upon the
      Parties hereto and their respective successors and permitted assigns.

      14.4 FORCE MAJEURE

      Neither Party shall be liable for delays in performance under this
      Agreement occasioned by force majeure or any cause beyond its control,
      including but not limited to war, civil disturbance, fire, flood,
      earthquake, windstorm, acts of default of common carriers, strikes,
      unforeseen shutdowns of sources of supply, governmental laws, acts,
      regulations or orders which have not been enacted as of the Effective Date
      (whether or not such later prove to be invalid) or any other occurrence,
      whether or not similar in character to the foregoing.

      14.5 NO AGENCY

      The Parties are independent contractors. Neither is the agent or legal
      representative, joint venturer, partner, employee or employer of the
      other. Each Party hereto agrees not to represent itself as the agent or
      legal representative of the other. This Agreement does not grant any Party
      any authority to assume or create any obligation on behalf of or in the
      name of the other Party.

      14.6 ENTIRE AGREEMENT

      The terms and conditions of this Agreement supersede the terms and
      conditions of any and all prior Agreements, and any and all
      representations that may have been made prior to this Agreement with
      respect to the subject matter of this Agreement. The terms

                                       30
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      and conditions herein constitute the entire Agreement between the Parties
      hereto and may not be amended, changed, modified, contradicted, explained
      or supplemented (including by course of dealing between the Parties, usage
      of trade or otherwise) except by a written instrument signed by an
      authorized officer of each of the Parties which refers specifically to
      this Agreement.

      14.7 FURTHER ASSURANCES

      Each Party agrees to duly execute and deliver, or cause to be duly
      executed and delivered, such further instruments and to do and cause to be
      done such further acts and things, including, without limitation, the
      filing of such additional assignments, agreements, documents and
      instruments that may be necessary or as the other Party may at any time
      reasonably request in connection with this Agreement or to carry out more
      effectively the provisions or purposes of, or to better assure and confirm
      unto such other Party its rights and remedies under, this Agreement. Each
      Party agrees to cause each of its employees and agents to take all actions
      and to execute, acknowledge and deliver all instruments or Agreements
      reasonably requested by the other Party and necessary for the perfection,
      maintenance, enforcement or defense of that Party's rights under this
      Agreement.

      14.8 SEVERABILITY OF CLAUSES

      If any provision of this Agreement is determined to be illegal, against
      public order, or otherwise unenforceable it shall not in any way defeat,
      invalidate or render unenforceable any other provision of this Agreement
      and each such provision shall at all times be considered separate and
      severable in this Agreement.

      14.9 WAIVER

      No waiver by either of the Parties of any breach of any provision hereof
      shall constitute a waiver of any other breach of any provision hereof.

      14.10 NOTICES

      Any notice required by this Agreement shall specifically reference this
      Agreement, shall be in writing and may either be delivered in hand, by
      facsimile during normal business hours with confirmation of receipt, by
      reputable overnight courier service or be mailed with postage prepaid by
      certified or registered mail, return receipt requested, to the addresses
      set forth below, or such other address for itself as any of the Parties
      may from time to time specify in writing to the other Party in accordance
      with this article. No notice shall be deemed given until it is actually
      received.

        If to BARRIER:           BARRIER THERAPEUTICS, INC.
                                 600 College Road East
                                 Suite 3200
                                 Princeton, NJ  08540

                                 Attention of: Chief Commercial Officer
                                 Facsimile number: 609-945-1212

        With a copy to:          General Counsel

                                       31
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                 Facsimile number: 609-945-1210

        If to FERRER:            FERRER INTERNACIONAL, S.A.
                                 Gran Via Carlos III,
                                 94-98, entlo.
                                 Barcelona, Spain

                                 Attention of: Licensing Department
                                 Facsimile number: +34 93 491 47 20

        With a copy to:          FERRER INTERNACIONAL, S.A.
                                 LEGAL DEPARTMENT
                                 Gran Via Carlos III,
                                 94-98, entlo.
                                 Barcelona, Spain

                                 Attention of: Legal Department
                                 Facsimile number: + 34 93 490 89 33

      14.11 SUCCESSORS AND ASSIGNS

      This Agreement shall ensure to the benefit of and be binding upon the
      Parties hereto and their respective successors and permitted assigns.

      14.12 EXECUTION IN COUNTERPARTS

      This Agreement may be executed in counterparts, each of which, when so
      executed and delivered, shall be deemed to be an original, and all of
      which counterparts, taken together, shall constitute one and the same
      instrument.

      14.13 UNITED NATIONS CONVENTION

      The United Nations Convention on Contracts for the International Sale of
      Goods will not apply in any way to this Agreement or to the transactions
      contemplated by this Agreement or otherwise to create any rights or to
      impose any duties or obligations on any Party to this Agreement. Any
      rights which have arisen or which might in the future arise under the
      United Nations Convention on Contracts for the International Sale of Goods
      are waived and released by all Parties to this Agreement.

      LANGUAGE

      The Parties hereto confirm that it is their wish that this Agreement be
      drawn up in English only.

      14.14 PUBLICITY

      Neither Party will issue a press release or make any public announcement
      in connection with the execution of this Agreement or the terms hereof,
      unless mutually agreed to by the Parties or required by law. FERRER shall
      not make any public announcement regarding any of the Products without
      BARRIER's prior written consent. BARRIER shall be entitled to describe
      this Agreement in any document which it files with the Securities

                                       32
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      and Exchange Commission ("SEC") after providing FERRER at least five (5)
      business days to review and comment on such description, or the maximum
      such lesser time as may be possible in an emergency. After issuing any
      mutually approved press release, public announcement or making any such
      SEC filing, each Party may make public disclosures in a manner consistent
      with the description contained in any such press release, public
      announcement or filed document. Prior to filing this Agreement with the
      SEC, BARRIER shall notify FERRER and, if requested in writing by FERRER
      within five (5) business days after such notification, request that the
      SEC grant confidential treatment to the provisions for which the
      non-filing Party has requested.

            The remainder of this page was intentionally left blank.
                        Signatures on the following page

                                       33
<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                   SIGNATURES

IN WITNESS WHEREOF each of the Parties has caused this Agreement to be executed
on its behalf by a duly authorized officer on the date and place shown below.

                                 BARRIER THERAPEUTICS, INC.
                                 (BARRIER)

                                 Per:  /s/ Al Altomari
                                       ----------------------------------------
                                       Print Name:  Al Altomari
                                       Print Title: Chief Commercial Officer

                                 Date: November 4, 2004

                                 City/Country:  Princeton, NJ, USA

                                 BARRIER THERAPEUTICS, N.V.
                                 (BARRIER NV)

                                 Per:  /s/ Geert Cauwenbaugh
                                       ----------------------------------------
                                       Print Name:  Geert Cauwenbaugh, Ph.D.
                                       Print Title: Executive Officer

                                 Date: November 4, 2004

                                 City/Country:  Princeton, NJ, USA

                                 GRUPO FERRER INTERNACIONAL, S.A.
                                 (FERRER)

                                 Per:  /s/ Jorge Ramentol
                                       ----------------------------------------
                                       Print Name:  Jorge Ramentol
                                       Print Title: Director General

                                 Date: 4th November 2004

                                 City/Country:  Barcelona

                                 Per:  /s/ Juan Fanes
                                       ----------------------------------------
                                       Print Name:  Juan Fanes
                                       Print Title: Finance Director

                                 Date: 4th November 2004

                                 City/Country:  Barcelona

              SIGNATURE PAGE TO DISTRIBUTION AND LICENSE AGREEMENT

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                 SCHEDULE 1.1.29

                                     PATENTS

THE ZIMYCAN PRODUCT

[**]

THE KETANSERIN PRODUCT

[**]

THE SEBAZOLE PRODUCT

[**]

THE LIAROZOLE PRODUCT

[**]

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                 SCHEDULE 8.1.3

            MINIMUM PURCHASE QUOTAS FOR ZIMYCAN AND SEBAZOLE PRODUCTS

                                  SEE ATTACHED
                        ALL FIGURES DENOMINATED IN UNITS

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                      [**]

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                      [**]

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                 SCHEDULE 8.1.4

          MINIMUM PURCHASE QUOTAS FOR KETANSERIN AND LIAROZOLE PRODUCTS

                                  SEE ATTACHED
                        ALL FIGURES DENOMINATED IN UNITS

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                      [**]

<PAGE>

** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                      [**]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]