Document:

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                                                                    EXHIBIT 10.5

                           ISTA PHARMACEUTICALS, INC.
                                     FORM OF
                            INDEMNIFICATION AGREEMENT

     This Indemnification Agreement ("Agreement") is effective as of________,
2000 by and between Ista Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and _________ ("Indemnitee").

     WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and its related
entities;

     WHEREAS, in order to induce Indemnitee to continue to provide services to
the Company, the Company wishes to provide for the indemnification of, and the
advancement of expenses to, Indemnitee to the maximum extent permitted by law;

     WHEREAS, the Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the Company's directors, officers, employees,
agents and fiduciaries, the significant increases in the cost of such insurance
and the general reductions in the coverage of such insurance;

     WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and

     WHEREAS, in view of the considerations set forth above, the Company desires
that Indemnitee shall be indemnified and advanced expenses by the Company as set
forth herein;

     NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below.

     1.   Certain Definitions.

          a.   "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company acting in such capacity or a corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing more than 50% of the total
voting power represented by the Company's then outstanding Voting Securities,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a

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vote of at least two thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company's assets.

          b.   "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

          c.   References to the "Company" shall include, in addition to Ista
Pharmaceuticals, Inc., any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger to which Ista
Pharmaceuticals, Inc. (or any of its wholly owned subsidiaries) is a party
which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

          d.   "Covered Event" shall mean any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.

          e.   "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.

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          f.   "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.

          g.   "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other indemnitees under similar
indemnity agreements).

          h.   References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.

          i.   "Reviewing Party" shall mean, subject to the provisions of
Section 2(d), any person or body appointed by the Board of Directors in
accordance with applicable law to review the Company's obligations hereunder and
under applicable law, which may include a member or members of the Company's
Board of Directors, Independent Legal Counsel or any other person or body not a
party to the particular Claim for which Indemnitee is seeking indemnification.

          j.   "Section" refers to a section of this Agreement unless otherwise
indicated.

          k.   "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.

     2.   Indemnification.

          a.   Indemnification of Expenses. Subject to the provisions of Section
2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest
extent permitted by law if Indemnitee was or is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, any Claim (whether by reason of or arising in part out of
a Covered Event), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses.

          b.   Review of Indemnification Obligations. Notwithstanding the
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under applicable
law, (i) the Company shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made prior to such determination by such
Reviewing Party,

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and (ii) the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all Expenses theretofore paid to
Indemnitee to which Indemnitee is not entitled hereunder under applicable law;
provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee is entitled to be indemnified hereunder under applicable law,
any determination made by any Reviewing Party that Indemnitee is not entitled to
be indemnified hereunder under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expenses
theretofore paid in indemnifying Indemnitee until a final judicial determination
is made with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). Indemnitee's obligation to reimburse the Company for
any Expenses shall be unsecured and no interest shall be charged thereon.

          c.   Indemnitee Rights on Unfavorable Determination; Binding Effect.
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.

          d.   Selection of Reviewing Party; Change in Control. If there has not
been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this Agreement, the
Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Company in writing, or (ii) an
Indemnitee shall have provided to the Company a written statement that such
Indemnitee has reasonably concluded that there may be a conflict of interest
between such Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.

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          e.   Mandatory Payment of Expenses. Notwithstanding any other
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.

     3.   Expense Advances.

          a.   Obligation to Make Expense Advances. Upon receipt of a written
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.

          b.   Form of Undertaking. Any obligation to repay any Expense Advances
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.

          c.   Determination of Reasonable Expense Advances. The parties agree
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.

     4.   Procedures for Indemnification and Expense Advances.

          a.   Timing of Payments. All payments of Expenses (including without
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such written
demand by Indemnitee is presented to the Company, except in the case of Expense
Advances, which shall be made no later than ten (10) business days after such
written demand by Indemnitee is presented to the Company.

          b.   Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.

          c.   No Presumptions; Burden of Proof. For purposes of this Agreement,
the termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that

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Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by this Agreement or applicable law. In addition, neither the failure
of any Reviewing Party to have made a determination as to whether Indemnitee has
met any particular standard of conduct or had any particular belief, nor an
actual determination by any Reviewing Party that Indemnitee has not met such
standard of conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under this Agreement under applicable law,
shall be a defense to Indemnitee's claim or create a presumption that Indemnitee
has not met any particular standard of conduct or did not have any particular
belief. In connection with any determination by any Reviewing Party or otherwise
as to whether the Indemnitee is entitled to be indemnified hereunder under
applicable law, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.

          d.   Notice to Insurers. If, at the time of the receipt by the Company
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.

          e.   Selection of Counsel. In the event the Company shall be obligated
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of separate counsel subsequently retained by
or on behalf of Indemnitee with respect to the same Claim; provided that, (i)
Indemnitee shall have the right to employ Indemnitee's separate counsel in any
such Claim at Indemnitee's expense and (ii) if (A) the employment of separate
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense,
or (C) the Company shall not continue to retain such counsel to defend such
Claim, then the fees and expenses of Indemnitee's separate counsel shall be
Expenses for which Indemnitee may receive indemnification or Expense Advances
hereunder.

     5.   Additional Indemnification Rights; Nonexclusivity.

          a.   Scope. The Company hereby agrees to indemnify the Indemnitee to
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that

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Indemnitee shall enjoy by this Agreement the greater benefits afforded by such
change. In the event of any change in any applicable law, statute or rule which
narrows the right of a Delaware corporation to indemnify a member of its board
of directors or an officer, employee, agent or fiduciary, such change, to the
extent not otherwise required by such law, statute or rule to be applied to this
Agreement, shall have no effect on this Agreement or the parties' rights and
obligations hereunder except as set forth in Section 10(a) hereof.

          b.   Nonexclusivity. The indemnification and the payment of Expense
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.

     6.   No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.

     7.   Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
Expenses incurred in connection with any Claim, but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Expenses to which Indemnitee is entitled.

     8.   Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

     9.   Liability Insurance. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.

     10.  Exceptions. Notwithstanding any other provision of this Agreement, the
Company shall not be obligated pursuant to the terms of this Agreement:

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          a.   Excluded Actions or Omissions. To indemnify or make Expense
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.

          b.   Claims Initiated by Indemnitee. To indemnify or make Expense
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification under this Agreement or any other agreement or insurance
policy or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Board of Directors has approved the initiation or bringing of such
Claim, or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advances, or insurance recovery, as
the case may be.

          c.   Lack of Good Faith. To indemnify Indemnitee for any Expenses
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.

          d.   Claims Under Section 16(b). To indemnify Indemnitee for Expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

     11.  Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

     12.  Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director, officer, employee, agent or fiduciary (as applicable) of the Company
or of any other enterprise at the Company's request.

     13.  Expenses Incurred in Action Relating to Enforcement or Interpretation.
In the event that any action is instituted by Indemnitee under this Agreement or
under any liability insurance

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policies maintained by the Company to enforce or interpret any of the terms
hereof or thereof, Indemnitee shall be entitled to be indemnified for all
Expenses incurred by Indemnitee with respect to such action (including without
limitation attorneys' fees), regardless of whether Indemnitee is ultimately
successful in such action, unless as a part of such action a court having
jurisdiction over such action makes a final judicial determination (as to which
all rights of appeal therefrom have been exhausted or lapsed) that each of the
material assertions made by Indemnitee as a basis for such action was not made
in good faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action. In
the event of an action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action a court having jurisdiction over such
action makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until such final judicial determination is made,
Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action.

     14.  Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

     15.  Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.

     16.  Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.

     17.  Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to

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the fullest extent possible, the provisions of this Agreement (including without
limitation each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

     18.  Choice of Law. This Agreement, and all rights, remedies, liabilities,
powers and duties of the parties to this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
in the State of Delaware without regard to principles of conflicts of laws.

     19.  Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

     20.  Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver.

     21.  Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.

     22.  No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.

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

ISTA PHARMACEUTICALS, INC.

By:
   -----------------------------------

Name:
     ---------------------------------

Title:
      --------------------------------

Address:
        ------------------------------

                                        AGREED TO AND ACCEPTED

                                        INDEMNITEE:

                                        ----------------------------------------
                                        (Signature)

                                        ----------------------------------------
                                        Name

                                        ----------------------------------------
                                        Address

                                      -11-<PAGE>   1
                                                                    EXHIBIT 10.6

CLINICAL DEVELOPMENT AGREEMENT

PROTOCOL #VIT-02-08961X AND PROTOCOL #VIT-03-08961X: Two Phase III Safety and
Efficacy Studies of Vitrase(TM) (Hyaluronidase for Ophthalmic Intravitreal
Injection) for Clearance of Severe Vitreous Hemorrhage.

PREPARED FOR:         Advanced Corneal Systems, Inc.
                      15279 Alton Parkway
                      Suite 100
                      Irvine, California 92618

BY:                   Covance Clinical and Periapproval Services Inc.
                      2121 North California Boulevard
                      Suite 500
                      Walnut Creek, California 94596

                      20 October 1998

                                                                  [COVANCE LOGO]
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                         CLINICAL DEVELOPMENT AGREEMENT

                 THIS AGREEMENT, made as of the date last signed below is by
and between ADVANCED CORNEAL SYSTEMS, INC., a corporation of the State of
California having its principal place of business at 15279 Alton Parkway, Suite
100, Irvine, California, 92618 ("ACS"), and COVANCE, INC., doing business as
COVANCE CLINICAL AND PERIAPPROVAL SERVICES, INC., a corporation of the State of
Delaware having its principal place of business at 210 Carnegie Center,
Princeton, New Jersey 08540-6233 ("COVANCE").

                                   WITNESSETH:

         WHEREAS, ACS is an ethical pharmaceutical manufacturer which is
currently considering the evaluation of the safety and effectiveness of a drug
known as Hyaluronidase Solution (the "DRUG") for the clearance of severe
vitreous hemorrhage; and

         WHEREAS, COVANCE is in the business of providing services for the
development of experimental new drugs in North and South America, Asia,
Australia, and Europe; and

         WHEREAS, ACS has entered into a contract substantially similar to this
Agreement with CroMedica Global, Inc. ("CROMEDICA"), for the purpose of having
CroMedica assist ACS with the execution of substantially the same clinical
investigation of the DRUG in South Africa ("CROMEDICA STUDY") and ACS intends to
enter into a contract substantially similar to this Agreement with Verum
Staticon ("VERUM"), for the purpose of having Verum assist ACS with the
execution of substantially the same clinical investigation of the DRUG in
Germany ("VERUM STUDY"); and

         WHEREAS, ACS desires to contract with COVANCE, and COVANCE desires to
be contracted by ACS, for the purposes of providing such services to assist ACS
in the execution of a clinical investigation of the DRUG and the preparation of
the data (incorporating the result's from both COVANCE's clinical investigation,
the CROMEDICA STUDY, and the VERUM STUDY) into a report or reports for ACS to
submit to the United States Food and Drug Administration ("FDA") and other
international regulatory authorities for marketing approval (collectively the
"SUBMISSIONS") and completion of other tasks as outlined in Exhibit A,

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                                                                 20 October 1998
                                                                          Page 2

         NOW, THEREFORE, the parties hereby agree as follows:

1.       Obligations of Covance: COVANCE hereby agrees to conduct a clinical
         investigation (the "STUDY") of the DRUG in accordance with ACS's
         instructions and the accepted standards of medical and clinical
         research standards. The services to be provided by COVANCE to ACS will
         include, but will not be limited to, the following:

         (a)      COVANCE will conduct the STUDY in accordance to agreed upon
                  protocols and as outlined in Exhibit A. The STUDY will be
                  conducted in full compliance with this Agreement and in
                  accordance with the protocol, any protocol amendments mutually
                  agreed to by the parties, any conditions set forth by the
                  reviewing Institutional Review Board ("IRB") and all
                  applicable Federal, state, and local laws, statutes,
                  ordinances, and regulations including all applicable
                  regulations enforced by the FDA for the conduct of clinical
                  trials used to support marketing approval of the DRUG. COVANCE
                  also agrees that Investigators will agree to conduct the study
                  in accordance with generally accepted standards of Good
                  Clinical Practice.

         (b)      COVANCE will include the data received from CroMedica and
                  Verum in connection with the CROMEDICA STUDY and VERUM STUDY
                  in the SUBMISSIONS or parts thereof, prepared by COVANCE.
                  COVANCE will be responsible for the timely and proper
                  preparation of the SUBMISSIONS or parts thereof COVANCE will
                  not be responsible for any delays, and/or deficiencies that
                  are caused by CROMEDICA's or VERUM's failure to implement the
                  agreed to PROTOCOLS or deliver the data from the CROMEDICA
                  STUDY or VERUM STUDY to COVANCE in accordance with mutually
                  agreeable timelines or in a mutually acceptable format;
                  provided, however, that COVANCE has provided ACS with timely
                  notice of potential delays and/or deficiencies once it has a
                  reasonable basis to believe either or both are likely.

         (c)      COVANCE will recruit qualified investigators identified by ACS
                  ("INVESTIGATOR") with the necessary and appropriate experience
                  and standing to perform the STUDY; and said INVESTIGATOR must
                  be licensed to practice medicine in the location where the
                  STUDY is to be conducted and must be in compliance with
                  21 CFR 312.53.

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                                                                 20 October 1998
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         (d)      COVANCE will prepare necessary and appropriate documentation
                  for submission to the appropriate regulatory authority and ACS
                  for the conduct of the STUDY including but not limited to the
                  following:

                  1)       A completed and signed Form FDA-1572

                  2)       Current curriculum vitae of the INVESTIGATOR and all
                           secondary INVESTIGATORS identified on Form FDA-1572.

                  3)       PROTOCOL (defined below) signature page signed by the
                           principal INVESTIGATOR.

                  4)       A copy of the informed consent form to be used by the
                           INVESTIGATOR.

                  5)       IRB's (defined below) approval of the PROTOCOL and
                           informed consent form.

                           For purposes of this Agreement: (i) "IRB" means an
                           institution review board that complies with the
                           requirements of Title 21, Part 56 of the code of
                           Federal Regulations, as amended, supplemented or
                           modified from time to time; and (ii) "PROTOCOL" means
                           the document which specifies the testing procedures
                           and conditions mutually agreed upon by ACS and
                           COVANCE for the performance of a STUDY.

                  6)       As appropriate, IRB approval of PROTOCOL amendments
                           and annual re-approvals.

         (e)      COVANCE will undertake to assure that INVESTIGATORS hereby
                  certify that they have not been debarred under the provisions
                  of the Generic Drug Enforcement Act of 1992, 21 U.S.C. 306 (a)
                  or (b). In the event that INVESTIGATOR:

                           (i)      becomes debarred; or

                           (ii)     receives notice of action or threat of
                                    action with respect to their debarment,
                                    during the term of this Agreement, COVANCE
                                    and INVESTIGATOR agree to notify ACS
                                    immediately. In the event that

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                                                                 20 October 1998
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                                    any INVESTIGATOR becomes debarred as set
                                    forth in clause (i) INVESTIGATOR understands
                                    that this Agreement shall automatically
                                    terminate without any further action or
                                    notice by either party. In the event that an
                                    INVESTIGATOR receives notice of action or
                                    threat of action as set forth in clause
                                    (ii) above, COVANCE and INVESTIGATOR
                                    understands that ACS shall have the right
                                    to terminate this Agreement immediately.

         (f)      COVANCE hereby certifies that they have not and will not
                  knowingly use in any capacity the services of any individual,
                  corporation, partnership or association which has been
                  debarred under 21 U.S.C. 306 (a) or (b). In the event that
                  COVANCE or any INVESTIGATOR becomes aware of the debarment or
                  threatened debarment of any individual, corporation,
                  partnership or association providing services to COVANCE or an
                  INVESTIGATOR which directly or indirectly relate to
                  Investigator's activities under this Agreement, COVANCE and
                  INVESTIGATOR shall notify ACS immediately. COVANCE and
                  INVESTIGATOR understand that ACS shall have the right to
                  terminate this Agreement immediately upon receipt of such
                  notice.

         (g)      COVANCE will provide all INVESTIGATORS with the current
                  INVESTIGATORS' brochure and any amendments thereto and, as the
                  investigation proceeds, will keep each INVESTIGATOR informed
                  of new information received from ACS regarding the DRUG.

         (h)      COVANCE will monitor the STUDY in accordance with all now or
                  hereafter applicable Federal, state, and local laws, statutes,
                  ordinances, and regulations, including without limitation:
                  Food and Drug Administration (or any other government body or
                  agency that succeeds it) ("FDA") guidelines on the
                  responsibilities of sponsors, monitors and clinical
                  INVESTIGATORS and informed consents in compliance with Good
                  Clinical Practices.

                  ACS shall have the right, but not the obligation, to
                  co-monitor, in conjunction with COVANCE, the INVESTIGATORS
                  retained by COVANCE and their STUDY with respect to the
                  services provided hereunder. In the event ACS determines there
                  is cause for independent monitoring by ACS, it may do so

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                                                                 20 October 1998
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                  following prior written notification to COVANCE, and COVANCE
                  will assist and cooperate with ACS therein.

         (i)      COVANCE agrees that throughout the duration of this Agreement,
                  and at any subsequent time when COVANCE shall receive
                  information regarding the safety of the DRUG used in the STUDY
                  as it pertains to serious or unexpected adverse experiences,
                  it shall notify ACS in writing, in English. Such notification
                  shall be in such a timely fashion so as to permit full
                  compliance with all regulatory requirements (e.g. 21 CRF
                  312.32) for the handling and disclosure of any information
                  concerning any serious or unexpected event, injury, toxicity
                  or sensitivity reaction or any unexpected incidence, or the
                  severity thereof, associated with the clinical use, studies,
                  investigations, tests, whether or not determined to be
                  attributable to the DRUG. "Serious," as used in this section,
                  refers to an experience at any dose which results in death or
                  which places the patient at immediate risk of death,
                  in-patient hospitalization or prolongation of existing
                  hospitalization, a persistent or significant disability or
                  incapacity, a congenital anomaly, cancer or birth defect, or
                  an important medical event that may jeopardize the patient and
                  may require medical or surgical intervention to prevent any of
                  the foregoing outcomes, or as such definition may otherwise be
                  amended, supplemented or modified from time to time by the
                  FDA. "Unexpected," as used in this section, refers to
                  conditions or developments to the frequency, specificity or
                  severity of which are not consistent with the current
                  investigator brochure or, if an investigator brochure is not
                  required or available, with the risk information described in
                  the general investigational plan or elsewhere in the current
                  application or conditions or developments that have not been
                  previously observed during clinical studies of the DRUG, or as
                  such definition may otherwise be amended, supplemented or
                  modified from time to time by the FDA.

                  ACS and COVANCE shall be responsible for collecting,
                  reporting, and processing all relevant serious and unexpected
                  adverse experience ("SAE") information and follow-up SAE
                  information as defined in the SAE Reporting Plan developed by
                  ACS and Covance.

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                                                                 20 October 1998
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         (j)      COVANCE will collect the evidence related to the safety of the
                  drug as it is obtained from the INVESTIGATORS being monitored
                  by COVANCE and forward such evidence to ACS.

         (k)      COVANCE will store copies of all data and records in
                  accordance with local and FDA regulations. The originals of
                  all such information will be forwarded to ACS at the
                  termination of the program.

         (1)      COVANCE will report to ACS any INVESTIGATOR that is not
                  complying with his/her signed agreement (Form FDA-1572) and
                  attempt to obtain compliance. If compliance is not promptly
                  obtained and after approval is received from ACS, Covance will
                  end the INVESTIGATORS participation in the STUDY, and recover
                  any DRUG and STUDY records.

         (m)      COVANCE will be responsible for the selection of monitors
                  qualified by training and experience to monitor the progress
                  of the investigation.

         (n)      ACS will undertake the shipment of the DRUG to participating
                  INVESTIGATORS, During the STUDY, COVANCE will monitor to
                  ensure that the clinical INVESTIGATOR maintains a record of
                  the dates and amounts of drug supplies received at the STUDY
                  location; the dates, amount and patients to whom the test DRUG
                  has been administered; the dates (when known) and amount of
                  the drug broken, spilled, or lost; and the dates and amount of
                  the DRUG supply which is being returned. At the completion or
                  early termination of each STUDY, COVANCE will make an
                  accounting of all clinical supplies. COVANCE will assure that
                  the INVESTIGATOR shall return to ACS (or to another location
                  specified by ACS), after the completion or earlier termination
                  of any such STUDIES all unused DRUG supplies and account for
                  all DRUG supplies which have been lost or missing.

         (o)      Should appropriate regulatory authorities or any other
                  Federal, state, or local government authority conduct, or give
                  notice of intent to conduct, an inspection at any
                  investigational site or take any other regulatory action with
                  respect to services provided for in this Agreement, then
                  COVANCE will promptly give ACS notice

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                                                                 20 October 1998
                                                                          Page 7

                  thereof, supply all information pertinent thereto, and ACS
                  shall have the right, but not the obligation, to be present at
                  any such inspection or regulatory action.

2.       Transfer of Obligations: Pursuant to 21 CFR 312.52, ACS has
         transferred to COVANCE all of the obligations identified in Attachment
         1 and agrees that the same description and extent of obligations
         transferred should be included in Form FDA 1571, Section #13. COVANCE
         accepts the transferred responsibilities and agrees to carry out
         diligently all transferred obligations. All obligations not
         specifically transferred hereunder are retained by ACS.

3.       Status Reporting: All of the hereinabove described services shall be
         performed in close cooperation with ACS, and designated ACS personnel
         will be kept continuously informed of the progress of the
         INVESTIGATIONS.

         COVANCE will provide status reports on the STUDY. The status reports
         will include, but not be limited to: the number of patients entered,
         dropped, and completed in the STUDY. Reports of monitoring visits will
         also be provided on a timely basis as specified in Exhibit A.

4.       Clinical Supplies: ACS will, at its expense, supply the INVESTIGATORS
         with the DRUG and other DRUG supplies as are agreed upon by COVANCE and
         ACS for the timely completion of the STUDY hereinabove described, and
         will direct the shipment of any such supplies to the location indicated
         by COVANCE, within a reasonable time after receipt of notification from
         COVANCE of the need for any such clinical supplies.

5.       Confidential Information: COVANCE agrees that all materials, documents
         and information provided to it by ACS and, except as provided in
         Section 14, all information developed by COVANCE exclusively in
         connection with the STUDY, whether prior or subsequent to the execution
         of this Agreement, for ACS pursuant to this Agreement is and shall be
         considered as confidential information to ACS (collectively, the
         "CONFIDENTIAL INFORMATION") and the sole property of ACS. COVANCE
         agrees to hold such CONFIDENTIAL INFORMATION in strict confidence for
         ten (10) years after the date of this Agreement and shall disclose the
         CONFIDENTIAL INFORMATION to hospital authorities, IRB, INVESTIGATORS
         and their respective agents, employees, officers and directors, and
         representatives only on a need-to-know

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                                                                 20 October 1998
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         basis (including fulfilling corporate reporting obligations) and only
         if the foregoing parties (other than hospital authorities and IRBs) are
         bound and obligated by the same provisions of confidentiality as used
         by any member of COVANCE; provided that (a) COVANCE will have no
         obligations with respect to any CONFIDENTIAL INFORMATION that is now or
         later becomes publicly available through no fault of COVANCE, (b)
         COVANCE obtains such CONFIDENTIAL INFORMATION from a third party
         entitled to disclose it, (c) COVANCE can demonstrate through written
         records it already has in their possession such CONFIDENTIAL
         INFORMATION as indicated in their written records, or (d) such
         CONFIDENTIAL INFORMATION is required by any law, rule, regulation,
         order, decision, decree or subpoena or other judicial, administrative
         or legal process to be disclosed.

         All obligations of confidentiality and non-disclosure set forth in this
         Agreement will survive, without limitation, the expiration or earlier
         termination, for any reason, of this Agreement.

         Nothing contained in this Section 5 shall be interpreted to limit the
         rights of COVANCE and ACS's obligations under Section 14 hereof and to
         the extent that any conflict arises in applying the provisions of
         Sections 5 and 14, the provisions of Section 14 shall control.

         Upon the completion or earlier termination of this Agreement, COVANCE
         will promptly return to ACS all of the CONFIDENTIAL INFORMATION, as
         well as all written material which incorporates any CONFIDENTIAL
         INFORMATION.

         COVANCE acknowledges that the disclosure of CONFIDENTIAL INFORMATION
         without ACS's express written permission will cause ACS irreparable
         harm and that the breach or threatened breach of the nondisclosure
         provisions of this Agreement will entitle ACS to injunctive relief, in
         addition to any other legal remedies that may be available to it.

6.       Compensation:

         (a)      Attached hereto as Exhibit A are the COVANCE Time and Cost
                  Estimates, which contains the budgets for out-of-pocket costs
                  and for COVANCE costs, which can only be modified by the
                  procedure described in this Section.

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                                                                 20 October 1998
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         (b)      ACS hereby agrees to pay COVANCE for all services performed by
                  COVANCE and its agents and clinical investigators pursuant to
                  this Agreement, as set forth in Exhibit A, provided that the
                  total amount paid by ACS shall not exceed the cost estimates
                  provided for in Exhibit A, unless agreed to in writing by the
                  parties or allowed for in this Section.

         (c)      All direct COVANCE out-of-pocket expenses incurred on behalf
                  of ACS, such as, but not limited to travel and shipping
                  expenses, do not have profit factors applied to them. COVANCE
                  expects that the specified out-of-pocket costs estimated in
                  Exhibit A will be correct to within 10%. ACS agrees to this
                  margin of the estimate as long as expenses are based on actual
                  costs and documented. If changes in the program occur that
                  affect out-of-pocket costs, or COVANCE otherwise projects that
                  costs may exceed the estimates plus 10%, COVANCE will provide
                  revised estimates for ACS's review and written approval as
                  specified in Section 8.

                  Out-of-pocket costs will be invoiced to ACS on a monthly
                  basis. These invoices will contain summary reports of
                  expenses. Receipts of all expenses will remain on file at
                  COVANCE and will be open to ACS inspection, if requested.

         (d)      COVANCE fees for this project will not exceed those specified
                  in Exhibit A unless there is a change in the program agreed to
                  in writing by the parties and documented as described in
                  Section 8.

                  COVANCE fees will be invoiced in accordance with the payment
                  schedule outlined in Attachment 2.

         (e)      ACS will, within thirty (30) days subsequent to the date of
                  this Agreement, pre-pay COVANCE an amount corresponding to 25%
                  of the out-of-pocket costs of the project over the first 12
                  months as contained in Exhibit A. This amount will be adjusted
                  to correspond to the next 12 month period each successive year
                  of the program.

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                                                                 20 October 1998
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                  This prepaid amount will be returned to ACS at the early
                  termination or completion of the project or credited against
                  final invoices as agreed to between COVANCE and ACS.

         (f)      COVANCE will submit to ACS a monthly invoice approximately
                  twenty (20) days after the end of each calendar month during
                  the term of this Agreement that will contain out-of-pocket
                  costs as specified in Section 6(b) and (c). Invoices for
                  COVANCE fees will be provided as specified in Section 6(d).
                  All invoices are payable within thirty (30) days of receipt.

         (g)      All payments or prepayments by ACS under Section 6 shall be
                  made free of interest.

7.       Assumptions:

         (a)      The time, cost, fee and budget estimates specified in Exhibit
                  A with respect to a STUDY are subject to a number of general
                  and STUDY specific assumptions. The general assumptions
                  (collectively, the "GENERAL ASSUMPTIONS") are as follows:

                  (i)      The scope of the STUDY remains constant;

                  (ii)     ACS and COVANCE execute all of their obligations
                           under this Agreement in a timely manner;

                  (iii)    ACS and Covance fully cooperate with each other in
                           the performance of their obligations under this
                           Agreement and refrain from any actions or inactions
                           which prevent a party from timely or properly
                           performing its obligations hereunder and thereunder,
                           respectively; and

                  (iv)     No other event outside of COVANCE's or ACS's control,
                           including, without limitation, the events described
                           in Section 10 occur.

                  The STUDY specific assumptions (the "STUDY SPECIFIC
                  ASSUMPTIONS") are set forth in Exhibit A.

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         (b)      In the event that any of the ASSUMPTIONS (defined below) are
                  not complied with by the parties or the parties desire to
                  modify or deviate (a "DEVIATION") from them, or the parties
                  determine that the STUDY objectives cannot be fulfilled based
                  on the ASSUMPTIONS, then the budget, fees, costs and time
                  estimates for such STUDY as specified in Exhibit A shall be
                  modified in accordance with the terms of Section 8 hereof. For
                  purposes of this Agreement, "ASSUMPTIONS" means any of the
                  GENERAL ASSUMPTIONS and the STUDY SPECIFIC ASSUMPTIONS.

8.       Change Orders:

         (a)      In the event a DEVIATION is identified by ACS or COVANCE, the
                  identifying party shall notify in writing the other party of
                  such DEVIATION. Within 20 business days from the receipt by
                  COVANCE or sending of such DEVIATION notice, COVANCE shall
                  provide ACS with an estimate of the modification to the
                  timeline, costs and fees and overall budget (whether an
                  increase or decrease) arising from such DEVIATION. ACS shall
                  have seven business days to approve such modification
                  estimates. If ACS does not approve such modification estimates
                  and has not terminated the STUDY but wants the STUDY to be
                  modified to take in account the DEVIATION, then ACS and
                  COVANCE shall use their best efforts to agree on modification
                  estimates that are mutually acceptable.

         (b)      During the DEVIATION ASSESSMENT PERIOD (defined below),
                  COVANCE shall continue work on the STUDY if practicable but
                  shall not implement the modification representing the
                  DEVIATION unless approved in writing by ACS.

                  For purposes of this Agreement, "DEVIATION ASSESSMENT PERIOD"
                  means the time from the date COVANCE sends or receives a
                  notice of DEVIATION pursuant to this Section 8 and the date
                  ACS either accepts or rejects COVANCE's modification estimates
                  as specified in this Section 8.

9.       Early Termination: ACS may terminate this Agreement prior to the
         STUDY's completion at any time for any reason upon 30 days written
         notice to COVANCE. In the event of such termination, COVANCE shall be
         promptly paid in full for all work and services performed in connection
         with such STUDY, including all out-of-pocket expenses and all

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                                                                 20 October 1998
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         COVANCE fees, as of the date work on such STUDY is actually concluded.
         COVANCE shall use all reasonable efforts to conclude or transfer the
         STUDY as expeditiously as practicable and in accordance with all
         applicable laws, rules and regulations, including those of the FDA.
         Further, COVANCE and ACS shall cooperate with each other during such
         STUDY termination to safeguard patient safety, continuity of patient
         treatment and to comply with applicable laws, rules and regulations.

         In addition to the costs, expenses and fees specified in this
         Section 9, ACS shall pay to COVANCE an amount equal 1.5 (months) times
         the average of the monthly fee paid to COVANCE during the STUDY (x
         dollars), as liquidated damages and not as a penalty; provided that
         such fee shall not be paid if ACS has terminated the STUDY because of
         COVANCE's breach of a material obligation under this Agreement.

10.      Force Majeure. The parties shall be excused from performing their
         obligations under this Agreement if its performance is delayed or
         prevented by any event beyond such party's is reasonable control,
         including, but not limited to, acts of God, fire, explosion, weather,
         disease, war, insurrection, civil strife, riots, government action or
         power failure, provided that such performance shall be excused only to
         the extent of and during such disability. Any time specified for
         completion of performance in this Agreement falling due during or
         subsequent to the occurrence of any such events shall be automatically
         extended for a period of time equal to the period of such disability.
         COVANCE will promptly notify ACS if, by reason of any of the events
         referred to herein, COVANCE is unable to meet any such time for
         performance specified in this Agreement.

11.      Indemnity - Clinical Investigators: ACS hereby agrees to indemnify and
         hold harmless the INVESTIGATORS, subject to limitations (a), (b), (c),
         (d) and (e) below, from and against any and all costs (including costs
         and reasonable attorneys' fees), expenses, damages and judgments
         resulting from a claim which occurs to a participant in the STUDY which
         was directly or indirectly caused by the DRUG provided:

         (a)      The conduct of the INVESTIGATOR is not negligent or otherwise
                  tortisus;

         (b)      ACS is properly notified in writing of the claim, but no
                  indemnitee shall lose indemnification rights hereunder by
                  failing to give the indemnifying party such

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                                                                 20 October 1998
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                  notice unless such failure materially and adversely affects
                  the indemnifying party's ability to defend;

         (c)      ACS is given sole and absolute control of, and discretion in,
                  the handling of such claim, action or suit, including, without
                  limitation, the selection of defense counsel, provided ACS
                  reasonably and promptly acknowledges its intent to assume
                  control of the defense of such claim, action or suit;

         (d)      ACS receives the full cooperation of the INVESTIGATOR during
                  pendency of the claim or lawsuit; and

         (e)      The STUDY is conducted in full accordance with the PROTOCOL,
                  any PROTOCOL amendment, and in accordance with generally
                  accepted medical standards; slight deviations arising out of
                  necessity and not contributing to the injury or affecting the
                  STUDY validity shall not be considered a failure to adhere to
                  the PROTOCOL.

12.      Indemnification - COVANCE:

         (a)      COVANCE shall indemnify and hold harmless ACS and its
                  officers, directors, employees and agents from any loss,
                  damage, cost or expense (including reasonable attorney's
                  fees) (a "LOSS") arising from any claim, demand, assessment,
                  action, suit or proceeding (a "CLAIM") for personal injury to
                  STUDY participants or personal injury to any employee of ACS
                  or property damage arising or occurring during the conduct of
                  the STUDY as a result of COVANCE's negligence, gross
                  negligence or intentional misconduct or inaction or
                  performance that violates the law; provided that if such LOSS
                  or CLAIM arises in whole or in part from ACS's negligence,
                  gross negligence or intentional misconduct or inaction, then
                  the amount of the LOSS that COVANCE shall indemnify ACS for
                  pursuant to this Section 12 shall be reduced by an amount in
                  proportion to the percentage of ACS's responsibilities for
                  such LOSS as determined by a court of competent jurisdiction
                  in a final and non-appealable decision or in a binding
                  settlement between the parties.

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                                                                 20 October 1998
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         (b)      ACS shall indemnify and hold harmless COVANCE, and their
                  respective affiliates and their respective officers,
                  directors, employees and agents (the "COVANCE GROUP") from any
                  CLAIM or LOSS arising from or related to (i) personal injury
                  to a participant in the STUDY or personal injury to any
                  employee of the COVANCE GROUP directly or indirectly caused by
                  the DRUG, (ii) this AGREEMENT, the STUDY or any aspect thereof
                  set forth in the PROTOCOL that violates any applicable law,
                  rule, regulation or ordinance, (iii) the DRUG's harmful or
                  otherwise unsafe effect, including, without limitation, a
                  CLAIM based upon ACS's or any other person's use, consumption,
                  sale, distribution or marketing of any substance, including
                  the DRUG, or (iv) the negligence, gross negligence or
                  intentional misconduct or inaction of ACS in the performance
                  of its obligations under this AGREEMENT or the PROTOCOL
                  related to such STUDY (v) the performance of CROMEDICA or
                  VERUM in its obligations; provided that if such LOSS or CLAIM
                  (other than a LOSS or CLAIM described in clause [iii] hereof
                  arises in whole or in part from COVANCE's negligence, gross
                  negligence or intentional misconduct or inaction or COVANCE's
                  violation of the law, then the amount of such LOSS that ACS
                  shall indemnify the COVANCE GROUP for pursuant to this Section
                  12 shall be reduced by an amount in proportion to the
                  percentage of COVANCE's responsibilities for such LOSS as
                  determined by a court of competent jurisdiction in a final and
                  non-appealable decision or in a binding settlement between the
                  parties. ACS shall not indemnify the COVANCE GROUP from any
                  LOSS or from any CLAIM described in clause (iii) hereof
                  arising solely from the willful misconduct or inaction or
                  gross negligence of COVANCE or COVANCE's violation of the law.

         (c)      Upon receipt of notice of any CLAIM which may give rise to a
                  right of indemnity from the other party hereto, the party
                  seeking indemnification (the "INDEMNIFIED PARTY") shall give
                  written notice thereof to the other party, (the "INDEMNIFYING
                  PARTY") with a CLAIM for indemnity. Such CLAIM for indemnity
                  shall indicate the nature of the CLAIM and the basis
                  therefore. Promptly after a CLAIM is made for which the
                  INDEMNIFIED PARTY seeks indemnity, the INDEMNIFIED PARTY shall
                  permit the INDEMNIFYING PARTY, at its own option and expense,
                  to assume the complete defense and settlement of such CLAIM,
                  provided that (i) the INDEMNIFIED PARTY will have the right to
                  participate in the defense of any such CLAIM at its own cost
                  and

<PAGE>   16
                                                                 20 October 1998
                                                                         Page 15

                  expense, (ii) the INDEMNIFYING PARTY will conduct the defense
                  of any CLAIM with due regard for the business interests and
                  potential related liabilities of the INDEMNIFIED PARTY. The
                  INDEMNIFYING PARTY will not, in defense of any such CLAIM,
                  except with the consent of the INDEMNIFIED PARTY, consent to
                  the entry of any judgment or enter into any settlement which
                  does not include, as an unconditional term thereof, the giving
                  by the claimant or plaintiff to the INDEMNIFIED PARTY of a
                  release from all liability in respect thereof. As to those
                  CLAIMS with respect to which the INDEMNIFYING PARTY does not
                  elect to assume control of the defense, the INDEMNIFIED PARTY
                  will afford the INDEMNIFYING PARTY an opportunity to
                  participate in such defense, at the INDEMNIFYING PARTY's own
                  cost and expense, and will not settle or otherwise dispose of
                  any of the same without the consent of the INDEMNIFYING PARTY.

         (d)      The obligations of the parties under this Section 12 shall
                  survive the termination of this AGREEMENT.

13.      Default: If COVANCE is in default of its material obligations under
         this Agreement, then ACS shall promptly notify COVANCE in writing of
         any such default. COVANCE shall have a period of thirty (30) days from
         the date of receipt of such notice within which to cause the cure of
         such default. If COVANCE shall fail to so cause such cure, or if such
         failure cannot be cured within the specified cure period, then this
         Agreement shall, at ACS's option, immediately terminate. In the event
         of such termination, ACS's sole remedy shall be, a reduction in the
         total contract price for the Services in an amount equal to the
         difference between (i) the total contract price for the Services and
         (ii) the value of the work properly performed; provided, however, that
         under no circumstances shall COVANCE be liable to ACS in an amount
         that, in aggregate, exceeds, the contract price paid for the Services,
         as specified in this Agreement. UNDER NO CIRCUMSTANCES SHALL ACS BE
         ENTITLED TO INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES
         ARISING IN CONNECTION WITH SUCH DEFAULT OR BREACH OF COVANCE'S
         OBLIGATIONS UNDER THIS AGREEMENT.

14.      Property Ownership. All materials, documents, data, information and
         suggestions of every kind and description supplied to COVANCE by ACS
         or prepared or developed by COVANCE pursuant to this Agreement (except
         for COVANCE procedural manuals,

<PAGE>   17
                                                                 20 October 1998
                                                                         Page 16

         personnel data, and COVANCE-developed computer software, technology or
         Covance's Interactive Voice Response System used for patient drug
         randomization) shall be the sole and exclusive property of ACS and ACS
         shall have the right to make whatever use it deems desirable of any
         such materials, documents and information; provided that COVANCE may
         retain copies of such materials as required by applicable laws, rules
         and regulations. Unless otherwise required by law or by the terms of
         this Agreement, all such ACS property which COVANCE shall have in its
         possessions shall be maintained by COVANCE for a period of not less
         than three (3) years from the date of receipt thereof and shall be
         organized in such manner that it will be ready for immediate reference.
         After three (3) years or such longer period as may be required by
         applicable laws or regulations, COVANCE may dispose of such property in
         accordance with ACS's instructions. If ACS fails to give said
         instructions, COVANCE shall so notify ACS; and if said instructions are
         still not forthcoming within thirty (30) days of said notification,
         then COVANCE may destroy such property as it determines.

15.      Recruitment

         (a)      ACS agrees that it will not solicit or otherwise encourage
                  COVANCE employees to seek employment with ACS throughout the
                  term of this Agreement.

         (b)      COVANCE agrees that it will not solicit or otherwise encourage
                  ACS employees to seek employment with COVANCE throughout the
                  term of this Agreement.

16.      Patent Rights: COVANCE shall not acquire any rights of any kind
         whatsoever with respect to ACS's product as a result of performance
         under this agreement or otherwise. All inventions, discoveries, and
         technology relating to the ACS product, whether patentable or not,
         conceived by COVANCE or its employees or agents, including the
         INVESTIGATORS or their employees or agents, solely or jointly with
         others as a result of work done under this Agreement, shall be, and
         remain at all times the sole and exclusive property of ACS. COVANCE
         will disclose promptly to ACS or its nominee any and all patentable
         inventions, discoveries and improvements conceived or made by COVANCE
         as a result of providing such services to ACS pursuant to this
         Agreement and relating to such services, and agrees to assign all its
         interest therein to ACS or its nominee; provided, ACS requests such
         assignment within one year of notification of such invention; provided,
         further, that COVANCE shall retain all rights to any data, processes,

<PAGE>   18
                                                                 20 October 1998
                                                                         Page 17

         software (including codes) technology, means, know-how developed by
         COVANCE which relate to data collection, data management or to
         Covance's Interactive Voice Response System used for patient drug
         randomization (IVRS data and programming). Whenever requested to do so
         by ACS, COVANCE will execute any and all applications, assignments, or
         other instruments and give testimony which ACS shall deem necessary to
         apply for and obtain Letters of Patent of the United States or of any
         foreign country or to protect otherwise ACS's interests therein, and
         ACS shall compensate COVANCE for the time devoted to said activities
         and reimburse it for expenses incurred. COVANCE agrees to include in
         agreements with INVESTIGATORS participating in the STUDY, a provision
         requiring such INVESTIGATORS to assign to ACS on terms substantially
         similar to this Section 16 patentable inventions, discoveries and
         improvements made by such INVESTIGATORS during the STUDY. These
         obligations shall continue beyond the termination of this Agreement and
         shall be binding upon COVANCE's assignees, administrators and other
         legal representatives.

17.      Modifications: No changes may be made in this Agreement except by
         written agreement of both parties.

18.      Entire Agreement: This Agreement, together with any attached
         Exhibit(s), is the entire and complete understanding of the parties in
         regard to the covered subject matter. It replaces, supersedes and
         renders void any and all predecessor agreements between the parties
         whether written or oral.

19.      Independent Contractor: COVANCE's relationship with ACS under this
         Agreement shall be that of an independent contractor, and nothing in
         this Agreement or the arrangements for which it is made shall
         constitute COVANCE, or anyone furnished or used by COVANCE in the
         performance of the services contemplated by this Agreement, as an
         employee, joint venture, partner, or servant of ACS.

20.      Contact with ACS: Until further notice, COVANCE's contacts within ACS
         will be Ron Yamamoto and Sheri Guille or such persons as said Mr.
         Yamamoto or Ms. Guille shall designate.

21.      Notices: Any notices which either party may be required or shall desire
         to give hereunder shall be deemed to be duly given when delivered
         personally or mailed by certified or

<PAGE>   19
                                                                 20 October 1998
                                                                         Page 18

         registered mail, postage prepaid, to the party to whom notice is to be
         given at the address first given above or such other address or
         addresses of which such party shall have given written notice.

22.      Severability: If any provisions hereof shall be determined to be
         invalid or unenforceable, the validity and effect of the other
         provisions of this Agreement shall not be affected thereby.

23.      Governing Law: This Agreement is a New Jersey contract. It shall be
         governed and construed and interpreted in accordance with the laws of
         New Jersey without giving effect to its choice of law principles.

24.      Waiver: The waiver by either party or the failure by either party to
         claim a breach of any provision of this Agreement shall not be deemed
         to constitute a waiver or estoppel with respect to any subsequent
         breach or with respect to any provision thereof.

25.      Term of Agreement: This Agreement shall become effective on the date
         last signed below and shall continue until midnight on the 30th day of
         September, 2004, unless modified as provided for herein.

26.      Captions. Any caption used in this Agreement is inserted for
         convenience and reference only and is to be ignored in the construction
         and interpretation of the provisions hereof.

                                       COVANCE INC.
                                       (d/b/a COVANCE CLINICAL AND
ADVANCED CORNEAL SYSTEMS, INC.         PERIAPPROVAL SERVICES, INC.)

By: /s/ [ILLEGIBLE]                    By: /s/ [ILLEGIBLE]
    -----------------------------          --------------------------------

Title: President & CEO                 Title: Corporate VP & GM
       --------------------------             -----------------------------

Date: October 24, 1998                 Date: 3 November, 1998
      ---------------------------            ------------------------------

<PAGE>   20

                                   EXHIBIT A.1

                           ACS: HYALURONIDASE SOLUTION
              PROTOCOL #VIT-02-08961X AND PROTOCOL #VIT-03-08961X
                             TIME AND COST ESTIMATE

<PAGE>   21
ADVANCED CORNEAL SYSTEMS

                           A Revised Time and Cost Estimate for Assistance with
                           the Conduct of Two Global Phase III Studies of
                           Vitrase(TM) (Hyaluronidase for Ophthalmic
                           Intravitreal Injection) for Clearance of Severe
                           Vitreous Hemorrhage

                           PREPARED FOR-
                           Advanced Corneal Systems, Inc.
                           15279 Alton Parkway, Suite 100
                           Irvine, California 92618

                           PREPARED BY-
                           Covance Clinical and Periapproval Services Inc.
                           2121 North California Boulevard, Suite 500
                           Walnut Creek, California 94596

                           10 July 1998
                           10 September 1998 (revision)
                           20 October 1998 (revision)
<PAGE>   22
TABLE OF CONTENTS

<TABLE>
<S>                                                                        <C>
  I. Introduction                                                           1

 II. Project Scope and Timelines
          Project Scope                                                     3
          Project Timelines                                                 4

III. Responsibilities and Services
          ACS and Covance Responsibilities                                  5
          Pre-Study Preparation                                             7
          Site Identification and Qualification                            10
          Study Drug Management                                            13
          Site Initiation, Monitoring, and Management                      14
          Serious Adverse Event Reporting                                  17
          Project Management                                               18
          Data Management                                                  20
          Statistical Analysis                                             23
          Clinical Trial Report Preparation                                23
          NDA Preparation                                                  24

 IV. Cost Estimates                                                        25

     Appendices
     Appendix 1: Covance's Interactive Voice Response System
     Appendix 2: Covance's Trial Tracker System
     Appendix 3: Covance Pharmaceutical Packaging Services Estimate
</TABLE>

              MATERIAL CONTAINED IN THIS PROPOSAL IS CONFIDENTIAL
                      AND IS THE PROPERTY OF COVANCE, INC.

<PAGE>   23

I. INTRODUCTION

     Advanced Corneal Systems (ACS) has requested that Covance Clinical and
     Periapproval Services, Inc. (Covance) revise and update the 10 September
     1998 Time and Cost Estimate for assistance in conducting two global Phase
     III Studies of Vitrase(TM) (Hyaluronidase for Ophthalmic Intravitreal
     Injection) for Clearance of Severe Vitreous Hemorrhage.

     This revised proposal contains a detailed summary of the scope of work to
     be performed by Covance, task assumptions, and cost estimates. We have
     made adjustments to reflect the following changes:

     - Covance will not be responsible for preparing and submitting the NDA

     - An increase in the monitoring hours during the enrollment period from 10
       to 16 hours per visit

     - Inclusion of Brazilian IND costs

     The changes above are in addition to the previous changes in scope from
     Covance's July 1998 Time and Cost Estimate, which include:

     - Covance will not be responsible for preparing the Canadian IND and the
       European MAA

     - A decrease in the number of Quality Assurance site audits from 30 to 15
       audits

     - An increase in the number of pre-study site evaluation visits from 114
       to 123 visits

     - A net increase in the number of initiated investigative sites from 120
       to 145 sites

     - 36 more sites in the United States

     - 7 more sites in France

     - 1 more site in the Netherlands

     - 2 more sites in the United Kingdom

     - 6 less sites in Canada

     - 5 less sites in Brazil

     - 10 less sites in South Africa

     - A net increase in the number of productive sites from 80 to 105 sites

     - An increase in the number of monitoring days from 1,284 to 2,365 days

     - An increase in the number of case report form pages per patient from 32
       to 36 pages. However, Covance has assumed a higher level of efficiency in
       data management, which results in lower overall data entry costs.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    1
<PAGE>   24
     - South African sites may participate in this study after completing the
       Phase II study. If required, costs for conducting this Phase III study
       and for drug supply management in South Africa will be provided at a
       later time.

     COSTS HAVE NOT BEEN INCLUDED WITHIN THIS TIME AND COST ESTIMATE FOR THE
     GERMAN CRA MONITORING SERVICES AND RELATED OUT-OF-POCKET EXPENSES, AS ACS
     WILL BE RESPONSIBLE FOR CONTRACTING AND MAINTAINING THE CONTRACT AND
     PAYMENTS WITH THE CRA.

     This Time and Cost Estimate, based on discussions with ACS, describes
     Covance's plan for supporting the Vitrase(TM) Phase III program. The
     Project Scope and Timeline section outlines the program scope and
     timelines. The Responsibilities and Services section provides a detailed
     summary of organizational responsibilities and task assumptions. Cost
     estimates appear in Section IV. Changes to timelines, organizational
     responsibilities, or program assumptions listed in this Time and Cost
     Estimate may have an impact on the costs indicated. Details regarding
     Covance's Interactive Voice Response System, Trial Tracker System, and
     Covance Pharmaceutical Packaging Services are provided as appendices.

     Advanced Corneal Systems                                   20 October 1998
     Vitrase(TM)                                                              2
<PAGE>   25
II.      PROJECT SCOPE AND TIMELINES

         PROJECT SCOPE

                  Two Phase III, randomized, masked safety and efficacy studies
                  of Vitrase(TM) for the treatment of severe vitreous hemorrhage
                  will be conducted under separate protocols. Protocol #
                  VIT-02-08961X will be conducted at 80 investigative sites in
                  North America (United States and Canada). Protocol #
                  VIT-03-08961X will be conducted at 60 investigative sites in
                  Europe and 5 sites in Brazil. All investigative sites are
                  stand-alone sites and are expected to enroll a minimum of 1.0
                  to 1.5 patients per month during a 15 month enrollment period.
                  In the North American study, a total of 800 eligible patients
                  will be randomized into one of four treatment arms in a
                  1:1:1:1 ratio

                  (1)      Vitrase(TM) 7.5 IU
                  (2)      Vitrase(TM) 55 IU
                  (3)      Vitrase(TM) 75 IU
                  (4)      Watchful waiting

                  In Europe and Brazil, 800 eligible patients will be randomized
                  into the same four treatment arms used in the North American
                  study.

                  While in the study, patients will be clinically evaluated at
                  Baseline (Day 0); Days 1, 2, and 7; and Months 1, 2, 3, 6, and
                  12. In addition, the FDA has requested bi-annual follow-up
                  visits over a three year period (Months 18, 24, 30, 36, 42,
                  and 48). Costs for activities for the follow-up period will be
                  provided in a separate proposal. Table 1 provides a summary of
                  the project specifications.

                  TABLE 1
<TABLE>
<CAPTION>
                  VITRASE(TM) PHASE III STUDY SPECIFICATIONS
                  -----------------------------------------------------------------------------------------
                  <S>                                  <C>
                  Number of Patients Enrolled          800 (North America) and 800 (Europe and Brazil)

                  Number of Initiated Sites            80 (North America) and 65 (Europe and Brazil)

                  Number of Productive Sites           60 (North America) and 45 (Europe and Brazil)

                  Case Report Form Size(a)             36 pages per patient

                  Enrollment Rate(b)                   Approximately 1.0 to 1.5 patients per site per month

                  Enrollment Period(b)                 15 months

                  Final Deliverable                    4 Integrated Clinical/Statistical Reports
                                                       - 3 Months (2 studies)
                                                       - 12 Months (2 studies)
                  -----------------------------------------------------------------------------------------
</TABLE>

                        (a) CRF size specified by ACS
                        (b) Enrollment rate and period projected by ACS

Advanced Corneal Systems                                        20 October 1998
Vitrase(TM)                                                                   3
<PAGE>   26
         PROJECT TIMELINES

                  Table 2 presents the assumed timelines for the Vitrase(TM)
                  Phase III program.

                  TABLE 2
<TABLE>
<CAPTION>
                  ESTIMATED TIMELINES
                  -----------------------------------------------------------------------
                  MILESTONE                                             DATE
                  -----------------------------------------------------------------------
                  <S>                                       <C>
                  Planning Activities Start                          July 1998

                  Investigator Screening                       July - September 1998

                  Regional Investigators' Meetings          October 1998 and January 1999

                  First Patient Enrolled                      October - November 1998

                  Last Patient Enrolled                             January 2000

                  Last Patient Out (3 months)                        April 2000

                  Delivery of 3 Month Clinical Study                 July 2000
                  Reports

                  Last Patient Out (1 Year Follow-Up)               January 2001

                  Delivery of 1 Year Follow-Up                        May 2001
                  Clinical Study Reports
                  -----------------------------------------------------------------------
</TABLE>

                  o  Timeline provided by ACS and apply to each study

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    4
<PAGE>   27
III. RESPONSIBILITIES AND SERVICES

     ACS AND COVANCE RESPONSIBILITIES

         Table 3 presents the responsibilities shared between ACS or its
         designee (e.g., German contract CRA) and Covance to meet the objectives
         of the Vitrase(TM) Phase III program. A detailed discussion of these
         activities is provided after Table 3.

<TABLE>
<CAPTION>
Table 3
Summary of Responsibilities for Vitrase(TM) Phase III Program
----------------------------------------------------------------------------
                                                          ACS      COVANCE
----------------------------------------------------------------------------
<S>                                                      <C>     <C>
Pre-Study Preparation

    Protocol Preparation                                  P         S

    Investigator's Brochure                               P

    Template informed consent form development            P         R

    Case-report form development                          R         P

    Print and ship case report forms                                P

    CRF Completion Instructions and Site Manual           R         P

    Study File Notebook                                             P

    Regulatory submissions (FDA, HPB and South            P
    African regulatory authorities)

    Regulatory submissions (European and Brazilian                  P
    regulatory authorities)

    Randomization scheme                                            P

    Kick-off meeting                                      S         P

    Project team training meeting                         S         P

Site Identification and Qualification

    Investigative site identification and screening (a)   S         P

    Pre-study site evaluation visits                      S         P

    Approve final site selection                          P         S

    Regulatory document acquisition and review            S         P

    Translations                                                    P

    Negotiation and administration of investigator        P
    contracts

Study Drug Management

    Clinical drug supply labeling and distribution

          United States and Canada                        P

          Europe, Brazil, and South Africa (b)            S         P

    On-site clinical drug supply inventory control                  P

    Patient randomization (IVRS)                                    P
</TABLE>

-------------------------------------------------------------------------------
(a) ACS has identified and screened a number of investigative sites in Europe
    and North America

(b) Study drug management costs for South Africa have not been included. Costs
    for these activities will be provided when the scope of work for South
    Africa is fully defined

P = Primary Responsibility

S = Shared Responsibility

R = Review

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    5
<PAGE>   28
Table 3 (continued)
Summary of Responsibilities for Vitrase(TM) Phase III Study
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Responsibility                                                       ACS      Covance
-------------------------------------------------------------------------------------
<S>                                                                 <C>       <C>
Site Initiation, Monitoring and Management
     Organization and conduct of Investigators' meetings                        P
     Initiation visits                                                S         P
     Develop clinical monitoring plan and study forms                 S         P
     Routine monitoring visits                                        S         P
     Close-out visits                                                 S         P
     In-house site management                                                   P
     Quality assurance site visits                                              P

Serious Adverse Event Reporting
     SAE Reporting Plan                                               R         P
     Collect study-specific adverse event information                           P
     Provide medical evaluation of adverse events                               P
     Report SAEs to FDA and HPB                                       P
     Report SAEs to all European and Brazilian reg. authorities                 P
     Report SAEs to investigative sites                                         P
     Maintain safety database                                                   P
     Reconcile Safety and Clinical Databases                                    P

Project Management
     Overall project management                                       S         P
     Conduct team meetings                                                      P
     Conduct weekly teleconferences with ACS                          S         P
     Conduct quarterly face-to-face meetings with ACS                 S         P
     Project status reporting                                         S         P
     Maintenance of study master files                                          P

Data Management Services
     Data Management Plan                                             R         P
     Develop database and data entry screens                                    P
     Data processing and entry                                                  P
     Data review and clean-up                                                   P
     AE and concomitant medication coding                                       P
     Quality assurance of databases                                             P
     Transfer of clinical data                                                  P
     CRF disposition and archival                                               P

Statistical Analysis
     Statistical Analysis Plans                                       R         P
     Statistical programming and analyses                                       P
     Review tables, listings, and figures                             R         P

Clinical Study Report Preparation
     Clinical study reports (3 and 12 Month Data)                     R         P

NDA Preparation                                                       P
-------------------------------------------------------------------------------------
</TABLE>

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    6
<PAGE>   29
PRE-STUDY PREPARATION

     PROTOCOL PREPARATION

     ACS will be responsible for the development of the study protocols. Covance
     will review the draft protocols and provide comments to ACS, who will be
     responsible for preparing the final protocols. Covance has assumed two
     review cycles for each protocol.

     ACS will submit the final study protocol to the US Food and Drug
     Administration (FDA) and the Canadian Health Protection Branch (HPB).
     Covance will provide the final protocol to all other regulatory agencies
     and all investigative sites.

     INVESTIGATOR'S BROCHURE

     ACS will provide the Investigator's Brochure to Covance. ACS will be
     responsible for updating the Investigator's Brochure, as necessary, and
     providing updates to the FDA, the HPB, and Covance. Covance will distribute
     the Investigator's Brochure and subsequent updates to all other regulatory
     authorities and all investigative sites.

     TEMPLATE INFORMED CONSENT FORM DEVELOPMENT

     ACS will prepare a template patient informed consent form (ICF) for each
     study based on the ICF used in the Phase II study. Covance will review the
     template and provide comments to ACS. ACS will be responsible for final
     approval of the template ICF. Covance has assumed two review cycles for ICF
     finalization.

     In Europe and Brazil, Covance will translate the ICFs into the local
     language, taking into account all country specific requirements.

     Covance will interact with investigative sites in obtaining site specific
     changes to the ICF in accordance with instructions provided by ACS.

     CASE REPORT FORM DEVELOPMENT AND PRINTING

     Covance will be responsible for designing the Phase III case report form
     (CRF) for each study. To allow for rapid retrieval, review, and data entry,
     Covance will design the CRFs to make use of:

     - A segmented design format

     - International date coding

     - Completion in English

     - Precoding, where applicable

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    7

<PAGE>   30

     Per ACS's instructions, Covance has assumed each CRF will be 36 pages in
     length, with approximately 10 to 15 unique pages. Covance will provide
     draft CRFs to ACS for review and comment. Covance has assumed two review
     cycles for each CRF.

     Covance will print the CRFs on three-part NCR paper and ship the CRFs to
     all investigative sites.

     CRF COMPLETION INSTRUCTIONS AND SITE MANUAL DEVELOPMENT

     To facilitate accurate completion of the CRF by the investigative sites,
     Covance will prepare CRF Completion Instructions for each study. These
     instructions will provide detailed procedures for completing each section
     of the CRF. It will also highlight important protocol adherence items and
     interrelated sections within the CRF.

     Covance will also prepare a Site Manual that will include the CRF
     completion instructions, monitoring frequency, query resolution
     procedures, patient screening procedures, and all other forms and
     procedures that are applicable for this study.

     Covance has assumed the CRF Completion Instructions and the Site Manual
     will be written in English and require one review cycle by ACS prior to
     finalization. Covance will be responsible for printing and shipping copies
     of the CRF Completion Instructions and Site Manual to monitors, study
     coordinators, investigators, and ACS.

     STUDY FILE NOTEBOOK

     Covance will develop and forward to each investigative site a Study File
     Notebook. The binder is provided to file the following documents:

     - Protocol and amendments

     - Protocol summary and study schema

     - Investigator's Brochure

     - Informed Consent Form

     - Institutional Review Board or Independent Ethic Committee approvals

     - Adverse event reporting procedure

     - Safety updates

     - FDA 1572

     - Regulatory binder maintenance instructions (with signature verification
       sheet and site visit log)

     - Correspondence

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    8
<PAGE>   31

     Covance will be responsible for ensuring that each investigator maintains
     and updates their Study File Notebook at each site.

     PREPARATION OF REGULATORY SUBMISSIONS

     ACS will be responsible for all initial and subsequent IND and INDs
     regulatory submissions and filings to the FDA and the HPB during this
     program, including all amendments and maintenance. Covance will be
     responsible for all initial and subsequent regulatory submissions and
     filings in Brazil, France, Germany, Italy, Poland, the Netherlands,
     and the United Kingdom, including all amendments and maintenance in
     support of these two Phase III clinical trials. Covance will be the
     primary contact for regulatory authorities within each of these European
     countries and Brazil.

     RANDOMIZATION SCHEME

     Covance will prepare the randomization schedule for each study and
     administer central patient randomization using an Interactive Voice
     Randomization System (IVRS). Covance's IVRS is described in detail in
     Appendix 1.

     KICK-OFF MEETING

     An ACS-Covance Phase II/III kick-off meeting was held on 25 June 1998.
     Discussion items at the meeting included task responsibilities, timelines,
     and communication plans.

     PROJECT TEAM TRAINING MEETING

     To ensure consistency in understanding and implementing program objectives,
     ACS's Project Physician and Covance's International Project Director will
     conduct two formal training sessions for Covance's clinical project team
     members. The first training session was conducted in North America on 20
     July and the second training session will be conducted at the European
     Investigators' Meeting. Covance has assumed members of the ACS Vitrase(TM)
     Project Team will attend and contribute to each meeting.

     The training session will include a review of the details of the
     Vitrase(TM) program, the Investigator Brochure, disease state, and
     regulatory requirements. It will also include a review the protocol, CRF
     completion requirements, monitoring requirements, pharmacy instructions,
     and present an overview of the pre-study requirements, adverse event
     reporting requirements, and expectations for study completion and
     follow-up.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                    9

<PAGE>   32
                  Each training session is expected to last one day and will be
                  videotaped for future reference. Covance and ACS will share
                  the responsibility for the preparation of all training
                  materials. All proposed training materials and plans will be
                  circulated between ACS and Covance for review and comment
                  prior to the training session.

         SITE IDENTIFICATION AND QUALIFICATION

                  INVESTIGATIVE SITE IDENTIFICATION AND SCREENING

                  Table 4 summarizes the total number of site contacts,
                  pre-study visits, and initiation visits to be conducted by
                  Covance for these studies in the US, Canada, Europe and
                  Brazil.

                  TABLE 4
<TABLE>
<CAPTION>
                  INVESTIGATIVE SITE IDENTIFICATION AND SCREENING
                  --------------------------------------------------------------
                  REGION           SITE CONTACTS       PRE-STUDY      INITIATION
                                                         VISITS         VISITS
                  --------------------------------------------------------------
                  <S>              <C>                 <C>            <C>
                  United States         120                90             76

                  Canada                 10                 8              4

                  Europe*                 0                20             43

                  Brazil                  5                 5              5
                  --------------------------------------------------------------
</TABLE>
                  *  Excludes sites located in Germany.

                  ACS has identified a contract CRA for the German sites who
                  will perform the following tasks according to Covance
                  standards:

                  - Evaluation and selection of sites including pre-study visits
                    and reports

                  - Budget and SOA negotiations

                  - Attendance and follow-up of Investigators' Meeting in
                    Brussels

                  - Attendance to one training meeting in Covance Brussels

                  - Translations

                  - Provide assistance to Investigators for EC submissions

                  - Initiation, routine monitoring, and close-out visits,
                    reports, and follow-up

                  - Provide input for status reports

                  - Attendance to project team meetings

                  - Maintenance of project files

                  - SAE-reporting according to the SAE plan

                  - Site management

                  - Shipping of non-drug supplies

                  - Tracking of investigator payments

                  - Assistance to the follow-up of issues raised during audits

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   10
<PAGE>   33
-    In-House review of retrieved CRFs

-    Clinical query resolution with sites

-    Drug/randomization code accountability on sites

Covance has assumed it will be responsible for the following activities for the
German sites:

-    Regulatory submissions

-    SAE Plan

-    SAE reporting to authorities

-    SAE reporting to Investigators and Ethics Committees (ECs)

-    Notifying reportable SAEs to Central ECs

-    Review and approval of Investigator regulatory document package

-    Site Audits

-    Drug distribution and tracking (including IVRS)

-    Drug label translation and review

Table 5 provides the assumed investigative site location by country, by study,
and the assumed patient enrollment by country.  The patient enrollment potential
within each country has not been confirmed by a formal feasibility study.

TABLE 5
<TABLE>
<CAPTION>

INVESTIGATIVE SITE LOCATION AND ESTIMATED PATIENT ENROLLMENT
--------------------------------------------------------------------------------
                                                               ESTIMATED NUMBER
LOCATION                                SITES                    OF PATIENTS
--------------------------------------------------------------------------------
<S>                                     <C>                         <C>
Study #VIT-02-08961X                     80                           800
     Canada                               4                            80
     United States                       76                           720

Study #VIT-03-08961X*                    65                           800
     France                              10                            75
     Germany                             17                           200
     Italy                                5                            75
     The Netherlands                      8                            50
     Poland                               8                           175
     United Kingdom                      12                           100
     Brazil                               5                           125
--------------------------------------------------------------------------------

</TABLE>

* Covance and ACS anticipates changes in the site numbers and patient enrollment
numbers.

Advanced Corneal Systems                                        20 October, 1998
Vitrase(TM)                                                                   11
<PAGE>   34
PRE-STUDY SITE EVALUATION VISITS

ACS has identified 10 sites in the US and 40 sites in Europe that do not require
pre-study visits. Therefore, Covance will conduct 98 pre-study site evaluation
visits in North America, 20 pre-study visits in Europe (excluding Germany), and
5 pre-study visits in Brazil. Each pre-study visit will last ten hours including
time for preparation, travel, and report generation. At each pre-study site
visit, the Covance monitor will conduct an in-depth interview to evaluate the
investigator with respect to:

-    His or her professional experience and training

-    Past experience in conducting clinical trials

-    Current participation in or future scheduling of studies that will compete
     for patients with severe vitreous hemorrhage.

-    Access to appropriate study patients

-    Evidence of the number of potential patients entering the investigator's
     facility on a monthly basis

-    Ability to meet ACS's and Covance's enrollment goals

-    Proper level of staffing, including availability of study coordinator

-    Adequacy of facilities, including required study medical equipment

-    Secure drug refrigeration (between 2 degrees and 8 degrees Celsius) and
     storage capabilities

-    Understanding of regulatory requirements

ACS may elect to co-monitor some of the pre-study site visits with the Covance
monitor.

Covance will provide a monitor's report to ACS electronically (via Covance's
Trial Tracker System) within ten working days of completing a pre-study site
visit. Covance will define the format of the pre-study visit reports.

REGULATORY DOCUMENTS ACQUISITION AND REVIEW

Covance will collect and review the required pre-study regulatory documents for
each investigative site, including Institutional Review Board (IRB) and
Independent Ethics Committee (IEC) approvals. Covance also will be responsible
for obtaining annual IRB and IEC renewals for the duration of this study.
Covance will review all documents for completeness and accuracy prior to
submission to regulatory authorities. ACS will submit regulatory documents to
the FDA, HPB, and South African regulatory authorities. Covenance will submit
regulatory documents to all other regulatory authorities in Europe and Brazil,
as appropriate.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   12
<PAGE>   35
     TRANSLATIONS

     Covance will ensure accurate translations of ICFs, protocol synopsis, and
     clinical drug labels into appropriate languages using
     translators/regulatory affairs staff located in Covance's Canadian,
     Brazilian, and European offices.

     NEGOTIATION AND ADMINISTRATION OF INVESTIGATOR BUDGETS AND CONTRACTS

     ACS will provide Covance with guidelines for negotiation of investigator
     budgets. Covance will be responsible for negotiating the lowest reasonable
     investigator budget within the guidelines provided by ACS. Covance will
     discuss with ACS investigative sites that do not fall within these
     guidelines. ACS will develop a standard investigator contract and payment
     schedule.

     ACS will be responsible for maintenance of investigator contracts and all
     administrative details and payments to investigators. ACS will reimburse
     investigators on a pro-rated basis for work performed according to a
     written agreement. Covance will visually verify that investigators have
     performed the work before payment.

STUDY DRUG MANAGEMENT

     CLINICAL DRUG SUPPLY

     ACS will be responsible for packaging, labeling, and shipment of study
     medications in Canada, Brazil, and the United States. ACS will send
     packaged drug to Covance for distribution to sites in Europe. Covance
     Pharmaceutical Packaging Services (CPPS) in Horsham, UK will be responsible
     for drug distribution in Europe, Brazil and South Africa. Covance will set
     up and maintain import licenses where required by local regulations.
     Covance also will be responsible for supplying, tracking, and shipping of
     all ancillary materials.

     Covance will be responsible for developing country-specific secondary
     labels from the original English label text provided by ACS. The secondary
     labels will also include investigator name and address, telephone number,
     site number, and any local regulatory requirements. To ensure the accuracy
     of the secondary labels, Covance will conduct back-translation
     certification of the final labels. Covance will affix the secondary labels
     before shipment of study medications to investigative sites within Europe.

     Covance has assumed ACS will be responsible for all country-specific
     secondary labeling activities for Canadian.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   13

<PAGE>   36
     ON-SITE CLINICAL DRUG SUPPLY INVENTORY CONTROL

     During monitoring visits and at study closure, Covance will be responsible
     for verifying site documentation regarding receipt of study drug and for
     ensuring the investigative sites maintain proper drug dispensing records.
     At the end of the study, Covance will either manage the return of study
     drug to ACS and reconcile any remaining drug supplies or instruct sites to
     destroy drug upon authorization from ACS.

     PATIENT RANDOMIZATION

     Covance proposes the use of an Interactive Voice Response System (IVRS)
     for this program. The IVRS provides computerized patient randomization
     using touch-tone telephone equipment and computerized voice output.

     The following features will be available in this program:

     - Secure site access to the IVRS through a touch-tone telephone, using a
       toll-free number and individual site access code

     - Patient randomization following the site's entering of specific project
       and patient information, which is repeated by the system for
       verification prior to randomizing a patient

     - Confirmation faxes to ACS and the investigative site

     - Management of warehouse and site drug inventory in "just-in-time" fashion

     - Drug expiration tracking

     - A secure and tested backup and disaster recovery plan

     - A system validated by standards that meet the FDA requirements based on
       "Guidelines on General Principles of Process Validation" and the Device
       Manufacturing Practices Parts 211.68 and 820.61

     - Support in at least 21 languages that is available 7 days a week, 24
       hours a day

     Appendix 1 contains detailed summaries and specifications for each of the
     above items.

SITE INITIATION, MONITORING, AND MANAGEMENT

     ORGANIZATION AND CONDUCT OF THREE INVESTIGATORS' MEETINGS

     Covance will organize and conduct three Investigators' Meeting tentatively
     scheduled for October 1998 and January 1999. The North American meeting
     will be held in Irvine, California. The European meeting will be conducted
     in Brussels, Belgium. The Brazilian meeting location is yet to be
     determined.

Advanced Corneal Systems                                        20 October, 1998
Vitrase(TM)                                                                   14
<PAGE>   37

     ACS and Covance will work together to develop the agenda and presentation
     responsibilities for each meeting and will conduct a rehearsal meeting
     prior to the first Investigators' Meeting. Each meeting is expected to be
     one day in length. To ensure consistency in meeting presentations the
     Covance International Project Director will attend each meeting. The
     following attendees are anticipated to attend the meetings:

     - Principal investigator from each site

     - Study coordinator from each site (North America only)

     - Five ACS project team members per meeting (only 2 assumed for Brazil
       Meeting)

     - Twelve Covance project team members for the North American meeting

     - Nine Covance project team members for the European meeting

     - Three Covance project team members for the Brazil meeting

     INITIATION VISITS

     Covance will be responsible for study initiation visits pending ACS's
     approval of the investigator's regulatory documents and after shipment of
     study drug has been approved. Covance has assumed Covance will conduct 128
     site initiation visits for this program. In addition, the German contract
     CRA will conduct 17 visits. Each initiation/monitoring visit will require
     approximately 14 hours spent on site. An additional six hours are allotted
     for preparation, travel, and report generation. At each initial visit, the
     Covance monitor will be responsible for reviewing with the investigator
     and site staff the protocol, the CRF and procedures for its completion,
     regulatory documentation and requirements, the details of drug dispensing,
     storage, and accountability, serious adverse events reporting and
     requirements, and other administrative aspects of the program.

     Covance will provide a monitor's report to ACS electronically (via
     Covance's Trial Tracker System) within ten working days of completing an
     initiation visit. Covance will define the format of the initiation visit
     reports.

     ROUTINE MONITORING VISITS

     Following the initial initiation/monitoring visit, Covance will conduct
     monitoring visits approximately every six to eight weeks during the
     enrollment period and every 12 weeks thereafter for the duration of the
     program. Each routine monitoring visit will last 16 hours including time
     for preparation, travel, and report generation. ACS may elect to
     co-monitor some of the visits with the Covance monitor. Covance also has
     assumed that ACS has identified and contracted with a contract CRA in
     Germany who will monitor all active sites in Germany. Table 6 displays the
     number of monitoring days by study Covance has

Advanced Corneal Systems                                        20 October, 1998
Vitrase(TM)                                                                   15
<PAGE>   38
                  assumed in this proposal. Covance has assumed 20 of the North
                  American sites will be non-productive and not require
                  monitoring visits. Prior to determining a site is
                  non-productive, Covance suggests conducting a follow-up
                  training site visit for inactive sites. Costs for this visit
                  are not included.

<TABLE>
<CAPTION>
                  TABLE 6
                  MONITORING DAYS BY LOCATION
                  -------------------------------------------------------------
                  LOCATION                             MONITORING DAYS
                  -------------------------------------------------------------
                  <S>                                  <C>
                  North America Study                       1,393

                  European Study (includes Brazil)*          972
                  -------------------------------------------------------------
</TABLE>
                  *  Assumes ACS contract CRA will monitor all German sites

                  Covance proposes to decouple retrieval of CRFs from monitoring
                  visits for this program. This strategy will allow
                  investigative sites to submit patient CRFs as soon as possible
                  following a patient visit. This will allow Covance to enter
                  data into the clinical database as early as possible. The
                  monitor will review the patient's source documentation against
                  the site's copy of the CRF. Any corrections or additions to
                  the CRF will be noted on a Data Clarification Form, which will
                  be signed-off by the investigator and forwarded to Covance's
                  data management group for processing.

                  Covance monitors will ensure that information collected in the
                  CRF is complete and accurately reflects the information
                  recorded on the patient's medical chart. During monitoring
                  visits, Covance monitors will review the following:

                  - Appropriate patient enrollment and randomization

                  - Protocol and patient compliance

                  - 100% of the CRF data fields for accuracy, completeness, and
                    consistency with source documentation

                  - Investigator's Study File Notebook (e.g., study logs, signed
                    patient informed consents forms, etc.)

                  - Drug supplies, pharmacy records, and appropriate drug
                    storage

                  - Data received regarding the safety of the drug

                  - Regulatory compliance (IRB/IEC correspondence, etc.)

                  - Appropriate review of other data instruments for
                    completeness, accuracy, and consistency with source
                    documents

                  Covance will provide a monitor's report to ACS electronically
                  (via Covance's Trial Tracker System) within ten working days
                  of completing a monitoring visit that will define any issues
                  found or discussed at the site. Covance will define the format
                  of the monitoring reports.

Advanced Corneal Systems                                        20 October 1998
Vitrase(TM)                                                                  16
<PAGE>   39
     CLOSE-OUT VISITS

     Where possible, Covance will close sites at the time of the final
     monitoring visit. Covance has assumed that non-accruing/non-productive
     sites will require a separate site visit for close-out. Each close-out
     visit will last ten hours including time for preparation, travel, and
     report generation.

     Covance will ensure that all site documentation is complete and accessible
     for potential future FDA or other regulatory authority audits, that the
     investigator is aware of his or her continuing responsibilities, and that
     all remaining clinical trial materials to be returned to ACS are removed
     from the investigative site.

     Covance will provide a monitor's report to ACS electronically (via
     Covance's Trial Tracker System) within ten working days of completing a
     close-out visit.

     IN-HOUSE SITE MANAGEMENT

     Between monitoring visits, Covance will maintain weekly telephone contact
     with investigative sites to discuss patient accrual, adverse experiences,
     query resolution, and any other study related issues. Covance will provide
     written documentation to ACS of all critical issues discussed.

     QUALITY ASSURANCE SITE AUDITS

     Quality Assurance Good Clinical Practices site audits will be conducted by
     Covance's Quality Assurance personnel. ACS has requested that 10% of sites
     will undergo a Quality Assurance Audit. Therefore, Covance will conduct
     eight site audits in North America, one site audit in Brazil, and six site
     audits in Europe for this program. Covance will provide audit reports to
     ACS within four weeks of conducting an audit. Covance has assumed that each
     audit will require three days on site to complete.

SERIOUS ADVERSE EVENT REPORTING

     SERIOUS ADVERSE EVENT REPORTING PLAN

     Covance and ACS will work together to develop a serious adverse events
     (SAE) reporting plan. The plan will define procedures and responsibilities
     for collecting, reporting and tracking SAEs. ACS will provide final
     approval and sign-off of the plan.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   17
<PAGE>   40
                  SAE REPORTING

                  ACS has asked Covance to assume 80 SAEs per study (160 total)
                  with one follow-up report per event on average. Covance will
                  use its standard SAE report forms. Covance will collect and
                  forward all SAE information from the investigators to ACS
                  within 24 hours of receipt. Covance also will collect SAE
                  follow-up information and forward the information to ACS.
                  Information on events occurring in North America will be
                  collected by Covance's Walnut Creek office. Information on
                  events occurring in Europe will be collected by Covance's
                  Maidenhead, UK office. Information on events occurring in
                  Brazil will be collected in Covance's Buenos Aires, Argentina
                  office. In processing SAEs, Covance will be responsible for:

                  - Providing medical evaluation

                  - Writing all SAE narratives

                  - Submission to ACS for filing with the FDA and HPB

                  - Reporting and submission of all reportable events in
                    compliance with applicable local regulations in Europe and
                    Brazil

                  - Notifying investigators of any events per local regulations

                  ACS will determine whether each SAE requires submission to the
                  FDA and submitting reportable SAEs to the FDA and HPB. Covance
                  has assumed 20% of SAEs (total of 32) will be reported to the
                  Regulatory Agencies.

                  SAE DATABASE

                  Covance will establish and maintain an SAE database and will
                  be responsible for reconciling the SAE and clinical databases.

         PROJECT MANAGEMENT

                  OVERALL PROJECT MANAGEMENT

                  Covance has assigned Cecile Lardinois as the International
                  Project Director and Toniann Derion, Christiane Booremans, and
                  Maria Fernanda Castro Duran as regional Project Managers in
                  the United States, Europe, and Brazil, respectively.

                  The International Project Director will be responsible for:

                  - Leading the Covance Vitrase(TM) project team and providing
                    expertise as needed

                  - Serving as ACS's key point of contact within Covance

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   18
<PAGE>   41
     - Maintaining effective communication with ACS and all groups performing
       project work

     - Preparing of project plans, timelines, and milestones

     - Directing all activities required to meet Covance's obligations to ACS

     - Ensuring Covance's budgetary, on-time, and quality performance

The regional Project Managers will serve under the International Project
Director and be responsible for coordinating the daily activities of the core
and extended Covance project team. The Project Managers will report directly to
the International Project Director on project status and issues.

COMMUNICATION WITH ACS

The Covance International Project Director will maintain contact with the ACS
Clinical Operations representative throughout the program. Covance has assumed
core project team telephone conferences will be conducted weekly and that
face-to-face meetings between ACS and Covance will occur quarterly with
Covance's North American team throughout the program. Covance's European Project
Manager will attend project team teleconferences on an as needed basis and
face-to-face meetings annually. Covance and ACS will conduct a contract and
budget status review in coordination with the quarterly face-to-face team
meetings. Covance has assumed these meetings will alternate between ACS's and
Covance's offices. A minimum of four Covance project team members will attend
each meeting.

PROJECT STATUS REPORTING

It is Covance's intention to provide ACS with project status reporting through
Covance's Trial Tracker system, which will allow ACS 24-hour access to key
project status information. ACS's project team members will be able to access
Trial Tracker from their desktops via Covance's network. A technical support
individual based in Covance's Walnut Creek office will be available on an
"on-call" basis to address any Trial Tracker issues. For each study, Trial
Tracker will contain modules that will provide the following information to ACS:

- Investigator data

     - Names and addresses

     - Budget/Payment Status

- Regulatory document status

- Monitor's trip reports

     - Pre-study investigative site visits

     - Initiation investigative site visits

     - Monitoring investigative site visits

Advanced Corneal Systems                                        20 October, 1998
Vitrase(TM)                                                                   19
<PAGE>   42
          o    Close-out investigative site visits

     o    Patient enrollment data

     o    Site contacts

          o    Telephone contacts

          o    Protocol exceptions

          o    Common study site issues

     o    CRF retrieval and correction tracking data

     o    SAE summaries

     Appendix 2 provides details on each of the Trial Tracker modules.

     Covance will update Trial Tracker information on a daily basis. The
     timeliness of the information contained within the individual modules will
     depend on the nature of the data collected for the specific module. For
     example, monitoring visit trip reports are scheduled for delivery to ACS
     within ten days of completion of the site visit. Therefore, information
     entered into the Site Visit Report Module will pertain to visits that
     occurred up to ten days before the daily system update.

     MAINTENANCE OF STUDY MASTER FILES

     In accordance with the International Conference on Harmonization (ICH) Good
     Clinical Practices and local applicable regulations, Covance will maintain
     study files that consist of the original CRFs, investigator regulatory
     documentation, and correspondence between ACS and the investigative sites.
     Covance will maintain the study files until completion of the program
     unless ACS requests provision of the files prior to completion of the
     program, at which time they will be forwarded to ACS. ACS will have access
     to the study files at all times.

DATA MANAGEMENT

     DATA MANAGEMENT PLAN

     Data Management activities for both studies will be conducted out of
     Covance's Walnut Creek office.

     Covance will be responsible for developing a Data Management Plan for this
     program. Covance will provide a draft of the Data Management Plan to ACS
     for review and comment.

     The Data Management Plan will include, but not be limited to:

     o    Definition of a data segment

     o    CRF log-in, pre-data entry clarification, and data entry procedures

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   20

<PAGE>   43
     - Coding specifications

     - Data coordination procedures (i.e., review systems, validation of data,
       query generation and resolution, and database correction procedures)

     - Database audit procedures

     DATABASE DESIGN

     Covance will develop separate but identical CRF database structures for
     the European study (including Brazil) and for the North American Study.

     CRF PROCESSING AND DATA ENTRY

     CRFs will be directly submitted by the study sites to Covance's Document
     Control Center in Walnut Creek as quickly as possible after the patient
     visit. Once in house, data personnel will inventory and forward the CRFs
     for data entry. Covance's CRF tracking system will track the CRFs
     throughout the data entry and data management process. Working copies of
     the CRF will be stored in Covance's Document Control Center and the
     original white copies will be kept in a separate off-site storage facility.

     Entry of the data from each CRF will occur promptly to ensure a current
     database. Data entry will be performed on an on-going basis by two
     independent operators: the first operator performs the initial entry and
     the second operator performs second key verification of all numeric and
     date fields, adverse experiences, and concomitant medications. Lengthy
     text fields (in excess of 80 characters) will be entered by the first data
     processor, then sight verified by the second operator. Any questionable
     discrepancies will be addressed by a Data Manager. Covance will data enter
     up to 57,600 CRF pages (1,600 patients x 36 CRF pages).

     DATA REVIEW AND CLEAN-UP

     The data review process will begin with the preparation of Data Review
     Guidelines, which will specify the computerized validation checks and query
     conventions. The Data Review Guidelines will be developed when the CRF
     Monitoring Conventions and Site Manual are developed, thus ensuring
     consistency and appropriateness in approach to data collection and
     handling. ACS will review and sign-off on the Data Review Guidelines.

     Data review will occur on an ongoing basis. Covance will immediately
     correct and document data problems that can be resolved through intra-CRF
     verification and without discussion with an investigator's staff. Data
     queries that require resolution with an Investigator's staff will be
     addressed by mail, facsimile or, if necessary, with investigative site
     staff during the next monitoring visit. Covance's standard procedures
     ensure that all corrections to a CRF are

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   21
<PAGE>   44
appropriately documented, reviewed, and approved by the investigator. Covance
will review and clean up to 57,600 CRF pages (1600 patients x 36 CRF pages).

ADVERSE EVENT AND CONCOMITANT MEDICATION CODING

Covance will be responsible for applying coding conventions to adverse events
and concomitant medications. Covance has assumed that it will use Covance's
standard COSTART dictionary to code intercurrent illnesses and adverse events
and Covance's standard WHODRUG dictionary to code concomitant medications.
Costs for additional coding for specific ophthalmologic events that cannot be
coded by COSTART have not been included in this proposal.

QUALITY CONTROL AND QUALITY ASSURANCE OF THE DATABASE

To ensure data quality, Covance will conduct a database audit (a random
sampling of the database verified with the hard copy CRF, item by item) of each
database. Covance will use its Standard Database Audit error rate of 0.05% or
less as the threshold for accepting a file. If the error rate is above 0.05%,
Covance will reject the file and conduct a systematic review of the database
for errors.

In addition, per Covance SOPs, Covance Regulatory Compliance personnel will
conduct a database audit on 10% of patients.

TRANSFER OF CLINICAL DATA

Covance will conduct one test data transfer to ACS of a populated database
using data structures compatible with ACS standards prior to CRF data entry.
Dummy data included in the test transfer will be prepared by Covance. Table 7
defines the data transfers per study.

<TABLE>
<CAPTION>
TABLE 7
DATA TRANSFERS BY STUDY
-------------------------------------------------------------------------------
                               NORTH            EUROPE AND
TRANSFER                      AMERICA             BRAZIL              TOTAL
-------------------------------------------------------------------------------
<S>                         <C>                <C>                  <C>
Dummy Data                         1                   1                   2
IND Updates                        3                   3                   6
Final Transfer                     1                   1                   2
Total                              5                   5                  10
-------------------------------------------------------------------------------
</TABLE>

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   22
<PAGE>   45
     CRF DISPOSITION AND ARCHIVAL

     Covance will be responsible for coordinating the disposition of the
     CRF's after the trial is completed.

STATISTICAL ANALYSIS

     STATISTICAL ANALYSIS PLAN

     Covance will prepare a Report and Analysis Plan (RAP) for the final
     analyses for each study. Covance has assumed each RAP will be finalized
     early in the program prior to data analysis and will be identical for each
     study.

     The RAP will define all statistical analyses and will include an outline
     of the statistical report with table, listing, and figure mock-ups. ACS
     will review the draft RAPs and provide comments to Covance, who will be
     responsible for incorporating ACS's comments and preparing final drafts
     for ACS to sign-off. Covance has assumed two review cycles for each RAP.

     STATISTICAL PROGRAMMING AND ANALYSIS

     Covance programmers will be responsible for creating programs for the
     development of safety and efficacy tables and listings. The programs will
     be based on the programs used to create the tables, listings, and figures
     from the Phase II analyses. Covance has assumed a total of 100 tables,
     listings, and figures for each of the 3 and 12 month final analyses.
     Analyses, tables, and listings will be substantially the same for the 3
     and 12 month analyses, with the exception of changes necessary to
     accommodate additional timepoints at 12 months. Covance has assumed two
     review cycles by ACS will be required prior to sign-off on final tables,
     listings, and figures by ACS.

CLINICAL STUDY REPORT PREPARATION

     CLINICAL STUDY REPORT

     Covance will be responsible for preparation of the Clinical Study Reports
     (CSR) for each study. Covance has assumed two CSRs per study: one after
     completion of three months in the study by all patients and one after
     completion of 12 months in the study by all patients. Covance will prepare
     the reports using Covance's standard report format, which follows ICH
     Guidelines. Covance will use the individual patient narratives from the
     SAE reports in the CSRs. Covance has

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   23
<PAGE>   46
     assumed that ACS will conduct two review cycles prior to sign-off on the
     final CSRs.

NDA PREPARATION

     NEW DRUG APPLICATION

     Early in the program, ACS and Covance will meet to define organizational
     responsibilities as related to the Vitrase(TM) New Drug Application (NDA).
     Following that meeting Covance will provide ACS with an estimate for its
     services as related to the NDA. No costs are provided within this Time and
     Cost Estimate for Covance's assistance with the Vitrase(TM) NDA.

Advanced Corneal Systems                                         20 October 1985
Vitrase(TM)                                                                   24
<PAGE>   47
IV.  COST ESTIMATES

Table 8 presents estimated Out-of-Pocket (OOP) Costs, Table 9 presents
estimated Covance Fees, and Table 10 presents estimated OOP costs and Covance
Fees for Covance Pharmaceutical Packaging Services (CPPS). Estimated Covance
fees are based upon the resources needed to complete tasks described in the
Responsibilities and Services Section of this Time and Cost Estimate.
Subsequent changes to the timelines, organizational responsibilities, and
program assumptions listed throughout this Time and Cost Estimate may have an
impact on the costs provided.

TABLE 8
ESTIMATED OUT-OF-POCKET (OOP) COSTS
--------------------------------------------------------------------------------
TASK                                         AMERICAS            EUROPE
--------------------------------------------------------------------------------
Travel (Pre-study Site Visits)            $   84,000            $ 10,000
Travel (Initiation Visits)                    85,000              22,000
Travel (Monitoring Visits)                   871,000             329,000
Travel (GCP Audits)                           17,000              19,000
Travel (ACS-Covance Meetings)                 81,000               9,500
Travel (Project Team Meetings)                 5,000              15,000
Investigators' Meetings                      258,000              62,000
Case Report Form Printing                     20,000              17,000
Miscellaneous (e.g., Binders)                 10,000              10,000
Shipping                                      31,000              31,000
Brazil Regulatory                             23,000
IVRS Charges                                  17,000                  --
--------------------------------------------------------------------------------
     TOTAL OUT-OF-POCKET COSTS            $1,502,000            $524,500
--------------------------------------------------------------------------------
OOP costs for a secure e-mail connection have not been included

Advanced Corneal Systems                                        20 October 1998
Vitrese(TM)                                                                  25

<PAGE>   48
TABLE 9
ESTIMATED COVANCE FEES PER TASK

<TABLE>
<CAPTION>
TASK                                                  AMERICAS(a)       EUROPE
----                                                 ------------     ----------
<S>                                                  <C>              <C>

Regulatory Submission (Brazil)                        $   19,000      $   68,000

Protocol/Case Report Form Preparation(b)                  47,000           3,000

Pre-Study Preparation                                    390,000         135,000

Initiation Visits                                        170,000          99,000

Monitoring Visits                                      1,491,000       1,155,000

Project Management                                     1,416,000         329,000

Site Management                                        1,176,000         381,000

Data Entry                                               207,000              --

Data Clean-up                                            976,000         118,000

Biostatistical Programming and Analysis(b)               280,000               0

Clinical Study Report Preparation                        219,000               0

Site Audits                                               54,000          33,000

Drug Supply Management (includes IVRS)                   338,000          28,000

Project Support                                        1,154,000         276,000
                                                     -----------      ----------
     TOTAL COVANCE FEES                              $ 7,937,000      $2,625,000
                                                     -----------      ----------
</TABLE>

     (a)  Costs include international project management, data management,
          analysis, report preparation and IVRS for both studies.

TABLE 10
ESTIMATED COVANCE PHARMACEUTICAL PACKAGING (CPPS) OOPS AND FEES

<TABLE>
<CAPTION>
TASK                                                   BRAZIL           EUROPE
----                                                   ------         ----------
<S>                                                    <C>            <C>
Drug Supply Management OOPs(a)                                            34,000

Drug Supply Management Fees                             5,000            122,000
                                                       ------         ----------
     TOTAL CPPS OOPS AND FEES                                         $  156,000
                                                                      ==========
</TABLE>

     (a)  OOPs for Brazil will be provided once the process for transporting
          study drug within Brazil to the sites has been finalized. Original
          estimates for a drug depot in Brazil were estimated to be
          $10,000-$20,000. Covance and ACS will continue to define logistics for
          drug distribution in Brazil.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   26
<PAGE>   49

APPENDIX 1

COVANCE'S INTERACTIVE VOICE RESPONSE SYSTEM

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   27
<PAGE>   50
COVANCE'S INTERACTIVE VOICE RESPONSE SYSTEM

     Covance will be responsible for randomization for ACS's Vitrase(TM) Phase
     III studies. We propose the use of Interactive Voice Response System
     (IVRS).

     GENERAL IVRS OVERVIEW

     The IVRS patient randomization system provides computerized patient
     randomization using touch-tone telephone equipment and computerized voice
     output. Covance's IVRSs have been in use since 1989 in over 130 protocols.
     More than 52,000 patients have been randomized and over 525,000 drug
     assignments have been performed in more than 32 countries using toll-free
     telephone numbers. Covance's IVRS is capable of supporting at least 21
     languages and is available 7 days a week, 24 hours a day.

     IVRS FUNCTIONAL REQUIREMENTS

     The following functions will be available:

     Site access to the IVRS

     With a touch-tone telephone, study staff will call the IVRS using a
     toll-free number. The IVRS will prompt the caller for his or her
     identification number and preassigned access code. The identification
     number is a unique number that identifies the caller. The access code has
     been implemented as a security measure.

     Patient Randomization

     Callers can randomize patients by entering specific project and patient
     information. All information entered by the caller is repeated by the
     system for verification prior to randomizing a patient; this allows the
     caller the chance to correct mis-entries during the call. Upon
     verification from the caller, the IVRS assigns the patient an
     identification number and a treatment arm from the randomization scheme
     generated by a Covance statistician. This will provide real-time patient
     enrollment.

     Drug numbers can be dynamically matched to the patients at the moment of
     the randomization and drug assignment. No pre-association between patient
     and drug numbers is required. This disassociation allows the ACS to start
     up the trial with minimal study drug supplies.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   28
<PAGE>   51
     An additional advantage of the IVRS is that it allows ACS to have the
     ability to control patient stratification, for example by age.
     Randomization can be done at site level and allow for balancing of the
     patient population at site or treatment level as patients are enrolled in
     the study.

     Confirmation Faxes

     The system will automatically fax confirmation statements after each
     randomization to both the study sites and ACS. These documents will serve
     as written verification of the randomization for auditing purposes.

     Drug Ordering and Inventory Management

     The IVRS will manage the warehouse and site drug inventory in a
     "just-in-time" fashion. This allows for limited initial drug supplies and
     minimal drug inventory at the sites, which is achieved by using actual
     patient enrollment data along with predetermined resupply algorithms. The
     drug inventory algorithms account for drug at warehouse, drug in route,
     drug at sites, and drug dispensed.

     Drug Expiration Tracking

     The Covance IVRS maintains drug lot numbers, kit numbers, expiration
     dates, and batch numbers. This allows the IVRS to categorize expired drug
     as unassignable within the system. In addition, if there is a drug recall
     this information allows the tracking of how much drug remains and where it
     is. Thus, measures can be implemented to ensure the appropriate drug
     inventory.

     Script Translations and Recordings

     If applicable, Covance will provide translations and recordings through
     our preferred vendor, which has certified language translators. Scripts in
     all languages are recorded by a voice professional at a recording studio
     to provide a high sound quality IVRS.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   29
<PAGE>   52
System Architecture

The IVRS architecture consists of an industry standard client/server and
computer telephony components. The database server is Sybase System 11, running
in a UNIX environment. The voice server component is designed with Dialogic
voice cards, the leading computer telephony boards, and Artisoft's Visual
Voice, an industry-leading computer telephony software development kit. The
IVRS voice servers run on Windows NT, the operating system standard for
computer telephony applications.

The system architecture has been designed with redundancy to handle component
or complete system failure in the event of a disaster; voice servers have dual
power supplies, disk-mirroring, and redundant disk arrays. Each voice server
acts as a backup to the other in the event of voice server failure. The Sybase
database server also has error correcting memory, disk-mirroring, redundant
disk arrays, and a backup processing unit. The backup processing unit is linked
to the primary unit via Hewlett Packard's Servicegard software. If the primary
processing unit fails, the backup processor will replace its functionality
within minutes.

Backup and Disaster Recovery

A disaster recovery plan has been developed and tested to support the IVRS
architecture. Its purpose is to minimize interruptions to the IVRS in the event
of hardware failures and natural disasters. An alternate site is maintained in
Covance's Nashville, Tennessee office to recover IVRSs operations during these
types of events.

Switching operations to the alternate site is estimated to take less than one
hour. This involves Covance's long distance telephone carrier to redirect the
toll-free service to the alternate site, as well as Covance staff to activate
the backup database server and voice server in Nashville. In the event that
Covance temporarily recovers to its alternate site,  Covance will transfer data
to ACS by diskette or other designated media until operations resume at the
Covance Princeton site.

Complete backups of all systems and data are performed on a daily basis (seven
days/week) and are maintained off-site.

System Validation

The IVRS software produced and administered by Covance is validated by
standards that meet the FDA requirements based on "Guidelines on General

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   30
<PAGE>   53
     Principles of Process Validation" and the Device Manufacturing Practices
     Parts 211.68 and 820.61.

     All Covance IVRSs are validated following the Covance Computer System
     Validation SOP. This SOP covers types of validation testing, the test
     plan, the results, and change control. The contents of the SOP are as
     follows:

     -    The Types of Validation Testing section describes unit testing,
        subsystem testing, system testing and acceptance testing.

     -    The Test Plan section describes the minimum test plan inclusion
        requirements. These are system description, subsystem list, glossary of
        terms, validation environment, test procedures, and test sheets.

     -    The Test Results section describes the approval signature sheet, test
        sheets, source code, test data, system output, error logs, error
        resolution, and other documents.

     -    The Change Control section describes the documentation and testing
        requirements for modification of the source code to add features and fix
        problems, changing any part of the operating environment software, or
        any hardware used.

     DATA REVIEWS

     A series of data reviews are performed throughout the life of an IVRS to
     ensure that a project's significant operating requirements are being met.
     Typical "business rules" may include: safety issues (such as assignment of
     treatment type or dose regimen); correct randomization; stratification or
     balancing; uniqueness of patient and drug numbers; windows of time between
     visits issues; and adherence to inclusion/exclusion criteria. These data
     reviews are appropriately documented, then reviewed and approved by
     validation and project management, and then become part of the permanent
     validation documentation for the project's IVRS.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   31
<PAGE>   54
STUDY ASSUMPTIONS

The following assumptions were made in preparing these estimates:

-    This is a Randomization and One Time Drug Assignment IVRS.

-    Options included are:

          -Randomization

          -Drug Assignment

          -Patient Query

-    A manual system will be utilized until 16 November 1998:

          -Each call will take approximately 1/2 hour to process.

          -Assume 2.25 patient/site will be randomized from 1 October 1998 -
           16 November 1998.

          -Site will call into the IVRS helpdesk and provide the required
           information to the helpdesk associate (ID, password, patient
           date-of-birth, gender). The helpdesk associate will provide the
           patient number, treatment assignment and the color of the
           instructions to prepare the medication. This information will be
           obtained from paper randomization lists. A manual confirmation fax
           will be sent out to the site.

-    Total IVRS duration is 16 months.

-    Covance will be ordering drug on a site by site basis; Covance will not be
     performing drug forecasting for manufacturing purposes or projected
     country level needs.

-    There is only 1 drug assignment per patient.

-    A touch-tone phone is required for investigators to interface with the
     IVRS; if an Investigator does not have a touch-tone phone, an adapter will
     be provided for a fee of $20 per adapter.

-    In order to access the IVRS, toll free phone numbers will be provided;
     toll-free phone service is for IVRS only.

-    IVRS staff will participate in 1 in-person Client meeting (8 hours).

-    1 in-house audit visit will occur with at least two Covance partners.

-    All IVRS functions will be tested and validated prior to system activation;
     the validation process will be conducted in accordance with IVRS
     Validation SOPs.

-    Study drug expires every 12 months.

-    One data transfer has been assumed.

-    Express mail costs are not included.

-    Covance, Inc. will provide the patient randomization codes. All
     randomization schemes imported into the IVRS will be 100% verified by
     Covance.

Advance Corneal Systems                                          20 October 1998
Vitrase(TM)                                                                   32

<PAGE>   55
COST EFFICIENCIES

Cost savings and efficiencies can be recognized by utilizing the drug management
services provided via the Covance IVRS. These savings include:

-    Reduction in drug manufacturing

-    Reduction in drug packaging

-    Reduction in drug labeling

-    Reduction in drug storage (warehouse)

-    Reduction in the quantity of drug to be destroyed

-    Reduction in the time to perform drug reconciliation

-    Total drug inventory management real time

Clinical support will not be required to track the following study parameters
as the data can be provided from the IVRS database via Trial Tracker:

-    Patient enrollment and status

-    Discontinuations

-    Drug expiration dates

-    Clinical supplies at the site and warehouse level

-    The system also allows for total control over patient enrollment (i.e.
     "turning off" a site or closing enrollment once enrollment numbers are
     met) and for interim analysis/trend analysis to be completed.

Your study centers benefit from these services as well;

-    Eliminates the time required to manually track enrollment and the time to
     communicate this information to ACS.

-    Reduces the amount of storage space required for drug at the site.

PROJECT MANAGEMENT BENEFITS OF USING AN IVRS

An IVRS will allow ACS to conduct project, site and study drug activities more
efficiently by providing reports on patient enrollment and demographics,
patient visits, and drug inventories. For example, an IVRS would give ACS the
ability to know real time patient enrollment and patient status; to turn on/off
patient enrollment when target numbers are reached at site, region, country or
study level; or to add or delete treatment arms at any time during the trial.

In terms of site management activities, an IVRS will also allow ACS to
efficiently forecast when CRFs are to be completed and submitted by the site
based on patient enrollment and site visits. Therefore, ACS will be able to
quickly determine which sites should be closed due to delinquent CRF completion
or lack

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   33

<PAGE>   56
                  of adequate enrollment. The IVRS can also assist in the
                  planning of site audits. Finally, an IVRS would give ACS to
                  ability to close enrollment within minutes when decisions on
                  safety and/or endpoints are made.

                  With respect to drug management, an IVRS would allow ACS to
                  start with minimal supplies to allow for early trial start up.
                  For example, ACS could only package enough drug to allow 3%
                  wastage versus the traditional 40% wastage. In addition, ACS
                  will have the ability to track expiration dates and batch
                  numbers; to recall and stop dispensing any particular drug
                  batch immediately; and to track drug inventories at all the
                  various depots and countries.

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   34
<PAGE>   57
APPENDIX 2

COVANCE'S TRIAL TRACKER SYSTEM

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   35
<PAGE>   58
COVANCE'S TRIAL TRACKER SYSTEM

     Trial Tracker is an integrated project management tool used by Covance
     teams to collect, monitor and report key study activities. The approach to
     this system is modular, allowing the Covance and ACS teams to select
     desired modules, as well as modify the contents of each selected module for
     optimal customization for each unique project. Covance has assumed that ACS
     will have access to the following modules:

TRIAL TRACKER MODULES

<TABLE>
<CAPTION>
MODULE                             OBJECTIVE

<S>                 <C>
Trial Tracker       a central menu system, which acts as the main interface to Trial Tracker.
Menu

Investigator        acts as central list of study investigator names and addresses. The
Database            Investigator Database assures consistency across Trial Tracker systems by
                    sharing key information about study sites.

Investigator        tracks the collection of study regulatory documents and identifies sites which
Recruitment         are ready for initiation. Investigator Recruitment allows the team to select good
                    clinical sites and move them quickly through the approval process.

Grant Payments      facilitates the study payment process from Project Director, through Finance,
                    and to the Investigator. This process allows for effective financial tracking and
                    timely payments.

Trip Reporting      collects site pre-study, initiation, routine, and final monitoring reports created by
                    the Covance project team. Trip Reporting expedites the creation, review, and
                    approval of site monitoring reports.

Patient Tracking    records each patient's current status and builds a history of each patient's visits
                    (projected and actual). Patient Tracking allows the Covance team to monitor
                    patient activity at each site and creates summary reports for the entire project.

Contact Log         allows the team to record issues raised during phone contacts, track protocol
                    exceptions, and organize the project team list. The Contact Log identifies
                    issues frequently raised by sites enabling the team to take corrective action.

Sherlock Tracking   displays the current status of CRFs as they are received, entered, reviewed
                    and cleaned by Covance. Sherlock Tracking allows the team to monitor data management
                    activities and identify trends in the processing of CRFs.
</TABLE>

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   36
<PAGE>   59
APPENDIX 3

COVANCE PHARMACEUTICAL PACKAGING SERVICES ESTIMATES

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   37
<PAGE>   60
--------------------------------------------------------------------------------
                           CPPS STUDY COST ESTIMATION
--------------------------------------------------------------------------------

                        PROTOCOL NO.: VITRASE PROGRAMME
                                      (ACS)

                        INTERNAL NO.: 400260

CONTENTS:
          SECTION I       -       JOB SPECIFICATION/DESCRIPTION
          SECTION II      -       QUOTE

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   38
<PAGE>   61

                                   SECTION I

--------------------------------------------------------------------------------
                               JOB SPECIFICATION
--------------------------------------------------------------------------------

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   39
<PAGE>   62
STUDY DESCRIPTION

PREPARATION AND APPLICATION, INCLUDING LANGUAGE TRANSLATION, OF A LABEL
COMPLYING WITH LOCAL LANGUAGE REGULATIONS TO READY PACKAGED MEDICATION AND THE
DISTRIBUTION OF THE MEDICATION AND ANY ADDITIONAL MATERIAL IS WHAT IS REQUIRED
FOR THIS STUDY. IF ADDITIONAL SERVICES ARE REQUIRED OR THE DETAILS WITHIN THIS
QUOTATION ALTER THEN COST WILL BE REVISED ACCORDINGLY.

THE PROGRAMME IS DUE TO RUN IN THE UNITED STATES AND EUROPE. THIS DOCUMENT ONLY
COVERS THE EUROPEAN COUNTRIES.

Assumptions of participating countries

<TABLE>
<CAPTION>
   COUNTRY         NUMBER OF SITES     NUMBER OF PATIENTS
--------------     ---------------     ------------------
<S>                <C>                 <C>
   FRANCE               13                     130
  GERMANY               17                     204
   ITALY                10                     100
NETHERLANDS              6                      72
   POLAND                8                      88
     UK                 10                     120
</TABLE>

ASSUMED STUDY REQUIREMENTS

First patient enrolled in study November 1998. (Could be US).

Last patient enrolled January 2000.

Assume 1 Vitrase vial and 1 Vitrase clinical kit per patient.

Despatch requests to be provided via IVRS directly to CPPS-Horsham.

CPPS-Horsham will be provided with drug supplies that are both primary and
secondary packaged. This will be delivered from ACS. CPPS-Horsham will need to
overlabel the Vitrase vials and apply an additional label on the Vitrase
clinical kit.

CPPS-Horsham will design a label based on English text for each participating
country, ensuring that all local cGMP requirements are adhered to.

Covance will be responsible for the label language translations. This will be
co-ordinated through the Covance regulatory group, by CPPS-Horsham.

Advance Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                  40
<PAGE>   63
The country specific labels will be applied in advance and an amount of drug
will be pre-allocated to the different countries.

Drug will be stored at 2-8 Degrees C.

Drug will be shipped at 2-8 Degrees C. in insulated boxes, accompanied by
frozen ice packs to the nominated sites.

Any miscellaneous materials, such as CRF's, Vitrase clinical kits will be
shipped at ambient temperatures.

Advanced Corneal Systems                                         20 October 1998
Vitrase (TM)                                                                  41
<PAGE>   64

                                   SECTION II

--------------------------------------------------------------------------------
                                     QUOTE
--------------------------------------------------------------------------------

Advanced Corneal Systems                                         25 October 1998
Vitrase(TM)                                                                   42
<PAGE>   65
QUOTE FOR ACS -- VITRASE(TM) PROGRAMME.

<TABLE>
<S>                                                              <C>
STUDY SET UP                                                   L.3,000.00

LABEL DESIGN AND PRINTING OF LABELS
(ASSUMES 6 LABEL TYPES/2 LABELS PER PATIENT)                   L.4,750.00
including:
Design of label texts
Printing of secondary labels
QA review/approval
Regulatory review/approval

PACKAGING AND LABELLING                                        L.6,250.00
including:
Preparation of packaging instructions
Labelling of vials and clinical kit boxes
QA review/approval

SHIPMENT COST FOR AMBIENT TEMPERATURE                          L.   80.00
PER SHIPMENT
including:
Design and printing of centre labels
Design and printing of shipping labels
Packaging material for (centre boxes)
Labels (centre labels)
Preparation of packaging and shipping instructions
Co-ordination of shipments with the medical centres,
and the forwarder
Preparation of shipping documents
Co-ordination of drug ordering with IVRS and the centres
Actual shipping costs excluded
</TABLE>

Advance Corneal Systems                                          20 October 1998
Vitrase(TM)                                                                   43
<PAGE>   66
SHIPMENT COST (MULTIPLE OR SINGLE PATIENT SHIPMENT)                  L.   250.00

FOR COLD STORAGE PER SHIPMENT

including:
Placement of vial into plastic bag prior to despatch
Design and printing of centre labels
Design and printing of shipping labels
Insulated packaging material (centre boxes)
Labels (centre labels)
Preparation of packaging and shipping instructions
Co-ordination of shipments with the medical centres,
and the forwarder
Preparation of shipping documents
Co-ordination of drug ordering with IVRS and the centres
Actual shipping costs excluded

ESTIMATED ACTUAL SHIPMENT FREIGHT COSTS                              L.20,000.00
(This is possible for change and should only be treated as a guide)

DESIGN AND VALIDATION OF INSULATED SHIPPING CASES                    L. 1,500.00
including:
Dimensional sizing
Validation of temperature shelf life

INVENTORY MANAGEMENT PER MONTH                                       L.   450.00
including:
Inventory management and follow up of medication
Packed medication (quality control: exp.date, batch no)
Follow up after stock levels as well as follow up of requests
for additional supplies
Inventory reports (monthly basis)

PROJECT MANAGEMENT PER MONTH                                         L.   450.00

STORAGE PER BAY PER MONTH BETWEEN 2-8oC                              L.    90.00

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   44
<PAGE>   67
<TABLE>
<S>                                              <C>
STORAGE PER BAY PER MONTH BETWEEN 15-30oC              L.40.00

RETURNED MEDICATION                               TO BE AGREED

DESTRUCTION OF RETURNED STUDY MEDICATION          TO BE AGREED

EUROPEAN RELEASE OF IMPORTED DRUG/PER BATCH           L.500.00

(assumes paperwork exercise only)
</TABLE>

Stephen Savage                          Heinz Stamm
Customer Services Director              General Manager

Date: 10/9/98

Advanced Corneal Systems                                         20 October 1998
Vitrase(TM)                                                                   45
<PAGE>   68
                              [COVANCE LETTERHEAD]

16 October 1998

Advanced Corneal Systems                               Reference#:  3375ctm
15279 Alton Parkway, #100
Irvine, CA 92618

RE: QUOTATION FOR ADVANCED CORNEAL SYSTEMS - PHASE III STUDIES FOR VITRASE -
STORAGE AND DISTRIBUTION - BRAZIL

This letter serves to confirm pricing and specifications for the above
referenced study. Pricing has been based on the information provided to date.
This quotation may be revised as more specific information becomes available.

                                  ASSUMPTIONS

o    Supplies will be provided for 125 patients.

o    There will be 5 sites in Brazil.

o    The vials of Vitrase will be packaged separate from the auxiliary supplies
     and will be packaged as one lot for all treatment groups (open labeled).

o    The vials of Vitrase will require refrigerated storage and shipment at 2 -
     8 degrees Celcius.

o    The auxiliary supplies will be stored and shipped in ambient temperature
     conditions.

o    This compound is not cytotoxic, a penicillin or cephalosporin, DEA
     scheduled product or considered hazardous material.

o    There will be one pallet of refrigerated product in storage and one pallet
     of ambient supplies in storage.

o    Each patient will receive one Vitrase vial and one kit of auxiliary
     supplies.

o    Initial site shipments will include supplies for 5 patients per site.

o    There will be 2 shipments to each site (ambient and refrigerated).

o    Covance Horsham will provide the validated insulated shippers.

o    One shipment will be made from CPPS Allentown to a distribution company in
     Brazil. Site shipments will be made from that distribution company.

o    There will be 12 months of inventory and project management.

<PAGE>   69
                                                                 20 October 1998
                                                                 Page 2

CPPS SUPPLIED COMPONENTS

Vitrase Vial Labels
Open labels to be printed at CPPS, Allentown
Quantity: 125

Vitrase Auxiliary Supply Labels
Open labels to be printed at CPPS, Allentown
Quantity: 125

Validated Insulated Shippers and Dividers
Provided by CPPS Horsham
Quantity: 25

Kool-it Bricks
Provided by CPPS Allentown
Quantity: 75

Plastic Ziplock Bags
To protect the vials from moisture during shipment
Provided by CPPS Allentown
Quantity: 50

CUSTOMER SUPPLIED COMPONENTS

Vitrase Vials

Auxiliary Supply Kits

ASSEMBLY:   Secondary Labeling Operations (2 put-ups)

              1. Vitrase Vials

              2. Auxiliary Supply Kits

                 The vials of Vitrase will be overlabeled and placed into the
                 original storage containers.
                 The auxiliary supply kits will receive an additional label.

PRICE:      Labeling of 125 patients' supplies @ $2,626.00.

                 Additional supplies will be billed @ $21.01/patient supply
                 (vial or auxiliary kit).

TOOLING:    N/A
<PAGE>   70
                                                                 20 October 1998
                                                                 Page 3

DISTRIBUTION: One shipment will be made from CPPS Allentown to the SAR
              warehouse in Brazil @ $145.00.

                    Note: CPPS requires 48-hour lead time to process and ship
                    distribution requests. Emergency shipments requiring less
                    than 48-hours lead time will receive an upcharge of $50.00
                    per shipment.

              Note: The costs for site distribution within Brazil are not
              included in this quotation.

              ESTIMATED BUDGET: Initial shipment to Brazil @ $145.00.

FREIGHT:      Freight charges are not included in the above prices. Freight
              will be billed at the carrier's cost. This includes freight for
              paperwork and samples.

STORAGE AT CPPS ALLENTOWN: Ambient storage of patient supplies @ $50.00 per
                           pallet per month.
                           Refrigerated storage of Vitrase vials @ $100.00
                           per pallet per month.

                           ESTIMATED BUDGET: 1 pallet of ambient supplies
                                             stored for 1 month = $50.00

                                             1 pallet of refrigerated vials
                                             stored for 1 month = $100.00

                    Note: The costs for storage in Brazil are not included in
                          this quotation.

RETURNED DRUG:      Not necessary at this time.

STORAGE OF RETURNS: Not necessary at this time.

DESTRUCTION: CPPS does not handle the destruction of drug product. CPPS is able
             to prepare returned or rejected drug product for shipment to an
             approved Medical Waste Facility. However, the contract for
             destruction and manifest for pick up of the product must be
             arranged between the client and the chosen Medical Waste Facility.
             If this service is necessary, it will be quoted at that time.

ADMINISTRATIVE CHARGES: Preparation of special reports required more than one
                        time per month will be billed @ $85.00 per technician
                        hour.

                        ESTIMATED BUDGET:  2 hours per month x 12 months
                                           @ $2,040.00
SPECIAL NOTES/INSTRUCTIONS: N/A
<PAGE>   71
                                                                 20 October 1998
                                                                 Page 4

TERMS:     Net 60 Days

DELIVERY:  F.O.B. Allentown, PA

ESTIMATED PRICING SUMMARY:     CLINICAL PACKAGING                $2,626.00
                               TOOLING                           N/A
                               DISTRIBUTION                      $  145.00
                               FREIGHT                           TBD
                               STORAGE OF STUDY SUPPLIES         $  100.00
                               RETURNED DRUG ACCOUNTABILITY      N/A
                               STORAGE OF RETURNED DRUG          N/A
                               ADMINISTRATIVE CHARGES            $2,040.00

                               TOTAL ESTIMATED COSTS             $4,911.00

Thank you for the opportunity to quote.

Sincerely,
Covance Pharmaceutical Packaging Services Inc.

Jennifer Gaidjunas
Senior Clinical Coordinator

Copy    Mike Ivers

I agree to the terms and conditions of this price estimate and understand that
if there are changes to the specifications listed above, a revised quotation may
be required.

X
 ---------------------------              -------------------------------
 Customer Approval Signature              Date
<PAGE>   72
                                  ATTACHMENT 1

                          ACS: HYALURONIDASE SOLUTION
              PROTOCOL #VIT-02-08961X AND PROTOCOL #VIT-03-08961X
                       TRANSFER OF OBLIGATIONS TO COVANCE
                                20 OCTOBER 1998

<PAGE>   73
                                                                    Attachment 1

                                                                 20 October 1998
                                                                          Page 1

                      TRANSFER OF OBLIGATIONS TO COVANCE*
                                20 OCTOBER 1998

The following obligations of the Study sponsor will be transferred from ACS to
COVANCE.

1.   The conduct of pre-study visits to assist ACS in the selection of
     investigators qualified by training and experience.

2.   Procurement of the following documents from each INVESTIGATOR to be
     monitored by COVANCE:

     a.   A completed and signed Form FDA-1572.
     b.   Current curriculum vitae of the principal INVESTIGATOR and all
          secondary INVESTIGATORS identified on Form FDA-1572.
     c.   PROTOCOL signature page signed by the principal INVESTIGATOR.
     d.   A copy of informed consent form to be used by the INVESTIGATOR.
     e.   IRB approval of the PROTOCOL and informed consent form.
     f.   As appropriate, IRB approval of PROTOCOL amendments and annual
          reapprovals.

3.   Provide all participating INVESTIGATORS with current investigators'
     brochure and, as the investigation proceeds, keep each participating
     INVESTIGATOR informed of new information received from ACS regarding the
     DRUG.

4.   In accordance with 21 CRF 312.32, COVANCE will promptly inform
     INVESTIGATORS and ACS of any important safety information, including
     serious adverse experiences received by COVANCE.

*   Terms not defined herein are used herein as defined in the Clinical
    Development Agreement; dated 20 October 1998, by and between ADVANCED
    CORNEAL SYSTEMS, INC. and COVANCE, INC.

<PAGE>   74

                                  ATTACHMENT 2

                          ACS: HYALURONIDASE SOLUTION

              PROTOCOL #VIT-02-08961X AND PROTOCOL #VIT-03-08961X

                                PAYMENT SCHEDULE
<PAGE>   75
                           Final AO Payment Schedule

<TABLE>
<CAPTION>

                     MILESTONE*                        EXPECTED DATE            PAYMENT
                     ----------                        -------------            --------
<S>       <C>                                          <C>                      <C>

1         Initial Payment                                   Oct-98              $900,000
2         10% of Patients Enrolled (160 patients)           Jan-99               800,000
3         20% of Patients Enrolled (320 patients)           Feb-99               600,000
4         30% of Patients Enrolled (480 patients)           Mar-99               600,000
5         40% of Patients Enrolled (640 patients)           May-99               600,000
6         50% of Patients Enrolled (800 patients)           Jun-99               600,000
7         60% of Patients Enrolled (960 patients)           Aug-99               600,000
8         70% of Patients Enrolled (1,120 patients)         Sep-99               500,000
9         80% of Patients Enrolled (1,280 patients)         Nov-99               500,000
10        90% of Patients Enrolled (1,440 patients)         Dec-99               500,000
11        100% of Patients Enrolled (1,600 patients)        Jan-00               500,000
12        100% of Patients Complete Three months            Apr-00               450,000
13        Last Three-Month CRF In-House                     May-00               340,000
14        Three Month Statistical Analysis Completed        Jun-00               340,000
15        Three Month CSR Completed                         Jul-00               340,000
16        60% of Patients Complete 1 year                   Aug-00               340,000
17        80% of Patients Complete 1 year                   Nov-00               546,000
18        100% of Patients Complete 1 year                  Jan-01               504,000
19        Last 12-Month CRF In-House                        Feb-01               340,000
20        12 Month Statistical Analysis Completed           Apr-01               350,000
21        12-Month CSR Completed                            May-01               250,000
22        Final Payment                                     Jun-01               252,000
                                                                             -----------

          TOTAL                                                              $10,562,000
                                                                             ===========
</TABLE>

*Covance will invoice ACS upon completion of milestones. All payments are due
within 30 days of receipt of invoice.

                                     Page 1
<PAGE>   76

                         ADVANCED CORNEAL
                         SYSTEMS

                         CHANGE ORDER #4 TO THE TIME AND COST ESTIMATE FOR
                         ASSISTANCE WITH THE CONDUCT OF ONE GLOBAL PHASE III
                         STUDY (PROTOCOL VIT-03-08961X) OF VITRASE(TM)
                         (HYALURONIDASE FOR OPHTHALMIC INTRAVITREAL INJECTION)
                         FOR CLEARANCE OF SEVERE VITREOUS HEMORRHAGE

                         Prepared for -
                         ADVANCE CORNEAL SYSTEMS, INC.
                         15279 ALTON PARKWAY, SUITE 100
                         IRVINE, CALIFORNIA 92618

                         Prepared by -
                         Convance Clinical and Periapproval Services SA
                         Avenue de Tervueren 273
                         1150 Brussels - Belgium

                         14 July 1999
                         Revised 10 September 1999
<PAGE>   77
Time & Cost Estimate - Change Order #4
ACS - Vitrase

                               TABLE OF CONTENTS

I. INTRODUCTION                                        3

II. PROJECT SCOPE AND TIMELINES                        4
    PROJECT SCOPE                                      4
    PROJECT TIMELINES                                  6

III. RESPONSIBILITIES AND SERVICES                     7
     EUROPE & BRAZIL                                   7
          A. GENERAL ASSUMPTIONS                       7
          B. TASK SPECIFIC ASSUMPTIONS                 9
          C. COST ESTIMATES                           16
          D. CHANGE ORDER FORMS                       18
          E. VALIDITY                                 18

ATTACHMENTS
    COVANCE PHARMACEUTICAL PACKAGING SERVICES         19
<PAGE>   78

Time & Cost Estimate - Change Order #4
ACS - Vitrase

I.  INTRODUCTION

    On 20 October 1998, Covance Inc. (Covance) provided Advanced Corneal
    Systems, Inc. (ACS) with a Time and Cost Estimate (TCE) for assistance in
    conducting two Phase III safety and efficacy studies of Vitrase(TM)
    involving 1,600 patients with severe vitreous hemorrhage.

    This TCE includes the task descriptions and the cost estimates for one study
    (protocol VIT-03-08961X) as from 1 June 1999, in response to the changes
    required in the revised protocol, dated 5 March 1999. In agreement with ACS,
    all expenses incurred from the start of the study until 31 May 1999 will be
    invoiced to ACS on a cost incurred basis. The following list indicates the
    changes affecting the scope of this program.

    o VIT-02-08961X

    This is a North American study. All work (with the exception of IVRS) has
    been withdrawn from Covance Inc. as of 8 May 1999. IVRS work on this study
    will be the subject of a separate Time & Cost Estimate (TCE).

    o VIT-03-08961X

    Covance will continue to work on this global study in the participating
    European and Brazilian countries. Changes include:

    o   Deletion of watchful waiting arm

    o   Replacement of 7.5 IU treatment arm with saline injection arm

    o   Decrease in number of patients from 660 to 306

        -  278 complete evaluable patients

        -  28 non-completers who will be replaced

                                                                               3
<PAGE>   79

Time & Cost Estimate--Change Order #4
ACS - Vitrase

     o    Decrease in number of Covance responsible investigative sites from 48
          to 32 in Europe and Brazil

               -    CroMedia will monitor sites in South Africa and
                    Australia/New-Zealand

               -    Staticon International will monitor sites in Germany and
                    Hungary

     o    Selection, pre-study and initiation of additional British and Polish
          sites needed to replace French sites

     o    Increase in number of CRF pages per patient from 36 to 50

     o    Addition of an interim analysis (additional monitoring/query
          resolution)

     o    Shift in start-up timelines because of delays in finalizing the study
          protocol and delays in receiving required regulatory filing documents
          required for submission to regulatory health authorities

     o    Brazilian Investigators' Meeting

     o    CroMedica will be responsible for data entry, data management and
          query generation

     o    Covance Pharmaceutical Packaging Services (CPPS Horsham) will be
          responsible for labeling of all drug supplies (including Brazil)

     o    CPPS Horsham will be responsible for generating randomizing envelopes
          for all participating countries

     o    CPPS Horsham will be responsible for storage and shipment of all drug
          supplies to participating countries

II.  PROJECT SCOPE AND TIMELINES

A.   PROJECT SCOPE

Protocol #VIT-03-08961X is a phase III, randomized, masked safety and efficacy
study of Vitrase(TM) for the treatment of severe vitreous hemorrhage, which
will be conducted at 51 investigative sites in Europe, 10 sites in South
Africa, 5 sites in Brazil, and 10-12 sites Australia/New-Zealand.

Covance is responsible for sits in The Netherlands, the United Kingdom, Poland
and Brazil.

Other countries are handled by other CROs and are not subject for this TCE.

Covance will however provide assistance for regulatory submissions in Italy and
minimal support activities for regulatory submissions in Hungary. In addition,
Covance is responsible for Investigator Package review and Serious Adverse
Events reporting to authorities for all participating countries.

                                                                               4
<PAGE>   80
Time & Cost Estimate-Change Order #4
ACS - Vitrase

All investigative sites are stand-alone sites which ACS expects to enroll a
minimum of 1.0 to 1.5 patients per month.

In Europe, South Africa, Australia/New-Zealand and Brazil, up to 561 eligible
patients will be randomized into the following three treatment arms in a 1:1:1
ratio for Protocol VIT-03-08961X.

(1) Saline Injection

(2) Vitrase(TM) 55 IU

(3) Vitrase(TM) 75 IU

While in the study, patients will be clinically evaluated at Screening and
Randomization; Days 1 and 7; and Months 1, 2, 3, 6, and 12. Patients will be
followed every six months thereafter, up to three additional years. Costs are
provided for patient monitoring and management through Month 12. Costs for
activities during the three-year follow-up period will be provided upon request
from ACS. Table 1 provides a summary of the project specifications.

TABLE 1

VITRASE(TM) PHASE III STUDY SPECIFICATIONS--PROTOCOL VIT-03-08961X

<TABLE>
<S>                                     <C>
Number of Patients Enrolled             561(a)

     completers                         510
     patients replaced (10%)            51
     original                           --

Number of Initiated Sites               78(b)

Case Report Form Size                   50 pages per patient

Enrollment Rate(c)                      Approximately 1.0 to 1.5 patients per
                                        site per month

Enrollment Period(c)                    7 months

Final Deliverable(d)                    Clean CRF
</TABLE>

     (a) ACS assumes European sites will enroll 231 patients and Brazilian
         sites 75 patients
     (b) Covance will initiate 27 sites in Europe and 5 sites in Brazil
     (c) Enrollment rate and period projected by ACS
     (d) An interim analysis will be conducted after 150 patients complete
         three months.

                                                                               5
<PAGE>   81
Time & Cost Estimate - Change Order #4
ACS - Vitrase

B. PROJECT TIMELINES

Table 2 presents the assumed timelines for the Vitrase(TM) Phase III program.

TABLE 2
ESTIMATED TIMELINES(a) - PROTOCOL VIT-03-08961X

<TABLE>
<CAPTION>
MILESTONE                                                          DATES
---------                                                          -----
<S>                                                   <C>

Final Protocol (Amendment 3)                                   5 March 1999

Study Drug Available                                     1 May 1999/July 1999(b)

Site Initiations (start-end)                          26 May 1999 - 30 September 1999

First Patient Enrolled                                          1 June 1999

Interim Analysis(c)                                            October 1999

Last Patient Enrolled(d)                                      15 January 2000

Last Patient Out (3 months)                                    15 April 2000

Delivery of Draft 3 Month Clinical Study Reports                 July 2000

Last Patient Out (1 Year Follow-up)                           15 January 2001

Delivery of Draft 12 month Clinical Study Reports               April 2001
</TABLE>

(a) Timeline provided by ACS

(b) Second batch to be supplied by ACS

(c) Time of interim analyses based on enrollment rate of 1.5 per patients per
    month

(d) Timeline based on by ACS assumed recruitment of 1.5 patients/site/month

                                                                               6
<PAGE>   82
Time & Cost Estimate--Change Order #4
ACS - Vitrase

III. RESPONSIBILITIES AND SERVICES

PROTOCOL VIT-03-08961X (EUROPE & BRAZIL)

Below is an outline of Covance responsibilities from 1 June 1999 through
completion of activities per the timelines stated in Section II (page 6) of this
Change Order.

A. GENERAL ASSUMPTIONS

1. THE ESTIMATES HAVE BEEN BASED ON THE PROTOCOL STATED BELOW:

<TABLE>
<CAPTION>
                                                               STATUS
ACS PROTOCOL #      NAME      PHASE          INDICATION     (DRAFT/FINAL)           DATE
--------------      ----      -----          ----------     -------------       -------------
<S>                 <C>       <C>            <C>            <C>                 <C>
VIT-03-08961X       VVHS       III           Vitreous            FINAL          05 March 1999
                                             hemorrhage
</TABLE>

2. THE TOTAL NUMBER OF PATIENTS AND SITES:

<TABLE>
<CAPTION>
TOTAL NUMBER OF PATIENTS                TOTAL NUMBER OF SITES
------------------------                ---------------------
<S>                                     <C>
          306                                   32
</TABLE>

3. END POINT OF COVANCE INVOLVEMENT IN THE STUDY IS: CLEAN CRF

                                                                               7
<PAGE>   83
Time & Cost Estimate-Change Order #4
ACS - Vitrase

4.  THE STUDY IS TO BE CONDUCTED IN THE FOLLOWING COUNTRIES:

<TABLE>
<CAPTION>
            COUNTRY                                         # SITES                                    # PATIENTS
            -------                                         -------                                    ----------
<S>                                                         <C>                                        <C>
         THE Netherlands                                       4                                            35
             Poland                                           10                                           140
         United Kingdom                                       13                                            56
             Brazil                                            5                                            75
              TOTAL                                           32                                           306
</TABLE>

5.  THE PROJECT WILL BE CONDUCTED ACCORDING TO THE FOLLOWING TIMELINES:

<TABLE>
<CAPTION>
                EVENT                                                                 TIMELINE
                -----                                                                 --------
<S>                                                                       <C>
Agreement reached                                                                   1 March 1999
Final Protocol                                                                      5 March 1999
Study Drug Available                                                           1 May 1999/ July 1999*
Site Initiations (start-end)                                               26 May 1999 - 30 September 1999
First Patient In                                                                    1 June 1999
First Patient Out                                                                   1 June 2000
First CRF to Data Management CroMedica                                             September 1999
Last Patient In                                                                   15 January 2000
Last Patient Out                                                                  15 January 2001
Start Audits                                                                       September 1999
Last CRF to Data Management CroMedica                                              February 2001
Last Query Resolved                                                             End February 2001 **
Statistical Analysis Provided                                                           N/A
Clinical Trial Report Provided                                                          N/A
Transfer of all archive materials to ACS                                              March 2001
</TABLE>

*  Availability of second batch to be used for supplies in Hungary, Australia
   and Brazil.

** Assumes one week turnaround time of queries by outside data management group.

                                                                               8
<PAGE>   84
Time & Cost Estimate--Change Order #4
ACS - Vitrase

B.   TASK-SPECIFIC ASSUMPTIONS

All tasks required as of 1 June 1999 for the successful completion of the
Covance portion of the study are listed below with the agreed assignment of
responsibilities for each of the tasks. The cost estimates are based on the
assumptions detailed for each of the tasks.

<TABLE>
<CAPTION>
                                                               ACS        COVANCE
                                                               ---        -------
<S>  <C>                                                       <C>        <C>
A.   REGULATORY SUBMISSIONS
1.   PREPARATION OF CLINICAL TRIAL APPLICATION

     o    the Netherlands                                                Completed

     o    Poland                                                         Completed

     o    United Kingdom                                                 Completed

     o    Brazil                                                             X

     o    Italy (support for ACS consultant)                                 X

     o    Hungary (minimal support)                                          X

     o    Australia/New Zealand (minimal support)                        Completed

       *  Assumes no updates to the authorities.

2.   REPORTING OF SAES TO REGULATORY AUTHORITIES

       *  Covance will report SAEs from all sites, including
       non-Covance countries, i.e. Germany, Hungary,
       Australia/New Zealand and South Africa.                               X

       * Standard Covance SAE reporting forms will be used.

       * Assumes a total of 17 reportable SAEs.

3.   NOTIFYING INVESTIGATORS OF SAEs

       * Includes notification to investigators and ethic
       committees for Covance countries and to other CROs
       for Germany, Hungary, Rep. of South Africa,
       Australia/New Zealand.                                                X

       * Assumes a total of 17 reportable SAEs.
</TABLE>

                                                                               9
<PAGE>   85
Time & Cost Estimate - Change Order #4
ACS - Vitrase

<TABLE>
<CAPTION>
B. PROTOCOL AND CRF PREPARATION                                         ACS            COVANCE
                                                                        ---            -------
<S>                                                                  <C>              <C>
1. PROTOCOL DESIGN                                                   Completed
   * Assumes no further protocol amendments
2. CRF DESIGN                                                        Completed
3. CRF PRINTING (3-part NCR paper)                                   Completed
4. SHIPPING OF CRFs TO INVESTIGATORS                                                      X

C. PRE-STUDY PREPARATION
1. IDENTIFY POTENTIAL INVESTIGATORS                                     (X)              (X)
   * Includes 20 calls to potential new investigators.
2. MAILING PROTOCOL PACKAGES to potential investigators                                   X
3. PRE-STUDY SITE VISITS
   * Includes a total of 5 Pre-Study Site Visits.                                         X
4. INVESTIGATOR GRANT NEGOTIATION                                       (X)              (X)
5. NEGOTIATIONS WITH SUBCONTRACTORS                                                      N/A
6. INVESTIGATORS' MEETINGS
   * Includes 1 Investigators' Meeting in Brazil with 2 Covance                           X
   attendees.
   * Includes organization and attendance of the meeting.
7. FORMS DEVELOPMENT
   (trip reports, investigator files, study file notebook, enrollment                  Minimal
   tracking,....)                                                                      review
8. PROJECT-SPECIFIC TRAINING
   * Assumes training for 3 Covance staff members (Project                                X
   Manager and 2 monitors).
9. TRANSLATIONS
          * informed consent forms                                                    Completed
          * drug reconstitution sheets                                                Completed
          * source data work sheets, to be translated into                                X
          Portuguese (Brazil).
   * Assumes no site specific changes.
</TABLE>

                                                                              10
<PAGE>   86
Time & Cost Estimate - Change Order #4
ACS - Vitrase

<TABLE>
<CAPTION>
C. PRE-STUDY PREPARATION                                                   ACS                 COVANCE
                                                                           ---                ---------
<S>                                                                        <C>                <C>

10. BACK-TRANSLATIONS INTO ENGLISH                                                            Completed

    * informed consent form

11. DESIGN OF MONITORING CONVENTIONS MANUAL                                 X                  Revision

    * Assumes no update during course of study.

12. ASSISTING INVESTIGATORS WITH ETHICS COMMITTEES                                                X

13. DESIGN OF SAE REPORTING PLAN                                                                  X

14. REVIEW OF INVESTIGATOR DOCUMENTS                                                              X

15. DESIGN OF SOURCE DATA VERIFICATION PLAN                                 X                  Revision

16. UPDATE TRIAL TRACKER DATABASE to cover amendment                                              X

17. SET-UP OF 24-HOUR MEDICAL COVER PLAN                                                          X

D. STUDY INITIATION VISITS

1. STUDY INITIATION VISITS                                                                        X
   * Includes a total of 31 study initiation visits.

E. ROUTINE MONITORING VISITS

1. ROUTINE MONITORING VISITS (INCL. CLOSE-OUT VISITS)

   * During enrollment, visits will be performed every 4 weeks
   in Poland and Brazil, and every 6 weeks in The Netherlands
   and United Kingdom, plus 1 extra visit after inclusion of the
   first patient and 1 visit for interim analysis.                                                X

   After the enrollment period, visits will be performed every
   12 weeks for all sites.

   * Includes 2 extra visits per site for unmasked monitor.

   -> Total # of Routine Monitoring Visits: 489
</TABLE>

                                                                              11
<PAGE>   87

TIME & COST ESTIMATE-CHANGE ORDER #4
ACS - VITRASE

<TABLE>
<CAPTION>
<S>                                                                          <C>                       <C>
F.   PROJECT MANAGEMENT                                                      ACS                       CONVANCE

1.   PROJECT PLAN                                                                                       Revision

2.   KICK-OFF MEETING                                                                                  Completed

3.   REVIEW AND APPROVAL OF INVOICES                                                                       X

4.   DEVELOPMENT/MAINTENANCE OF PROJECT DATABASES                                                       Revision

5.   PREPARATION OF MONTHLY STATUS REPORTS                                                                 X

6.   MEETINGS WITH ACS
     * Includes a total of 1 face-to-face meeting per year of 1 day
     duration between ACS and Covance.                                                                     X

     * Includes 2 Convance participants at each meeting.

7.   TELEPHONE CONTACTS WITH ACS                                                                           X

8.   OVERALL PROJECT SUPERVISION                                                                           X

9.   PROJECT TEAM MEETINGS

     * Includes a total of 2 meetings of 1 day duration per full
       year (i.e. 1 meeting in 1999, 2 meetings in 2000 and                                                X
       1 meeting in 2001).

     * Includes 7 Covance participants per meeting.

10.  PROJECT FILES                                                                                         X

11.  INTERACTION WITH OTHER CROS                                                                           X

12.  ARCHIVING OF CRFS and all other study documentation after
     study completion                                                          X

14.  SHIPPING OF CRFS and all other study documentation to ACS
     after study completion                                                                                X

15.  PERIODIC BUDGET AND CONTRACT REVIEW, telephone calls and
     meetings with ACS regarding contract issues                                                           X
</TABLE>

                                                                              12
<PAGE>   88
Time & Cost Estimate - Change Order #4
ACS - Vitrase

<TABLE>
<CAPTION>
G.   SITE MANAGEMENT                                                ACS         COVANCE
                                                                    ---         -------
<S>                                                                 <C>         <C>

1.   SERIOUS ADVERSE EVENT REPORTING

       - to ACS
       - to data management (CroMedica)
       - to authorities                 \
       - to investigators                  Reportable SAEs only                    X
       - to other monitoring CROs       /
       * Assumes a total of 56 SAEs.

2.   MAINTENANCE OF SAE DATABASE                                                   X

3.   TELEPHONE MONITORING OF SITES                                                 X

4.   IN-HOUSE FOLLOW-UP OF MONITORING VISITS                                       X

5.   IN-HOUSE FOLLOW-UP OF ISSUES FOUND DURING AUDITS                              X

6.   INVESTIGATOR FILES                                                            X

7.   ADMINISTRATION OF PAYMENTS for

       - Investigators (assumes a max. of 4 payments per site)       X
       - Patient travel, Ethic Committees, Authorities (MoH),
         pharmacy fees, etc.                                                       X

8.   SHIPPING OF NON-DRUG SUPPLIES TO INVESTIGATIONAL SITES

       - Case Report Forms
       - Pharmacy binders                                                          X
       - Other

9.   ORGANIZATION OF ETDRS MATERIALS TO SITES                        X             X

10.  NEWSLETTERS                                                     X
</TABLE>

                                                                              13
<PAGE>   89
Time & Cost Estimate-Change Order #4
ACS - Vitrase

<TABLE>
<CAPTION>
H.   DATA CLEAN-UP                                                  ACS         COVANCE
--   -------------                                                  ---         -------
<S>                                                                 <C>         <C>
1.   IN-HOUSE CRF REVIEW

       - Includes CRF tracking, translations of investigator
         comments.                                                                 X

       - Assumes no copying of CRFs

2.   CLINICAL QUERY RESOLUTION                                                     X

3.   SUPPORT TO DATA MANAGEMENT AT CROMEDICA for
     reconciliation of safety data and clinical databases                          X
</TABLE>

<TABLE>
<CAPTION>
I.   STATISTICAL/CLINICAL REPORTS                                   ACS         COVANCE
--   -----------------------------                                  ---         -------
<S>                                                                 <C>         <C>
1.   STATISTICAL ANALYSIS/REPORT
       - Design Statistical Analysis Plan
       - Statistical Analysis                                        X
       - Statistical Report

2.   CLINICAL TRIAL REPORT (CTR)

       - Design CTR Plan
       - Production CTR                                              X
       - Review CTR
</TABLE>

<TABLE>
<CAPTION>
J.   SITE AUDITS                                                    ACS         COVANCE
--   -----------                                                    ---         -------
<S>                                                                 <C>         <C>
1.   SITE AUDITS BY THE CLIENT (represented by CroMedica) with
     Covance assistance

       - Includes scheduling, travel, in-house file review, pre-
         and post-audit discussions, assistance of the monitor       X            (X)
         during the audit

       - Assumes 9 site audits.
</TABLE>

                                                                              14
<PAGE>   90
Time & Cost Estimate - Change Order #4
ACS - Vitrase

<TABLE>
<CAPTION>
                                                                    ACS         COVANCE
                                                                 ---------    -----------
<S>                                                              <C>           <C>
K.   DRUG SUPPLIES MANAGEMENT
1.   SET-UP

       - includes design of Drug Supply Plan, obtaining
         investigator consignees, set-up tracking system                           X

2.   DRUG IMPORTATION                                                              X

3.   DESIGN OF CORE LABEL                                        Completed

4.   REVIEW OF LABELS                                                              X

5.   TRANSLATIONS OF LABELS                                                    Completed

6.   TRACKING OF DRUG SUPPLIES BY MONITORS for Covance
     sites only                                                                    X

       - Under refrigerated storage conditions
       - Includes re-supply requests for sites

7.   WAREHOUSE STORAGE AND TRACKING OF DRUG SUPPLIES FOR ALL
     STUDY SITES

       - will be performed by CPPS

8.   PREPARATION OF DRUG RANDOMIZATION PLAN AND BLINDING
     ENVELOPES                                                                 Completed

9.   DISTRIBUTION OF BLINDING ENVELOPES TO INVESTIGATIONAL
     SITES                                                                         X

       - will be performed by CPPS

10.  DRUG LABELING                                                                 X

       - will be performed by CPPS

11. DRUG PACKAGING                                                                 X

       - will be performed by CPPS

12. SHIPPING OF DRUG SUPPLIES TO INVESTIGATIONAL SITES                             X

       - will be performed by CPPS

13. REMAINING DRUG DISPOSAL                                                        X

       - assumes return of drug to CPPS/destruction by CPPS
         following approval by ACS
</TABLE>

                                                                              15
<PAGE>   91
Time & Cost Estimate--Change Order #4
ACS - Vitrase

C. COST ESTIMATES

COVANCE PROFESSIONAL FEES

Covance costs have been calculated based on staff time needed to complete all
the tasks as outlined in Section B of this proposal. Individuals from various
departments throughout Covance will participate. These individuals will be
integrated into a dedicated project team. Estimated Covance professional fees
are presented in the table below. The cost table includes the estimates as of 1
June 1999 until completion of the study. In agreement with ACS, all expenses
incurred from the start of the study until 31 May 1999 will be invoiced to ACS
on a cost incurred basis. From 1 June 1999, this contract will become a fixed
price contract.

COVANCE FEES

<TABLE>
<CAPTION>
TASK                                                      FEES (US$)
----                                                      ----------
<S>                                                       <C>

Regulatory Submissions                                       26,900
Protocol and CRF Preparation                              Completed
Pre-Study Preparation                                       116,500
Study Initiation Visits                                      39,900
Routine Monitoring Visits                                   718,000
Project Management                                          525,500
Site Management                                             380,000
Data Entry and/or Import                                        N/A
Data Clean-Up                                                75,000
Generation and Review of Tables/Listings/Figures                N/A
Statistical Analysis/Statistical Report                         N/A
Clinical Trial Report (CTR)                                     N/A
Site Audits                                                   9,500
Drug Supplies Management                                     32,500
exclusive CPPS Horsham fees (see Attachment 1)
Project Specific Support                                    122,100
TOTAL                                                     2,045,900
</TABLE>

                                                                              16
<PAGE>   92
Time & Cost Estimate-Change Order #4
ACS - Vitrase

OUT-OF-POCKET COSTS

Presented below are out-of-pocket costs for travel and accomodation, and
shipping of study materials to the investigational sites. These are all
pass-through costs.

OUT-OF-POCKET COSTS

<TABLE>
<CAPTION>
ITEM                                                       COST (US$)
----                                                       ----------
<S>                                                        <C>
Travel and Accomodation                                    423,200
Client Meeting                                              12,300
Project Specific Training                                        0
Project Team Meetings                                       23,500
Kick-Off Meeting                                                 0
Shipping of non-drug supplies                               32,000
Printing                                                     4,000
Patient travel                                             t.b.d.
Investigators' Meeting, including investigators'           t.b.d.
travel & accommodation
Ethic Committees' fees
Authorities' fees                                          t.b.d.
Pharmacy fees
Custom clearance fees                                      t.b.d.
TOTAL (EXCL. T.B.D.)                                       491,000
</TABLE>

In addition to the above, the estimated fees for regulatory submissions in
Brazil are approximately $35,000. This has not been included in this TCE.

                                                                              17
<PAGE>   93
Time & Cost Estimate-Change Order #4
ACS - Vitrase

D.  CHANGE ORDER FORMS

Covance professional fees are fixed, and are based on assumptions and
specifications described in this proposal. Deviations from the assumptions and
specifications will be jointly reviewed and assessed by ACS and Covance with
regard to impact on cost and timelines. Deviations outside Covance's control or
changes in the assumptions, specifications or scope of the project resulting in
a change in time or costs will need to be re-negotiated with ACS. Once a
deviation is identified, a "Change Order Form" will be prepared by Covance, with
an estimate of the new timelines, fees and expenses associated with this
deviation. Upon ACS's approval of Covance's estimate, said change notice will be
effective. Any events or changes of assumptions which affect the time or costs
and which are within Covance's control will be the responsibility of Covance and
will not affect the program budget.

E.  VALIDITY

This Time and Cost Estimate is valid for 90 days.

                                                                              18
<PAGE>   94
Time & Cost Estimate--Change Order #4
ACS - Vitrase

                                   ATTACHMENT

                   COVANCE PHARMACEUTICAL PACKAGING SERVICES
                                 (CPPS HORSHAM)

JOB SPECIFICATION

o   STUDY DESCRIPTION

Additional countries are now set to participate in this study. Therefore
packaged supplies are required for Hungary and Australia, neither of these
countries were listed among the original participating sites.

Additionally, packaging has had to be split over two runs, which was not
originally intended, as drug material was not available to pack under one
packaging campaign. Therefore packaging for original countries has to be
repeated.

Preparation and application of a label complying with local language regulations
to ready packaged medication and the distribution of the medication and any
additional material is what is required for this study. If additional services
are required or the details within this quotation alter then cost will be
revised accordingly.

                                                                              19
<PAGE>   95
Time & Cost Estimate--Change Order #4
ACS - Vitrase

o MODIFICATION REQUIREMENTS

Items covered within this change order are as follows:

Labeling of Vitrase vials and Clinical kit cartons (including provision in each
carton of a lose two-part Saline vial label), for the following countries:

<TABLE>
<CAPTION>
COUNTRY             # VITRASE VIALS TO LABEL       # CLINICAL KITS TO LABEL
-------             ------------------------       ------------------------
<S>                 <C>                           <C>
Netherlands                   8                             15
  Poland                     36                             54
    UK                       28                             42
  Germany                    32                             48
South Africa                 32                             48
  Hungary                    72                            108
 Australia                   96                            144
   Brazil                    17                             63
</TABLE>

QUOTE

<TABLE>
<CAPTION>
                    TASK DESCRIPTION                   COST (US$)
                    ----------------                   ----------
                    <S>                                <C>

LABEL DESIGN AND PRINTING OF LABELS (3 labels per
patient and setting of new texts), including design of     4,780
label texts, printing of secondary labels for
medication vials, clinical kits and saline vials,
QA review/approval, regulatory review/approval

PACKAGING AND LABELING (of material listed above),
including preparation of packaging instructions,           6,070
labeling of vials and clinical kit boxes, QA
review/approval
</TABLE>

                                                                              20
<PAGE>   96
Time & Cost Estimate-Change Order #4
ACS - Vitrase

<TABLE>
<CAPTION>
            TASK DESCRIPTION                                                         COST (US$)
<S>                                                                                  <C>
SHIPMENT COST FOR AMBIENT TEMPERATURE - per shipment,
including design and printing of center labels, design and                              130
printing of shipping labels, packaging material (center
boxes), labels (center labels), preparation of packaging and
shipping instructions, co-ordination of shipments with the
medical centers, and the forwarder, preparation of shipping
documents, co-ordination of drug ordering with IVRS and
the centers

Actual shipping costs excluded

SHIPMENT COST (MULTIPLE OR SINGLE PATIENT SHIPMENT) FOR
COLD STORAGE - per shipment, including placement of vial                                410
into plastic bag prior to dispatch, design and printing of
center labels, design and printing of shipping labels,
insulated packaging material (center boxes), labels (center
labels), preparation of packaging and shipping instructions,
co-ordination of shipments with the medical centers, and the
forwarder, preparation of shipping documents, co-ordination
of drug ordering with IVRS and the centers

Actual shipping costs excluded

INVENTORY MANAGEMENT PER MONTH, including inventory
management and follow up of medication, packed                                          730
medication (quality control: expiry date, batch number),
follow up after stock levels as well as follow up of requests
for additional supplies, inventory reports (monthly basis)

PROJECT MANAGEMENT PER MONTH                                                            730

STORAGE PER BAY PER MONTH BETWEEN 2-8 degrees C                                         150

STORAGE PER BAY PER MONTH BETWEEN 15-30 degrees C                                        65

RETURNED MEDICATION                                                                To be agreed

DESTRUCTION OF RETURNED STUDY MEDICATION                                           To be agreed

EUROPEAN RELEASE OF IMPORTED DRUG/PER BATCH (assumes                                    810
paperwork exercise only)
</TABLE>

                                                                              21

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