Document:

Exhibit 10.2

                    EMPLOYMENT AGREEMENT WITH MICHAEL M. LEE

     EMPLOYMENT AGREEMENT  ("Agreement") made and entered into as of the 1st day
of July, 2000 by and between AlphaRx Inc., a Delaware  corporation  ("Company"),
and Michael M. Lee ("Executive").

     WHEREAS, Company desires to employ Executive as its President and Executive
desires to be employed by Company, upon the terms and conditions hereinafter set
forth.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth and the  mutual  benefits  to be derived  herefrom,  and  intending  to be
legally bound hereby, the Company and the Executive agree as follows:

1.     Employment  and Term.  Company  hereby  employs  Executive  and Executive
       hereby  accepts  employment  for a term  commencing on July 1st, 2000 and
       continuing  until June 30th, 2003,  unless sooner  terminated as provided
       for  in  this  Agreement.  Company  and  Executive  have  the  option  to
       renegotiate this Agreement beyond the three-year period. Executive hereby
       warrants  and  represents  to Company  that he is free to enter into this
       Agreement and is not a party to any agreement,  written or otherwise,  or
       bound by any restrictions, which limit or restrict him from entering into
       this  Agreement or performing the services,  duties and  responsibilities
       called for hereunder.

2.     Duties.

2.1    Executive  shall  perform the duties of the  President of the Company and
       such additional executive duties of Company and its affiliates as may be,
       from time to time,  requested of him by the Company's  Board of Directors
       or the  Chairman  and/or  Chief  Executive  Officer  of the  Company.  As
       President of the Company,  the Executive shall report to the Chairman/CEO
       of the Company.

2.1.1  The duties as President of the Company  shall  include but not be limited
       to (i)  having  general  and active  management  of the  business  of the
       Company  (ii)  seeing  that all orders and  resolutions  of the Board are
       carried into effect,  subject  however,  to the right of the directors to
       delegate  any  specific  powers,   except  such  as  may  be  by  statute
       exclusively conferred on the President,  to any other officer or officers
       of the Company  (iii)  executing  bonds,  mortgages  and other  contracts
       requiring  a seal,  under the seal of the  Company  (iv) be  Ex-Offico  a
       member  of all  committees  (v) have the  general  powers  and  duties of
       supervision and management usually vested in the office of President of a
       Company (vi) assist the Board of Directors,  Chairman/CEO  in formulating
       the business plan, goals and objectives for the Company's future growth.

2.2    Executive shall devote his full professional time and best efforts to the
       performance of his duties and  responsibilities  hereunder to advance the
       interests of the Company and shall not during the term of this  Agreement
       (as  defined in

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       Section 1 hereof) be employed,  involved or otherwise  engaged in, either
       directly or indirectly,  any other  employment for gain,  profit or other
       pecuniary advantage, without prior written consent of Company. At no time
       shall  Executive  engage in any activity that conflicts with the business
       of the Company or its  affiliates.  Nothing set forth in this section 2.2
       shall be  construed to prevent  Executive  from (i) acting as a member of
       Board  of  Trustees  or a  member  of Board  of  Directors  of any  other
       corporation,  or as a member of the Board of Trustees of any organization
       or entity  which is not a competitor  of the Company or (ii)  devoting of
       such of  Executive's  time and  attention to  philanthropic,  charitable,
       civic,  community or other  activities  or  endeavors as Executive  shall
       reasonably determine but only to the extent that Executive's pursuance of
       any activities or endeavors does not materially and adversely  effect the
       Executive's  ability  to perform  and  discharge  Executive's  duties and
       objectives to the Company hereunder.

2.3    Except for required  travel on Company  business or unless Company agrees
       otherwise, Executive shall perform his duties and responsibilities at the
       Company's  principal  executive  offices  located in the greater  Toronto
       area. The Company shall furnish Executive with office space,  secretarial
       assistance,  a personal computer, a company car and such other facilities
       and  services as shall be suitable to  Executive's  position and adequate
       for the performance of his duties hereunder.

3.     Compensation.  For all duties and responsibilities to be performed and/or
       assumed by Executive hereunder, Executive shall be entitled to receive an
       annual salary as set forth below ("Base Salary").  The Base Salary,  less
       any sums  required  to be  withheld  by law,  shall be  payable  in equal
       monthly  installments or such other more frequent regular installments as
       the Company may, from time to time, determine.  For purposes hereof, Base
       Salary shall be:

3.1    For the six-month period commencing with the date hereof, the Base Salary
       shall be $24,000  per year which shall be  increased  to $36,000 per year
       after the first six months of employment.

3.2    For each year thereafter, the Base Salary shall be increased by an amount
       determined  by the Board of Directors  but in no event less than (i) five
       percent (5%) after the first year, six percent (6%) after the second year
       and each year thereafter  upon mutual  agreement to extend the term. Each
       percentage  increase  for a  particular  year  shall be based on the Base
       Salary for the immediately preceding year.

4.     Fringe  Benefits.  Company  shall pay for or provide  Executive  with the
       following benefits:

4.1    For the first year,  Executive  shall be entitled to three (3) weeks paid
       vacation to be used at the Executive's discretion.  Thereafter, Executive
       shall be entitled to four (4) weeks paid  vacation  during each full year
       of this Agreement to be used at

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       the Executives discretion. Vacation time shall accrue on a pro-rata basis
       during  each  year  of this  Agreement.  Any  unused  vacation  shall  be
       cumulative from year to year unless otherwise agreed upon by the parties.

4.2    Health and  hospitalization  insurance  established and maintained by the
       Company for its senior executives and key management personnel. Since the
       Company  presently  does not  have,  in  effect,  a plan for  health  and
       hospitalization  insurance,  Company  shall  reimburse  Executive for all
       COBRA payments made by Executive to his previous  employer for health and
       hospitalization  coverage  for  Executive  and  his  family.  Thereafter,
       Company  shall  either  secure and  maintain  health and  hospitalization
       insurance  for Executive  and his  dependents or reimburse  Executive for
       coverage  comparable  to Blue  Shield/Blue  Cross for  Executive  and his
       dependents.

4.3    Such other  employee  benefits  maintained  by the Company for its senior
       executives and key management employees,  including,  all pension, profit
       sharing,  retirement,  stock bonus and stock option plans,  to the extent
       Executive is eligible to participate pursuant to the terms and conditions
       of such plans.

4.4    Executive shall be reimbursed in a timely manner for all items of travel,
       entertainment  and  miscellaneous  expenses  which  Executive  reasonably
       incurs  in  connection  with the  performance  of his  duties  hereunder,
       provided that the Executive  submits to the Company such  statements  and
       other  evidence  supporting  said  expenses as the Company my  reasonably
       require.   Executive,  when  traveling  on  Company  business,  shall  be
       permitted to fly first class on all domestic  flights and business  class
       on all international flights.

4.5    Executive  shall be  reimbursed  in a timely  manner  for all  reasonable
       moving  expenses   actually  incurred  by  Executive  in  relocating  the
       Executive  and his  family  to any  locations  required  by the  Company.
       ("Relocation  Expenses").  The Relocation Expenses shall include the cost
       of temporary residence,  a moving company and related expenses. The total
       Relocation  Expenses for which  Executive  shall be reimbursed  shall not
       exceed  $50,000  and shall be approved  in  writing,  in advance,  by the
       Company.

5.     Stock Options.

5.1    As  part  of  Executive's   compensation  for  services  to  be  rendered
       hereunder,  Executive  shall have the right and option to  purchase  from
       Company  voting common stock in Company  ("Option").  The total number of
       shares  available to Executive under this Option is Two Hundred  Thousand
       Shares  (200,000)  at a  purchase  price of Ten Cents  ($0.10)  per share
       (Option  Shares").  The  Option  Shares are  available  for  purchase  in
       installments  as  listed in  Column A below  and each  installment  shall
       become vested on the corresponding date listed in Column B, as follows:

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       Column A            Column B
       Number of Shares    Date Option Shares Available for Purchase
                           Become Vested

       50,000              Upon the commencement of Executive's employment
                           pursuant to the terms of this Agreement

       50,000              First anniversary date of this Agreement

       50,000              Second anniversary date of this Agreement

       50,000              Third Anniversary date of this Agreement

In order for the Option Shares to become vested as provided for above, Executive
must be  employed  by the Company  under the terms of this  Agreement  as of the
vesting date set forth in Column B above.

5.2    Except as otherwise  provided for below,  the term of the Option  granted
       shall  remain in effect  for ten (10)  years  from the date on which such
       Option Shares  become  vested.  If the  Executive's  employment  with the
       Company is terminated by the Company for Cause (as defined  herein) or by
       the act of Executive,  the  Executive's  right to exercise  vested Option
       Shares  shall cease and become  null and void within  thirty (30) days of
       the date employment  terminated,  except as otherwise provided in Section
       5.3 hereof.  All unvested Option Shares will terminate  immediately as of
       the date of such  termination  of  employment.  In the event the  Company
       receives,  accepts  and  consummates  a  tender  offer  for  all  of  its
       outstanding  common stock prior to the vesting of the Option Shares,  the
       vesting rights shall be accelerated so as to allow  Executive to exercise
       the Option to purchase all of the Option Shares  immediately prior to the
       consummation of such tender offer.

5.3    Notwithstanding  anything  in  this  Section  5 to the  contrary,  if the
       Executive's  employment is terminated for Cause,  as set forth in Section
       6.3,  the Company  shall have the right to  terminate  and  withdraw  any
       vested or unvested Options under this Agreement.

5.4    The  purchase  price of the Option  Shares shall be paid in full upon the
       exercise  of the  Option,  and  Company  shall not be required to deliver
       certificates  for such Option  Shares  until  payment  has been made.  In
       addition  to, and at the time of payment of the  purchase  price for such
       Option Shares,  Executive  shall be responsible for all federal and state
       withholding or other employment taxes applicable to the taxable income of
       such  Executive  and any other fees  resulting  from the  exercise of the
       Executive.

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5.5    Each share of Option Stock  purchased  pursuant to the terms hereof shall
       carry  all  appropriate  registration  and/or  restrictions  on sale  and
       notices as determined from time to time by Company's  securities counsel.
       Executive shall cooperate with Company and Company's counsel in complying
       with all applicable securities laws.

6.     Termination  of  Employment.  The  employment  of Executive and Company's
       liability and obligations hereunder shall terminate as follows:

6.1    This Agreement shall terminate  immediately  upon the death of Executive.
       In  such  event,  Company  shall  pay to such  person  as  Executive  may
       designate  in a written  notice  filed  with the  Company,  or if no such
       person  shall be  designated,  to  Executive's  estate,  a lump sum death
       benefit in an amount  equal to twelve  (12)  months of  Executive's  Base
       Salary as in effect on the date of Executive's death and double indemnity
       in event Executive's death occurs while traveling on Company business.

6.2    This  Agreement  shall  terminate  immediately  upon  the  Disability  of
       Executive.  Disability  shall  exist  if  due  to a  mental  or  physical
       condition, Executive is determined to be unable to perform his duties and
       responsibilities  hereunder  for a  continuous  period of two (2) months.
       Disability shall be conclusively  established by written certification by
       two (2) licensed,  disinterested  physicians  selected as mutually agreed
       upon between  Company and Executive.  In the event the two (2) physicians
       disagree,  a third  physician  shall be selected by the two physicians to
       break  such  impasse.  The costs  associated  with the  determination  of
       Disability  shall be borne equally between Company and Executive.  In the
       event of  Disability,  Executive  shall be  entitled  to receive his Base
       Salary  in  accordance  with  Section  3 for a period  of six (6)  months
       following the onset of Disability.

6.3    The Company may discharge the Executive for Cause and thereby immediately
       terminate  his  employment  under this  Agreement.  For  purposes of this
       Agreement,  Company  shall have  "Cause"  to  terminate  the  Executive's
       employment if the Executive, in the reasonable judgment of the Company:

6.3.1  Willfully  fails to perform any  reasonable  directive  of the  Company's
       Board of Directors, Chairman or Chief Executive Officer.

6.3.2  Materially  breaches any of the agreements,  duties,  responsibilities or
       obligations under this Agreement.

6.3.3  Embezzles or converts to his own use any funds or property of the Company
       or any client or customer of the Company.

6.3.4  Is convicted of a felony or any crime involving larceny,  embezzlement or
       moral turpitude.

6.4    In the event that  Executive's  employment  is  terminated by the Company
       without Cause, as defined in Section 6.3, above,  for a reason other than
       death or

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       Disability,  or  Executive  shall  resign for "Good  Reason",  as defined
       below, then, in such event:

6.4.1  Executive's Base Salary, as defined in Section 3 as then in effect, shall
       continue to be paid for a period of twelve (12) months ("Payment Period")
       or balance of Agreement whichever is longer.

6.4.2  Company  shall  maintain  in effect  during the Payment  Period,  for the
       continued benefit of the Executive, all of the employee benefit plans and
       programs in which the Executive was entitled to  participate  immediately
       prior to the Executive's  termination provided same is possible under the
       general  terms  and  provisions  of  such  benefit  plans  and  programs.
       Moreover,  during  the  Payment  Period the  Company  shall  provide  the
       Executive with such reasonable  administrative  and  secretarial  support
       services as may be necessary or appropriate in order to assist  Executive
       in finding  new  employment  or  Executive  may  select an  out-placement
       service  to be paid  for by the  Company  at a cost  not to  exceed  Five
       Thousand Dollars ($5,000).

For purposes of this Section 6.4, "Good Reason" shall mean:

       (i)    An assignment to the Executive of any duties inconsistent with, or
              a  material  change  in  the  nature  or  scope  of,   Executive's
              responsibilities, authority or duties hereunder.

       (ii)   Failure  by the  Company  to comply  with the  provisions  of this
              Agreement.

       (iii)  Ill health of  Executive  or a member of his family,  or any other
              compelling  personal  circumstance which, in the mutual discretion
              of the  Executive  and the  Chairman  of the  Company,  makes  the
              Executive's   continued   employment  hereunder   impossible,   or
              inappropriate.

6.5    Executive may voluntarily  terminate his employment  under this Agreement
       without  Good  Reason,  as defined in  Section  6.4 above,  by giving the
       Company  ninety  (90) days prior  written  notice  thereof,  and upon the
       expiration of such ninety (90) day period,  Executive's  employment under
       this  Agreement  shall  terminate,  and  Company  shall  have no  further
       obligation  or  liabilities  under  this  Agreement  except  to  pay  the
       Executive the portion, if any, that remains unpaid of the Base Salary and
       unpaid  accrued  prorated  vacation  for  the  period  up to the  date of
       termination. Resignation as defined herein must be in written form to the
       Board, witnessed and signed by the Executive.

7.     Surrender of Books and Records.  Executive  acknowledges  that all lists,
       books,  records,  literature,  products and any other  materials owned by
       Company or its affiliates or used by them in connection  with the conduct
       of their business,  shall at all times remain the property of Company and
       its  affiliates  and  that  upon  termination  of  employment  hereunder,
       irrespective of the time, manner or cause

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<PAGE>

       of  said  termination,  Executive  will  surrender  to  Company  and  its
       affiliates all such lists, books, records, literature, products and other
       materials.

8.     Miscellaneous.

8.1    This Agreement constitutes the entire understanding and agreement between
       Company and Executive  regarding its subject  matter and  supersedes  all
       prior negotiations and agreements,  whether oral or written, between them
       with respect to its subject  matter.  This  Agreement may not be modified
       except by a written agreement signed by the Executive and the Company.

8.2    This  Agreement  shall be  binding  upon and inure to the  benefit of the
       parties and their respective  heirs,  executors,  successors and assigns,
       except that this Agreement may not be assigned by the Executive.

8.3    No waiver by either party of any  condition or of the breach by the other
       of any term or covenant  contained in this Agreement,  whether by conduct
       or otherwise,  in any one or more instances  shall be deemed or construed
       as a further or  continuing  waiver of any such  condition or breach or a
       waiver  of any  other  condition,  or the  breach  of any  other  term or
       covenant  set forth in this  Agreement.  Moreover,  the failure of either
       party to exercise any right  hereunder  shall not bar the later  exercise
       thereof.

8.4    This  Agreement  shall be governed by the statutes and common laws of the
       State of Delaware, excluding it's choice of law statutes or common law.

8.5    The headings of the various  sections and  paragraphs  have been included
       herein for  convenience  only and shall not be construed in  interpreting
       this Agreement.

8.6    If  any   provision   of  this   Agreement   shall  be  held  invalid  or
       unenforceable,  the  remainder  of this  Agreement  shall,  nevertheless,
       remain in full force and  effect.  If any  provision  is held  invalid or
       unenforceable  with  respect  to  particular  circumstances,   it  shall,
       nevertheless, remain in full force and effect in all other circumstances.

8.7    This  Agreement  may be executed in several  counterparts,  each of which
       shall  be  deemed  to be an  original  but  all of  which  together  will
       constitute one and the same instrument.

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     IN WITNESS  WHEREOF,  this Agreement has been executed by the Executive and
on behalf of the Company by its duly authorized  officer on the date first above
written.

ALPHARX INC.

By: /s/ Sandro Persia                          By: /s/ Michael M. Lee
    --------------------------                     ---------------------------
    Sandro Persia                                  Michael M. Lee
    Secretary                                      Chairman/CEO

EXECUTIVE

By: /s/ Michael M. Lee
    -------------------------
    Michael M. Lee

                                       8Exhibit 10.2(a)

                               AMENDMENT AGREEMENT

     AMENDMENT  AGREEMENT,  dated as of August 20, 2001, by and between ALPHARX,
INC.,  a  Delaware  corporation  (the  "Company"),   and  Michael  M.  Lee  (the
"Executive").

                                    RECITALS

     The Company and the Executive are parties to an Employment Agreement, dated
July 1,  2000  (the  "Employment  Agreement"),  and have  agreed  to  amend  the
Employment  Agreement  to extend  the term of the  Employment  Agreement  and to
increase the Executive's compensation thereunder.  Capitalized terms used herein
shall have the meanings set forth in the Employment  Agreement  unless otherwise
defined herein.

     NOW,  THEREFORE,  in  consideration  of the mutual covenants and agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1.   Section 1 of the Employment Agreement is hereby deleted in its entirety and
     the following new Section 1is hereby inserted in lieu thereof:

     1.   Employment and Term.  Company  hereby employs  Executive and Executive
          hereby accepts  employment for a term commencing on July 1st, 2000 and
          continuing  until  December  31, 2003,  unless  sooner  terminated  as
          provided for in this Agreement.

2.   Section 3.1 and 3.2 of the  Employment  Agreement is hereby  deleted in its
     entirety  and the  following  new  Section  3.1 is hereby  inserted in lieu
     thereof.

     3.1  The Company  shall pay the  Executive  an annual  Base  Salary  ("Base
          Salary") as follows:

           (i) commencing  July 1, 2000,  and ending  December  31, 2000, a Base
               Salary at the rate of $24,000 per year;

          (ii) commencing  January 1, 2001,  and ending  June 30,  2001,  a Base
               Salary at the rate of $36,000 per year;

         (iii) commencing  July 1, 2001,  and ending  December  31, 2001, a Base
               Salary at the rate of $200,000 per year;

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          (iv) commencing  January 1, 2002, and ending December 31, 2002, a Base
               Salary at the rate of $240,000 per year; and

           (v) commencing  January 1, 2003 and ending  December  31, 2003 a Base
               Salary at the rate of $280,000 per year.

               The  Executive's  Base Salary  shall be paid at such times and in
          such manner as is  consistent  with the Company's  prevailing  payroll
          practices for other senior executives of the Company.

     3. Except as otherwise amended by this Amendment Agreement,  the Employment
     Agreement  shall  remain in full force and effect,  and the Company and the
     Executive  each  hereby  reaffirm  each  of  their  respective  agreements,
     covenants and obligations set forth therein.

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

ALPHARX INC.

By: /s/ Sandro Persia                    By: /s/ Michael M. Lee
    --------------------------               ---------------------------
    Sandro Persia                            Michael M. Lee
    Secretary                                Chairman/CEO

EXECUTIVE

By: /s/ Michael M. Lee
    ------------------------
    Michael M. Lee

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