Document:

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                                                                     EXHIBIT 4.3

     Effective as of December 27, 2000, the text of Section 10.2 of the
Partnership Agreement was designated as paragraph (a) of such Section, and a new
paragraph (b) was added to Section 10.2 reading in its entirety as follows:

               "(b) Notwithstanding any other provision of this Article 10,
          a Unitholder may at any time sell or transfer its Units to any other
          Unitholder or the Managing General Partner in whole and not in part,
          and any Unitholder or the Managing General Partner may at any time
          purchase the Units of any other Unitholder, in each such case on such
          terms and provisions as such Unitholders or the Managing General
          Partner, as applicable, may mutually agree."<PAGE>   1
                                                                    EXHIBIT 10.4

                EXTENSION, MODIFICATION AND RATIFICATION OF LEASE

This Extension, Modification and Ratification of Lease ("Agreement") effective
the 31st day of May, 2000, between WOODLANDS EQUITY PARTNERSHIP - '89 (Lessor)
and ZONAGEN INCORPORATED (Lessee) for and in consideration of $1.00, and other
good and valuable consideration.

                                   WITNESSETH:

1.       Lessor and Lessee hereby confirm and ratify (as modified below) all of
         the terms, conditions and covenants in that certain Lease Agreement
         ("Lease") between the parties dated March 22, 1990, and modified under
         Modification and Ratification of Lease dated October 13, 1992;
         Extension, Modification and Ratification of Lease dated July 12, 1993;
         Extension, Modification and Ratification of Lease dated January 25,
         1996; and Expansion, Modification and Ratification of Lease date June
         26, 1997; and Modification and Ratification of Lease dated November 1,
         1997; under which Lessee has leased from Lessor approximately 24,000
         square feet of net rentable area in that building located at 2408
         Timberloch Place, Bays B1 through B9, The Woodlands, Montgomery County,
         Texas.

2.       Lessor and Lessee agree that the Lease Term will be extended for 36
         months, changing the expiration date from May 31, 2000, to May 31, 2003
         ("Extension Period").

3.       Lessor and Lessee agree that the Security Deposit, as set out in
         Section 6 of the Lease, shall be increased by $1,609.79, and amount to
         be paid to Lessor contemporaneously with the execution of the
         Agreement. The total Security Deposit held by Lessor shall be
         $20,000.00.

4.       Lessor and Lessee agree that during the Extension Period, the Base
         Rent, as set out in Section 7 of the Lease, shall be $20,000.00.

5.       Lessor and Lessee agree that Section 33 of the Lease shall be deleted
         in its entirety and the following Section 33 shall be inserted in its
         stead:

         "33. Assignment by Lessee. Lessee shall not assign this Lease or any
         interest therein, nor sublet the Premises or any part thereof or any
         right or privilege appurtenant thereto, nor permit any other person,
         firm or entity to occupy or use the Premises or any portion thereof
         without first obtaining the prior written consent of Lessor. Lessor
         shall have the right, at its option, to terminate this Lease as to any
         portion of the Premises covered by a proposed assignment or sublease
         unless, based upon Lessee's historic improvement of the Premises beyond
         Lessor's allowance for leasehold improvements, as determined by Lessor
         in its sole discretion, the base rental amount to be paid by the
         assignee or sublessee is higher than the Base Rent paid by Lessee under
         the Lease, or to approve any such assignment or sublease only upon the
         condition that a) 1/2 of all rentals paid by the assignee or sublessee
         in excess of the rentals due from Lessee hereunder, shall be paid
         directly to Lessor, b) the proposed sublessee or assignee is
         financially capable of assuming Lessee's obligations hereunder, in the
         sole reasonable discretion of Lessor, c) in the event of an assignment
         to an assignee approved by Lessor at a base rent less than the Base
         Rent required by this Lease, Lessee

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         agrees to remain responsible for the full amount, less that paid by the
         assignee, and d) the proposed sublessee or assignee agrees to use the
         Premises only for the uses permitted of Lessee under this Lease, and to
         comply with all of the other terms and conditions of this Lease.
         Otherwise, Lessor's consent to any proposed sublease or assignment
         shall not be unreasonably withheld. Consent by Lessor to one
         assignment, subletting occupation or use by another person shall not be
         deemed to be a consent to any subsequent assignment, subletting,
         occupation or use by the same or another person. Consent to an
         assignment or sublease shall not release Lessee from liability for the
         continued performance of the terms and provisions to be kept and
         performed by Lessee hereunder, unless Lessor specifically and in
         writing releases Lessee from said liability. Any assignment or
         subletting by operation of law or otherwise, (including without
         limitation, a transfer of controlling interest in Lessee to any other
         person, firm or entity) without the prior written consent of Lessor,
         shall be void and shall, at the option of Lessor, terminate this Lease.
         Lessee covenants and agrees that when the prior written consent of
         Lessor is obtained, and in the event the subletting or assignment is to
         be arranged through public advertisement or listing of any kind, Lessee
         will treat all applications for sublease or assignment in a uniform
         manner and will award leases according to objective standards. No
         decision on any application shall be made on the ground of the
         applicant's race, color, religion, sex or national origin.

6.       No Other Modification. The Lease, as amended by this Agreement, will
         continue in full force and effect and is hereby ratified by Lessor and
         Lessee. All defined and capitalized terms as set forth in the Lease
         shall have the same meanings when used in this Agreement unless
         otherwise provided herein. Nothing in this Agreement modifies any of
         the provisions of the Lease, except as expressly provided in this
         Agreement. This Agreement embodies the entire agreement and
         understanding between Lessor and Lessee as may be applicable with
         respect to the specific matters set forth herein, and supercedes all
         prior agreements and understandings, written or oral, between Lessor
         and Lessee related to such matters.

                           [INTENTIONALLY LEFT BLANK]

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         The parties hereto have executed this Agreement in multiple
counterparts, each of which shall constitute an original, but collectively shall
constitute only one document. Notwithstanding anything contained herein to the
contrary, the terms of this Agreement shall not be binding on Lessor until it
has been signed by Lessor and a fully executed copy is delivered to Lessee.

                                       LESSOR:

                                       WOODLANDS EQUITY PARTNERSHIP-89 LIMITED
                                       A Texas Limited Partnership
                                       By: THE WOODLANDS COMMERCIAL PROPERTIES
                                           COMPANY, L.P., A Texas Limited
                                           Partnership
                                           Its General Partner
                                           By: The Woodlands Operating Company,
                                               L.P. a Texas limited partnership
                                               Its Authorized Agent

                                               By: /s/ Eric H. Wojner
                                                  ------------------------------
                                               Name: Eric H. Wojner
                                                    ----------------------------
                                               Title: V.P., Commercial Division
                                                     ---------------------------

                                       LESSEE:

                                       ZONAGEN INCORPORATED

                                       By: /s/ F. Scott Reding
                                          ---------------------------
                                       Name: F. Scott Reding
                                            -------------------------
                                       Title: CFO
                                             ------------------------

                                       3<PAGE>   1

                                                                    EXHIBIT 10.7

                               FIRST AMENDMENT TO
                              EMPLOYMENT AGREEMENT

         This First Amendment to Employment Agreement (the "First Amendment") is
executed and dated effective as of the 31st day of January, 2001 between
Zonagen, Inc. (the "Company") and Louis Ploth, Jr. (the "Executive").

         WHEREAS, the Company and Executive entered into an Employment Agreement
dated as of October 16, 1993 (the "Employment Agreement") which Employment
Agreement has been renewed pursuant to the terms thereof;

         WHEREAS, the Company and Executive now wish to amend certain provisions
of the Employment Agreement;

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

         1. Capitalized terms used but not defined herein have the respective
meanings set forth in the Employment Agreement.

         2. Section 3 of the Employment Agreement is hereby amended to include
the following paragraph:

                  "(ii)    Upon the earlier of (x) a Change of Control (as
                           defined below) of the Company or (y) the termination
                           of further action by the Board of Directors in
                           furtherance of a Change of Control, provided the
                           Executive is an employee of the Company on either
                           such date, the Executive shall receive a lump sum
                           bonus payment in the amount of $25,000, subject only
                           to such payroll and withholding deductions as are
                           required by applicable federal and state laws."

         3. Section 6 of the Employment Agreement is hereby amended to include
the following subsection (g) at the end thereof:

                  "Notwithstanding anything in this Section 6 to the contrary,
                  upon a Change of Control (as defined below), provided the
                  Executive is an employee of the Company immediately prior
                  thereto, the Company shall:

                           (i)      pay to the Executive, upon the closing of
                                    the Change of Control, a lump sum cash
                                    payment equal to .5 times the Executive's
                                    then current annual salary; such payment
                                    shall be in lieu of any other payments
                                    payable to the Executive pursuant to Section
                                    6(a) above, and the terms of Section 6(d)
                                    and 6(f) shall not apply in such instance;

                           (ii)     accelerate in full the vesting of all shares
                                    subject to any of the Executive's
                                    outstanding stock options, and Executive
                                    shall have a period of two years following
                                    the Change of Control to exercise such
                                    options; and

                           (iii)    continue, for the period of six (6) months
                                    commencing on the date of such Change of
                                    Control, to provide the benefits

<PAGE>   2

                                    contemplated by Section 4(a) of this
                                    Agreement (provided that the continuation of
                                    such benefits shall be construed so as not
                                    to extend the period during which the
                                    Company shall be required to provide
                                    benefits under COBRA following the date of
                                    such Change of Control).

                  As used in this Agreement, a "Change of Control" shall mean:

                           (i)      the acquisition after the Effective Date of
                                    this First Amendment, by any individual,
                                    entity or group (within the meaning of
                                    Section 13(d)(3) or 14(d)(2) of the
                                    Securities Exchange Act of 1934, as amended)
                                    (a "Person") of beneficial ownership of 30%
                                    or more of either (i) the then outstanding
                                    shares of common stock of the Company (the
                                    "Outstanding Common Stock") or (ii) the
                                    combined voting power of the then
                                    outstanding voting securities of the Company
                                    entitled to vote generally in the election
                                    of directors (the "Outstanding Voting
                                    Securities"), provided that for purposes of
                                    this subsection (i), the following
                                    acquisitions shall not constitute a Change
                                    of Control: (A) any acquisition directly
                                    from the Company, (B) any acquisition by the
                                    Company, (C) any acquisition by any employee
                                    benefit plan (or related trust) sponsored or
                                    maintained by the Company or any corporation
                                    controlled by the Company, or (D) any
                                    acquisition by any corporation pursuant to a
                                    transaction which complies with clauses (A),
                                    (B) and (C) of subsection (ii) hereof; or

                           (ii)     consummation after the Effective Date of
                                    this First Amendment of a reorganization,
                                    merger or consolidation or sale or other
                                    disposition of all or substantially all of
                                    the assets of the Company (a "Corporate
                                    Transaction") in each case, unless,
                                    following such Corporate Transaction, (A)
                                    (1) all or substantially all of the persons
                                    who were the beneficial owners of the
                                    Outstanding Common Stock immediately prior
                                    to such Corporate Transaction beneficially
                                    own, directly or indirectly, more than 30%
                                    of the then outstanding shares of common
                                    stock of the corporation resulting from such
                                    Corporate Transaction, and (2) all or
                                    substantially all of the persons who were
                                    the beneficial owners of the Outstanding
                                    Voting Securities immediately prior to such
                                    Corporate Transaction beneficially own,
                                    directly or indirectly, more than 30% of the
                                    combined voting power of the then
                                    outstanding voting securities entitled to
                                    vote generally in the election of directors
                                    of the corporation resulting from such
                                    Corporate Transaction (including, without
                                    limitation, a corporation which as a result
                                    of such transaction owns the Company or all
                                    or substantially all of the Company's assets
                                    either directly or through one or more
                                    subsidiaries) in substantially the same
                                    proportions as their ownership of the

                                      -2-
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                                    Outstanding Common Stock and the Outstanding
                                    Voting Securities immediately prior to such
                                    Corporate Transaction, as the case may be,
                                    (B) no Person (excluding (l) any corporation
                                    resulting from such Corporate Transaction or
                                    any employee benefit plan (or related trust)
                                    of the Company or such corporation resulting
                                    from such Corporate Transaction and (2) any
                                    Person approved by the members of the Board
                                    in office immediately prior to such
                                    Corporate Transaction) beneficially owns,
                                    directly or indirectly, 30% or more of the
                                    then outstanding shares of common stock of
                                    the corporation resulting from such
                                    Corporate Transaction or the combined voting
                                    power of the then outstanding voting
                                    securities of such corporation except to the
                                    extent that such ownership existed prior to
                                    such Corporate Transaction and (C) at least
                                    a majority of the members of the board of
                                    directors of the corporation resulting from
                                    such Corporate Transaction were members of
                                    the Board at the time of the execution of
                                    the initial agreement or of the action of
                                    the Board providing for such Corporate
                                    Transaction."

         4. In addition, and notwithstanding any other provision of his
Employment Agreement to the contrary, Executive shall be permitted to consult
with other companies during the term of this Employment Agreement, provided that
such consulting activities do not interfere with Employee's duties to the
Company or otherwise violate the terms of the Proprietary Information and
Inventions and Non-Competition Agreement entered into between the Company and
Executive, and are conducted on Executive's own time. Further, Executive shall
be permitted to have reasonable use of Company facilities (telephone, computers,
fax) during his employment term to pursue other employment opportunities,
provided that such use does not interfere with the discharge of his employment
duties to the Company.

         5. Except as amended and modified by this First Amendment, the
Employment Agreement shall continue in full force and effect. The Employment
Agreement and this First Amendment shall be construed as one and the same
instrument.

         6. This First Amendment may be signed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this First Amendment to produce or account for more than one such
counterpart.

         7. This First Amendment (i) constitutes the entire contract between the
parties relative to the amendments to the Employment Agreement made hereby, (ii)
supersedes all prior agreements, consents and undertakings relating to such
amendments and (iii) may not be contradicted by evidence of prior
contemporaneous or subsequent oral agreements of the parties.

         8. This First Amendment shall be construed and enforced in accordance
with the laws of the State of Texas.

         9. This First Amendment shall be binding upon and shall inure to the
benefit of and enforceable by the parties hereto and their respective successors
and assigns.

                                      -3-
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         IN WITNESS WHEREOF, the parties have executed this First Amendment to
the Employment Agreement effective (the "Effective Date") for all purposes as of
the date first above written.

EMPLOYEE                                     COMPANY

                                             ZONAGEN, INC.

/s/  Louis Ploth, Jr.                        By: /s/ Joseph S. Podolski
------------------------------------             -------------------------------
Louis Ploth, Jr.                                 Joseph S. Podolski
                                                 President and
                                                 Chief Executive Officer

                                      -4-

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