Document:

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                                                                   Exhibit 10.78

              MUTUAL TERMINATION OF DEFERRED COMPENSATION AGREEMENT

         THIS AGREEMENT is made as of this 22nd day of December, 2003, by and
between SELECT MEDICAL CORPORATION, a Delaware corporation ("Employer"), and
ROCCO A. ORTENZIO, an individual ("Executive").

                                   BACKGROUND

         A. Employer and Executive executed and delivered that certain Deferred
Compensation Agreement, dated January 1, 2000 (the "Agreement"), pursuant to
which Employer and Executive agreed that Executive's compensation for the period
beginning on March 1, 1997 and ending on December 31, 2000 (with interest
thereon as therein provided) would be deferred and paid as therein provided.

         B. All capitalized terms not specifically defined herein shall have the
meanings ascribed to them in the Agreement.

         C. The parties hereto now mutually desire to terminate the Agreement.

         NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:

         1.       Mutual Termination of the Agreement. The Agreement is hereby
terminated effective on December 22, 2003. Notwithstanding anything contained to
the contrary in Section 4 of the Agreement, all amounts credited to the Account
will be paid to Executive on or before December 26, 2003. Upon receipt of such
amounts, Executive shall be deemed to have fully released Employer from any
obligation relating to, or arising under, the Agreement.

         2.       Binding Effect. This instrument shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.

         3.       Entire Agreement. This is the entire agreement between the
parties hereto regarding the matters described herein, and there are no other
terms, conditions, provisions or statements, oral or otherwise, of any kind
whatsoever.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument, under seal, as of the day and year first above written.

                                    SELECT MEDICAL CORPORATION, a Delaware
                                    corporation

                                    By: /s/ Michael E. Tarvin
                                        ---------------------------------------
                                             Michael E. Tarvin,
                                             Senior Vice President

                                         /s/  Rocco A. Ortenzio
                                         --------------------------------------<PAGE>
                                                                   Exhibit 10.16

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

                        DEVELOPMENT AND SUPPLY AGREEMENT

THIS AGREEMENT (hereinafter "AGREEMENT") is made by and between Abbott GmbH &
Co. KG, having a place of business at Knollstrasse 50, 67061 Ludwigshafen,
Germany (hereinafter "ABBOTT"), and Barrier Therapeutics, Inc. having a place of
business at 100 Princeton Overlook, Princeton, NJ 08540, USA (hereinafter
"BARRIER"). This Agreement is effective as of the date of the last signature
below (hereinafter "EFFECTIVE DATE").

WHEREAS Abbott has developed inter alia Meltrex(TM) Technology (as hereinafter
defined) that can be used in the formulation of pharmaceutical products and has
rights to certain patents and patent applications claiming the same; and

WHEREAS Barrier has rights to develop, market and sell a certain pharmaceutical
Drug Substance (as hereinafter defined); and

WHEREAS Abbott has previously carried out studies successfully demonstrating the
feasibility of formulating said Drug Substance using Meltrex(TM) Technology, and

WHEREAS Abbott and Barrier wish to enter into a Development Programme (as
hereinafter defined) with respect to the development of Bulk Product and
Finished Product (as hereinafter defined); and

WHEREAS upon successful completion of such development and obtaining marketing
approval for Finished Product, Barrier intends to entrust the manufacturing of
both Bulk Product and Finished Product to Abbott; and

WHEREAS Abbott has adequate manufacturing facilities and capacity to undertake
the manufacture and to ensure the supply of both Bulk Product and Finished
Product to Barrier for Barrier's total worldwide requirements of Finished
Product.

NOW THEREFORE the parties agree as follows:

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

                                    ARTICLE I
                                   DEFINITIONS

1.1   AFFILIATE means any person or business entity which directly or indirectly
      controls, is controlled by, or is under common control with a party to
      this Agreement. A business entity shall be deemed to "control" another
      business entity, if it owns directly or indirectly, more than fifty
      percent (50%) of the outstanding voting securities, capital stock, or
      other comparable equity or ownership interest of such business entity, or
      exercises equivalent influence over such entity. If the laws of the
      jurisdiction in which such entity operates prohibit ownership by a party
      of fifty percent (50%) or more, "control" shall be deemed to exist at the
      maximum level of ownership allowed by such jurisdiction.

1.2   BULK PRODUCT means Drug Substance formulated by Abbott using its
      Meltrex(TM) Technology according to the terms of this Agreement.

1.3   DELIMITATION OF RESPONSIBILITIES AGREEMENT means the document setting out
      the respective pharmaceutical responsibilities of the parties with regard
      to the preparation of Finished Product to be attached hereto as Schedule
      C.

1.4   DEVELOPMENT PROGRAMME means the outline programme set out in Schedule A
      hereto and all the detailed Workplans for the development of Bulk Product
      and Finished Product attached hereto from time to time as Schedule B and
      made a part hereof.

1.5   DRUG SUBSTANCE means the antifungal compound itraconazole, alone or as a
      premix ("Triaset").

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separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

1.6   FINISHED PRODUCT means the final tablets made by milling and compressing
      Bulk Product according to the terms of this Agreement and suitable for
      marketing and sale.

1.7   MELTREX(TM) TECHNOLOGY means any and all know-how, proprietary data,
      patents and patent applications owned or controlled by Abbott or any of
      its Affiliates relating to the formulation and shaping of pharmaceutical
      products by melt-extrusion.

1.8   REGULATORY AGENCIES means the regulatory authorities having jurisdiction
      over the clinical testing, manufacture, marketing and sale of Finished
      Product.

1.9   SPECIFICATIONS means the manufacturing and test procedures for Drug
      Substance, components, intermediates, Bulk Product and Finished Product,
      and in-process controls, including without limitation legal label text and
      unit descriptions if applicable.

1.10  WORKPLAN means each detailed programme of technical work, including the
      timetable and cost, which is required for the development of Bulk Product
      and Finished Product and which will be set out from time to time as
      Schedule B (i.e. Schedule B-1, Schedule B-2, etc) hereto.

                                   ARTICLE II
                              DEVELOPMENT PROGRAMME

2.1   Abbott hereby agrees to undertake the Development Programme as outlined in
      Schedule A hereto, including, without limitation, manufacturing Bulk
      Product and Finished Product in accordance with the Specifications which
      shall be agreed to by the parties. On payment by Barrier of the
      irrevocable sum of US$ [**] prior to commencement of Stage 2 of the
      Development Programme, Abbott undertakes to

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separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      develop Meltrex(TM) formulations of Drug Substance exclusively for
      Barrier. Barrier represents and warrants that it shall not sell any Bulk
      Product or Finished Product manufactured by Abbott for use in the
      Development Programme to any third party and shall only use such Bulk
      Product and Finished Product in preapproval clinical and in vitro studies
      until the supply agreement referred to in Article V is signed by both
      parties. Schedule B shall consist of a number of Workplans which may be
      added to or amended from time-to-time by mutual agreement of the parties.
      The aim of such Development Programme is to enable Abbott to perform all
      the development and scaling-up activities required (i) to provide
      sufficient samples of Finished Product for Barrier to carry out further
      testing in humans; and (ii) to provide batches of Bulk Product and
      Finished Product for validation and other requirements of Regulatory
      Agencies; and (iii) to generate such data and documentation related to the
      manufacture of Bulk Product and Finished Product as are necessary to
      enable Barrier to apply to Regulatory Agencies for marketing authorisation
      for Finished Product.

2.2   Abbott shall use all reasonable efforts to carry out and complete each
      Workplan within the agreed timetable. Both parties undertake to keep each
      other informed of any possible or anticipated change in their respective
      timescales of activities which may affect the Development Programme.

2.3   If at any time during the Development Programme, Abbott anticipates that
      for any reason whatsoever it is no longer in a position to complete any
      part of the

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

      Development Programme within the timetables provided for in Schedules A
      and B, it will promptly so notify Barrier and both parties will
      immediately review the situation and seek to agree any revisions to the
      Development Programme.

                                  ARTICLE III
                            SUPPLY OF DRUG SUBSTANCE

3.1   During the Development Programme Barrier will provide Abbott with Drug
      Substance at no cost to Abbott in sufficient quantities to enable Abbott
      to carry out its obligations under the Development Programme. Abbott shall
      use such Drug Substance solely for the purpose of meeting said
      obligations.

3.2   Barrier shall at all times inform Abbott immediately of any reported or
      potential safety hazards or side effects relating to Drug Substance, Bulk
      Product or Finished Product.

                                   ARTICLE IV
                                DEVELOPMENT COSTS

4.1   In consideration of Abbott's contribution to the Development Programme
      Barrier shall pay the agreed development costs and fees to Abbott. The
      fees and costs payable to Abbott and the payment timetables are set out in
      Schedules A and B.

4.2   In the event that during the Development Programme Abbott anticipates any
      substantial (i.e. more than ten percent) increase in. the estimated total
      development costs, Abbott shall promptly inform Barrier and the parties
      shall review the causes of such increases and seek in good faith either to
      rectify such causes or to increase Abbott's reimbursement.

4.3   In the event that during the Development Programme Barrier requests Abbott
      to undertake additional work not included in the current Development
      Programme the parties shall in good faith negotiate whether Abbott shall
      perform such

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separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      additional work and, if so, the additional reimbursement for Abbott. If
      the parties agree on such additional work, the parties shall make the
      necessary revisions to the Development Programme and Workplans, including
      the timetable and fees.

                                    ARTICLE V
                         COMMERCIAL SUPPLY AND LICENSES

As soon as reasonably possible after Barrier submits the first New Drug
Application for Finished Product to a Regulatory Agency, the parties will enter
into a supply agreement which will include inter alia the following provisions:

5.1   Barrier will appoint Abbott as its exclusive supplier for Barrier's entire
      requirements of Bulk Product and Finished Product and Abbott agrees to
      manufacture Bulk Product in its facilities for the exclusive purpose of
      using it to manufacture and supply Finished Product to Barrier or its
      designee. The agreement will also provide for alternative sources of
      supply of Bulk Product to Barrier in the event that Abbott is unable or
      unwilling to fulfill Barrier's requirements.

5.2   The obligation of the parties to adhere to the agreed Specifications.

5.3   Barrier shall provide or procure that a third party provides Abbott in a
      timely fashion and free of cost with sufficient quantities of Drug
      Substance to enable Abbott to supply Barrier's requirements of Finished
      Product. Appropriate forecasting procedures will be agreed.

5.4   Barrier and Abbott will agree on the supply price for Finished Product
      based on Abbott's fully burdened manufacturing cost.

5.5   For the term of this Agreement and said supply agreement Barrier will
      grant to Abbott, or procure the grant to Abbott of, a royalty-free
      enabling license under

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

      any patents relating to Drug Substance in as far as such a license is
      necessary for Abbott to develop and manufacture Bulk Product and Finished
      Product for Barrier.

5.6   In addition to the supply price specified in paragraph 5.4 above, Barrier
      shall also pay Abbott a "fee" per tablet of Finished Product equivalent to
      [**] percent [**] [**]

5.7   Barrier will include wording on all packaging, labels, etc of Finished
      Product to the effect that such Finished Product was formulated using
      Meltrex(TM) Technology.

                                   ARTICLE VI
                          INTELLECTUAL PROPERTY RIGHTS

6.1   All intellectual property rights including, but not limited to, patentable
      inventions, improvements, technology, methods, applications and products
      arising from the Development Programme (hereinafter "IPR") shall be: (a)
      exclusively owned by Barrier if such IPR relates solely to Drug Substance
      with no royalty obligations whatsoever to Abbott, its employees or
      affiliates; (b) exclusively owned by Abbott if such IPR relates solely to
      Meltrex(TM) Technology with no royalty obligations whatsoever to Barrier,
      its employees or affiliates; and (c) jointly owned by the parties in equal
      shares if such IPR relates to the combination of Drug Substance with
      Meltrex(TM) Technology.

6.2   Each party shall be entitled at its sole discretion to file patent
      applications for the IPR of which it has exclusive ownership. Any patent
      applications for the jointly owned IPR shall be filed by Abbott using an
      independent law firm. The parties shall share equally in the cost of
      filing and prosecuting applications for jointly

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

      owned IPR, provided that if Abbott desires not to file such application or
      prosecute such application in certain jurisdictions or for certain claims,
      it may transfer such right to Barrier by notice in writing, at which point
      Abbott shall no longer be obligated to pay for such prosecution and
      Barrier may at that point determine whether or not to file and prosecute
      such application.

6.3   In the case of jointly owned IPR, the parties shall negotiate in good
      faith (a) an exclusive license for Barrier to use and sell, but not make,
      Finished Product and (b) an exclusive license for Abbott to use its
      Meltrex(TM) Technology to make, use and sell products which do not contain
      Drug Substance. Neither party shall grant any rights under such jointly
      owned IPR to any third party without the prior written consent of the
      other party.

                                   ARTICLE VII
                                 CONFIDENTIALITY

Pursuant to the purposes of this Agreement, each party may from time to time
disclose to the other party, orally, in writing or in an electronic medium,
information of a confidential or proprietary nature ("CONFIDENTIAL
INFORMATION"). Each party undertakes to keep strictly secret such Confidential
Information received from the other party and not to publish it or make
commercial or any other use of it without the express prior consent in writing
of the disclosing party, unless otherwise permitted under this Agreement. The
obligation of secrecy does not apply when and if the receiving party can prove
that the Confidential Information

a)    was known to it or any of its Affiliates prior to the date it was
      transferred hereunder, as evidenced by written records;

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separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

b)    became or becomes known to it or any of its Affiliates through a third
      party having the right to disclose the same subsequent to the date it was
      received hereunder without it being responsible therefor;

c)    was or becomes known to the public or generally available to the public
      otherwise than through the act or default of the receiving party or its
      agents;

d)    is independently developed by the receiving party or any of its Affiliates
      as evidenced by written records; or

e)    is required by law, regulatory, administrative or judicial order to be
      disclosed, in which event the receiving party shall notify the disclosing
      party as soon as possible prior to such required disclosure and shall
      cooperate with the disclosing party's efforts to limit such disclosure.

The foregoing obligations shall cease after the expiration of a period off ten
(10) years commencing on the Effective Date or five (5) years after the
termination of this Agreement whichever is the later.

                                  ARTICLE VIII
                              TERM AND TERMINATION

8.1   This Agreement shall come into effect on the Effective Date and remain in
      full force and effect throughout the Development Programme and until
      Barrier achieves the first approval for marketing Finished Product from a
      Regulatory Agency. If no such approval is obtained by [**], then either
      party may terminate this Agreement upon sixty (60) days' written notice to
      the other party.

8.2   Either party may terminate this Agreement for a material breach by the
      other party in the performance of its obligations hereunder, or in the
      event that at any time Abbott revises its estimated total development
      costs as set forth in Schedules

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

      A and B by more than 50% or if by [**] Abbott has not delivered to Barrier
      a final feasibility report indicating a high degree of probable
      achievement of the Aim of Work set forth in Schedule B-1, by giving to the
      breaching party written notice specifying such breach within forty-five
      (45) days after the non-breaching party becomes aware of the occurrence of
      such breach and, if the breaching party has not remedied or cured the
      default within sixty (60) days of such notice being given (or, if a breach
      is not capable of being cured within such 60 day period, the breaching
      party has not promptly provided the other party with a detailed plan for
      curing such breach and has not promptly begun and continued all reasonable
      efforts to execute such plan), then termination shall become effective, at
      the non-breaching party's option at the end of said sixty (60) day period.

8.3   In the event of any proceedings, voluntary or involuntary, in bankruptcy
      by or against Barrier or Abbott, or the appointment with or without the
      parties' consent of a receiver for either party, or in the event of
      insolvency of the either party, the other party shall be entitled to
      terminate this Agreement upon giving written notice without any liability
      whatsoever.

8.4   Upon termination of this Agreement for any reason whatsoever Barrier and
      Abbott will cease to use any and all Confidential Information provided by
      the other party.

8.5   Termination of this Agreement for any reason whatsoever will have no
      effect on any rights or obligations that have accrued prior to the
      effective date of such termination.

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                                   ARTICLE IX
                                  MISCELLANEOUS

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

9.1   Nothing in this Agreement will be deemed or construed as providing either
      party any right, title, interest, or license in or under any intellectual
      property right owned or controlled by the other party other than
      explicitly specified in Articles V and VI above.

9.2   Modifications and amendments to this Agreement and its Schedules require
      the prior written consent of both parties.

9.3   No waiver of any requirement of this Agreement, whether by conduct or
      otherwise, will be effective unless in writing. The waiver in any one or
      more instances will not be deemed or construed to be a further or
      continuing waiver of any such requirement or of any other requirement of
      this Agreement.

9.4   If any one or more of the provisions of this Agreement will be held to be
      invalid, illegal, or unenforceable, the validity, legality, or
      enforceability of the remaining provisions of this Agreement will not in
      any way be affected or impaired thereby.

9.5   Any notice required or permitted to be given hereunder will be deemed
      sufficient if delivered by hand or sent by overnight courier to the
      parties at the addresses set forth below or such other addresses as either
      party may designate. Notice will be deemed given when received.

      If to Barrier, to:      President
                              Barrier Therapeutics, Inc.
                              100 Princeton Overlook
                              Princeton, NJ  08540
                              USA

      If to Abbott, to:
                              Head of SOLIQS
                              Abbott GmbH & Co. KG
                              Knollstrasse 50
                              67061 Ludwigshafen
                              Germany

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

9.6   Neither party will assign this Agreement, or subcontract any of its
      obligations hereunder, to any other person or entity other than to one or
      more of its Affiliates, without the prior written consent of the other
      party, which consent will not be unreasonably withheld; however, in the
      event of any assignment or subcontract, the party effecting such
      assignment or subcontract shall guarantee the performance of the assignee
      or subcontractor in a form satisfactory to the other party.
      Notwithstanding the foregoing, either party may, without such written
      consent, assign this Agreement, and its rights and objections hereunder,
      in connection with the transfer or sale of all or substantially all of its
      business, or in the event of its merger or consolidation or change in
      control or similar transaction provided the permitted assignee shall have
      assumed all obligations of the assignor under this Agreement.

9.7   This Agreement will be binding upon and inure to the benefit of the
      permitted successors or permitted assigns of Abbott and Barrier.

9.8   The parties agree to attempt to resolve any dispute involving this
      Agreement in good faith through upper management meetings between the
      parties and, if unresolved within sixty (60) days of the first meeting, to
      arbitrate the dispute in accordance with the terms of Article 9.15.

9.9   This Agreement shall be construed, interpreted and applied in accordance
      with the laws of Germany, without reference to its conflict of laws
      provisions, and the place of jurisdiction shall be the Courts of Mannheim,
      Germany.

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

9.10  Neither party shall be liable for any failure or delay in performing its
      obligations hereunder when any such failure or delay shall be caused
      (directly or indirectly) by fires, flood, earthquakes, accidents,
      explosions, sabotage, strikes or other labour disturbances, civil
      commotion, riots, invasions, wars, acts, restraints, requisitions,
      regulations, or directions of governmental authorities, shortages of
      labour, fuel, power, or raw material, inability to obtain equipment or
      supplies, inability to obtain or delays in transportation, acts of God, or
      any cause beyond the reasonable control of that party. Performance under
      this Agreement of the affected party shall be delayed during the
      occurrence of any of the circumstances described in this paragraph 9.10,
      provided that written notice of such circumstances is provided to the
      unaffected party.

9.11  Neither party shall use the name of the other party in publicity or
      advertising in relation to any activities under this Agreement without the
      prior written approval of the other party which shall not be unreasonably
      withheld.

9.12  Each party warrants that it has the right and authority to enter into this
      Agreement and that it is not under any other contractual obligation,
      express or implied, inconsistent with the terms hereof. Barrier represents
      and warrants to Abbott that it shall comply with all applicable laws,
      rules and regulations in the development and commercialisation of the Drug
      Substance, Bulk Product and Finished Product. Barrier further represents
      and warrants that it owns or has licensed all rights in and to the Drug
      Substance and its development and commercialisation to the extent
      necessary to permit the development and commercialisation contemplated
      hereunder.

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

9.13  Neither party shall make any representation or incur any obligation in the
      name or on behalf of the other party except as explicitly authorised
      hereunder. Nothing in this Agreement shall be deemed to establish a
      relationship of principal and agent between Barrier and Abbott nor any of
      their agents or employees for any purpose whatsoever. Nothing in this
      Agreement shall be deemed to constitute the parties as a partnership,
      association or other relationship.

9.14  This Agreement constitutes the entire agreement of Abbott and Barrier with
      respect to the subject matter hereof and this Agreement cancels and
      supersedes all agreements of any kind related to the subject matter hereof
      entered into prior to the Effective Date of this Agreement.

9.15  All disputes, claims or controversies arising in connection with, pursuant
      to, or related to, this Agreement shall be finally determined under the
      Arbitration Rules of the International Chamber of Commerce ("ICC") by
      three arbitrators, knowledgeable in the field of pharmaceuticals,
      conversant in the English language, and appointed by the ICC in accordance
      with said Rules, except that any disputes regarding the validity, scope or
      enforceability of a patent shall be submitted to a court of competent
      jurisdiction. The arbitrator appointed to chair the arbitral tribunal
      shall be a lawyer fluent in English. The place of arbitration shall be
      London, England. The language of the arbitration shall be English.
      Documents in other languages shall be permitted as exhibits but mutually
      acceptable translations in English shall be provided by the offering
      party. The award may grant any relief appropriate under the applicable
      law, including without limitation declaratory relief and/or specific
      performance. However, the

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separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      parties agree that notwithstanding the applicable law, the arbitral
      tribunal shall not be empowered to award punitive damages against either
      party. The parties hereby agree that there shall be no right of appeal to
      any court on the merits of the dispute. Judgement on the award may be
      entered in any court having jurisdiction over the award or any of the
      parties or their assets.

9.16  LIMITATION OF LIABILITY: UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
      LIABLE TO THE OTHER UNDER ANY LEGAL OR EQUITABLE CLAIM OR CAUSE OF ACTION,
      WHETHER IN CONTRACT, TORT OR OTHERWISE, FOR INDIRECT OR CONSEQUENTIAL
      DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) REGARDLESS OF
      WHETHER OR NOT SUCH PARTY WAS INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.

9.17  Each party hereby agrees to indemnify, defend and hold the other party and
      its Affiliates and, each of their directors, officers, shareholders,
      agents, representatives and employees (the "INDEMNIFIED GROUP") harmless
      from and against any and all costs, expenses (including reasonable
      attorneys' fees and amounts paid in settlement), damages and liabilities
      claimed by a third party ("CLAIM") resulting directly or indirectly from
      activities conducted by the indemnifying party, its Affiliates or any of
      their directors, officers, shareholders, agents, representatives,
      employees or sublicensees (the "INDEMNIFYING GROUP"), but only to the
      extent such claim results from the negligence or wilful misconduct or
      breach of this Agreement by the Indemnifying Group (and, in the case of
      Barrier, resulting from Barrier's commercialisation of the Bulk Product
      and

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separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

      Finished Product) except to the extent such claim Claim results from the
      negligence or wilful misconduct or breach of this Agreement by the
      Indemnified Group. In the event that a party is seeking indemnification
      under this Section, it shall inform the other party of a Claim as soon as
      reasonably practicable after it receives notice of the Claim, shall permit
      the indemnifying party to assume direction and control of the defence of
      the Claim (including the right to settle the Claim solely for monetary
      consideration), and shall cooperate as requested in the defence and
      settlement of the Claim. The Indemnified Group shall not voluntarily make
      any payment or incur any expense in connection with any claim or suit
      without the consent of the indemnifying party, provided that if the
      indemnifying party does not assume direction and control of the defence of
      the Claim, the Indemnified Group may assume direction and control of the
      defence of the Claim and, if successful, shall be reimbursed by the
      indemnifying party for costs incurred in connection with such defense.

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

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives as of the dates set forth below:

BARRIER THERAPEUTICS INC.                 ABBOTT GMBH & CO. KG

By:    /s/ Geert Cauwenbergh              By:    /s/ Dieter Wagner
       -------------------------------           -------------------------------

Name:                                     Name:  Dr. Dieter Wagner
       -------------------------------
Title:                                    Title: Divisional Vice President
       -------------------------------
Date:                                     By:    /s/ Jorg Breitenbach
       -------------------------------           -------------------------------

                                          Name:  Dr. Jorg Breitenbach

                                          Title: Head of SOLIQS

                                          Date:  16/5/02
                                                 -------------------------------

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

                                   SCHEDULE A

                              DEVELOPMENT PROGRAMME

STAGE 1: [**] Abbott to carry out short-term stability testing on selected
samples of Bulk Product. Duration approximately 3 months.

STAGE 2: Barrier to procure transfer of the [**] milling and compression
procedures to Abbott.

STAGE 3: On receipt of the [**] payment from Barrier, Abbott to prepare and
supply at a cost to be agreed two formulations to Barrier for a pilot biostudy.

STAGE 4:  [**]

STAGE 5: Pharmaceutical development of Bulk Product and Finished Product by
Abbott.

STAGE 6: Manufacture of registration batches of Finished Product for pivotal
biostudy and long-term, stability study. Barrier to pay Abbott an irrevocable
milestone payment of [**]

STAGE 7: Manufacture of validation batches.

STAGE 8: Completion of documentation for submission to Regulatory Agencies.
Barrier to pay Abbott an irrevocable milestone payment of [**]

                                                                              18
<PAGE>

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

                                  SCHEDULE B-1

                              WORKPLAN FOR STAGE 1

1.    AIM OF WORK

Abbott will seek to adjust the Drug Substance extrudate previously made by its
SOLIQS business unit to meet the properties of the Drug Substance extrudate
manufactured on an [**]

Abbott expects to achieve this target using its Meltrex(TM) Technology by [**]

Material will be collected for analytical testing and subsequent milling and
compression trials. Analytical testing will focus on [**]

2.    RESPONSIBILITIES OF THE PARTIES

2.1   BARRIER

2.1.1 Barrier will provide Abbott with [**] of Triaset mixture, free of charge,
      together with any information on drug handling, safety and relevant
      toxicolgical data for Drug Substance (at least MDMS) which Abbott has not
      previously received.

2.1.2 Barrier will provide and/or update Abbott with full details of the draft
      assay, related substances and disssolution methods which Abbott has not
      previously received.

2.1.3 Barrier will provide Abbott with samples of the Drug Substance extrudate
      produced [**]

2.2   ABBOTT

2.2.1 Abbott will carry out a maximum of ten different trials using its
      Meltrex(TM) Technology, focusing on [**]

2.2.2 Abbott will carry out preliminary stability testing of the Meltrex(TM)
      formulations at [**]

2.2.3 In parallel with the above steps, Abbott will also perform process
      analysis of the Meltrex(TM) formulations [**]

3.    TIMELINES

Abbott will use all reasonable efforts to start the programme of work set out in
this Schedule B-1 within 12 weeks of signing the Agreement, subject to Abbott
receiving in good time the Drug Substance and data requirements set out in
Section 2.1 above.

4.    COSTS

Abbott's costs for carrying out the programme of work set out in this Schedule
B-1 will be [**] of which [**]

ABBOTT GMBH & CO. KG                          BARRIER THERAPEUTICS, INC.

By:   /s/ Jorg Breitenbach                    By:    /s/ Geert Cauwenbergh
      -----------------------------                  --------------------------
      Dr. Jorg Breitenbach                           Dr. Geert Cauwenbergh

      Head of SOLIQS

By:   /s/ Gunther Berndl                      Date:
      -----------------------------                 ---------------------------
      Dr. Gunther Berndl
      Head of Pharmaceutical
      Development, SOLIQS

Date: 16/5/02
      -----------------------------

                                                                              19
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

                                   SCHEDULE C

                   DELIMITATION OF RESPONSIBILITIES AGREEMENT

                                 (TO BE AGREED)

                                                                              20
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

             ATTACHMENT TO DEVELOPMENT AND SUPPLY AGREEMENT BETWEEN

               ABBOTT GMBH & CO. KG AND BARRIER THERAPEUTICS, INC.

                            AMENDMENT TO SCHEDULE B-1

The parties hereby agree that the short term stability testing envisaged in
Section 2.2.2 of Schedule B-1 (Stage 1) and costing US $[**] shall be
transferred to Schedule B-2 hereunder. The remaining sum to be paid by Barrier
in relation to the work undertaken by Abbott pursuant to Schedule B-1 is
therefore reduced to US $[**] payable to Abbott on Barrier's receipt of the
final feasibility report.

                                  SCHEDULE B-2

                              WORKPLAN FOR STAGE 3

1.    AIM OF WORK

In parallel to the results obtained from the screening Programme (Schedule B-1)
Abbott will select two process parameters to manufacture two (2) batches of Bulk
Product to be used for clinical trial supply. The selection will be made based
on technical parameters. The technical responsibilities will be described
hereinafter. The Delimitation of Pharmaceutical Responsibilities Agreement will
be separately described in Schedule C of this Agreement.

2.    RESPONSIBILITIES OF THE PARTIES

      2.1   BARRIER

            2.1.1 Barrier will provide Abbott with [**] of GMP-quality Drug
Substance (as Itraconazole) and [**] of GMP-quality HPMC free of charge together
with a Certificate of Analysis and any information on drug handling, safety and
relevant
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

toxicolgical data for Drug Substance (at least MSDS) which Abbott has not
previously received.

            2.1.2 Barrier will perform the analytical testing necessary to
release the Bulk Product for further processing.

            2.1.3 Barrier will perform milling and tabletting of the Bulk
Product to manufacture the Finished Product applicable for clinical trial
supply.

            2.1.4 Barrier will perform the final release of the clinical trial
samples.

      2.2   ABBOTT

            2.2.1 Abbott will manufacture two (2) batches of Bulk Product under
GMP conditions for human use including mixing of raw materials and extrusion.

            2.2.2 In parallel with the above step 2.2.1, Abbott will also
perform [**]

            2.2.3 Abbott will carry out short term stability testing of the two
(2) batches of Bulk Product obtained under step 2.2.1 above [**] according to
ICH conditions in bulk container packaging material. [**]

3.    TIMELINES

Abbott will use all reasonable efforts to deliver Bulk Product for clinical
trial supply before the end of [**], subject to Abbott receiving in good time
the Drug Substance and data requirements set out in Section 2.1.1 above.

4.    COSTS AND PAYMENT SCHEDULE

Abbott's costs for carrying out the programme of work set out in this Schedule
B-2 will be US$ [**], made up of:

-     Manufacture and supply of 2 GMP batches                          US $ [**]
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

-     Process analysis                                                US $  [**]

-     Short term stability study (2.2.3)                              US $  [**]

-     (transferred from Section 2.2.2 of Schedule B-1)

Payments will be made to Abbott by Barrier as follows:

-     [**]

-     [**]

-     [**]

-     [**]

-     [**]

ABBOTT GMBH & CO. KG                      BARRIER THERAPEUTICS, INC.

By: /s/ Jorg Breitenbach                  By: /s/ Geert Cauwenbergh
    ----------------------------------        ----------------------------------
      Dr. Jorg Breitenbach
      Head of SOLIQS

By: /s/ Jon Lewis                         Date: 30 September 2002
    ----------------------------------          --------------------------------
      Dr. Jon Lewis
      Head of Business Development
      SOLIQS

Date: 27 September 2002
      --------------------------------
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

             ATTACHMENT TO DEVELOPMENT AND SUPPLY AGREEMENT BETWEEN
               ABBOTT GMBH & CO. KG AND BARRIER THERAPEUTICS, INC.

                                  SCHEDULE B-3
                              WORKPLAN FOR STAGE 3

1.    AIM OF WORK

Abbott will manufacture [**] Bulk Product, or the maximum amount that can be
manufactured out of the remainder material, to be used for technical assessment
and further manufacturing trials. The selected conditions are equivalent to the
selected conditions for the manufacture under SCHEDULE B-2. The technical
responsibilities will be described hereinafter.

2.    RESPONSIBILITIES OF THE PARTIES

      2.1   BARRIER

            2.1.1 Barrier has provided Abbott with material under the SCHEDULES
B-1 and B-2 and Abbott will now use up the remainder.

            2.1.2 Barrier will perform milling and tabletting of the Bulk
Product for technical assessment.

      2.2   ABBOTT

            2.2.1 Abbott will manufacture [**] Bulk Product, or the maximum
amount that can be manufactured out of the remainder material, to be used for
technical assessment and further manufacturing trials including mixing of raw
materials and extrusion.

            2.2.2 In parallel with the above step 2.2.1, Abbott will also
perform process analysis of the Meltrex(TM) formulations for [**].
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

3.    TIMELINES

Abbott will use all reasonable efforts to deliver Bulk Product for technical
assessment and further manufacturing trials before the end of [**].

4.    COSTS AND PAYMENT SCHEDULE

Abbott's costs for carrying out the programme of work set out in this Schedule
B-3 will be US$ [**] make up of:

-     Manufacture and supply of manufacture [**] Bulk Product          US $ [**]

-     Process analysis                                                 US $ [**]

Payments will be made to Abbott by Barrier as follows:

-     [**]

-     [**]

ABBOTT GMBH & CO. KG                      BARRIER THERAPEUTICS, INC.

By: /s/ Jorg Breitenbach                  By: /s/ Charles T. Nomides
    ----------------------------------        ----------------------------------
      Dr. Jorg Breitenbach                       Charles T. Nomides
      Head of SOLIQS                             COO

By: /s/ Jon Lewis                         Date: 11-MAR-03
    ----------------------------------          --------------------------------
      Dr. Jon Lewis
      Head of Business Development
      SOLIQS

Date: 18 March 2003
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

             ATTACHMENT TO DEVELOPMENT AND SUPPLY AGREEMENT BETWEEN
               ABBOTT GMBH & CO. KG AND BARRIER THERAPEUTICS, INC.

                                  SCHEDULE B-4

                              PRE-STAGE 5 WORKPLAN

1.    AIM OF WORK

Abbott will manufacture two batches of [**] Bulk Product to be used for
technical and analytical assessment and further manufacturing trials. The target
of these trials is to [**]. Analytical testing will be carried out with the
intention of defining methods of distinguishing between different batches of
Bulk Product. The technical responsibilities will be described hereinafter.

2.    RESPONSIBILITIES OF THE PARTIES

      2.1   BARRIER

            2.1.1 Barrier has provided Abbott with sufficient Drug Substance.

            2.1.2 Barrier will provide Abbott with reference standards of the
Drug Substance and related compounds necessary for the development and
validation of the HPLC method.

            2.1.3 Barrier will perform milling and tabletting of the Bulk
Product for technical assessment. Barrier agrees to inform Abbott about all data
obtained from the tested formulations for a joint evaluation of further steps.

      2.2   ABBOTT

            2.2.1 Abbott will manufacture two batches each [**] Bulk Product to
be used for technical assessment and further assessment of mixing of raw
materials.

            2.2.2 In parallel with the above step 2.2.1, Abbott will also
perform [**].
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

            2.2.3 Abbott will develop and validate an HPLC method which is
suitable both for the determination of drug content and degradation products in
the Bulk Product and for submission to a Regulatory Agency as part of a New Drug
Application. [**]. The validation parameters will be [**].

            2.2.4 Abbott will thoroughly, [**] The results will be summarized in
a report.

            2.2.5 Abbott will thoroughly [**] The results will be summarized in
a report.

            2.2.6 Based an the results of the evaluations in Sections 2.2.3,
2.2.4 and 2.2.5, Abbott and Barrier will jointly select the analytical and HPLC
methods necessary to be able to set preliminary specifications for Bulk Product
to ensure the efficacy of the Finished Product.

3.    TIMELINES

Abbott will use all reasonable efforts to deliver Bulk Product for technical
assessment and further manufacturing trials, and the reports pursuant to
Sections 2.2.4 and 2.2.5, before the end of [**] provided Barrier agrees to this
Schedule B-4 by [**]. Abbott will use all reasonable efforts to complete the
HPLC method development and validation (Section 2.2.3) within [**] of receipt of
the reference samples of Drug Substance and related substances or the signature
of this Schedule B-4, whichever is the later.

4.    COSTS AND PAYMENT SCHEDULE

Abbott's costs for carrying out the programme of work set out in this Schedule
B-4 will be US$ [**] made up of:
<PAGE>
** Certain information in this exhibit has been omitted and will be filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request.

-     Manufacture and supply of two batches each of [**] Bulk Product   US$ [**]

-     Process analysis (Section 2.2.2)                                  US$ [**]

-     Development and validation of HPLC method (Section 2.2.3)         US$ [**]

-     Evaluation of microscopy methods (Section 2.2.4)                  US$ [**]

-     Evaluation of other methods (Section 2.2.5)                       US$ [**]

Payments will be made by Barrier to Abbott as follows:

-     US$ [**] within 30 days of signature of this Schedule B-4, and

-     US$ [**] Barrier's receipt of Abbott's report.

ABBOTT GMBH & CO. KG                      BARRIER THERAPEUTICS, INC.

By: /s/ Jorg Breitenbach                  By: /s/ Geert Cauwenbergh
    ----------------------------------       -----------------------------------
      Dr. Jorg Breitenbach
      Head of SOLIQS

By: /s/ Jon Lewis                         Date: 24/04/03
    ----------------------------------          --------------------------------
      Dr. Jon Lewis
      Head of Business Development
      SOLIQS

Date: 24th April 2003
<PAGE>

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

             ATTACHMENT TO DEVELOPMENT AND SUPPLY AGREEMENT BETWEEN
               ABBOTT GMBH & CO. KG AND BARRIER THERAPEUTICS, INC.

                                  SCHEDULE B-5

      DEVELOPMENT AND PREPARATION OF REGISTRATION BATCHES (STAGES 5 AND 6)

1.    AIM OF WORK

As a result of the pilot biostudy carried out by Barrier using Bulk Product
supplied by Abbott according to Schedule B-2, Barrier now wishes Abbott to
perform the necessary additional pharmaceutical development programme and
manufacture of six (6) batches each of [**] kg Bulk Product to be used for a
pivotal study and for long-term stability testing prior to submission by Barrier
of an NDA for Finished Product.

The technical responsibilities are described hereunder.

2.    RESPONSIBILITIES OF THE PARTIES

2.1   BARRIER

2.1.1 Barrier has already provided Abbott with sufficient Drug Substance for
      this programme.

2.1.2 Barrier, or its nominee, will perform milling and tabletting of the Bulk
      Product to produce Finished Product.

2.1.3 Barrier, or its nominee, will perform release and other testing in
      accordance with the Delimitation of Pharmaceutical Responsibilities
      Agreement set out in Schedule C to this Agreement.

2.2   ABBOTT

2.2.1 Abbott will carry out process development of the selected formulation of
      Bulk Product on its [**] in accordance with the Development Protocol
      agreed between the parties and attached hereto as Appendix A.

2.2.2 Abbott will provide Barrier, or its nominee, with samples (approximately
      [**] of Bulk Product resulting from this process development programme
      ("mock NDA lot") for Barrier, or its nominee, to carry out further milling
      and tabletting experiments.

2.2.3 Abbott will then manufacture six (6) batches of Bulk Product using the
      [**], each batch being [**] kg, and will supply these six (6) batches to
      Barrier, or its nominee, for milling and tabletting into Finished product.

2.2.4 Abbott will carry out in process controls and analytical characterization
      appropriate for NDA batches. Abbott will take forensic samples for the FDA
      and will provide such samples to Barrier or its nominee.
<PAGE>

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

2.2.5 Abbott will provide Barrier with copies of executed batch records,
      including all associated documentation such as test results and any
      deviation reports.

2.2.6 Abbott will provide Barrier with a final development report as soon as
      reasonably possible after completing the development programme.

3.    TIMELINES

Abbott will use all reasonable efforts to deliver the first [**] kg NDA batch of
Bulk Product to Barrier, or its nominee, by [**]. Abbott will use all reasonable
efforts to deliver the remaining five (5) [**] kg batches of Bulk Product to
Barrier, or its nominee, by [**]. Abbott will use all reasonable efforts to
complete the NDA documentation by end of [**].

4.    COSTS AND PAYMENT SCHEDULE

Abbott's costs for carrying out the programme of work set out in this Schedule
B-5 will be [**] made up of:

[**]

Payments will be made by Barrier to Abbott as follows:

[**]
<PAGE>

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

ABBOTT GMBH & CO. KG                              BARRIER THERAPEUTICS, INC.

By:   ppa  /s/ Jorg Breitenbach                   By:  /s/ Charles T. Nomides
       ----------------------------------          ------------------------
Dr. Jorg Breitenbach
Director, Head of SOLIQS

                                                  Date: 16-JUL-03
                                                       ----------
By:     /s/ Dieter Wagner
       ----------------------------------
Dr. Dieter Wagner
Divisional Vice President
German Operations

Date: June 17th 2003
      ---------------
                                   APPENDIX A

                                      [**]

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