QLT INC/BC
CHANGE OF CONTROL LETTER AGREEMENT DATED DECEMBER 9,2005
<DOCUMENT>
<TYPE>EX-10.42
<SEQUENCE>4
<FILENAME>o30599exv10w42.txt
<DESCRIPTION>CHANGE OF CONTROL LETTER AGREEMENT DATED DECEMBER 9,2005
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.42

                                                                December 9, 2005

STRICTLY PERSONAL AND CONFIDENTIAL

Mr. Michael Duncan,

c/o 2579 Midpoint Drive,
Fort Collins, Colorado
U.S.A. 80525

Dear Mike:

                                  INTRODUCTION

            A dedicated executive management team is essential to protecting and
enhancing the best interests of QLT Inc. ("QLT"), QLT USA, Inc. ("QLT USA") and
the shareholders of QLT. QLT USA wishes to provide you with compensation and
benefits arrangements which would come into effect in circumstances related to a
change in control of QLT, as the parent of QLT USA, which are competitive with
those of other corporations, in order to ensure that QLT USA receives the
benefit of the full attention and dedication of the executives at all times, and
notwithstanding any threatened or pending change in control. Given the
importance of your role with QLT USA, we wish to ensure that you are provided
with such an arrangement in the event of a change of control of QLT.

            The purpose of this Letter Agreement is to document the terms of the
severance package to which you as a Company executive shall be entitled if
material changes in the terms of your employment with QLT USA occur without your
consent, or if your employment with QLT USA is terminated, in connection with a
change in control of QLT. This Letter Agreement terminates and replaces the
Change of Control Agreement entered into between Atrix Laboratories, Inc. and
you dated April 5, 2004.

                  NOW THEREFORE in consideration of $10.00, the promises made by
each party to the other as set out in this Letter Agreement and other good and
valuable consideration, the receipt and sufficiency of which each of the parties
acknowledges, QLT USA and you agree as follows:

                                     PART I
                                   DEFINITIONS

1.1   DEFINITIONS. In this Letter Agreement:

      (a)   "AFFILIATE" has the meaning given to it in the Business Corporations
            Act (British Columbia);

      (b)   "BENEFIT PLANS" means the coverage under QLT USA's group benefit
            plan for employees which QLT USA provides to you and your eligible
            dependants, including all medical, dental, life and other benefit
            plans but excluding short and long term disability coverage;

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      (c)   "BOARD" means the Board of Directors of QLT;

      (d)   "CHANGE OF CONTROL" means any of the following events:

            (i)   MERGER. A merger, consolidation, reorganization or arrangement
                  involving QLT other than a merger, consolidation,
                  reorganization or arrangement in which stockholders of QLT
                  immediately prior to such merger, consolidation,
                  reorganization or arrangement own, directly or indirectly,
                  securities possessing at least 65% of the total combined
                  voting power of the outstanding voting securities of the
                  corporation resulting from such merger, consolidation,
                  reorganization or arrangement in substantially the same
                  proportion as their ownership of such voting securities
                  immediately prior to such merger, consolidation,
                  reorganization or arrangement;

            (ii)  TENDER OFFER. The acquisition, directly or indirectly, by any
                  person or related group of persons acting jointly or in
                  concert (other than QLT or a person that directly or
                  indirectly controls, is controlled by, or is under common
                  control with, QLT of beneficial ownership of securities
                  possessing more than 35% of the total combined voting power of
                  QLT's outstanding securities pursuant to a tender offer made
                  directly to QLT's stockholders;

            (iii) SALE. The sale, transfer or other disposition of all or
                  substantially all of the assets of QLT other than a sale,
                  transfer or other disposition to an Affiliate of QLT or to an
                  entity in which stockholders of QLT immediately prior to such
                  sale, transfer or other disposition own, directly or
                  indirectly, securities possessing at least 65% of the total
                  combined voting power of the outstanding voting securities of
                  the purchasing entity in substantially the same proportion as
                  their ownership of such voting securities immediately prior to
                  sale, transfer or other disposition; or

            (iv)  BOARD CHANGE. A change in the composition of the Board over a
                  period of 24 consecutive months or less such that a majority
                  of the Board members ceases to be comprised of individuals who
                  either have been:

                  (A)   Board members continuously since the beginning of such
                        period, or

                  (B)   appointed or nominated for election as Board members
                        during such period by at least a majority of the Board
                        members described in subsection (A) above who were still
                        in office at the time the Board approved such
                        appointment or nomination.

      (e)   "INVOLUNTARY TERMINATION" means any one of the following:

            (i)   the termination of your employment by QLT USA or the giving of
                  written notice to you by QLT USA of the intended termination
                  of your employment, in either case for reasons other than
                  cause, permanent disability or death, within the 24 month
                  period following the occurrence of a Change of Control, or

            (ii)  your giving written notice to QLT USA, within 24 months after
                  a Triggering Event, in which you advise that a Triggering
                  Event has occurred and tender your resignation from employment
                  with QLT USA;

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      (f)   "SUCCESSOR" shall mean any corporation which is the legal successor
            to QLT, or which acquires substantially all of the assets of QLT,
            pursuant to a Change of Control;

      (g)   "TRIGGERING EVENT" shall mean, without your express written consent,
            the occurrence of any one or more of the following circumstances
            after a Change of Control:

            (i)   the assignment to you of any duties which are materially
                  inconsistent, in an adverse respect, with your position,
                  authority, duties or responsibilities prior to the Change of
                  Control, or any other action by QLT USA or the Successor which
                  results in a material diminution in such position, authority
                  or responsibilities, except an isolated and inadvertent action
                  not taken in bad faith and which is remedied by QLT USA or the
                  Successor promptly after receipt of notice thereof from you;

            (ii)  any reduction by QLT USA or the Successor in your base salary;

            (iii) a reduction by QLT USA or the Successor of 25% or more of your
                  annual cash incentive compensation opportunity;

            (iv)  QLT USA or the Successor's requiring you to, or notifying you
                  that you will be required to, relocate to or be based at, or
                  situate one day or more per week in, a location which is 100
                  kilometers or more from the location where you were based
                  immediately prior to the Change of Control;

            (v)   the failure by QLT USA or the Successor to continue,
                  substantially as in effect immediately prior to the Change of
                  Control, all of QLT USA's Benefit Plans, in which you
                  participate (or substantially equivalent successor plans,
                  programs, policies, practices or arrangements) or the failure
                  by QLT USA or the Successor to continue your participation
                  therein on substantially the same basis as existed immediately
                  prior to the Change of Control;

            (vi)  the failure of QLT or QLT USA to obtain an agreement from any
                  Successor to assume and agree to perform this Letter
                  Agreement, as contemplated in Section 3.5 of this Letter
                  Agreement, and your Employment Agreement with QLT USA (the
                  "Employment Agreement"); or

            (vii) any purported termination by QLT USA or the Successor of your
                  employment other than for cause, permanent disability or
                  death.

                                     PART II
                           CHANGE OF CONTROL BENEFITS

2.1   SEVERANCE PAYMENT. Upon the occurrence of an Involuntary Termination, you
      shall receive a severance payment from QLT USA equal to the base salary
      and maximum bonus entitlement to which you would have been entitled in an
      18 MONTH PERIOD (the "Severance Period"), calculated as set out below.
      Notwithstanding the foregoing, in the event QLT USA in its sole discretion
      elects to pay the amounts set out in this Section 2.1 (the "Severance
      Pay") in lieu of notice, payment of the Severance Pay will be subject to,
      and will be made 10 days after, receipt by QLT of a release properly
      executed by you, which release will be in the form set out in SCHEDULE A
      (with such modifications as may be

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      required by QLT USA to ensure that such release is enforceable under the
      laws and circumstances in effect at such time). In the event that you fail
      to execute and deliver to QLT USA that release within 10 days after the
      termination of your employment, QLT USA will not be obligated to pay or
      provide to you the Severance Pay.

            (a)   the rate of base salary will be that in effect at the time of
                  the Involuntary Termination or as was in effect immediately
                  prior to the occurrence of a Triggering Event, whichever rate
                  is greater; and

            (b)   the maximum bonus entitlement will be calculated as the
                  maximum amount available to you under QLT USA's cash incentive
                  compensation plan at the time of the Involuntary Termination
                  as if 100% of your individual goals and the corporate goals
                  were met but not exceeded or the entitlement which was
                  available to you immediately prior to the occurrence of a
                  Triggering Event, whichever amount is greater, pro-rated for
                  any portion of the Severance Period of less than a year.

2.2 OTHER COMPENSATION. In addition to the amounts paid under Section 2.1, upon
the occurrence of an Involuntary Termination, QLT USA shall:

            (a)   EXPENSES - reimburse you for all reasonable business related
                  promotion, entertainment and/or travel expenses incurred by
                  you during the course of your employment with QLT USA, subject
                  to the expense reimbursement provisions set out in your
                  Employment Agreement with QLT USA and QLT USA's Policy and
                  Procedures Manual, as amended from time to time;

            (b)   VACATION - make a payment to you in respect of your accrued
                  but unpaid vacation pay up to and including your last day of
                  employment with QLT USA;

            (c)   CASH INCENTIVE COMPENSATION EARNED PRIOR TO INVOLUNTARY
                  TERMINATION - in addition to the payments under Section 2.1(b)
                  above, QLT USA shall make a payment to you in respect of your
                  entitlement to participate in QLT USA's cash incentive
                  compensation plan in respect of the current calendar year, and
                  the prior year if such payment has not yet been made, to be
                  pro-rated with respect to the portion of the current calendar
                  year worked by you up to and including your last day of
                  employment with QLT USA and, in respect of the current
                  calendar year, shall be calculated at the maximum annual bonus
                  entitlement available to you under QLT USA's cash incentive
                  compensation plan at the time of the Involuntary Termination
                  as if 100% of your individual goals and the corporate goals
                  were met but not exceeded or the entitlement which was
                  available to you immediately prior to the occurrence of any
                  prior Triggering Event, whichever amount is greater;

            (d)   BENEFITS - If:

                  I.    You elect continued coverage under QLT USA's health plan
                        pursuant to the Comprehensive Omnibus Reconciliation Act
                        of 1985, as amended ("COBRA"), then QLT USA will
                        continue to pay you QLT USA's portion of the premium for
                        your continued coverage under the QLT USA health plan
                        until the first to occur of (A) the expiry of the Notice
                        Period, and (B) the date on which your COBRA
                        continuation period terminates in accordance with COBRA;
                        and

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                  II.   you elects continued coverage under QLT USA's life
                        insurance plan, then QLT USA will continue to pay QLT
                        USA's portion of the premium for your continued coverage
                        under QLT USA's life insurance plan, or if continued
                        coverage under QLT USA's life insurance plan is not
                        available pursuant to the terms of such plan, then QLT
                        USA will pay to you the amount of the premium that would
                        otherwise be payable by QLT USA if your employment were
                        not terminated until the end of the Notice Period. you
                        acknowledge and agree that pension and short and long
                        term disability plans provided through QLT USA will not
                        be continued beyond your Last Active Day.

                        (collectively, the "BENEFITS COMPENSATION");

            (e)   RELOCATION EXPENSES - pay any relocation expenses
                  reimbursement to which you may be entitled under the terms of
                  your Employment Agreement with QLT USA, such expenses to be
                  calculated and paid in accordance with terms of your
                  Employment Agreement, provided that there is no duplication of
                  payments pursuant to the Employment Agreement and this clause;

            (f)   OUT-PLACEMENT COUNSELLING - reimburse you for out-placement
                  counselling services from a qualified counsellor to be agreed
                  to by you and QLT USA to a maximum of U.S.$5,000 for services
                  rendered to you in seeking alternative employment.

            409A TAXES. To the extent applicable, this Letter Agreement will be
            interpreted in accordance with Section 409A of the Internal Revenue
            Code ("CODE") and Department of Treasury regulations and other
            interpretive guidance issued thereunder. Notwithstanding anything to
            the contrary in this Letter Agreement, in the event that QLT USA
            determines that amounts payable under this Letter Agreement may be
            subject to Code Section 409A, QLT USA may adopt such amendments to
            this Letter Agreement or adopt other policies and procedures
            (including amendments, policies and procedures with retroactive
            effect), or take any other actions that QLT USA determines are
            necessary or appropriate to (a) exempt the Award from Code Section
            409A and/or preserve the intended tax treatment of the benefits
            provided with respect to the payments under this Agreement, or (b)
            comply with the requirements of Code Section 409A and related
            Department of Treasury guidance. You acknowledge that compliance
            with Code Section 409A may require that payments under the Letter
            Agreement be delayed until the end of six months following you's
            termination of employment.

2.3 TIMING OF PAYMENT. The amounts set out in Sections 2.1 and 2.2 shall be paid
to you in a lump sum payment and will, in the case of the Severance Pay be made
10 days after receipt by QLT of a release properly executed by you, which
release will be in the form set out in SCHEDULE A, or in the case of the other
payments owing under Sections 2.2 will be made within 30 days of your
Involuntary Termination, in the same manner as if you were employed throughout
the Severance Period.

2.4 NO DUPLICATION. QLT USA agrees that an Involuntary Termination by you, as
defined in subsection 1.1(e)(ii), shall constitute a termination of your
employment by QLT USA without cause pursuant to your Employment Agreement and
any other agreement in effect between you and QLT USA. In the event that the
severance payment and other compensation provisions set out in Sections 2.1 and
2.2

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of this Letter Agreement and the severance payment provisions in your Employment
Agreement with QLT USA are both applicable, you agree that, upon QLT USA's
request, you shall given written notice to QLT USA with respect to which
agreement which you wish to be paid out under and that you shall not be entitled
to severance pay under both agreements.

2.5 OPTIONS. Upon the occurrence of an Involuntary Termination, the provisions
of your Stock Option Agreement(s) with QLT USA shall govern all stock option
issues, including, without limitation, acceleration of vesting and the time
period remaining to exercise any vested options.

2.6 ACKNOWLEDGEMENT. In the event of an Involuntary Termination, payment by QLT
USA of the amounts set out in Sections 2.1 and 2.2 or, if you elect to receive
severance under your Employment Agreement payment of the amounts set out
therein, in lieu of receiving a duplicative payment hereunder, shall be in full
and final satisfaction of all amounts that might otherwise be payable by QLT USA
to you by way of compensation for length of service, damages in lieu of notice
of termination or any other obligations arising under your employment with QLT
USA and QLT USA shall have no further obligations, statutory or otherwise,
arising out of or in respect of your employment.

2.7 TERMINATION FOR CAUSE, PERMANENT DISABILITY OR DEATH. For greater certainty,
if your employment is terminated for cause, permanent disability or death or you
terminate your employment other than as an Involuntary Termination, you shall
not be entitled to payment of the amounts under this Letter Agreement and the
terms of your Employment Agreement with QLT USA shall govern.

2.8 WAIVER OF NON-COMPETITION COVENANT. Effective upon your Involuntary
Termination, QLT USA hereby waives any and all rights it has to insist upon
compliance with or to enforce any covenant, undertaking or agreement by you
under your Employment Agreement or otherwise, pursuant to which you have agreed
not to compete with QLT USA in your future employment or otherwise limit your
future employment opportunities. Your obligations of confidentiality to QLT USA
contained in your Employment Agreement and the Proprietary Information and
Inventions Agreement for Employees dated May 30, 2002 entered into between you
and QLT USA (formerly Atrix Laboratories, Inc.) shall remain in full force and
effect and are not altered by this Letter Agreement.

2.9 RIGHT TO WAIVE ANY AND ALL CONSIDERATION. In your discretion, upon your
written request to QLT USA made within 15 days of your Involuntary Termination,
you may elect to irrevocably waive your right to any of the consideration
payable by QLT USA pursuant to this Letter Agreement.

                                    PART III
                            MISCELLANEOUS PROVISIONS

3.1 TERM OF AGREEMENT. This Letter Agreement shall remain in effect for the term
of your employment with QLT USA and for a further six month period thereafter,
unless the parties mutually agree to an earlier termination, provided that the
expiry or termination of this Letter Agreement shall not affect the rights and
obligations of the parties arising under this Letter Agreement prior to its
termination or expiry.

3.2 LEGAL FEES. QLT USA shall pay, to the full extent permitted by law, all
legal fees and expenses which you may reasonably incur as a result of any
contest (regardless of the outcome thereof) by QLT USA or its successors or
Affiliates, you or others of the validity or enforceability of, or liability
under,

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any provision of this Letter Agreement or any guarantee of performance thereof
(including as a result of any contest by you about the amount of any payment
pursuant to this Letter Agreement).

3.3 WITHHOLDING TAXES. QLT USA may withhold from any amounts payable under this
Letter Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

3.4 GENERAL CREDITOR STATUS. The benefits to which you may become entitled under
this Letter Agreement shall be paid, when due, from the general assets of QLT
USA. Your right (or the right of the executors or administrators of your estate)
to receive any such payments shall at all times be that of a general creditor of
QLT USA and shall have no priority over the claims of other general creditors of
QLT USA.

3.5 SUCCESSORS; BINDING AGREEMENT. QLT USA shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets to assume and agree to perform
this Letter Agreement by express written agreement in the same manner and to the
same extent that it would be required to perform it if no such succession had
taken place. Failure of QLT USA to obtain such assumption and agreement within
30 days of any such succession shall be a breach of this Letter Agreement and
shall entitle you to compensation from QLT USA in the same amount and on the
same terms as you would be entitled under this Letter Agreement, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date of the Involuntary Termination.

3.6 DEATH. Notwithstanding anything else in this Letter Agreement, should you
die after becoming entitled to benefits under this Letter Agreement but before
receipt of all benefits to which you became entitled under this Letter
Agreement, then the payment of such benefits shall be made, on the due date or
dates hereunder had you survived, to the executors or administrators of your
estate.

3.7 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Colorado and the laws of the United
States in force therein without regard to its conflict of law rules. The parties
agree that by executing this Agreement they have attorned to the jurisdiction of
the courts of Colorado and the appellate courts therefrom.

3.8 NOTICE. The parties agree that any notice or other communication required to
be given under this Letter Agreement will be in writing and will be delivered
personally to the addresses set forth on page 1 of this Letter Agreement (or, in
your case, to the most recent address for you which QLT USA has on record), or
to such other addresses and persons as may from time to time be notified in
writing by the parties.

3.9 ENTIRE AGREEMENT. This Letter Agreement, the Employment Agreement, the
Proprietary Information and Inventions Agreement for Employees referred to in
paragraph 2.8 above and any Stock Option Agreements you have with QLT USA
constitute the entire agreement between QLT USA and you with respect to the
subject matter hereof, and supersede all previous communications, understandings
and agreements (whether verbal or written) between QLT USA and you regarding the
subject matter hereof. To the extent that there is any conflict between the
provisions of this Letter Agreement, the Employment Agreement, the Proprietary
Information and Inventions Agreement for Employees and any Stock Option
Agreements between you and QLT USA, the following provisions shall apply:

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            (i)   If the conflict is with respect to an event, entitlement or
                  obligation in the event of a Change of Control, the provisions
                  of this Letter Agreement shall govern (unless you and QLT USA
                  otherwise mutually agree).

            (ii)  If the conflict is with respect to an entitlement or
                  obligation with respect to stock options of QLT USA, the
                  provisions of the Stock Option Agreements shall govern (unless
                  you and QLT USA otherwise mutually agree).

            (iii) In the event of any other conflict, the provisions of the
                  Employment Agreement (which incorporate the terms of the
                  Proprietary Information and Inventions Agreement for
                  Employees) shall govern (unless you and QLT USA otherwise
                  mutually agree).

3.10 SEVERABILITY OF PROVISIONS. If any provision of this Letter Agreement as
applied to either party or to any circumstance should be adjudged by a court of
competent jurisdiction to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the maximum extent
permissible by law):

            (i)   The application of that provision under circumstances
                  different from those adjudicated by the court;

            (ii)  The application of any other provision of this Letter
                  Agreement; or

            (iii) The enforceability or invalidity of this Letter Agreement as a
                  whole.

If any provision of this Letter Agreement becomes or is deemed invalid, illegal
or unenforceable in any jurisdiction by reason of the scope, extent or duration
of its coverage, then the provision shall be deemed amended to the extent
necessary to conform to applicable law so as to be valid and enforceable or, if
the provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this
Letter Agreement shall continue in full force and effect.

3.11 CAPTIONS. The captions appearing in this Letter Agreement have been
inserted for reference and as a matter of convenience and in no way define,
limit or enlarge the scope or meaning of this Letter Agreement or any provision.

3.12 AMENDMENTS. Any amendment to this Letter Agreement shall only be effective
if the amendment is in writing and is signed by QLT USA and by you.

3.13 REMEDIES. All rights and remedies provided pursuant to this Letter
Agreement or by law shall be cumulative, and no such right or remedy shall be
exclusive of any other. A party may pursue any one or more rights or remedies
hereunder or may seek damages or specific performance in the event of another
party's breach hereunder or may pursue any other remedy by law or equity,
whether or not stated in this Letter Agreement.

3.14 NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Letter Agreement shall
confer upon you any right to continue in the employment of QLT USA for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of QLT USA or you, which rights are hereby expressly reserved by
each, to terminate your employment at any time in accordance with the terms of
your Employment Agreement.

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            Please indicate your acceptance of the foregoing provisions of this
Letter Agreement by signing the enclosed copy of this Letter Agreement and
returning it to QLT USA.

QLT USA, INC.

By:        /s/ Robert L. Butchofsky
       ------------------------------
       Robert L. Butchofsky,
       Director

ACCEPTED AND AGREED TO this ___ day of ________, 2005 by:

Signature:     /s/ Michael R. Duncan
            --------------------------
            MICHAEL R. DUNCAN

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                                   SCHEDULE A

                                 FORM OF RELEASE

                      EMPLOYEE ACKNOWLEDGEMENT AND RELEASE

RELEASE

In exchange for my receipt of severance pay and other benefits to which I am not
otherwise entitled, I hereby release acquit and forever discharge QLT USA, Inc.,
including its officers, directors, agents, attorneys, servants, employees,
stockholders, successors, assigns, subsidiaries and affiliates (collectively
"QLT USA"), of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligation of
every kind and nature, in law, equity or otherwise, known and unknown, suspected
and unsuspected, disclosed and undisclosed, arising at any time before and
including my employment termination date, including, but not limited to:

            (a)   any and all such claims and demands directly or indirectly
                  arising out of or in any way relation to my employment and the
                  termination of my employment, claims or demands related to
                  salary, bonuses, commissions, stock, stock options, or any
                  other ownership interests in QLT USA (including QLT Inc.),
                  vacation pay, fringe benefits, expense, reimbursements,
                  sabbatical benefits, severance benefits, or any other form of
                  compensation;

            (b)   claims pursuant to any federal, state or local law or cause of
                  action, as amended, including but not limited to the: Federal
                  Age Discrimination in Employment Act ("ADEA"), Title VII of
                  the Civil Rights Act of 1964, Civil Rights Act of 1866, Fair
                  Labor Standards Act, Older Workers Benefit Protection Act,
                  Employee Retirement Income Security Act, Family and Medical
                  Leave Act, Americans with Disabilities Act, Colorado Wage Act
                  and Colorado Anti-Discrimination Act; and

            (c)   any and all claims related to wrongful discharge, harassment,
                  breach of the covenant of good faith and fair dealing,
                  contract law, tort law, discrimination, fraud, negligence,
                  personal injury, loos of income, defamation or emotional
                  distress.

I acknowledge that, among other things, I am waiving and releasing any rights I
may have under the ADEA, that this waiver and release is knowing, voluntary and
willing, and that the consideration given for this waiver and release is in
addition to anything of value to which I was already entitled as an employee of
QLT USA. I further acknowledge that I have been advised that:

                  (a)   the waiver and release granted herein does not relate to
                        claims which may arise after this release is executed;

                  (b)   I should consult with an attorney prior to executing
                        this release (although I may voluntarily choose not to
                        do so);

                  (c)   I have (45 days if my age is 40 or over and 21 days if I
                        am under the age of 40) beginning the day after I
                        receive this release in which to consider it, after
                        which QLT USA's offer to enter into the Letter
                        Agreement, to which this release is attached, will be

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                        terminated and withdrawn if I have not executed the
                        Letter Agreement and this release (although I may
                        voluntarily choose to execute the documents earlier);

                  (d)   I have seven (7) days beginning the day after I execute
                        this release to revoke my consent to the release. I
                        agree that the revocation must be in writing and
                        hand-delivered or mailed to QLT USA, Inc. If mailed, the
                        revocation must be postmarked within the seven (7) day
                        period, properly addressed to QLT USA, Inc. at 2579
                        Midpoint Drive, Fort Collins, Colorado, U.S.A., 80525,
                        Attention: President, and sent by certified mail, return
                        receipt requested. I understand that I will not receive
                        any payment under this Letter Agreement if I revoke the
                        Letter Agreement and in any event, I understand that I
                        will not receive any settlement payment until after the
                        seven (7) day revocation period has expired;

                  (e)   the Letter Agreement shall not be effective and
                        enforceable and no severance paid until the seven (7)
                        day revocation period has expired;

                  (f)   by executing the Letter Agreement and this release I am
                        representing that I am entering into these agreements
                        and releases based upon my own knowledge and judgement
                        and that I have not relied on any representations or
                        promises of QLT USA other than those contained in the
                        Letter Agreement and this release;

                  (g)   if any facts or matters upon which I have relied in
                        entering into the Letter Agreement and this release
                        shall later prove to be otherwise, the Letter Agreement
                        and this release shall nevertheless remain in full force
                        and effect; and

                  (h)   by executing the Letter Agreement and this release I am
                        representing that I am entering into these agreements
                        and releases voluntarily, without coercion, and with
                        full knowledge that they are intended, to the maximum
                        extent permitted by law, as a complete and final
                        releases and waiver of any and all of my claims.

I also acknowledge that a general release does not extend to claims that the
creditor does no know or suspect to exist in the creditor's favor at the time of
executing the release, which if known by the creditor would and must have
materially affected the creditor's settlement with the debtor. I hereby
expressly waive and relinquish all rights and benefits under any such principal
of law in any jurisdiction with respect to any unknown or unsuspected claims I
may have against QLT USA.

I HAVE READ AND UNDERSTOOD, AND I AGREE COMPLETELY TO THE TERMS STATED ABOVE.

Date:_____________________     By:_______________________________
                                  _______________________________
                                  Printed Name

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