Confidential Treatment Request Filed With The Secretary Of The Securities And - OSI PHARMACEUTICALS INC - 8-16-1999 by OSIP-Agreements

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									Portions of Exhibit 10.2 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

ANADERM RESEARCH CORP. Amended and Restated Stockholders' Agreement dated April 23, 1999 (in substitution for the Stockholders' Agreement dated April 23, 1996, as amended on September 10, 1998)

TABLE OF CONTENTS ARTICLE I - DEFINITIONS........................................................2 ARTICLE II - CAPITAL CONTRIBUTIONS.............................................5 2.1. Capital Contributions.............................................5 2.2. Non Disclosure....................................................7 ARTICLE III - APPLICABILITY; RESTRICTIONS ON TRANSFER OF SHARES................7 3.1. Amendment and Restatement of Original Stockholders' Agreement.....7 3.2. Shares Subject to Agreement.......................................7 3.3. General Restriction on Transfer...................................7 3.4. Permitted Transfers...............................................8 ARTICLE IV - CORPORATE GOVERNANCE..............................................8 4.1. Board of Directors................................................8 4.2. Nomination and Election of Directors..............................9 4.3. Board of Directors................................................9 4.4. Officers of the Company...........................................9 4.5. Quorum of the Board..............................................10 4.6. Action by the Board of Directors.................................10 4.7. Quorum of Stockholders...........................................11 4.8. Action by Stockholder............................................11 ARTICLE V - DISPOSITION OF SHARES.............................................12 5.1. Right of First Refusal...........................................12 5.2. Involuntary Transfers............................................15 5.3. Put and Call Rights..............................................16 5.4. Fair Value.......................................................18 5.5. Tag Along Rights.................................................20 5.6. Take Along Right.................................................22 5.7. Stock Purchase Assignment........................................23 ARTICLE VI - PREEMPTIVE RIGHTS................................................23 6.1. Preemptive Rights................................................23 ARTICLE VII - DEVELOPMENT OF A LEAD COMPOUND..................................24 7.1. Pfizer's Right of First Refusal for Initial Development..........24 7.2. Pfizer's Right of First Refusal for Further Development..........26 7.3. Development by Pfizer............................................26 7.4. Development by the Company.......................................28 7.5. Analog Manufacture...............................................29 7.6. Approval of Analog Production and Screening......................29 7.7. Assignment of Analog Rights......................................29

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7.8. 7.9.

Development of Lead Compound for Different Indications...........29 Request to Cease Lead Compound Development.......................30

ARTICLE VIII - LEGENDING OF SECURITIES........................................30 8.1. Legends..........................................................30

ANADERM RESEARCH CORP. Amended and Restated Stockholders' Agreement dated April 23, 1999 (in substitution for the Stockholders' Agreement dated April 23, 1996, as amended on September 10, 1998)

TABLE OF CONTENTS ARTICLE I - DEFINITIONS........................................................2 ARTICLE II - CAPITAL CONTRIBUTIONS.............................................5 2.1. Capital Contributions.............................................5 2.2. Non Disclosure....................................................7 ARTICLE III - APPLICABILITY; RESTRICTIONS ON TRANSFER OF SHARES................7 3.1. Amendment and Restatement of Original Stockholders' Agreement.....7 3.2. Shares Subject to Agreement.......................................7 3.3. General Restriction on Transfer...................................7 3.4. Permitted Transfers...............................................8 ARTICLE IV - CORPORATE GOVERNANCE..............................................8 4.1. Board of Directors................................................8 4.2. Nomination and Election of Directors..............................9 4.3. Board of Directors................................................9 4.4. Officers of the Company...........................................9 4.5. Quorum of the Board..............................................10 4.6. Action by the Board of Directors.................................10 4.7. Quorum of Stockholders...........................................11 4.8. Action by Stockholder............................................11 ARTICLE V - DISPOSITION OF SHARES.............................................12 5.1. Right of First Refusal...........................................12 5.2. Involuntary Transfers............................................15 5.3. Put and Call Rights..............................................16 5.4. Fair Value.......................................................18 5.5. Tag Along Rights.................................................20 5.6. Take Along Right.................................................22 5.7. Stock Purchase Assignment........................................23 ARTICLE VI - PREEMPTIVE RIGHTS................................................23 6.1. Preemptive Rights................................................23 ARTICLE VII - DEVELOPMENT OF A LEAD COMPOUND..................................24 7.1. Pfizer's Right of First Refusal for Initial Development..........24 7.2. Pfizer's Right of First Refusal for Further Development..........26 7.3. Development by Pfizer............................................26 7.4. Development by the Company.......................................28 7.5. Analog Manufacture...............................................29 7.6. Approval of Analog Production and Screening......................29 7.7. Assignment of Analog Rights......................................29

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7.8. 7.9.

Development of Lead Compound for Different Indications...........29 Request to Cease Lead Compound Development.......................30

ARTICLE VIII - LEGENDING OF SECURITIES........................................30 8.1. Legends..........................................................30 ARTICLE IX - TERMINATION AND SURVIVAL OF PROVISIONS...........................31 9.1. Termination......................................................31 9.2. Survival.........................................................31 ARTICLE X - REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS....................31 10.1. Representations and Warranties of Each Stockholder...............31 ARTICLE XI - INSUFFICIENT SURPLUS AND INSOLVENCY..............................33

TABLE OF CONTENTS ARTICLE I - DEFINITIONS........................................................2 ARTICLE II - CAPITAL CONTRIBUTIONS.............................................5 2.1. Capital Contributions.............................................5 2.2. Non Disclosure....................................................7 ARTICLE III - APPLICABILITY; RESTRICTIONS ON TRANSFER OF SHARES................7 3.1. Amendment and Restatement of Original Stockholders' Agreement.....7 3.2. Shares Subject to Agreement.......................................7 3.3. General Restriction on Transfer...................................7 3.4. Permitted Transfers...............................................8 ARTICLE IV - CORPORATE GOVERNANCE..............................................8 4.1. Board of Directors................................................8 4.2. Nomination and Election of Directors..............................9 4.3. Board of Directors................................................9 4.4. Officers of the Company...........................................9 4.5. Quorum of the Board..............................................10 4.6. Action by the Board of Directors.................................10 4.7. Quorum of Stockholders...........................................11 4.8. Action by Stockholder............................................11 ARTICLE V - DISPOSITION OF SHARES.............................................12 5.1. Right of First Refusal...........................................12 5.2. Involuntary Transfers............................................15 5.3. Put and Call Rights..............................................16 5.4. Fair Value.......................................................18 5.5. Tag Along Rights.................................................20 5.6. Take Along Right.................................................22 5.7. Stock Purchase Assignment........................................23 ARTICLE VI - PREEMPTIVE RIGHTS................................................23 6.1. Preemptive Rights................................................23 ARTICLE VII - DEVELOPMENT OF A LEAD COMPOUND..................................24 7.1. Pfizer's Right of First Refusal for Initial Development..........24 7.2. Pfizer's Right of First Refusal for Further Development..........26 7.3. Development by Pfizer............................................26 7.4. Development by the Company.......................................28 7.5. Analog Manufacture...............................................29 7.6. Approval of Analog Production and Screening......................29 7.7. Assignment of Analog Rights......................................29

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7.8. 7.9.

Development of Lead Compound for Different Indications...........29 Request to Cease Lead Compound Development.......................30

ARTICLE VIII - LEGENDING OF SECURITIES........................................30 8.1. Legends..........................................................30 ARTICLE IX - TERMINATION AND SURVIVAL OF PROVISIONS...........................31 9.1. Termination......................................................31 9.2. Survival.........................................................31 ARTICLE X - REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS....................31 10.1. Representations and Warranties of Each Stockholder...............31 ARTICLE XI - INSUFFICIENT SURPLUS AND INSOLVENCY..............................33 ARTICLE XII - MISCELLANEOUS...................................................34 12.1. Notices..........................................................34 12.2. Entire Agreement.................................................37 12.3. Governing Law....................................................38 APPENDIX A....................................................................40

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7.8. 7.9.

Development of Lead Compound for Different Indications...........29 Request to Cease Lead Compound Development.......................30

ARTICLE VIII - LEGENDING OF SECURITIES........................................30 8.1. Legends..........................................................30 ARTICLE IX - TERMINATION AND SURVIVAL OF PROVISIONS...........................31 9.1. Termination......................................................31 9.2. Survival.........................................................31 ARTICLE X - REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS....................31 10.1. Representations and Warranties of Each Stockholder...............31 ARTICLE XI - INSUFFICIENT SURPLUS AND INSOLVENCY..............................33 ARTICLE XII - MISCELLANEOUS...................................................34 12.1. Notices..........................................................34 12.2. Entire Agreement.................................................37 12.3. Governing Law....................................................38 APPENDIX A....................................................................40

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ANADERM RESTATED AND AMENDED STOCKHOLDERS' AGREEMENT THIS RESTATED AND AMENDED STOCKHOLDERS'AGREEMENT ("Agreement") is made as of the 23rd day of April 1999, among ANADERM RESEARCH CORP., a Delaware corporation, having its principal place of business at 235 East 42nd Street, New York, New York 10017 (the "Company"), PFIZER INC., a Delaware corporation, having its principal place of business at 235 East 42nd Street, New York, New York 10017 ("Pfizer"), OSI PHARMACEUTICALS, INC., a Delaware corporation, formerly known as Oncogene Science, Inc., having its principal place of business at 106 Charles Lindbergh Boulevard, Uniondale, New York 11553 ("OSI"), NEW YORK UNIVERSITY, a New York corporation, having a principal place of business at 550 First Avenue, New York, New York 10016 ("NYU"), ** , each having a business address at New York University Medical Center, 550 First Avenue, New York, New York 10016 ** collectively referred to herein as the "NYU Faculty Members"). Pfizer, OSI, NYU and the NYU Faculty Members shall collectively be referred to herein as the "Stockholders". WHEREAS, the Company was organized to discover, develop and market pharmaceutical products for the prevention or treatment of baldness and wrinkles, and for the control of skin and hair pigmentation; and ** This portion has been redacted pursuant to a request for confidential treatment.

WHEREAS, the Stockholders entered into a Stockholders' Agreement dated April 23, 1996 as amended by the Amendment to the Stockholders' Agreement dated September 10, 1998 (together the "Original Stockholders' Agreement") which they now wish to be amended and restated by this Agreement; WHEREAS, the NYU Faculty Members have exercised their options under the Stock Option Agreement defined in the Original Stockholders' Agreement; WHEREAS, the Stockholders have entered into a subscription agreement dated February 27, 1998 (the "Subscription Agreement") which provided for additional Stockholder capital contributions to the Company by certain of the Stockholders in exchange for shares in the Company; and WHEREAS, the parties to this Agreement believe it is in their mutual best interest to provide for continuity and harmony in the management and the policies of the Company and therefore the parties hereto wish to amend and restate the Original Stockholders' Agreement as set out below. NOW, THEREFORE, in consideration of the agreements and covenants contained herein and for other valuable

ANADERM RESTATED AND AMENDED STOCKHOLDERS' AGREEMENT THIS RESTATED AND AMENDED STOCKHOLDERS'AGREEMENT ("Agreement") is made as of the 23rd day of April 1999, among ANADERM RESEARCH CORP., a Delaware corporation, having its principal place of business at 235 East 42nd Street, New York, New York 10017 (the "Company"), PFIZER INC., a Delaware corporation, having its principal place of business at 235 East 42nd Street, New York, New York 10017 ("Pfizer"), OSI PHARMACEUTICALS, INC., a Delaware corporation, formerly known as Oncogene Science, Inc., having its principal place of business at 106 Charles Lindbergh Boulevard, Uniondale, New York 11553 ("OSI"), NEW YORK UNIVERSITY, a New York corporation, having a principal place of business at 550 First Avenue, New York, New York 10016 ("NYU"), ** , each having a business address at New York University Medical Center, 550 First Avenue, New York, New York 10016 ** collectively referred to herein as the "NYU Faculty Members"). Pfizer, OSI, NYU and the NYU Faculty Members shall collectively be referred to herein as the "Stockholders". WHEREAS, the Company was organized to discover, develop and market pharmaceutical products for the prevention or treatment of baldness and wrinkles, and for the control of skin and hair pigmentation; and ** This portion has been redacted pursuant to a request for confidential treatment.

WHEREAS, the Stockholders entered into a Stockholders' Agreement dated April 23, 1996 as amended by the Amendment to the Stockholders' Agreement dated September 10, 1998 (together the "Original Stockholders' Agreement") which they now wish to be amended and restated by this Agreement; WHEREAS, the NYU Faculty Members have exercised their options under the Stock Option Agreement defined in the Original Stockholders' Agreement; WHEREAS, the Stockholders have entered into a subscription agreement dated February 27, 1998 (the "Subscription Agreement") which provided for additional Stockholder capital contributions to the Company by certain of the Stockholders in exchange for shares in the Company; and WHEREAS, the parties to this Agreement believe it is in their mutual best interest to provide for continuity and harmony in the management and the policies of the Company and therefore the parties hereto wish to amend and restate the Original Stockholders' Agreement as set out below. NOW, THEREFORE, in consideration of the agreements and covenants contained herein and for other valuable consideration, receipt of which is hereby acknowledged, it is mutually agreed and covenanted by and among the parties to this Agreement as follows: ARTICLE I - DEFINITIONS As used in this Agreement or any of the Schedules or Exhibits hereto, the following terms have the meanings indicated. All capitalized terms used but not defined herein shall have the same meanings ascribed to them, respectively, in the Research Agreements (as defined in this Article 1), as such may be amended from time to time. 2

1.1 "Affiliate" means any corporation or other legal entity owning, directly or indirectly, 50% or more of the voting capital shares or similar voting securities of the Company, OSI or Pfizer, or any corporation or other legal entity 50% or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by the Company, OSI or Pfizer. However, a foreign corporation or other legal entity shall be considered an Affiliate of the Company, OSI or Pfizer, if the Company, OSI or Pfizer, respectively, owns the maximum amount of voting securities of such corporation or entity that a U. S. company is permitted to own under the laws of the applicable foreign country and such maximum amount is at least 40%.

WHEREAS, the Stockholders entered into a Stockholders' Agreement dated April 23, 1996 as amended by the Amendment to the Stockholders' Agreement dated September 10, 1998 (together the "Original Stockholders' Agreement") which they now wish to be amended and restated by this Agreement; WHEREAS, the NYU Faculty Members have exercised their options under the Stock Option Agreement defined in the Original Stockholders' Agreement; WHEREAS, the Stockholders have entered into a subscription agreement dated February 27, 1998 (the "Subscription Agreement") which provided for additional Stockholder capital contributions to the Company by certain of the Stockholders in exchange for shares in the Company; and WHEREAS, the parties to this Agreement believe it is in their mutual best interest to provide for continuity and harmony in the management and the policies of the Company and therefore the parties hereto wish to amend and restate the Original Stockholders' Agreement as set out below. NOW, THEREFORE, in consideration of the agreements and covenants contained herein and for other valuable consideration, receipt of which is hereby acknowledged, it is mutually agreed and covenanted by and among the parties to this Agreement as follows: ARTICLE I - DEFINITIONS As used in this Agreement or any of the Schedules or Exhibits hereto, the following terms have the meanings indicated. All capitalized terms used but not defined herein shall have the same meanings ascribed to them, respectively, in the Research Agreements (as defined in this Article 1), as such may be amended from time to time. 2

1.1 "Affiliate" means any corporation or other legal entity owning, directly or indirectly, 50% or more of the voting capital shares or similar voting securities of the Company, OSI or Pfizer, or any corporation or other legal entity 50% or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by the Company, OSI or Pfizer. However, a foreign corporation or other legal entity shall be considered an Affiliate of the Company, OSI or Pfizer, if the Company, OSI or Pfizer, respectively, owns the maximum amount of voting securities of such corporation or entity that a U. S. company is permitted to own under the laws of the applicable foreign country and such maximum amount is at least 40%. 1.2 "Anaderm Royalty" shall have the meaning given to such term in Section 7.3 hereof. 1.3 "Common Stock" shall mean the common stock of the Company, but unless otherwise indicated, any reference to shares of Common Stock outstanding shall not include shares of Common Stock underlying unexercised options, warrants, rights or convertible securities of the Company (unless such reference states that such amount is determined after giving effect to such exercise or conversion, until such options, warrants or rights have been duly exercised or convertible securities duly converted.). 1.4 "Drug Product" means a product that contains one or more therapeutically active compounds or that relates to a method of administering or using one or more therapeutically active compounds. 1.5 "Fair Value" means the price per share of Common Stock determined in accordance with Section 5.4. 3

1.6 "Field" means the (a) stimulation or control of hair growth, (b) prevention or reversal of wrinkling of the skin, or (c) alteration of skin or hair pigmentation, in each case in human subjects. 1.7 "Involuntary Transfer" means any involuntary sale, transfer, encumbrance or other disposition by, or in which, any Stockholder is deprived or divested of any right, title or interest in or to its shares of Common Stock,

1.1 "Affiliate" means any corporation or other legal entity owning, directly or indirectly, 50% or more of the voting capital shares or similar voting securities of the Company, OSI or Pfizer, or any corporation or other legal entity 50% or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by the Company, OSI or Pfizer. However, a foreign corporation or other legal entity shall be considered an Affiliate of the Company, OSI or Pfizer, if the Company, OSI or Pfizer, respectively, owns the maximum amount of voting securities of such corporation or entity that a U. S. company is permitted to own under the laws of the applicable foreign country and such maximum amount is at least 40%. 1.2 "Anaderm Royalty" shall have the meaning given to such term in Section 7.3 hereof. 1.3 "Common Stock" shall mean the common stock of the Company, but unless otherwise indicated, any reference to shares of Common Stock outstanding shall not include shares of Common Stock underlying unexercised options, warrants, rights or convertible securities of the Company (unless such reference states that such amount is determined after giving effect to such exercise or conversion, until such options, warrants or rights have been duly exercised or convertible securities duly converted.). 1.4 "Drug Product" means a product that contains one or more therapeutically active compounds or that relates to a method of administering or using one or more therapeutically active compounds. 1.5 "Fair Value" means the price per share of Common Stock determined in accordance with Section 5.4. 3

1.6 "Field" means the (a) stimulation or control of hair growth, (b) prevention or reversal of wrinkling of the skin, or (c) alteration of skin or hair pigmentation, in each case in human subjects. 1.7 "Involuntary Transfer" means any involuntary sale, transfer, encumbrance or other disposition by, or in which, any Stockholder is deprived or divested of any right, title or interest in or to its shares of Common Stock, including, without limitation, any transfer in connection with a divorce, death, bankruptcy (whether voluntary or involuntary), reorganization, insolvency or similar proceeding, distraint, levy, attachment, execution or other involuntary event of any nature whatsoever. 1.8 "NYU Research Agreement" means the Research and Licensing Agreement dated as of April 23, 1999 among the Company, NYU and Pfizer. 1.9 "OSI Compound File" means compounds maintained by OSI. 1.10 "OSI Research Agreement" means the Collaborative Research Agreement dated as of April 23, 1999, among the Company, OSI and Pfizer. 1.11 "Permitted Transferee" shall have the meaning given to such term in Section 3.4. 1.12 "Pfizer Compound File" means the compounds maintained by Pfizer's Central Research Division. 1.13 "Pfizer Selected Library" means a Selected Library within the Pfizer Compound File. 1.14 "Research Agreements" means the OSI Research Agreement and the NYU Research Agreement. 4

1.15 "Third Party" means a party other than Pfizer, Anaderm, OSI, NYU or an Affiliate of Pfizer, OSI or Anaderm. 1.16 "Transferred Shares" shall have the meaning set out in Section 5.2.

1.6 "Field" means the (a) stimulation or control of hair growth, (b) prevention or reversal of wrinkling of the skin, or (c) alteration of skin or hair pigmentation, in each case in human subjects. 1.7 "Involuntary Transfer" means any involuntary sale, transfer, encumbrance or other disposition by, or in which, any Stockholder is deprived or divested of any right, title or interest in or to its shares of Common Stock, including, without limitation, any transfer in connection with a divorce, death, bankruptcy (whether voluntary or involuntary), reorganization, insolvency or similar proceeding, distraint, levy, attachment, execution or other involuntary event of any nature whatsoever. 1.8 "NYU Research Agreement" means the Research and Licensing Agreement dated as of April 23, 1999 among the Company, NYU and Pfizer. 1.9 "OSI Compound File" means compounds maintained by OSI. 1.10 "OSI Research Agreement" means the Collaborative Research Agreement dated as of April 23, 1999, among the Company, OSI and Pfizer. 1.11 "Permitted Transferee" shall have the meaning given to such term in Section 3.4. 1.12 "Pfizer Compound File" means the compounds maintained by Pfizer's Central Research Division. 1.13 "Pfizer Selected Library" means a Selected Library within the Pfizer Compound File. 1.14 "Research Agreements" means the OSI Research Agreement and the NYU Research Agreement. 4

1.15 "Third Party" means a party other than Pfizer, Anaderm, OSI, NYU or an Affiliate of Pfizer, OSI or Anaderm. 1.16 "Transferred Shares" shall have the meaning set out in Section 5.2. 1.17 "Valid Claim" shall have the meaning given to such term in either of the Research Agreements, as applicable. 1.18 For purposes of this Agreement, a Human Therapeutic Product is considered to be "based on" a Lead Compound which is identified by screening a Pfizer Selected Library if the Human Therapeutic Product contains, or relates to a method of administering or using a Lead Compound identified by screening, and is part of, a Pfizer Selected Library or by screening Analogs of a compound from a Pfizer Selected Library. ARTICLE II - CAPITAL CONTRIBUTIONS 2.1. Capital Contributions. (a) As of the date of this Agreement, the capital structure of the Company is:
SHARES OF COMMON STOCK ** TOTAL ISSUED SHARES ---------** **

OWNERSHIP INTEREST ** **

** This portion has been redacted pursuant to a request for confidential treatment.

1.15 "Third Party" means a party other than Pfizer, Anaderm, OSI, NYU or an Affiliate of Pfizer, OSI or Anaderm. 1.16 "Transferred Shares" shall have the meaning set out in Section 5.2. 1.17 "Valid Claim" shall have the meaning given to such term in either of the Research Agreements, as applicable. 1.18 For purposes of this Agreement, a Human Therapeutic Product is considered to be "based on" a Lead Compound which is identified by screening a Pfizer Selected Library if the Human Therapeutic Product contains, or relates to a method of administering or using a Lead Compound identified by screening, and is part of, a Pfizer Selected Library or by screening Analogs of a compound from a Pfizer Selected Library. ARTICLE II - CAPITAL CONTRIBUTIONS 2.1. Capital Contributions. (a) As of the date of this Agreement, the capital structure of the Company is:
SHARES OF COMMON STOCK ** TOTAL ISSUED SHARES ---------** **

OWNERSHIP INTEREST ** **

** This portion has been redacted pursuant to a request for confidential treatment. 5

(b) Capital Contribution. In order to provide additional funding for the Company, Pfizer shall have the right (but not the obligation) to subscribe in cash from time to time for additional shares of Common Stock at the price of ** per share, up to a maximum of ** shares of Common Stock and the Company shall issue such additional shares as subscribed by Pfizer. Any share subscription by Pfizer under this section shall not be subject to the provisions of Article 6 herein, which the parties hereto hereby waive on behalf of themselves and their successors and assigns in accordance with this Agreement. (c) Other Capital Contributions. In addition to the capital contributions provided for in this section, additional contributions may be made to the capital of the Company in accordance with the General Corporation Law of the State of Delaware, subject to the provisions of Section 6.1 hereof. (d) The Pfizer Compound File and Other Support by Pfizer for the Company. To support the Company's research activities and subject as set out below, Pfizer may from time to time at its discretion permit the Company to use certain compounds from the Pfizer Compound File as it exists from time to time, solely for screening purposes in connection with the Research Program provided that the selection of compounds for use in screening satisfies the Company's research goals and is consistent with Pfizer corporate policy. Prior to implementing any screens, the Company will propose screens to Pfizer and Pfizer shall have the right to approve such screens. At any time after Pfizer has made available to the

** This portion has been redacted pursuant to a request for confidential treatment. 6

(b) Capital Contribution. In order to provide additional funding for the Company, Pfizer shall have the right (but not the obligation) to subscribe in cash from time to time for additional shares of Common Stock at the price of ** per share, up to a maximum of ** shares of Common Stock and the Company shall issue such additional shares as subscribed by Pfizer. Any share subscription by Pfizer under this section shall not be subject to the provisions of Article 6 herein, which the parties hereto hereby waive on behalf of themselves and their successors and assigns in accordance with this Agreement. (c) Other Capital Contributions. In addition to the capital contributions provided for in this section, additional contributions may be made to the capital of the Company in accordance with the General Corporation Law of the State of Delaware, subject to the provisions of Section 6.1 hereof. (d) The Pfizer Compound File and Other Support by Pfizer for the Company. To support the Company's research activities and subject as set out below, Pfizer may from time to time at its discretion permit the Company to use certain compounds from the Pfizer Compound File as it exists from time to time, solely for screening purposes in connection with the Research Program provided that the selection of compounds for use in screening satisfies the Company's research goals and is consistent with Pfizer corporate policy. Prior to implementing any screens, the Company will propose screens to Pfizer and Pfizer shall have the right to approve such screens. At any time after Pfizer has made available to the

** This portion has been redacted pursuant to a request for confidential treatment. 6

Company a compound for screening under this Section 2.1(d), Pfizer may require that the Company immediately return such compound if Pfizer has designated it as a clinical candidate or a backup to a clinical candidate and the Company shall, if requested in writing by Pfizer, forthwith cease all development of such compound and return the same to Pfizer. (e) The OSI Compound File. To support the Company's research activities, OSI may from time to time at its discretion permit the Company to use certain compounds from the OSI Compound File as it exists from time to time, solely for screening purposes in connection with the Research Program, provided that the selection of compounds for use in screening satisfies the Company's research goals and is consistent with OSI corporate policy. 2.2. Non Disclosure. Pfizer shall not be obliged to disclose information relating to a Pfizer compound or Pfizer Selected Library, including but not limited to chemical structures, methods of synthesis, structure-activity relationships, materials and methods for production, recovery and purification. ARTICLE III - APPLICABILITY; RESTRICTIONS ON TRANSFER OF SHARES 3.1. Amendment and Restatement of Original Stockholders' Agreement. Each of the Stockholders hereby acknowledges and agrees that the Original Stockholders' Agreement in its entirety is hereby amended and restated by this Agreement which shall apply in substitution therefor. 3.2. Shares Subject to Agreement. Each of the Stockholders hereby agrees that all shares of Common Stock held on the date hereof or acquired at any time hereafter by such Stockholder shall be subject to the provisions set forth in this Agreement. 3.3. General Restriction on Transfer. Each Stockholder hereby agrees not to sell, assign, hypothecate, transfer, pledge, encumber, give away, or otherwise dispose of any shares 7

of Common Stock that such Stockholder holds on the date hereof or acquires at any time hereafter except

Company a compound for screening under this Section 2.1(d), Pfizer may require that the Company immediately return such compound if Pfizer has designated it as a clinical candidate or a backup to a clinical candidate and the Company shall, if requested in writing by Pfizer, forthwith cease all development of such compound and return the same to Pfizer. (e) The OSI Compound File. To support the Company's research activities, OSI may from time to time at its discretion permit the Company to use certain compounds from the OSI Compound File as it exists from time to time, solely for screening purposes in connection with the Research Program, provided that the selection of compounds for use in screening satisfies the Company's research goals and is consistent with OSI corporate policy. 2.2. Non Disclosure. Pfizer shall not be obliged to disclose information relating to a Pfizer compound or Pfizer Selected Library, including but not limited to chemical structures, methods of synthesis, structure-activity relationships, materials and methods for production, recovery and purification. ARTICLE III - APPLICABILITY; RESTRICTIONS ON TRANSFER OF SHARES 3.1. Amendment and Restatement of Original Stockholders' Agreement. Each of the Stockholders hereby acknowledges and agrees that the Original Stockholders' Agreement in its entirety is hereby amended and restated by this Agreement which shall apply in substitution therefor. 3.2. Shares Subject to Agreement. Each of the Stockholders hereby agrees that all shares of Common Stock held on the date hereof or acquired at any time hereafter by such Stockholder shall be subject to the provisions set forth in this Agreement. 3.3. General Restriction on Transfer. Each Stockholder hereby agrees not to sell, assign, hypothecate, transfer, pledge, encumber, give away, or otherwise dispose of any shares 7

of Common Stock that such Stockholder holds on the date hereof or acquires at any time hereafter except pursuant to and in compliance with the terms and conditions of this Agreement. The Company hereby agrees that it will not transfer or recognize any transfer of Common Stock except in compliance with the terms of this Agreement. All certificates representing shares of Common Stock of the Company shall be legended in accordance with Article VIII hereof. 3.4. Permitted Transfers. Notwithstanding any provision to the contrary in this Article III, any Stockholder may, upon prior notice thereof to the Company, transfer title to its shares of Common Stock to (i) a trust established by such Stockholder, if the sole beneficiaries of such trust are the Stockholder, the Stockholder's spouse or the Stockholder's children, (ii) an Affiliate of such Stockholder or, (iii) in the case of any transfer of shares of Common Stock pursuant to Article 5 to Pfizer (each a "Permitted Transferee"), provided that in the case of each of the foregoing, such Permitted Transferee executes an instrument satisfactory to the Company agreeing to be bound by the terms and provisions of this Agreement. ARTICLE IV - CORPORATE GOVERNANCE 4.1. Board of Directors. In accordance with the By-Laws of the Company and Section 141 of the General Corporation Law of the State of Delaware, the Board of Directors shall be responsible for the governance of the Company. On the date hereof the Board of Directors consists of ** persons as provided in Section 4.3. At any time after the date hereof, the number of directors may be increased or decreased as provided in the Company By-Laws.

** This portion has been redacted pursuant to a request for confidential treatment. 8

of Common Stock that such Stockholder holds on the date hereof or acquires at any time hereafter except pursuant to and in compliance with the terms and conditions of this Agreement. The Company hereby agrees that it will not transfer or recognize any transfer of Common Stock except in compliance with the terms of this Agreement. All certificates representing shares of Common Stock of the Company shall be legended in accordance with Article VIII hereof. 3.4. Permitted Transfers. Notwithstanding any provision to the contrary in this Article III, any Stockholder may, upon prior notice thereof to the Company, transfer title to its shares of Common Stock to (i) a trust established by such Stockholder, if the sole beneficiaries of such trust are the Stockholder, the Stockholder's spouse or the Stockholder's children, (ii) an Affiliate of such Stockholder or, (iii) in the case of any transfer of shares of Common Stock pursuant to Article 5 to Pfizer (each a "Permitted Transferee"), provided that in the case of each of the foregoing, such Permitted Transferee executes an instrument satisfactory to the Company agreeing to be bound by the terms and provisions of this Agreement. ARTICLE IV - CORPORATE GOVERNANCE 4.1. Board of Directors. In accordance with the By-Laws of the Company and Section 141 of the General Corporation Law of the State of Delaware, the Board of Directors shall be responsible for the governance of the Company. On the date hereof the Board of Directors consists of ** persons as provided in Section 4.3. At any time after the date hereof, the number of directors may be increased or decreased as provided in the Company By-Laws.

** This portion has been redacted pursuant to a request for confidential treatment. 8

4.2. Nomination and Election of Directors. As long as Pfizer owns a majority of the outstanding shares of Common Stock, the Stockholders agree that Pfizer shall have the right to nominate and appoint all members of the Board of Directors save, for so long as OSI remains a Stockholder, one, who shall be nominated by OSI. Pfizer and OSI each hereby agree to vote their respective shares of Common Stock for the election of the nominees of Pfizer and (if applicable) OSI in accordance with this Section 4.2. Should OSI cease to be a Stockholder, it shall promptly obtain the resignation of its nominated director and tender such resignation to the Company. 4.3. Board of Directors. The Stockholders hereby agree that on the date hereof the Board of Directors of the Company shall consist of the following five persons, each of whom is nominated by the Stockholder set forth opposite such directors name:
Name of Director ---------------** Nominated by: ------------**

4.4. Officers of the Company. The Stockholders acknowledge that the Board of Directors of the Company has elected, in accordance with the By-Laws, the following persons as officers of the Company in the positions set forth opposite their respective names:
Name ---** ---------Office -----**

** This portion has been redacted pursuant to a request for confidential treatment.

4.2. Nomination and Election of Directors. As long as Pfizer owns a majority of the outstanding shares of Common Stock, the Stockholders agree that Pfizer shall have the right to nominate and appoint all members of the Board of Directors save, for so long as OSI remains a Stockholder, one, who shall be nominated by OSI. Pfizer and OSI each hereby agree to vote their respective shares of Common Stock for the election of the nominees of Pfizer and (if applicable) OSI in accordance with this Section 4.2. Should OSI cease to be a Stockholder, it shall promptly obtain the resignation of its nominated director and tender such resignation to the Company. 4.3. Board of Directors. The Stockholders hereby agree that on the date hereof the Board of Directors of the Company shall consist of the following five persons, each of whom is nominated by the Stockholder set forth opposite such directors name:
Name of Director ---------------** Nominated by: ------------**

4.4. Officers of the Company. The Stockholders acknowledge that the Board of Directors of the Company has elected, in accordance with the By-Laws, the following persons as officers of the Company in the positions set forth opposite their respective names:
Name ---** ---------Office -----**

** This portion has been redacted pursuant to a request for confidential treatment. 9

4.5. Quorum of the Board. No action shall be taken at any meeting of the Board of Directors of the Company, unless at least a majority of the entire Board shall be present. For purposes of a quorum, any director may be present at any meeting in person, by means of telephone or similar communications equipment by means of which each person participating in the meeting can hear and speak to each other or, to the extent permitted by applicable law, by proxy. 4.6. Action by the Board of Directors. If a quorum exists, any action taken by the Board of Directors shall be authorized by the affirmative vote of a majority of those members of Board of Directors present at the meeting; provided, however, that: (a) with respect to action taken by the Board of Directors pursuant to Section 3.3 of the OSI Research Agreement concerning restrictions as to other research conducted by Pfizer in the Field, any such action shall require authorization by all of the members of the Board of Directors, and (b) the affirmative vote of ** members of the Board of Directors is required to take the following actions (unless, in the case of (vii) and (viii) such expenditures are provided for in the annual budget): (i) to authorize, issue or enter into any agreement providing for the issuance (contingent or otherwise) of any equity securities or any notes or debt securities containing equity features (including, without limitation, any notes or debt securities convertible into or exchangeable for equity securities) save that this sub-paragraph (i) shall not apply to any issue or agreement to issue additional shares of Common Stock to Pfizer under Section 2.1(b) of this Agreement;

** This portion has been redacted pursuant to a request for confidential treatment. 10

4.5. Quorum of the Board. No action shall be taken at any meeting of the Board of Directors of the Company, unless at least a majority of the entire Board shall be present. For purposes of a quorum, any director may be present at any meeting in person, by means of telephone or similar communications equipment by means of which each person participating in the meeting can hear and speak to each other or, to the extent permitted by applicable law, by proxy. 4.6. Action by the Board of Directors. If a quorum exists, any action taken by the Board of Directors shall be authorized by the affirmative vote of a majority of those members of Board of Directors present at the meeting; provided, however, that: (a) with respect to action taken by the Board of Directors pursuant to Section 3.3 of the OSI Research Agreement concerning restrictions as to other research conducted by Pfizer in the Field, any such action shall require authorization by all of the members of the Board of Directors, and (b) the affirmative vote of ** members of the Board of Directors is required to take the following actions (unless, in the case of (vii) and (viii) such expenditures are provided for in the annual budget): (i) to authorize, issue or enter into any agreement providing for the issuance (contingent or otherwise) of any equity securities or any notes or debt securities containing equity features (including, without limitation, any notes or debt securities convertible into or exchangeable for equity securities) save that this sub-paragraph (i) shall not apply to any issue or agreement to issue additional shares of Common Stock to Pfizer under Section 2.1(b) of this Agreement;

** This portion has been redacted pursuant to a request for confidential treatment. 10

(ii) to directly or indirectly redeem, purchase or otherwise acquire, any of the Company's equity securities; (iii) to make any amendments, modifications or changes to the Certificate of Incorporation or By-Laws of the Company, the OSI Research Agreement or the NYU Research Agreement; (iv) to hire, fire and determine the amount of compensation paid to Officers of the Company; (v) to sell, lease or otherwise dispose of more than 25% of the Company's assets in any transaction or series of transactions; (vi) to merge or consolidate with any person or entity; (vii) to create, incur, assume or suffer to exist any indebtedness exceeding in the aggregate $10,000 outstanding at any time other than in the ordinary course of business; or (viii) to make any capital expenditures exceeding $10,000 with respect to any single capital expenditure or $250,000 in the aggregate during any twelve-month period. 4.7. Quorum of Stockholders. No action shall be taken at any meeting of stockholders of the Company unless at least a majority of the holders of the outstanding shares of Common Stock entitled to vote are present in person or by proxy. 4.8. Action by Stockholder. If a quorum exists, any corporate action taken at a meeting of the stockholders, except as otherwise set forth herein and except as may be required by law, shall be authorized by the affirmative vote of a majority of the votes cast at a meeting of stockholders by the holders of shares of Common Stock entitled to vote thereon. 11

ARTICLE V - DISPOSITION OF SHARES

(ii) to directly or indirectly redeem, purchase or otherwise acquire, any of the Company's equity securities; (iii) to make any amendments, modifications or changes to the Certificate of Incorporation or By-Laws of the Company, the OSI Research Agreement or the NYU Research Agreement; (iv) to hire, fire and determine the amount of compensation paid to Officers of the Company; (v) to sell, lease or otherwise dispose of more than 25% of the Company's assets in any transaction or series of transactions; (vi) to merge or consolidate with any person or entity; (vii) to create, incur, assume or suffer to exist any indebtedness exceeding in the aggregate $10,000 outstanding at any time other than in the ordinary course of business; or (viii) to make any capital expenditures exceeding $10,000 with respect to any single capital expenditure or $250,000 in the aggregate during any twelve-month period. 4.7. Quorum of Stockholders. No action shall be taken at any meeting of stockholders of the Company unless at least a majority of the holders of the outstanding shares of Common Stock entitled to vote are present in person or by proxy. 4.8. Action by Stockholder. If a quorum exists, any corporate action taken at a meeting of the stockholders, except as otherwise set forth herein and except as may be required by law, shall be authorized by the affirmative vote of a majority of the votes cast at a meeting of stockholders by the holders of shares of Common Stock entitled to vote thereon. 11

ARTICLE V - DISPOSITION OF SHARES 5.1. Right of First Refusal (a) If NYU or any NYU Faculty Member (the "NYU Seller") desires to sell, transfer or otherwise dispose of any or all of his or its shares of Common Stock, such NYU Seller may offer to sell such shares (the "Offered Shares") to an unaffiliated Third Party for all cash payable at the closing of such sale, subject to the Company's rights as hereinafter set forth, or offer to sell such Offered Shares to the Company directly. The NYU Seller shall give written notice thereof (an "Offering Notice") to the Company, with a copy to each of the other Stockholders, which Offering Notice shall state or contain (i) the name of such NYU Stockholder, (ii) the number of Offered Shares, (iii) the name, address and the amount of cash proposed to be paid by a prospective purchaser pursuant to a bona fide offer (the "Offer Price"), if any, and all the other terms and conditions relating to such bona fide offer. The delivery by any NYU Seller of an Offering Notice shall constitute a binding offer by the NYU Seller to sell to the Company, and the Company shall thereupon have the right, but not the obligation, to purchase any or all, of the Offered Shares at the Offer Price (the applicable price being herein referred to as the "Purchase Price"); provided, however, that such Purchase Price shall be paid in accordance with Section 5.1(g) hereof. Within thirty (30) days after the Company's receipt of the Offering Notice, the Company shall notify the NYU Seller in writing of its acceptance or rejection of the offer to purchase the Offered Shares. (b) In the event that the Company elects to purchase all of the Offered Shares, the closing shall take place in accordance with Section 5.1(g) hereof. (c) In the event that the Company rejects the offer to purchase the Offered Shares from the NYU Seller or elects to purchase fewer than all of the Offered Shares, the 12

ARTICLE V - DISPOSITION OF SHARES 5.1. Right of First Refusal (a) If NYU or any NYU Faculty Member (the "NYU Seller") desires to sell, transfer or otherwise dispose of any or all of his or its shares of Common Stock, such NYU Seller may offer to sell such shares (the "Offered Shares") to an unaffiliated Third Party for all cash payable at the closing of such sale, subject to the Company's rights as hereinafter set forth, or offer to sell such Offered Shares to the Company directly. The NYU Seller shall give written notice thereof (an "Offering Notice") to the Company, with a copy to each of the other Stockholders, which Offering Notice shall state or contain (i) the name of such NYU Stockholder, (ii) the number of Offered Shares, (iii) the name, address and the amount of cash proposed to be paid by a prospective purchaser pursuant to a bona fide offer (the "Offer Price"), if any, and all the other terms and conditions relating to such bona fide offer. The delivery by any NYU Seller of an Offering Notice shall constitute a binding offer by the NYU Seller to sell to the Company, and the Company shall thereupon have the right, but not the obligation, to purchase any or all, of the Offered Shares at the Offer Price (the applicable price being herein referred to as the "Purchase Price"); provided, however, that such Purchase Price shall be paid in accordance with Section 5.1(g) hereof. Within thirty (30) days after the Company's receipt of the Offering Notice, the Company shall notify the NYU Seller in writing of its acceptance or rejection of the offer to purchase the Offered Shares. (b) In the event that the Company elects to purchase all of the Offered Shares, the closing shall take place in accordance with Section 5.1(g) hereof. (c) In the event that the Company rejects the offer to purchase the Offered Shares from the NYU Seller or elects to purchase fewer than all of the Offered Shares, the 12

NYU Seller shall deliver written notice thereof (the "Second Notice") to each of the other Stockholders with a copy to the Company, within ten (10) days after the NYU Seller's receipt of the Company's response to its offer. The Second Notice shall state or contain (i) the number of Offered Shares, (ii) the number of Offered Shares which the Company has agreed to purchase, if any, (iii) the number of Offered Shares available for sale to the other Stockholders, and (iv) the name, address and the Offer Price proposed to be paid by the prospective purchaser. The delivery by any NYU Seller of a Second Notice shall constitute a binding offer by the NYU Seller to sell to the Company and the other Stockholders, and the Company and the other Stockholders shall thereupon have the right, but not the obligation, to purchase in the aggregate, all, but not less than all, of the Offered Shares at the Purchase Price; provided, however that such Purchase Price shall be paid in accordance with Section 5.1(g) hereof. (d) Any Stockholder (other than the NYU Seller) electing to purchase Offered Shares shall deliver to the NYU Seller, with a copy to the Company, within twenty (20) days after the Second Notice is sent to the Stockholders (the "Acceptance Period"), a notice (an "Acceptance Notice") of such Stockholder's election stating the maximum number of Offered Shares which such Stockholder desires to purchase (such Stockholder's "Elected Share Number"). The giving of such Acceptance Notice shall irrevocably commit the Stockholder giving such notice (an "Electing Stockholder") to purchase the Elected Share Number (or any lesser number thereof as may be determined as hereinafter provided). (e) In the event the Company, together with the Electing Stockholders, have not elected to purchase, in the aggregate, all of the Offered Shares, then the NYU Seller may sell the Offered Shares to the prospective purchaser at the Offer Price for cash consideration 13

payable at closing and on the other terms and conditions specified in the Offering Notice, and such sale shall take place within sixty (60) days after the expiration of the Acceptance Period; provided, however that such prospective purchaser shall execute an instrument satisfactory to the Company agreeing to be bound by the terms and provisions of this Agreement (including this Article 5). References herein to Stockholders and to shares of

NYU Seller shall deliver written notice thereof (the "Second Notice") to each of the other Stockholders with a copy to the Company, within ten (10) days after the NYU Seller's receipt of the Company's response to its offer. The Second Notice shall state or contain (i) the number of Offered Shares, (ii) the number of Offered Shares which the Company has agreed to purchase, if any, (iii) the number of Offered Shares available for sale to the other Stockholders, and (iv) the name, address and the Offer Price proposed to be paid by the prospective purchaser. The delivery by any NYU Seller of a Second Notice shall constitute a binding offer by the NYU Seller to sell to the Company and the other Stockholders, and the Company and the other Stockholders shall thereupon have the right, but not the obligation, to purchase in the aggregate, all, but not less than all, of the Offered Shares at the Purchase Price; provided, however that such Purchase Price shall be paid in accordance with Section 5.1(g) hereof. (d) Any Stockholder (other than the NYU Seller) electing to purchase Offered Shares shall deliver to the NYU Seller, with a copy to the Company, within twenty (20) days after the Second Notice is sent to the Stockholders (the "Acceptance Period"), a notice (an "Acceptance Notice") of such Stockholder's election stating the maximum number of Offered Shares which such Stockholder desires to purchase (such Stockholder's "Elected Share Number"). The giving of such Acceptance Notice shall irrevocably commit the Stockholder giving such notice (an "Electing Stockholder") to purchase the Elected Share Number (or any lesser number thereof as may be determined as hereinafter provided). (e) In the event the Company, together with the Electing Stockholders, have not elected to purchase, in the aggregate, all of the Offered Shares, then the NYU Seller may sell the Offered Shares to the prospective purchaser at the Offer Price for cash consideration 13

payable at closing and on the other terms and conditions specified in the Offering Notice, and such sale shall take place within sixty (60) days after the expiration of the Acceptance Period; provided, however that such prospective purchaser shall execute an instrument satisfactory to the Company agreeing to be bound by the terms and provisions of this Agreement (including this Article 5). References herein to Stockholders and to shares of Common Stock held or owned by any Stockholder shall be deemed to include any such prospective purchaser that purchases Common Stock hereunder and such shares held or owned by such prospective purchaser, respectively. If such sale has not taken place within sixty (60) days following the expiration of the Acceptance Period, all the provisions contained in this Agreement shall again be in effect with respect to such Offered Shares. (f) If all of the Offered Shares offered to the Stockholders have been fully subscribed for by the Company and the Electing Stockholders pursuant to Section 5.1(e), then the Company shall send to the NYU Seller, within five days after the expiration of the Acceptance Period, a written notice to such effect and shall include in such notice the name of each Electing Stockholder, the number of such Offered Shares allocated to such Electing Stockholder and the Company for purchase and the closing date of the purchase and sale of the Offered Shares. In the event the Offered Shares available to the Electing Stockholders are oversubscribed for, the number of Offered Shares each Electing Stockholder shall be allocated shall be determined pro rata based on the percentage that each Electing Stockholder's shares of Common Stock bears to the total outstanding shares of Common Stock. (g) In the event that the Company and/or the Electing Stockholders, as the case may be, elect to purchase all of the Offered Shares under this Section 5.1, the closing of the purchase and sale of the Offered Shares shall take place at the principal executive offices of 14

the Company within thirty (30) days following the date the notice to such effect is given by the Company to the NYU Seller pursuant to Sections 5.1(a), 5.1(c) or 5.1(f) (whichever is applicable), or at such other place, on such other date, or both, as the NYU Seller, the Company and the Electing Stockholders, as applicable, may agree upon in writing. The Purchase Price payable by the Electing Stockholders and/or the Company hereunder shall be paid either (i) in full by cash or certified

payable at closing and on the other terms and conditions specified in the Offering Notice, and such sale shall take place within sixty (60) days after the expiration of the Acceptance Period; provided, however that such prospective purchaser shall execute an instrument satisfactory to the Company agreeing to be bound by the terms and provisions of this Agreement (including this Article 5). References herein to Stockholders and to shares of Common Stock held or owned by any Stockholder shall be deemed to include any such prospective purchaser that purchases Common Stock hereunder and such shares held or owned by such prospective purchaser, respectively. If such sale has not taken place within sixty (60) days following the expiration of the Acceptance Period, all the provisions contained in this Agreement shall again be in effect with respect to such Offered Shares. (f) If all of the Offered Shares offered to the Stockholders have been fully subscribed for by the Company and the Electing Stockholders pursuant to Section 5.1(e), then the Company shall send to the NYU Seller, within five days after the expiration of the Acceptance Period, a written notice to such effect and shall include in such notice the name of each Electing Stockholder, the number of such Offered Shares allocated to such Electing Stockholder and the Company for purchase and the closing date of the purchase and sale of the Offered Shares. In the event the Offered Shares available to the Electing Stockholders are oversubscribed for, the number of Offered Shares each Electing Stockholder shall be allocated shall be determined pro rata based on the percentage that each Electing Stockholder's shares of Common Stock bears to the total outstanding shares of Common Stock. (g) In the event that the Company and/or the Electing Stockholders, as the case may be, elect to purchase all of the Offered Shares under this Section 5.1, the closing of the purchase and sale of the Offered Shares shall take place at the principal executive offices of 14

the Company within thirty (30) days following the date the notice to such effect is given by the Company to the NYU Seller pursuant to Sections 5.1(a), 5.1(c) or 5.1(f) (whichever is applicable), or at such other place, on such other date, or both, as the NYU Seller, the Company and the Electing Stockholders, as applicable, may agree upon in writing. The Purchase Price payable by the Electing Stockholders and/or the Company hereunder shall be paid either (i) in full by cash or certified check at the closing of such purchase, or (ii) one-third of the Purchase Price shall be paid in cash or by certified check at the closing; and the balance of the Offer Price shall be payable on the first and second anniversaries of such closing in two equal annual installments, together with interest from the closing calculated on the amount of such installment at the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank N.A. 5.2. Involuntary Transfers If any Involuntary Transfer of Common Stock takes place, the following procedures shall apply: (a) Any Stockholder deprived or divested of any shares of Common Stock by Involuntary Transfer (the "Transferor") shall promptly give written notice thereof in reasonable detail to the Company. Any person or entity that takes or proposes to take any ownership interest in such shares of Common Stock (the "Transferred Shares") as a result of such Involuntary Transfer (the "Transferee") shall hold such interest subject to the rights of the Company as set forth in Section 5.2(b). (b) For a period of 180 days following the earlier to occur of receipt of the notice referred to in Section 5.2(a) or discovery of any Involuntary Transfer, the Company may purchase the Transferred Shares in accordance with Section 5.2(c), subject to the terms 15

set forth herein. If the Company elects to purchase the Transferred Shares, the Company shall notify the Transferee of its rights hereunder and specify the number of Transferred Shares to be purchased.

the Company within thirty (30) days following the date the notice to such effect is given by the Company to the NYU Seller pursuant to Sections 5.1(a), 5.1(c) or 5.1(f) (whichever is applicable), or at such other place, on such other date, or both, as the NYU Seller, the Company and the Electing Stockholders, as applicable, may agree upon in writing. The Purchase Price payable by the Electing Stockholders and/or the Company hereunder shall be paid either (i) in full by cash or certified check at the closing of such purchase, or (ii) one-third of the Purchase Price shall be paid in cash or by certified check at the closing; and the balance of the Offer Price shall be payable on the first and second anniversaries of such closing in two equal annual installments, together with interest from the closing calculated on the amount of such installment at the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank N.A. 5.2. Involuntary Transfers If any Involuntary Transfer of Common Stock takes place, the following procedures shall apply: (a) Any Stockholder deprived or divested of any shares of Common Stock by Involuntary Transfer (the "Transferor") shall promptly give written notice thereof in reasonable detail to the Company. Any person or entity that takes or proposes to take any ownership interest in such shares of Common Stock (the "Transferred Shares") as a result of such Involuntary Transfer (the "Transferee") shall hold such interest subject to the rights of the Company as set forth in Section 5.2(b). (b) For a period of 180 days following the earlier to occur of receipt of the notice referred to in Section 5.2(a) or discovery of any Involuntary Transfer, the Company may purchase the Transferred Shares in accordance with Section 5.2(c), subject to the terms 15

set forth herein. If the Company elects to purchase the Transferred Shares, the Company shall notify the Transferee of its rights hereunder and specify the number of Transferred Shares to be purchased. (c) The closing for any sale of Transferred Shares to the Company shall take place at the Company's principal executive office not later than sixty (60) days after the Transferee receives the notice referred to in Section 5.2(b) or 14 days after the determination of Fair Value, whichever is later. The purchase price payable by the Company for any Transferred Shares purchased hereunder shall be the Fair Value of such Transferred Shares. (d) In the event that the Company does not purchase all or any of the Transferred Shares pursuant to Section 5.2, the Transferee shall take and hold all rights and interests in any Transferred Shares that are not so purchased subject to the terms of this Agreement. 5.3. Put and Call Rights (a) On the terms and subject to the conditions set forth in Section 5.3, from the date of this Agreement until December 31, 1999, any of OSI, NYU and each of the NYU Faculty Members separately may require the Company or Pfizer to purchase all but not less than all of the shares of Common Stock held by each such Stockholder at the price set forth immediately below which is based on the formula attached hereto as Appendix A and agreed to by all of the Stockholders (the "Fixed Put Right"). The formula attached hereto as Appendix A was negotiated among OSI, Pfizer and the Company and thus it and the resulting Fixed Put Right Prices do not necessarily reflect the fair market value of the Company or the Common Stock as they might be determined pursuant to Section 5.4 or otherwise. Upon the exercise of the Fixed Put Right by each of OSI, NYU and/or each of the NYU Faculty, each exercising 16

Stockholder agrees to acknowledge in writing that it has been provided access to and has obtained all of the information that it has requested from Pfizer and the Company in connection with its negotiation of such formula and the resulting Fixed Put Right Prices.

set forth herein. If the Company elects to purchase the Transferred Shares, the Company shall notify the Transferee of its rights hereunder and specify the number of Transferred Shares to be purchased. (c) The closing for any sale of Transferred Shares to the Company shall take place at the Company's principal executive office not later than sixty (60) days after the Transferee receives the notice referred to in Section 5.2(b) or 14 days after the determination of Fair Value, whichever is later. The purchase price payable by the Company for any Transferred Shares purchased hereunder shall be the Fair Value of such Transferred Shares. (d) In the event that the Company does not purchase all or any of the Transferred Shares pursuant to Section 5.2, the Transferee shall take and hold all rights and interests in any Transferred Shares that are not so purchased subject to the terms of this Agreement. 5.3. Put and Call Rights (a) On the terms and subject to the conditions set forth in Section 5.3, from the date of this Agreement until December 31, 1999, any of OSI, NYU and each of the NYU Faculty Members separately may require the Company or Pfizer to purchase all but not less than all of the shares of Common Stock held by each such Stockholder at the price set forth immediately below which is based on the formula attached hereto as Appendix A and agreed to by all of the Stockholders (the "Fixed Put Right"). The formula attached hereto as Appendix A was negotiated among OSI, Pfizer and the Company and thus it and the resulting Fixed Put Right Prices do not necessarily reflect the fair market value of the Company or the Common Stock as they might be determined pursuant to Section 5.4 or otherwise. Upon the exercise of the Fixed Put Right by each of OSI, NYU and/or each of the NYU Faculty, each exercising 16

Stockholder agrees to acknowledge in writing that it has been provided access to and has obtained all of the information that it has requested from Pfizer and the Company in connection with its negotiation of such formula and the resulting Fixed Put Right Prices. Fixed Put Right Prices ** ** (b) On the terms and subject to the conditions set forth in Section 5.3, at any time subsequent to April 23, 2000, any of OSI, NYU and each of the NYU Faculty Members may require the Company or Pfizer to purchase all but not less than all of the shares of Common Stock held by each such Stockholder at a price equal to the Fair Value of such shares (the "Put Right"), subject to the limitations set forth in Section 11.1. (c) On the terms and subject to the conditions set forth in this Section 5.3, at any time subsequent to April 23, 2002, the Company, or Pfizer, as the case may be, may require OSI, NYU or any NYU Faculty Member to sell to the Company all but not less than all of the shares of Common Stock held by such Stockholder at a price equal to the Fair Value of such shares (the "Call Right"). (d) Any of OSI, NYU or any NYU Faculty Member may exercise the Fixed Put Right or the Put Right, as the case may be, by delivering to the Company, or Pfizer, as the case may be, with a copy to Pfizer, (if applicable), written notice setting forth the number of shares of Common Stock held by such Stockholder. The Company may exercise the Call Right with respect to OSI, NYU or any NYU Faculty Member by delivering to such Stockholder written notice setting forth the terms of the proposed purchase of Common Stock.

** This portion has been redacted pursuant to a request for confidential treatment. 17

Stockholder agrees to acknowledge in writing that it has been provided access to and has obtained all of the information that it has requested from Pfizer and the Company in connection with its negotiation of such formula and the resulting Fixed Put Right Prices. Fixed Put Right Prices ** ** (b) On the terms and subject to the conditions set forth in Section 5.3, at any time subsequent to April 23, 2000, any of OSI, NYU and each of the NYU Faculty Members may require the Company or Pfizer to purchase all but not less than all of the shares of Common Stock held by each such Stockholder at a price equal to the Fair Value of such shares (the "Put Right"), subject to the limitations set forth in Section 11.1. (c) On the terms and subject to the conditions set forth in this Section 5.3, at any time subsequent to April 23, 2002, the Company, or Pfizer, as the case may be, may require OSI, NYU or any NYU Faculty Member to sell to the Company all but not less than all of the shares of Common Stock held by such Stockholder at a price equal to the Fair Value of such shares (the "Call Right"). (d) Any of OSI, NYU or any NYU Faculty Member may exercise the Fixed Put Right or the Put Right, as the case may be, by delivering to the Company, or Pfizer, as the case may be, with a copy to Pfizer, (if applicable), written notice setting forth the number of shares of Common Stock held by such Stockholder. The Company may exercise the Call Right with respect to OSI, NYU or any NYU Faculty Member by delivering to such Stockholder written notice setting forth the terms of the proposed purchase of Common Stock.

** This portion has been redacted pursuant to a request for confidential treatment. 17

(e) Unless otherwise agreed to by the Company, or Pfizer, as the case may be, and the selling Stockholder(s), the closing of any purchase of Common Stock pursuant to the exercise of any Fixed Put Right, Put Right or any Call Right hereunder shall take place at the principal executive offices of the Company within sixty (60) days after the delivery of the notice referred to in Section 5.3(d) or, where applicable, 14 days after determination of Fair Value, whichever is later. With respect to the Put Right or Call Right, the Company or Pfizer, as the case may be, shall pay the Fair Value of such shares either (i) in full by cash or certified check at the closing, or (ii) one-third of the total amount due shall be paid in cash or by certified check at the closing, and the balance of the amount due shall be payable on the first and second anniversaries of such closing in two equal installments, together with interest on the amount of such installments from the date of closing calculated at the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank, N.A. If the Company or Pfizer elects to pay in installments under (ii) herein, the Company or Pfizer, as the case may be, shall execute a promissory note for the benefit of the Stockholders exercising their put and call rights concerning the first and second anniversary payments. In the case of an exercise of any Fixed Put Right, the Company or Pfizer (if applicable), shall pay the applicable price of such shares set forth in Section 5.3(a) in full by cash or certified check at the closing. 5.4. Fair Value Fair Value shall be calculated as follows: (a) During a 15 day period following the date on which a Put or Call Right is exercised under Section 5.3, the party or parties exercising such option ("Exerciser) (or its or their personal representative) and the Board of Directors of the Company and/or the 18

(e) Unless otherwise agreed to by the Company, or Pfizer, as the case may be, and the selling Stockholder(s), the closing of any purchase of Common Stock pursuant to the exercise of any Fixed Put Right, Put Right or any Call Right hereunder shall take place at the principal executive offices of the Company within sixty (60) days after the delivery of the notice referred to in Section 5.3(d) or, where applicable, 14 days after determination of Fair Value, whichever is later. With respect to the Put Right or Call Right, the Company or Pfizer, as the case may be, shall pay the Fair Value of such shares either (i) in full by cash or certified check at the closing, or (ii) one-third of the total amount due shall be paid in cash or by certified check at the closing, and the balance of the amount due shall be payable on the first and second anniversaries of such closing in two equal installments, together with interest on the amount of such installments from the date of closing calculated at the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank, N.A. If the Company or Pfizer elects to pay in installments under (ii) herein, the Company or Pfizer, as the case may be, shall execute a promissory note for the benefit of the Stockholders exercising their put and call rights concerning the first and second anniversary payments. In the case of an exercise of any Fixed Put Right, the Company or Pfizer (if applicable), shall pay the applicable price of such shares set forth in Section 5.3(a) in full by cash or certified check at the closing. 5.4. Fair Value Fair Value shall be calculated as follows: (a) During a 15 day period following the date on which a Put or Call Right is exercised under Section 5.3, the party or parties exercising such option ("Exerciser) (or its or their personal representative) and the Board of Directors of the Company and/or the 18

receiving party of the exercise notice, as the case may require, shall each submit to the other party or parties a proposal as to the fair market value of each share of Common Stock. If the differential between the highest proposal and the lowest proposal is not more than 10%, then the Fair Value shall be equal to the average of such proposals; or (b) In the event that the differential between the highest and lowest proposals under clause (a) above is more than 10% or if only one or no proposal is submitted under clause (a) above, then within ten business days after the submission of such proposals, the Board of Directors shall select and retain a qualified independent appraiser of closely held businesses (the "Appraiser). If the Exerciser, or, if the Exerciser is the Company, the receiving party does not submit written notice contesting the selection of the qualified independent appraiser within ten business days of being so informed of such selection, then the Board of Director's selection shall be final. If the Exerciser or, if the Exerciser is the Company, the receiving party timely submits such notice, then the Board of Directors shall request the American Arbitration Association in the City of New York to appoint promptly the Appraiser. The Exerciser(s) (or his or their personal representative), on the one hand, and the Board of Directors of the Company and/or the receiving party or parties of the exercise notice, as the case may require, on the other hand, shall each submit to the Appraiser such party's respective proposal as to the Fair Value (which proposal shall be the same proposal, if any, submitted under clause (a) above), together with such supporting data as such party deems relevant. The Appraiser shall then conduct its own evaluation of such opinions and such data, and shall conduct such independent procedures and investigation as the Appraiser shall deem necessary in order to form an opinion as to the fair market value of each share of Common Stock. In determining fair market value, the Appraiser shall assume that (i) the Company is 19

sold as a going concern in an organized auction, (ii) there is no discount for minority ownership, and (iii) there is a market for shares of the Company. The Appraiser shall within 30 days of receipt of the relevant parties' proposals, determine the Fair Value, which shall be within the range proposed by the Exerciser and the Board of Directors and/or receiving party. The Appraiser shall forthwith upon determination of Fair Value, give written notice of its determination to the Exerciser (or its personal representative), the receiving party and the Company. Unless the Board of Directors of the Company otherwise decides, the fees and expenses of the Appraiser shall

receiving party of the exercise notice, as the case may require, shall each submit to the other party or parties a proposal as to the fair market value of each share of Common Stock. If the differential between the highest proposal and the lowest proposal is not more than 10%, then the Fair Value shall be equal to the average of such proposals; or (b) In the event that the differential between the highest and lowest proposals under clause (a) above is more than 10% or if only one or no proposal is submitted under clause (a) above, then within ten business days after the submission of such proposals, the Board of Directors shall select and retain a qualified independent appraiser of closely held businesses (the "Appraiser). If the Exerciser, or, if the Exerciser is the Company, the receiving party does not submit written notice contesting the selection of the qualified independent appraiser within ten business days of being so informed of such selection, then the Board of Director's selection shall be final. If the Exerciser or, if the Exerciser is the Company, the receiving party timely submits such notice, then the Board of Directors shall request the American Arbitration Association in the City of New York to appoint promptly the Appraiser. The Exerciser(s) (or his or their personal representative), on the one hand, and the Board of Directors of the Company and/or the receiving party or parties of the exercise notice, as the case may require, on the other hand, shall each submit to the Appraiser such party's respective proposal as to the Fair Value (which proposal shall be the same proposal, if any, submitted under clause (a) above), together with such supporting data as such party deems relevant. The Appraiser shall then conduct its own evaluation of such opinions and such data, and shall conduct such independent procedures and investigation as the Appraiser shall deem necessary in order to form an opinion as to the fair market value of each share of Common Stock. In determining fair market value, the Appraiser shall assume that (i) the Company is 19

sold as a going concern in an organized auction, (ii) there is no discount for minority ownership, and (iii) there is a market for shares of the Company. The Appraiser shall within 30 days of receipt of the relevant parties' proposals, determine the Fair Value, which shall be within the range proposed by the Exerciser and the Board of Directors and/or receiving party. The Appraiser shall forthwith upon determination of Fair Value, give written notice of its determination to the Exerciser (or its personal representative), the receiving party and the Company. Unless the Board of Directors of the Company otherwise decides, the fees and expenses of the Appraiser shall be paid equally by the Exerciser (or its personal representative) and the Company. (c) If Fair Value is being calculated on Transferred Shares pursuant to an involuntary transfer under Section 5.2, the 15-day period referred to in (a) above starts on the day after the Company gives notice to the Transferee of its intention to purchase such Transferred Shares. The Transferee shall act as the Exerciser and submit a Fair Value proposal. 5.5. Tag Along Rights (a) In the event that one or more Stockholders propose to sell or otherwise dispose of shares representing more than fifty percent of the outstanding shares of Common Stock then outstanding (the "Majority Stockholders") in one or a series of transactions to any Third Party (other than a Permitted Transferee), such Majority Stockholders shall not consummate or enter into any agreement to consummate such sale unless such Third Party purchaser offers to purchase from each other Stockholder the number of shares of such other Stockholder's Common Stock as determined in accordance with Section 5.5(b) at the same price and on the same other terms as such purchaser offered to purchase such shares from the 20

Majority Stockholders ("Tag Along Rights"). Any Stockholder proposing to sell or otherwise dispose of its Common Stock to a Third Party purchaser pursuant to Section 5.5 shall agree, and be able, to transfer to such purchaser good and marketable title to the shares that such Stockholder proposes to sell, free and clear of all liens, claims and encumbrances. (b) The maximum number of shares of Common Stock that any Stockholder may require any Third Party to purchase pursuant to Section 5.5(a) shall be the total number of shares of Common Stock owned by each such

sold as a going concern in an organized auction, (ii) there is no discount for minority ownership, and (iii) there is a market for shares of the Company. The Appraiser shall within 30 days of receipt of the relevant parties' proposals, determine the Fair Value, which shall be within the range proposed by the Exerciser and the Board of Directors and/or receiving party. The Appraiser shall forthwith upon determination of Fair Value, give written notice of its determination to the Exerciser (or its personal representative), the receiving party and the Company. Unless the Board of Directors of the Company otherwise decides, the fees and expenses of the Appraiser shall be paid equally by the Exerciser (or its personal representative) and the Company. (c) If Fair Value is being calculated on Transferred Shares pursuant to an involuntary transfer under Section 5.2, the 15-day period referred to in (a) above starts on the day after the Company gives notice to the Transferee of its intention to purchase such Transferred Shares. The Transferee shall act as the Exerciser and submit a Fair Value proposal. 5.5. Tag Along Rights (a) In the event that one or more Stockholders propose to sell or otherwise dispose of shares representing more than fifty percent of the outstanding shares of Common Stock then outstanding (the "Majority Stockholders") in one or a series of transactions to any Third Party (other than a Permitted Transferee), such Majority Stockholders shall not consummate or enter into any agreement to consummate such sale unless such Third Party purchaser offers to purchase from each other Stockholder the number of shares of such other Stockholder's Common Stock as determined in accordance with Section 5.5(b) at the same price and on the same other terms as such purchaser offered to purchase such shares from the 20

Majority Stockholders ("Tag Along Rights"). Any Stockholder proposing to sell or otherwise dispose of its Common Stock to a Third Party purchaser pursuant to Section 5.5 shall agree, and be able, to transfer to such purchaser good and marketable title to the shares that such Stockholder proposes to sell, free and clear of all liens, claims and encumbrances. (b) The maximum number of shares of Common Stock that any Stockholder may require any Third Party to purchase pursuant to Section 5.5(a) shall be the total number of shares of Common Stock owned by each such Stockholder multiplied by the percentage that the total number of shares of Common Stock to be purchased by the Third Party bears to the total number of outstanding shares of Common Stock. (c) Prior to any sale under Section 5.5(a), the Majority Stockholders shall notify the Company and each of the other Stockholders in writing of such proposed sale, setting forth (i) the number of shares of Common Stock that such Stockholder proposes to sell, (ii) the name and address of the Third Party purchaser; and (iii) the amount of consideration (including the value of any non-cash consideration) offered by the Third Party purchaser. Within ten (10) days after receiving the foregoing notice, any Stockholder may elect to exercise its Tag Along Rights by delivering written notice to the Majority Stockholders of such Stockholder's election to sell the shares of Common Stock offered for sale pursuant to Section 5.5. If none of the Stockholders so notifies the Majority Stockholders within the foregoing ten (10) day period, then the Majority Stockholders shall have the right to effect the proposed sale of such shares for a period of sixty (60) days thereafter on substantially the same terms and conditions as such shares were offered to the other Stockholders. 21

5.6. Take Along Right (a) If Pfizer, and for so long as OSI's percentage ownership of Common Stock outstanding is greater than ten percent, OSI (the "Control Group") approve any sale of the Company by merger, consolidation, sale of the Company's assets, sale of Common Stock or otherwise, to any person other than a member of the Control Group or an Affiliate of a member of the Control Group, each of the other Stockholders hereby agree to consent to, vote for and raise no objections against, such sale. If such sale is structured as a sale of all of the outstanding Common Stock, each other Stockholder hereby agrees to sell all of its shares of Common Stock on the terms

Majority Stockholders ("Tag Along Rights"). Any Stockholder proposing to sell or otherwise dispose of its Common Stock to a Third Party purchaser pursuant to Section 5.5 shall agree, and be able, to transfer to such purchaser good and marketable title to the shares that such Stockholder proposes to sell, free and clear of all liens, claims and encumbrances. (b) The maximum number of shares of Common Stock that any Stockholder may require any Third Party to purchase pursuant to Section 5.5(a) shall be the total number of shares of Common Stock owned by each such Stockholder multiplied by the percentage that the total number of shares of Common Stock to be purchased by the Third Party bears to the total number of outstanding shares of Common Stock. (c) Prior to any sale under Section 5.5(a), the Majority Stockholders shall notify the Company and each of the other Stockholders in writing of such proposed sale, setting forth (i) the number of shares of Common Stock that such Stockholder proposes to sell, (ii) the name and address of the Third Party purchaser; and (iii) the amount of consideration (including the value of any non-cash consideration) offered by the Third Party purchaser. Within ten (10) days after receiving the foregoing notice, any Stockholder may elect to exercise its Tag Along Rights by delivering written notice to the Majority Stockholders of such Stockholder's election to sell the shares of Common Stock offered for sale pursuant to Section 5.5. If none of the Stockholders so notifies the Majority Stockholders within the foregoing ten (10) day period, then the Majority Stockholders shall have the right to effect the proposed sale of such shares for a period of sixty (60) days thereafter on substantially the same terms and conditions as such shares were offered to the other Stockholders. 21

5.6. Take Along Right (a) If Pfizer, and for so long as OSI's percentage ownership of Common Stock outstanding is greater than ten percent, OSI (the "Control Group") approve any sale of the Company by merger, consolidation, sale of the Company's assets, sale of Common Stock or otherwise, to any person other than a member of the Control Group or an Affiliate of a member of the Control Group, each of the other Stockholders hereby agree to consent to, vote for and raise no objections against, such sale. If such sale is structured as a sale of all of the outstanding Common Stock, each other Stockholder hereby agrees to sell all of its shares of Common Stock on the terms approved by the Control Group and to take all reasonable actions requested by the Control Group or the purchaser in connection with the consummation of any such sale ("Take Along Right"). As consideration for the sale of such Stockholders' shares of Common Stock, each Stockholder will receive for each share of Common Stock cash and the fair market value of any non-cash consideration in the same amount as the Control Group receives for the sale of each share of Common Stock. (b) If the closing of any sale of Common Stock pursuant to Section 5.6(a) has not been effected within 180 days after the Control Group first approves of such sale, the obligation of any Stockholder to participate in such sale shall terminate and the provisions of Section 5.6 shall be reinstated. (c) Nothing contained in Section 5.6 shall obligate the Control Group to consummate any sale or the Company hereunder, and the Control Group may abandon any such sale at any time. If any such proposed sale is abandoned, the Control Group shall promptly send written notice thereof to each of the other Stockholders. 22

5.7. Stock Purchase Assignment. Any right or obligation of the Company under Article 5 of this Agreement to purchase Common Stock of a Stockholder may be assigned by the Company to Pfizer. Pfizer shall not be under any legal obligation to accept such assignment unless it so agrees in writing. ARTICLE VI - PREEMPTIVE RIGHTS 6.1. Preemptive Rights.

5.6. Take Along Right (a) If Pfizer, and for so long as OSI's percentage ownership of Common Stock outstanding is greater than ten percent, OSI (the "Control Group") approve any sale of the Company by merger, consolidation, sale of the Company's assets, sale of Common Stock or otherwise, to any person other than a member of the Control Group or an Affiliate of a member of the Control Group, each of the other Stockholders hereby agree to consent to, vote for and raise no objections against, such sale. If such sale is structured as a sale of all of the outstanding Common Stock, each other Stockholder hereby agrees to sell all of its shares of Common Stock on the terms approved by the Control Group and to take all reasonable actions requested by the Control Group or the purchaser in connection with the consummation of any such sale ("Take Along Right"). As consideration for the sale of such Stockholders' shares of Common Stock, each Stockholder will receive for each share of Common Stock cash and the fair market value of any non-cash consideration in the same amount as the Control Group receives for the sale of each share of Common Stock. (b) If the closing of any sale of Common Stock pursuant to Section 5.6(a) has not been effected within 180 days after the Control Group first approves of such sale, the obligation of any Stockholder to participate in such sale shall terminate and the provisions of Section 5.6 shall be reinstated. (c) Nothing contained in Section 5.6 shall obligate the Control Group to consummate any sale or the Company hereunder, and the Control Group may abandon any such sale at any time. If any such proposed sale is abandoned, the Control Group shall promptly send written notice thereof to each of the other Stockholders. 22

5.7. Stock Purchase Assignment. Any right or obligation of the Company under Article 5 of this Agreement to purchase Common Stock of a Stockholder may be assigned by the Company to Pfizer. Pfizer shall not be under any legal obligation to accept such assignment unless it so agrees in writing. ARTICLE VI - PREEMPTIVE RIGHTS 6.1. Preemptive Rights. (a) Except as permitted by Section 2.1(b) herein, after the date hereof, the Company shall not issue any additional shares of Common Stock ("New Shares") to any person or entity (the "New Stockholder") unless the Company grants to all Stockholders the right to subscribe for and purchase the same aggregate number of additional shares of Common Stock (the "Preemptive Shares") as the number of New Shares, at the same price and upon the same terms as the New Shares are being offered. The Company shall determine the number of Preemptive Shares to be offered to each Stockholder by multiplying the total number of Preemptive Shares by the percentage that each such Stockholder's shares of Common Stock bears to the total number of shares of Common Stock outstanding immediately prior to the issuance of New Shares and Preemptive Shares hereunder. Notwithstanding the foregoing, there shall be no preemptive rights by reason of any underwritten public offering. (b) Prior to the issuance of any New Shares pursuant to Section 6.1, the Company shall give each Stockholder written notice setting forth the terms upon which such Stockholder may purchase Preemptive Shares hereunder. (c) After receiving the notice described in Section 6.1(b), any Stockholder may exercise its preemptive rights hereunder by replying in writing within twenty (20) days 23

after the date of such notice that such Stockholder agrees to purchase the Preemptive Shares offered pursuant to Section 6.1. Each Stockholder may exercise preemptive rights with respect to all, but not less than all, of the Preemptive Shares that such Stockholder has the right to purchase pursuant to Section 6. 1.

5.7. Stock Purchase Assignment. Any right or obligation of the Company under Article 5 of this Agreement to purchase Common Stock of a Stockholder may be assigned by the Company to Pfizer. Pfizer shall not be under any legal obligation to accept such assignment unless it so agrees in writing. ARTICLE VI - PREEMPTIVE RIGHTS 6.1. Preemptive Rights. (a) Except as permitted by Section 2.1(b) herein, after the date hereof, the Company shall not issue any additional shares of Common Stock ("New Shares") to any person or entity (the "New Stockholder") unless the Company grants to all Stockholders the right to subscribe for and purchase the same aggregate number of additional shares of Common Stock (the "Preemptive Shares") as the number of New Shares, at the same price and upon the same terms as the New Shares are being offered. The Company shall determine the number of Preemptive Shares to be offered to each Stockholder by multiplying the total number of Preemptive Shares by the percentage that each such Stockholder's shares of Common Stock bears to the total number of shares of Common Stock outstanding immediately prior to the issuance of New Shares and Preemptive Shares hereunder. Notwithstanding the foregoing, there shall be no preemptive rights by reason of any underwritten public offering. (b) Prior to the issuance of any New Shares pursuant to Section 6.1, the Company shall give each Stockholder written notice setting forth the terms upon which such Stockholder may purchase Preemptive Shares hereunder. (c) After receiving the notice described in Section 6.1(b), any Stockholder may exercise its preemptive rights hereunder by replying in writing within twenty (20) days 23

after the date of such notice that such Stockholder agrees to purchase the Preemptive Shares offered pursuant to Section 6.1. Each Stockholder may exercise preemptive rights with respect to all, but not less than all, of the Preemptive Shares that such Stockholder has the right to purchase pursuant to Section 6. 1. (d) If any Stockholder fails to reply in accordance with Section 6.1(c), the Company shall have ninety (90) days thereafter to consummate the sale of Common Stock to a New Stockholder pursuant to Section 6. 1. If the Company has not consummated such sale within such ninety (90) day period, the Company may not sell shares of common stock subsequently to any New Stockholder without first offering the Stockholders preemptive rights with respect to such shares in the manner provided for in Section 6.1. (e) If the offering price for any New Shares consists of any consideration other than cash, then the price at which the Stockholders shall be offered preemptive rights hereunder with respect to any Preemptive Shares shall be determined by an independent appraiser selected by the Company. Any Stockholder purchasing Preemptive Shares hereunder shall pay the purchase price therefor to the Company in cash; provided, however, that after obtaining the consent of the Board of Directors of the Company, OSI may give consideration other than cash if the value of such non-cash consideration is determined by such independent appraiser to be at least equal to the amount of consideration proposed to be paid by the New Stockholder for the New Shares hereunder. ARTICLE VII - DEVELOPMENT OF A LEAD COMPOUND 7.1. Pfizer's Right of First Refusal for Initial Development. (a) If the Company makes a preliminary assessment that any compound that was invented, or for which a New Use was invented, by any person in the course of such 24

person's participation in the Research Program is or may be effective in treating any indication in the Field or the

after the date of such notice that such Stockholder agrees to purchase the Preemptive Shares offered pursuant to Section 6.1. Each Stockholder may exercise preemptive rights with respect to all, but not less than all, of the Preemptive Shares that such Stockholder has the right to purchase pursuant to Section 6. 1. (d) If any Stockholder fails to reply in accordance with Section 6.1(c), the Company shall have ninety (90) days thereafter to consummate the sale of Common Stock to a New Stockholder pursuant to Section 6. 1. If the Company has not consummated such sale within such ninety (90) day period, the Company may not sell shares of common stock subsequently to any New Stockholder without first offering the Stockholders preemptive rights with respect to such shares in the manner provided for in Section 6.1. (e) If the offering price for any New Shares consists of any consideration other than cash, then the price at which the Stockholders shall be offered preemptive rights hereunder with respect to any Preemptive Shares shall be determined by an independent appraiser selected by the Company. Any Stockholder purchasing Preemptive Shares hereunder shall pay the purchase price therefor to the Company in cash; provided, however, that after obtaining the consent of the Board of Directors of the Company, OSI may give consideration other than cash if the value of such non-cash consideration is determined by such independent appraiser to be at least equal to the amount of consideration proposed to be paid by the New Stockholder for the New Shares hereunder. ARTICLE VII - DEVELOPMENT OF A LEAD COMPOUND 7.1. Pfizer's Right of First Refusal for Initial Development. (a) If the Company makes a preliminary assessment that any compound that was invented, or for which a New Use was invented, by any person in the course of such 24

person's participation in the Research Program is or may be effective in treating any indication in the Field or the Dermatology Indications, such compound shall be considered a Lead Compound and the Company shall promptly present such compound or New Use to Pfizer. Within sixty (60) days of such presentation, Pfizer may notify the Company in writing of Pfizer's election to (i) make an additional capital contribution to the Company to enable the Company to further develop such Lead Compound or New Use, or (ii) negotiate the terms pursuant to which Pfizer may collaborate with the Company in the development of such Lead Compound or New Use, or acquire all of the Company's rights and interests in such Lead Compound or New Use. Any rights acquired by Pfizer from the Company hereunder with respect to any Lead Compound are subject to the royalty fees payable to OSI and NYU under the Research Agreements and the royalty fees payable to the Company under Section 7.3 hereof. (b) If Pfizer makes any additional capital contribution to the Company pursuant to Section 7.1(a)(i), any additional shares of Common Stock issued in exchange therefor are subject to the preemptive rights provisions of Section 6.1. (c) If Pfizer elects not to exercise its right of first refusal pursuant to Section 7.1(a), or if Pfizer fails to pursue diligently the development of any Lead Compound or New Use with respect to which it has obtained rights under Section 7.1(a)(ii), which determination shall be made by the Board of Directors of the Company, then the Company may further develop and market such Lead Compound or New Use independently, or the Company may enter into licensing, joint venture or other arrangements with third parties to facilitate such development. 25

7.2. Pfizer's Right of First Refusal for Further Development. (a) If any Lead Compound or New Use developed by the Company with respect to which Pfizer has made a capital contribution pursuant to Section 7.1(a)(i) reaches the stage where the Company has decided to submit an application to the Food and Drug Administration for designation of such Lead Compound or New Use as an

person's participation in the Research Program is or may be effective in treating any indication in the Field or the Dermatology Indications, such compound shall be considered a Lead Compound and the Company shall promptly present such compound or New Use to Pfizer. Within sixty (60) days of such presentation, Pfizer may notify the Company in writing of Pfizer's election to (i) make an additional capital contribution to the Company to enable the Company to further develop such Lead Compound or New Use, or (ii) negotiate the terms pursuant to which Pfizer may collaborate with the Company in the development of such Lead Compound or New Use, or acquire all of the Company's rights and interests in such Lead Compound or New Use. Any rights acquired by Pfizer from the Company hereunder with respect to any Lead Compound are subject to the royalty fees payable to OSI and NYU under the Research Agreements and the royalty fees payable to the Company under Section 7.3 hereof. (b) If Pfizer makes any additional capital contribution to the Company pursuant to Section 7.1(a)(i), any additional shares of Common Stock issued in exchange therefor are subject to the preemptive rights provisions of Section 6.1. (c) If Pfizer elects not to exercise its right of first refusal pursuant to Section 7.1(a), or if Pfizer fails to pursue diligently the development of any Lead Compound or New Use with respect to which it has obtained rights under Section 7.1(a)(ii), which determination shall be made by the Board of Directors of the Company, then the Company may further develop and market such Lead Compound or New Use independently, or the Company may enter into licensing, joint venture or other arrangements with third parties to facilitate such development. 25

7.2. Pfizer's Right of First Refusal for Further Development. (a) If any Lead Compound or New Use developed by the Company with respect to which Pfizer has made a capital contribution pursuant to Section 7.1(a)(i) reaches the stage where the Company has decided to submit an application to the Food and Drug Administration for designation of such Lead Compound or New Use as an Investigational New Drug, or to pursue clinical testing of such Lead Compound or New Use in humans, the Company shall present such Lead Compound or New Use to Pfizer. Within sixty (60) days of such presentation, Pfizer shall notify the Company in writing if Pfizer elects to negotiate the terms under which it may acquire the Company's rights and interest in such Lead Compound or New Use. Any such rights acquired by Pfizer are subject to the royalty fees payable to OSI and NYU under the Research Agreements and the royalty fees payable to the Company under Article 7.3 hereof. (b) If Pfizer elects not to exercise its right of first refusal pursuant to Section 7.2(a), then the Company may further develop and market such Lead Compound or New Use independently, or by entering into licensing, joint venture or other arrangements with third parties to facilitate such development. 7.3. Development by Pfizer. (a) If Pfizer acquires rights in any Lead Compound pursuant to Section 7.1 or 7.2 hereof, Pfizer shall pay to the Company a royalty equal to: (i) ** of the Net Sales of any Human Therapeutic Product based on such Lead Compound; or (ii) ** of the Net Sales of any Human Therapeutic Product where the Lead Compound has been identified by screening

** This portion has been redacted pursuant to a request for confidential treatment. 26

and is part of a Pfizer Selected Library or by screening of Analogs of a compound from a Pfizer Selected Library (the "Anaderm Royalty".) The Anaderm Royalty shall be in addition to, and not in lieu of, any royalties or other payments that may be due to NYU or OSI under the Research Agreements. The Anaderm Royalty shall be paid

7.2. Pfizer's Right of First Refusal for Further Development. (a) If any Lead Compound or New Use developed by the Company with respect to which Pfizer has made a capital contribution pursuant to Section 7.1(a)(i) reaches the stage where the Company has decided to submit an application to the Food and Drug Administration for designation of such Lead Compound or New Use as an Investigational New Drug, or to pursue clinical testing of such Lead Compound or New Use in humans, the Company shall present such Lead Compound or New Use to Pfizer. Within sixty (60) days of such presentation, Pfizer shall notify the Company in writing if Pfizer elects to negotiate the terms under which it may acquire the Company's rights and interest in such Lead Compound or New Use. Any such rights acquired by Pfizer are subject to the royalty fees payable to OSI and NYU under the Research Agreements and the royalty fees payable to the Company under Article 7.3 hereof. (b) If Pfizer elects not to exercise its right of first refusal pursuant to Section 7.2(a), then the Company may further develop and market such Lead Compound or New Use independently, or by entering into licensing, joint venture or other arrangements with third parties to facilitate such development. 7.3. Development by Pfizer. (a) If Pfizer acquires rights in any Lead Compound pursuant to Section 7.1 or 7.2 hereof, Pfizer shall pay to the Company a royalty equal to: (i) ** of the Net Sales of any Human Therapeutic Product based on such Lead Compound; or (ii) ** of the Net Sales of any Human Therapeutic Product where the Lead Compound has been identified by screening

** This portion has been redacted pursuant to a request for confidential treatment. 26

and is part of a Pfizer Selected Library or by screening of Analogs of a compound from a Pfizer Selected Library (the "Anaderm Royalty".) The Anaderm Royalty shall be in addition to, and not in lieu of, any royalties or other payments that may be due to NYU or OSI under the Research Agreements. The Anaderm Royalty shall be paid to the Company, notwithstanding the termination provisions of Article 9 of this Agreement, for a period of ten years beginning with the first commercial sale of such Human Therapeutic Product in any country, unless at the end of such ten year period there exists in that country a Valid Claim of an issued patent to such Human Therapeutic Product, a compound or composition contained therein, a method or process employed in making such Human Therapeutic Product, or a method of use for which such Human Therapeutic Product is being marketed in that country, in which case Pfizer shall continue to pay the Anaderm Royalty to the Company on Net Sales of such Human Therapeutic Compound in such country during the period in which such Valid Claim exists in that country. (b) If Pfizer decides to negotiate an agreement with a Third Party pursuant to which Pfizer would grant such Third Party a license under Pfizer's rights in any Lead Compound or Human Therapeutic Product, which rights Pfizer acquired from the Company pursuant to its Rights of First Refusal under Section 7.1 or 7.2 hereof, and Pfizer determines that payment of the Anaderm Royalty would render the proposed licensing arrangement commercially unfeasible to Pfizer, then Pfizer may negotiate with the Company in good faith to determine the amount of royalties or other compensation that the Company will receive in lieu of the Anaderm Royalty from such arrangement. 27

7.4. Development by the Company. (a) Subject to the provisions of section 7.4 (b) and 7.4(c) below, in the event that Pfizer elects not to exercise its Rights of First Refusal with respect to any Lead Compound or New Use pursuant to Section 7.1 or 7.2 hereof and the Company decides to license such Lead Compound or New Use to a Third Party, any payments received

and is part of a Pfizer Selected Library or by screening of Analogs of a compound from a Pfizer Selected Library (the "Anaderm Royalty".) The Anaderm Royalty shall be in addition to, and not in lieu of, any royalties or other payments that may be due to NYU or OSI under the Research Agreements. The Anaderm Royalty shall be paid to the Company, notwithstanding the termination provisions of Article 9 of this Agreement, for a period of ten years beginning with the first commercial sale of such Human Therapeutic Product in any country, unless at the end of such ten year period there exists in that country a Valid Claim of an issued patent to such Human Therapeutic Product, a compound or composition contained therein, a method or process employed in making such Human Therapeutic Product, or a method of use for which such Human Therapeutic Product is being marketed in that country, in which case Pfizer shall continue to pay the Anaderm Royalty to the Company on Net Sales of such Human Therapeutic Compound in such country during the period in which such Valid Claim exists in that country. (b) If Pfizer decides to negotiate an agreement with a Third Party pursuant to which Pfizer would grant such Third Party a license under Pfizer's rights in any Lead Compound or Human Therapeutic Product, which rights Pfizer acquired from the Company pursuant to its Rights of First Refusal under Section 7.1 or 7.2 hereof, and Pfizer determines that payment of the Anaderm Royalty would render the proposed licensing arrangement commercially unfeasible to Pfizer, then Pfizer may negotiate with the Company in good faith to determine the amount of royalties or other compensation that the Company will receive in lieu of the Anaderm Royalty from such arrangement. 27

7.4. Development by the Company. (a) Subject to the provisions of section 7.4 (b) and 7.4(c) below, in the event that Pfizer elects not to exercise its Rights of First Refusal with respect to any Lead Compound or New Use pursuant to Section 7.1 or 7.2 hereof and the Company decides to license such Lead Compound or New Use to a Third Party, any payments received in connection with such license arrangement, less any associated expenses, shall be paid as follows: ** to the Company, ** to OSI under the OSI Research Agreement, ** to NYU under the NYU Research Agreement, and ** to Pfizer. (b) Notwithstanding the provisions of Section 7.4(a) above, and subject to the provisions of Section 7.4(c) below, in cases where the Lead Compound or New Use that is licensed to a Third Party was identified (i) by screening a Pfizer Selected Library and the Lead Compound is part of the Pfizer Selected Library or the New Use is based on a Lead Compound that is part of the Pfizer Selected Library, or (ii) by screening Analogs of a compound from a Pfizer Selected Library, any payments received in connection with such license arrangement, less any associated expenses, shall be paid as follows: ** to the Company, ** to OSI; ** to NYU; and ** to Pfizer. (c) Notwithstanding the provisions of Sections 7.4(a) and (b) above, no royalties shall be owed to NYU under this Section 7.4 unless NYU or any of the NYU Principal Investigators or other employees or students of NYU participating in the Research Program pursuant to the NYU Research Agreement has made an Inventive Contribution during the course of participating in

** This portion has been redacted pursuant to a request for confidential treatment. 28

the Research Program with respect to the Lead Compound or New Use licensed to the Third Party. ** 7.5. Analog Manufacture. The Company may make or have made Analogs of compounds provided to it in a Pfizer Scientific Library or as part of the Pfizer Compound File, and, as between Pfizer and the Company, the Company shall own all such Analogs not already owned by Pfizer. The Company shall make all such Analogs and mixtures of such Analogs available to Pfizer for screening and analoging.

7.4. Development by the Company. (a) Subject to the provisions of section 7.4 (b) and 7.4(c) below, in the event that Pfizer elects not to exercise its Rights of First Refusal with respect to any Lead Compound or New Use pursuant to Section 7.1 or 7.2 hereof and the Company decides to license such Lead Compound or New Use to a Third Party, any payments received in connection with such license arrangement, less any associated expenses, shall be paid as follows: ** to the Company, ** to OSI under the OSI Research Agreement, ** to NYU under the NYU Research Agreement, and ** to Pfizer. (b) Notwithstanding the provisions of Section 7.4(a) above, and subject to the provisions of Section 7.4(c) below, in cases where the Lead Compound or New Use that is licensed to a Third Party was identified (i) by screening a Pfizer Selected Library and the Lead Compound is part of the Pfizer Selected Library or the New Use is based on a Lead Compound that is part of the Pfizer Selected Library, or (ii) by screening Analogs of a compound from a Pfizer Selected Library, any payments received in connection with such license arrangement, less any associated expenses, shall be paid as follows: ** to the Company, ** to OSI; ** to NYU; and ** to Pfizer. (c) Notwithstanding the provisions of Sections 7.4(a) and (b) above, no royalties shall be owed to NYU under this Section 7.4 unless NYU or any of the NYU Principal Investigators or other employees or students of NYU participating in the Research Program pursuant to the NYU Research Agreement has made an Inventive Contribution during the course of participating in

** This portion has been redacted pursuant to a request for confidential treatment. 28

the Research Program with respect to the Lead Compound or New Use licensed to the Third Party. ** 7.5. Analog Manufacture. The Company may make or have made Analogs of compounds provided to it in a Pfizer Scientific Library or as part of the Pfizer Compound File, and, as between Pfizer and the Company, the Company shall own all such Analogs not already owned by Pfizer. The Company shall make all such Analogs and mixtures of such Analogs available to Pfizer for screening and analoging. 7.6. Approval of Analog Production and Screening. Pfizer shall have the right to approve the choice of any Third Party selected by the Company to produce and screen Analogs of Pfizer compounds. No Third Parties shall be allowed to screen OSI Compounds or Analogs of OSI Compounds without the prior written consent of OSI. 7.7. Assignment of Analog Rights. If Pfizer elects to develop and market a Human Therapeutic Product outside the Field that contains an Analog of a Pfizer compound that was made by or on behalf of the Company pursuant to Section 7.5 of this Agreement, and is not contained in a Human Therapeutic Product that is being marketed by the Company or a Third Party licensee of the Company, the Company shall assign its rights in such Analog to Pfizer for royalties and/or other compensation negotiated in good faith. 7.8. Development of Lead Compound for Different Indications. If Pfizer and the Company express interest in developing the same Lead Compound for different indications, Pfizer shall have the right, subject to certain restrictions referred to in Section 7.9 of this

** This portion has been redacted pursuant to a request for confidential treatment. 29

Agreement, to request in writing that the Company cease all development of said Lead Compound, and the

the Research Program with respect to the Lead Compound or New Use licensed to the Third Party. ** 7.5. Analog Manufacture. The Company may make or have made Analogs of compounds provided to it in a Pfizer Scientific Library or as part of the Pfizer Compound File, and, as between Pfizer and the Company, the Company shall own all such Analogs not already owned by Pfizer. The Company shall make all such Analogs and mixtures of such Analogs available to Pfizer for screening and analoging. 7.6. Approval of Analog Production and Screening. Pfizer shall have the right to approve the choice of any Third Party selected by the Company to produce and screen Analogs of Pfizer compounds. No Third Parties shall be allowed to screen OSI Compounds or Analogs of OSI Compounds without the prior written consent of OSI. 7.7. Assignment of Analog Rights. If Pfizer elects to develop and market a Human Therapeutic Product outside the Field that contains an Analog of a Pfizer compound that was made by or on behalf of the Company pursuant to Section 7.5 of this Agreement, and is not contained in a Human Therapeutic Product that is being marketed by the Company or a Third Party licensee of the Company, the Company shall assign its rights in such Analog to Pfizer for royalties and/or other compensation negotiated in good faith. 7.8. Development of Lead Compound for Different Indications. If Pfizer and the Company express interest in developing the same Lead Compound for different indications, Pfizer shall have the right, subject to certain restrictions referred to in Section 7.9 of this

** This portion has been redacted pursuant to a request for confidential treatment. 29

Agreement, to request in writing that the Company cease all development of said Lead Compound, and the Company shall forthwith comply with such written request. 7.9. Request to Cease Lead Compound Development. The right of Pfizer to request that the Company cease development of any Lead Compound will terminate three (3) months after the date on which Pfizer is informed, pursuant to Section 7.2(a) of the Agreement, of the Company's decision to apply to the FDA for designation of said Lead Compound as an Investigational New Drug. ARTICLE VIII - LEGENDING OF SECURITIES 8.1. Legends. Each certificate representing shares of Common Stock issued after the date hereof shall bear a legend in substantially the form set forth below: "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A RESTATED AND AMENDED STOCKHOLDERS AGREEMENT, DATED APRIL 23, 1999, AMONG THE COMPANY AND THE STOCKHOLDERS OF THE COMPANY SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION OF THESE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT. SUCH AGREEMENT ALSO CONTAINS PROVISIONS RELATING TO THE COMPOSITION OF THE BOARD OF DIRECTORS OF THE COMPANY AND THE EXERCISE OF VOTING RIGHTS OF THE HOLDERS OF THE SECURITIES REPRESENTED HEREBY." 30

ARTICLE IX - TERMINATION AND SURVIVAL OF PROVISIONS

Agreement, to request in writing that the Company cease all development of said Lead Compound, and the Company shall forthwith comply with such written request. 7.9. Request to Cease Lead Compound Development. The right of Pfizer to request that the Company cease development of any Lead Compound will terminate three (3) months after the date on which Pfizer is informed, pursuant to Section 7.2(a) of the Agreement, of the Company's decision to apply to the FDA for designation of said Lead Compound as an Investigational New Drug. ARTICLE VIII - LEGENDING OF SECURITIES 8.1. Legends. Each certificate representing shares of Common Stock issued after the date hereof shall bear a legend in substantially the form set forth below: "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF A RESTATED AND AMENDED STOCKHOLDERS AGREEMENT, DATED APRIL 23, 1999, AMONG THE COMPANY AND THE STOCKHOLDERS OF THE COMPANY SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION OF THESE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT. SUCH AGREEMENT ALSO CONTAINS PROVISIONS RELATING TO THE COMPOSITION OF THE BOARD OF DIRECTORS OF THE COMPANY AND THE EXERCISE OF VOTING RIGHTS OF THE HOLDERS OF THE SECURITIES REPRESENTED HEREBY." 30

ARTICLE IX - TERMINATION AND SURVIVAL OF PROVISIONS 9.1. Termination. This Agreement shall terminate (a) as to any party when such party ceases to be a Stockholder, or (b) upon the earlier to occur of (i) the date upon which the parties then bound by this Agreement consent in writing to terminate this Agreement; (ii) the date as of which there remains only one Stockholder of the Company; and (iii) the dissolution or liquidation of the Company. 9.2. Survival. Notwithstanding the termination of the Agreement under 9.1, the royalty provisions, if applicable, contained in Article 7 and Sections 2.1(d), 2.1(e) and 2.2 herein, shall survive with respect to any and all parties terminated. ARTICLE X - REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS 10.1. Representations and Warranties of Each Stockholder. Each Stockholder represents and warrants to the other parties, solely with respect to itself, that: (a) If such Stockholder is a corporation, partnership or trust, (i) such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (ii) such party has all requisite corporate, partnership or trust power and authority to execute, deliver and perform this Agreement; and (iii) such party has taken all corporate, partnership or trust action required to duly authorize such execution, delivery and performance. 31

(b) If such Stockholder is a natural person, he or she has full legal capacity, right, power and authority to execute,

ARTICLE IX - TERMINATION AND SURVIVAL OF PROVISIONS 9.1. Termination. This Agreement shall terminate (a) as to any party when such party ceases to be a Stockholder, or (b) upon the earlier to occur of (i) the date upon which the parties then bound by this Agreement consent in writing to terminate this Agreement; (ii) the date as of which there remains only one Stockholder of the Company; and (iii) the dissolution or liquidation of the Company. 9.2. Survival. Notwithstanding the termination of the Agreement under 9.1, the royalty provisions, if applicable, contained in Article 7 and Sections 2.1(d), 2.1(e) and 2.2 herein, shall survive with respect to any and all parties terminated. ARTICLE X - REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS 10.1. Representations and Warranties of Each Stockholder. Each Stockholder represents and warrants to the other parties, solely with respect to itself, that: (a) If such Stockholder is a corporation, partnership or trust, (i) such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (ii) such party has all requisite corporate, partnership or trust power and authority to execute, deliver and perform this Agreement; and (iii) such party has taken all corporate, partnership or trust action required to duly authorize such execution, delivery and performance. 31

(b) If such Stockholder is a natural person, he or she has full legal capacity, right, power and authority to execute, deliver and perform this Agreement. (c) This Agreement has been duly executed and delivered by such Stockholder and constitutes a binding obligation of such Stockholder enforceable in accordance with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights generally, or by principles governing the availability of equitable remedies. (d) Neither the execution, delivery or performance by such Stockholder of this Agreement, nor the consummation by such Stockholder of the transactions contemplated hereby, does or will (with the giving of notice or the passage of time or both) conflict in any material respect with, or constitute a material default under, (i) if such party is a corporation, partnership or other entity, the Certificate of Incorporation, Bylaws, partnership agreement or other organizational or governing documents of such party, (ii) any judgment to or by which such party is or may be subject, bound or affected, or (iii) any applicable law or obligation to which such Stockholder is bound. (e) No judgment has been issued, and no action or proceeding has been instituted or, to the knowledge of such Stockholder, threatened, against or otherwise involving such Stockholder, (i) to set aside or modify any authorization of the execution, delivery and performance by such Stockholder of this Agreement, (ii) to enjoin or prevent the execution, delivery or performance by such Stockholder of this Agreement, or (iii) seeking damages in connection with the execution, delivery or performance by such Stockholder of this Agreement. 32

ARTICLE XI - INSUFFICIENT SURPLUS AND INSOLVENCY 11.1 Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to purchase, redeem, receive, take or otherwise acquire shares of Common Stock of a selling Stockholder if the capital of the Company is impaired or would become impaired thereby. If the Company's capital is or would become impaired

(b) If such Stockholder is a natural person, he or she has full legal capacity, right, power and authority to execute, deliver and perform this Agreement. (c) This Agreement has been duly executed and delivered by such Stockholder and constitutes a binding obligation of such Stockholder enforceable in accordance with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights generally, or by principles governing the availability of equitable remedies. (d) Neither the execution, delivery or performance by such Stockholder of this Agreement, nor the consummation by such Stockholder of the transactions contemplated hereby, does or will (with the giving of notice or the passage of time or both) conflict in any material respect with, or constitute a material default under, (i) if such party is a corporation, partnership or other entity, the Certificate of Incorporation, Bylaws, partnership agreement or other organizational or governing documents of such party, (ii) any judgment to or by which such party is or may be subject, bound or affected, or (iii) any applicable law or obligation to which such Stockholder is bound. (e) No judgment has been issued, and no action or proceeding has been instituted or, to the knowledge of such Stockholder, threatened, against or otherwise involving such Stockholder, (i) to set aside or modify any authorization of the execution, delivery and performance by such Stockholder of this Agreement, (ii) to enjoin or prevent the execution, delivery or performance by such Stockholder of this Agreement, or (iii) seeking damages in connection with the execution, delivery or performance by such Stockholder of this Agreement. 32

ARTICLE XI - INSUFFICIENT SURPLUS AND INSOLVENCY 11.1 Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to purchase, redeem, receive, take or otherwise acquire shares of Common Stock of a selling Stockholder if the capital of the Company is impaired or would become impaired thereby. If the Company's capital is or would become impaired by purchasing the Common Stock of the selling Stockholder, the Company shall notify all of the Stockholders in writing of such impairment, and indicate that the Company is precluded from making such purchase. Upon receiving such notices, the Company's remaining Stockholders shall be deemed to have been offered the shares of the selling Stockholder on the same terms as such shares would have been offered to the Company. The Company shall determine the number of shares deemed to have been offered to each Stockholder by multiplying the total number of shares by the percentage that each such remaining Stockholder's shares of Common Stock bears to the total number of shares of Common Stock held by the non-selling Stockholders at the date of the notice. The price of which such Stockholders would pay for such shares shall be Fair Value in the case of a sale or transfer pursuant to Section 5.2 or 5.3, or, in the case of a sale pursuant to Section 5.1, the purchase price provided for in such section. Any Stockholder may purchase such shares by paying the purchase price therefor within sixty (60) days after delivery of the notice from the Company ("Closing"). The purchasing Stockholder shall pay the Fair Value of such shares or purchase price referred to in Section 5.1 either (i) in full by cash or certified check at the Closing, or (ii) one-third of the total amount due shall be paid in cash or certified check at the Closing, and the balance of the amount due shall be payable on the first and second anniversaries of such closing in two equal installments, together with interest on the amount of such installments from the date of Closing calculated at 33

the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank, N.A. The selling Stockholder shall retain all right, title and interest in and to any shares of Common Stock that are not purchased by the other Stockholders. ARTICLE XII - MISCELLANEOUS 12.1. Notices. All notices, requests, consents, demands, elections and other communications required or permitted hereunder shall be in writing and shall be given to the intended recipient at the following address:

ARTICLE XI - INSUFFICIENT SURPLUS AND INSOLVENCY 11.1 Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to purchase, redeem, receive, take or otherwise acquire shares of Common Stock of a selling Stockholder if the capital of the Company is impaired or would become impaired thereby. If the Company's capital is or would become impaired by purchasing the Common Stock of the selling Stockholder, the Company shall notify all of the Stockholders in writing of such impairment, and indicate that the Company is precluded from making such purchase. Upon receiving such notices, the Company's remaining Stockholders shall be deemed to have been offered the shares of the selling Stockholder on the same terms as such shares would have been offered to the Company. The Company shall determine the number of shares deemed to have been offered to each Stockholder by multiplying the total number of shares by the percentage that each such remaining Stockholder's shares of Common Stock bears to the total number of shares of Common Stock held by the non-selling Stockholders at the date of the notice. The price of which such Stockholders would pay for such shares shall be Fair Value in the case of a sale or transfer pursuant to Section 5.2 or 5.3, or, in the case of a sale pursuant to Section 5.1, the purchase price provided for in such section. Any Stockholder may purchase such shares by paying the purchase price therefor within sixty (60) days after delivery of the notice from the Company ("Closing"). The purchasing Stockholder shall pay the Fair Value of such shares or purchase price referred to in Section 5.1 either (i) in full by cash or certified check at the Closing, or (ii) one-third of the total amount due shall be paid in cash or certified check at the Closing, and the balance of the amount due shall be payable on the first and second anniversaries of such closing in two equal installments, together with interest on the amount of such installments from the date of Closing calculated at 33

the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank, N.A. The selling Stockholder shall retain all right, title and interest in and to any shares of Common Stock that are not purchased by the other Stockholders. ARTICLE XII - MISCELLANEOUS 12.1. Notices. All notices, requests, consents, demands, elections and other communications required or permitted hereunder shall be in writing and shall be given to the intended recipient at the following address: if to the Company: Anaderm Research Corp. 235 East 42nd Street New York, NY 10017-5755 Att: ** Tel: 212-573-3770 Fax: 212-808-6495 with copies to: Pfizer Inc. 235 East 42nd Street New York, NY 10017-5755 Att: Office of General Counsel Tel: 212-573-3637 Fax: 212-573-1445 Squadron, Ellenoff, Plesent & Sheinfeld 551 Fifth Avenue New York, NY 10176 Att: Joel I. Papernik, Esq. Tel: 212-476-8364 Fax: 212-697-6686

the prime rate, as in effect from time to time during the period prior to the payment of such installment, as published by Citibank, N.A. The selling Stockholder shall retain all right, title and interest in and to any shares of Common Stock that are not purchased by the other Stockholders. ARTICLE XII - MISCELLANEOUS 12.1. Notices. All notices, requests, consents, demands, elections and other communications required or permitted hereunder shall be in writing and shall be given to the intended recipient at the following address: if to the Company: Anaderm Research Corp. 235 East 42nd Street New York, NY 10017-5755 Att: ** Tel: 212-573-3770 Fax: 212-808-6495 with copies to: Pfizer Inc. 235 East 42nd Street New York, NY 10017-5755 Att: Office of General Counsel Tel: 212-573-3637 Fax: 212-573-1445 Squadron, Ellenoff, Plesent & Sheinfeld 551 Fifth Avenue New York, NY 10176 Att: Joel I. Papernik, Esq. Tel: 212-476-8364 Fax: 212-697-6686

** This portion has been redacted pursuant to a request for confidential treatment. 34

If to Pfizer: Pfizer Inc. 235 East 42nd Street New York, NY 10017-5755 Att: Office of General Counsel Tel: 212-573-3637 Fax: 212-573-1445 If to OSI: OSI Pharmaceuticals, Inc. 106 Charles Lindbergh Blvd. Uniondale, NY 11553 Att: Gary E. Frashier Tel: 516-222-0023 Fax: 516-745-6429

If to Pfizer: Pfizer Inc. 235 East 42nd Street New York, NY 10017-5755 Att: Office of General Counsel Tel: 212-573-3637 Fax: 212-573-1445 If to OSI: OSI Pharmaceuticals, Inc. 106 Charles Lindbergh Blvd. Uniondale, NY 11553 Att: Gary E. Frashier Tel: 516-222-0023 Fax: 516-745-6429 If to NYU: NYU Medical Center 550 First Avenue New York, NY 10016 Att: ** Tel: 212-263-8191 Fax: 212-263-8189 with a copy to: ** NYU Medical Center 550 First Avenue, MSB 153 New York, NY 10016 Tel: 212-263-7921 Fax: 212-545-8846

** This portion has been redacted pursuant to a request for confidential treatment. 35

If to ** : ** c/o NYU Medical Center 550 First Avenue New York, NY 10016 Tel: 212-263-8191 Fax: 212-263-8189 If to ** : ** c/o NYU Medical Center 550 First Avenue New York, NY 10016 Tel: 212-263-8191 Fax: 212-263-8189

If to ** : ** c/o NYU Medical Center 550 First Avenue New York, NY 10016 Tel: 212-263-8191 Fax: 212-263-8189 If to ** : ** c/o NYU Medical Center 550 First Avenue New York, NY 10016 Tel: 212-263-8191 Fax: 212-263-8189 If to ** : ** c/o NYU Medical Center 550 First Avenue New York, NY 10016 Tel: 212-263-8191 Fax: 212-263-8189 If to ** : ** c/o NYU Medical Center 550 First Avenue New York, NY 10016 Tel: 212-263-8191 Fax: 212-263-8189 Any such notice, request, consent, demand, election or other communication shall be deemed to have been duly given if personally delivered or sent by registered or certified mail,

** This portion has been redacted pursuant to a request for confidential treatment. 36

return receipt requested, by Federal Express, Express Mail or similar overnight delivery service or by telegram, telex or facsimile transmission confirmed by letter, and will be deemed given, unless earlier received (i) if sent by certified or registered mail, return receipt requested, five calendar days after being deposited in the United States mail, postage prepaid; (ii) if sent by overnight delivery service for next business day delivery, the next business day after being entrusted to such service, with delivery charges prepaid or charged to the sender's account; (iii) if sent by telegram or telex or facsimile transmission, on the date sent, provided confirmatory notice is sent by any other method specified in clause (i), (ii) or (iv); and (iv) if delivered by hand, on the date of delivery. 12.2. Entire Agreement. This Agreement, together with the Appendices hereto and the Research Agreements, constitute the entire understanding among the parties hereto relating to the subject matter hereof. This Agreement may not be amended except by a writing signed by all parties hereto. No discharge, or waiver, in whole or in part, of any of its provisions shall be valid, unless in writing, signed by the party against whom the same is sought to be enforced. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their legal successors, the latter being deemed to include, without limitation, all executors, administrators, receivers, committees, other personal representatives, transferees of interest pursuant hereto, and all other legal successors, and shall, in addition, be binding upon all persons who, whether in breach of this Agreement or otherwise, have

return receipt requested, by Federal Express, Express Mail or similar overnight delivery service or by telegram, telex or facsimile transmission confirmed by letter, and will be deemed given, unless earlier received (i) if sent by certified or registered mail, return receipt requested, five calendar days after being deposited in the United States mail, postage prepaid; (ii) if sent by overnight delivery service for next business day delivery, the next business day after being entrusted to such service, with delivery charges prepaid or charged to the sender's account; (iii) if sent by telegram or telex or facsimile transmission, on the date sent, provided confirmatory notice is sent by any other method specified in clause (i), (ii) or (iv); and (iv) if delivered by hand, on the date of delivery. 12.2. Entire Agreement. This Agreement, together with the Appendices hereto and the Research Agreements, constitute the entire understanding among the parties hereto relating to the subject matter hereof. This Agreement may not be amended except by a writing signed by all parties hereto. No discharge, or waiver, in whole or in part, of any of its provisions shall be valid, unless in writing, signed by the party against whom the same is sought to be enforced. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their legal successors, the latter being deemed to include, without limitation, all executors, administrators, receivers, committees, other personal representatives, transferees of interest pursuant hereto, and all other legal successors, and shall, in addition, be binding upon all persons who, whether in breach of this Agreement or otherwise, have or claim an interest in the shares of the Company or are in possession of a certificate representing shares in the Company, or any other evidence of an interest in the shares of the Company. 37

12.3. Governing Law. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of New York, without regard to its conflict of law provisions. 38

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ANADERM RESEARCH CORP.
By: /s/ -----------------------------------------Name: ** Title: President and CEO

PFIZER INC.
By: /s/ -----------------------------------------Name: Paul S. Miller Title: Executive Vice President And General Counsel

OSI PHARMACEUTICALS, INC.
By: /s/ -----------------------------------------Name: Colin Goddard, Ph.D. Title: President and CEO

NEW YORK UNIVERSITY
By: /s/

12.3. Governing Law. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of New York, without regard to its conflict of law provisions. 38

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ANADERM RESEARCH CORP.
By: /s/ -----------------------------------------Name: ** Title: President and CEO

PFIZER INC.
By: /s/ -----------------------------------------Name: Paul S. Miller Title: Executive Vice President And General Counsel

OSI PHARMACEUTICALS, INC.
By: /s/ -----------------------------------------Name: Colin Goddard, Ph.D. Title: President and CEO

NEW YORK UNIVERSITY
By: /s/ -----------------------------------------Name: ** Title: **

** ** ** ** ** This portion has been redacted pursuant to a request for confidential treatment.

APPENDIX A

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ANADERM RESEARCH CORP.
By: /s/ -----------------------------------------Name: ** Title: President and CEO

PFIZER INC.
By: /s/ -----------------------------------------Name: Paul S. Miller Title: Executive Vice President And General Counsel

OSI PHARMACEUTICALS, INC.
By: /s/ -----------------------------------------Name: Colin Goddard, Ph.D. Title: President and CEO

NEW YORK UNIVERSITY
By: /s/ -----------------------------------------Name: ** Title: **

** ** ** ** ** This portion has been redacted pursuant to a request for confidential treatment.

APPENDIX A As used in Section 5.3(a) of the Agreement, the formula to calculate the Fixed Put Right for each Stockholder is ** through and including April 23, 1999.

APPENDIX A As used in Section 5.3(a) of the Agreement, the formula to calculate the Fixed Put Right for each Stockholder is ** through and including April 23, 1999.

** This portion has been redacted pursuant to a request for confidential treatment.

Portions of Exhibit 10.3 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT is entered into as of April 1, 1999 (the "Effective Date") by and between PFIZER INC, a Delaware corporation, having an office at 235 East 42nd Street, New York, New York 10017 and its Affiliates ("Pfizer"), and OSI PHARMACEUTICALS, INC., a Delaware corporation, having an office at 106 Charles Lindbergh Blvd., Uniondale, New York 11553-3649 and its Affiliates ("OSI Pharmaceuticals"); WHEREAS, OSI Pharmaceuticals desires to develop compounds derived from the Collaborative Research Agreement between Pfizer and OSI Pharmaceuticals, dated April 1, 1996, under Pfizer's and OSI Pharmaceutical's right, title and interest in the patent rights of the compounds listed in Exhibit A ("Compounds"), so that OSI Pharmaceuticals can conduct preclinical research and clinical trials, for such compounds to assess the treatment of psoriasis and related dermal pathology; and WHEREAS, Pfizer is willing to grant a license; Therefore, in consideration of the mutual covenants and promises set forth in this Agreement, the parties agree as follows: 1. Definitions. The capitalized terms used in this Agreement shall have the meanings specified for such terms in this Section 1. 1.1 "1996 Agreement" means the Collaborative Research Agreement between Pfizer and OSI Pharmaceuticals effective April 1, 1996 and the letter amendments to such Agreement including the letter amendments dated July 25, 1997 and November 3, 1997. 1.2 "Net Sales" means the gross amount invoiced by Pfizer or OSI Pharmaceuticals, their respective Affiliates, or any sublicensee of Pfizer of OSI Pharmaceuticals for sales to a third party or parties of Products, less normal and customary trade discounts actually allowed, rebates, returns, credits, taxes the legal incidence of which is on the purchaser and separately shown on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices and 1

transportation, insurance and postage charges, if prepaid by Pfizer or OSI Pharmaceuticals or any sublicensee of either party and billed on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices as a separate item. 1.3 "Product" means any pharmaceutical product developed in the course of the Development Program, the

Portions of Exhibit 10.3 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT is entered into as of April 1, 1999 (the "Effective Date") by and between PFIZER INC, a Delaware corporation, having an office at 235 East 42nd Street, New York, New York 10017 and its Affiliates ("Pfizer"), and OSI PHARMACEUTICALS, INC., a Delaware corporation, having an office at 106 Charles Lindbergh Blvd., Uniondale, New York 11553-3649 and its Affiliates ("OSI Pharmaceuticals"); WHEREAS, OSI Pharmaceuticals desires to develop compounds derived from the Collaborative Research Agreement between Pfizer and OSI Pharmaceuticals, dated April 1, 1996, under Pfizer's and OSI Pharmaceutical's right, title and interest in the patent rights of the compounds listed in Exhibit A ("Compounds"), so that OSI Pharmaceuticals can conduct preclinical research and clinical trials, for such compounds to assess the treatment of psoriasis and related dermal pathology; and WHEREAS, Pfizer is willing to grant a license; Therefore, in consideration of the mutual covenants and promises set forth in this Agreement, the parties agree as follows: 1. Definitions. The capitalized terms used in this Agreement shall have the meanings specified for such terms in this Section 1. 1.1 "1996 Agreement" means the Collaborative Research Agreement between Pfizer and OSI Pharmaceuticals effective April 1, 1996 and the letter amendments to such Agreement including the letter amendments dated July 25, 1997 and November 3, 1997. 1.2 "Net Sales" means the gross amount invoiced by Pfizer or OSI Pharmaceuticals, their respective Affiliates, or any sublicensee of Pfizer of OSI Pharmaceuticals for sales to a third party or parties of Products, less normal and customary trade discounts actually allowed, rebates, returns, credits, taxes the legal incidence of which is on the purchaser and separately shown on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices and 1

transportation, insurance and postage charges, if prepaid by Pfizer or OSI Pharmaceuticals or any sublicensee of either party and billed on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices as a separate item. 1.3 "Product" means any pharmaceutical product developed in the course of the Development Program, the manufacture, use, sale, offer for sale or import of which would infringe any Valid Claim within the Patent Rights in the absence of a license. 1.4 "Sublicensee" shall mean a third party who has been granted a sublicense to make, use, sell, offer for sale or import Products. 1.5 "Area" shall mean the development of Compounds directed to the treatment or prevention of psoriasis and related dermal pathologies such as eczema. 1.6 "Affiliate" means any corporation or other legal entity owning, directly or indirectly, fifty percent (50%) or more of the voting capital shares or similar voting securities of Pfizer or OSI Pharmaceuticals; any corporation or other legal entity fifty percent (50%) or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by Pfizer or OSI Pharmaceuticals or any corporation or other legal entity fifty

DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT is entered into as of April 1, 1999 (the "Effective Date") by and between PFIZER INC, a Delaware corporation, having an office at 235 East 42nd Street, New York, New York 10017 and its Affiliates ("Pfizer"), and OSI PHARMACEUTICALS, INC., a Delaware corporation, having an office at 106 Charles Lindbergh Blvd., Uniondale, New York 11553-3649 and its Affiliates ("OSI Pharmaceuticals"); WHEREAS, OSI Pharmaceuticals desires to develop compounds derived from the Collaborative Research Agreement between Pfizer and OSI Pharmaceuticals, dated April 1, 1996, under Pfizer's and OSI Pharmaceutical's right, title and interest in the patent rights of the compounds listed in Exhibit A ("Compounds"), so that OSI Pharmaceuticals can conduct preclinical research and clinical trials, for such compounds to assess the treatment of psoriasis and related dermal pathology; and WHEREAS, Pfizer is willing to grant a license; Therefore, in consideration of the mutual covenants and promises set forth in this Agreement, the parties agree as follows: 1. Definitions. The capitalized terms used in this Agreement shall have the meanings specified for such terms in this Section 1. 1.1 "1996 Agreement" means the Collaborative Research Agreement between Pfizer and OSI Pharmaceuticals effective April 1, 1996 and the letter amendments to such Agreement including the letter amendments dated July 25, 1997 and November 3, 1997. 1.2 "Net Sales" means the gross amount invoiced by Pfizer or OSI Pharmaceuticals, their respective Affiliates, or any sublicensee of Pfizer of OSI Pharmaceuticals for sales to a third party or parties of Products, less normal and customary trade discounts actually allowed, rebates, returns, credits, taxes the legal incidence of which is on the purchaser and separately shown on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices and 1

transportation, insurance and postage charges, if prepaid by Pfizer or OSI Pharmaceuticals or any sublicensee of either party and billed on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices as a separate item. 1.3 "Product" means any pharmaceutical product developed in the course of the Development Program, the manufacture, use, sale, offer for sale or import of which would infringe any Valid Claim within the Patent Rights in the absence of a license. 1.4 "Sublicensee" shall mean a third party who has been granted a sublicense to make, use, sell, offer for sale or import Products. 1.5 "Area" shall mean the development of Compounds directed to the treatment or prevention of psoriasis and related dermal pathologies such as eczema. 1.6 "Affiliate" means any corporation or other legal entity owning, directly or indirectly, fifty percent (50%) or more of the voting capital shares or similar voting securities of Pfizer or OSI Pharmaceuticals; any corporation or other legal entity fifty percent (50%) or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by Pfizer or OSI Pharmaceuticals or any corporation or other legal entity fifty percent (50%) or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by a corporation or other legal entity which owns, directly or indirectly, fifty percent (50%) or more of the voting capital shares or similar voting securities of Pfizer or OSI Pharmaceuticals. 1.7 "Development Program" is the preclinical and clinical program in the Area conducted by OSI

transportation, insurance and postage charges, if prepaid by Pfizer or OSI Pharmaceuticals or any sublicensee of either party and billed on Pfizer's or OSI Pharmaceuticals' or any sublicensee of either party's invoices as a separate item. 1.3 "Product" means any pharmaceutical product developed in the course of the Development Program, the manufacture, use, sale, offer for sale or import of which would infringe any Valid Claim within the Patent Rights in the absence of a license. 1.4 "Sublicensee" shall mean a third party who has been granted a sublicense to make, use, sell, offer for sale or import Products. 1.5 "Area" shall mean the development of Compounds directed to the treatment or prevention of psoriasis and related dermal pathologies such as eczema. 1.6 "Affiliate" means any corporation or other legal entity owning, directly or indirectly, fifty percent (50%) or more of the voting capital shares or similar voting securities of Pfizer or OSI Pharmaceuticals; any corporation or other legal entity fifty percent (50%) or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by Pfizer or OSI Pharmaceuticals or any corporation or other legal entity fifty percent (50%) or more of the voting capital shares or similar voting rights of which is owned, directly or indirectly, by a corporation or other legal entity which owns, directly or indirectly, fifty percent (50%) or more of the voting capital shares or similar voting securities of Pfizer or OSI Pharmaceuticals. 1.7 "Development Program" is the preclinical and clinical program in the Area conducted by OSI Pharmaceuticals pursuant to this Agreement, attached as Exhibit B. 1.8 "Effective Date" is April 1, 1999. 1.9 "Technology" means and includes all materials, technology, technical information, know-how, expertise and trade secrets within the Area. 1.10 "Program Technology" means Technology that is or was developed by employees of or consultants to Pfizer or OSI Pharmaceuticals solely or jointly with each other in the course of performing research and fulfilling their respective obligations to this Agreement. 1.11 "Confidential Information" means all information about any element of the Development Program or Program Technology which is disclosed by OSI Pharmaceuticals or Pfizer to the other and designated "Confidential" in writing by at the time of disclosure or within thirty (30) days following disclosure, to the extent that such information as of the date of disclosure to the receiving party is not (i) known other than by virtue of a prior confidential 2

disclosure to the receiving party by OSI Pharmaceuticals or Pfizer; or (ii) disclosed in published literature, or otherwise generally known to the public through no fault or omission of the receiving party; or (iii) obtained from a third party free from any obligation of confidentiality to the disclosing party. 1.12 "Valid Claim" means a claim within Patent Rights so long as such claim shall not have been disclaimed and shall not have been held invalid in a final decision rendered by a tribunal of competent jurisdiction from which no appeal has been or can be taken. 1.13 "Patent Rights" shall mean all patent rights in and to inventions within Program Technology including all the Valid Claims of patent applications, whether domestic or foreign, claiming such patentable inventions, including all continuations, continuations-in-part, divisions, and renewals, all letters patent granted thereon, and all reissues, reexaminations and extensions thereof. 1.14 "Developing Party" shall mean the party granted a license in Section 3.2 or 3.3 as the case may be.

disclosure to the receiving party by OSI Pharmaceuticals or Pfizer; or (ii) disclosed in published literature, or otherwise generally known to the public through no fault or omission of the receiving party; or (iii) obtained from a third party free from any obligation of confidentiality to the disclosing party. 1.12 "Valid Claim" means a claim within Patent Rights so long as such claim shall not have been disclaimed and shall not have been held invalid in a final decision rendered by a tribunal of competent jurisdiction from which no appeal has been or can be taken. 1.13 "Patent Rights" shall mean all patent rights in and to inventions within Program Technology including all the Valid Claims of patent applications, whether domestic or foreign, claiming such patentable inventions, including all continuations, continuations-in-part, divisions, and renewals, all letters patent granted thereon, and all reissues, reexaminations and extensions thereof. 1.14 "Developing Party" shall mean the party granted a license in Section 3.2 or 3.3 as the case may be. 1.15 "Licensor" shall mean the party granting the license in Section 3.2 or 3.3, as the case may be. 2. Development Program. 2.1 Purpose. OSI Pharmaceuticals shall conduct a Development Program, which is attached as Exhibit B. The Development Program shall include preclinical and clinical research, through and including Phase II clinical trials, on the Compounds to assess their safety and efficacy to be developed as therapeutic agents for the treatment of psoriasis and other related dermal pathologies. 3. Grant of Licenses, Term, Rights and Obligations. 3.1 License granted to OSI Pharmaceuticals for the Development Program. Pfizer grants to OSI Pharmaceuticals an exclusive, except for Pfizer, license to make and use the Compounds for all research purposes for the performance of the Development Program other than the sale or manufacture for sale of products or processes. 3.2 License granted to Pfizer under the Patents and Program Technology. At the end of the Development Program, Pfizer will have three (3) months from the receipt of the data 3

package from the clinical studies, described in Exhibit B, delivered by OSI Pharmaceuticals to Pfizer, to notify OSI Pharmaceuticals of Pfizer's intention to continue development and commercialization of each Compound. If Pfizer notifies OSI Pharmaceuticals of its intention to continue development and commercialization of one or more of such Compounds, Pfizer shall have an exclusive, world-wide license, with the right to grant sublicenses, to make, use, sell, offer for sale and import Products under all of OSI Pharmaceuticals' right, title and interest in the Patent Rights and Program Technology with respect to such Compounds subject to the terms and conditions of this Agreement. 3.3. License granted to OSI Pharmaceuticals under the Patents and Program Technology. If Pfizer fails to notify OSI Pharmaceuticals that it intends to develop and commercialize any such Compound, such failure shall serve to grant to OSI Pharmaceuticals an exclusive, world-wide, royalty-bearing license, including the right to grant sublicenses, to manufacture, use, sell, offer for sale and import Products under all Pfizer's right, title and interest in the Patent Rights in such Compounds, subject to the terms and conditions of this Agreement; provided, however, that OSI Pharmaceuticals may, within three (3) months of the expiration of the three (3) month period described in Section 3.2, refuse to accept any or all such licenses in which case the parties shall have the rights and duties with respect to such Patent Rights set forth in the 1996 Agreement. 3.4 Term of Licenses. The term of the grant set forth in Section 3.1 shall commence on the Effective Date and shall terminate in each country on the date of the last to expire of the Patent Rights in that country. The term of the grant set forth in Section 3.2 and 3.3 shall begin when accepted in Section 3.2, or at the end of the refusal period in Section 3.3 and shall terminate in each country on the date of the last to expire of the Patent Rights in that country.

package from the clinical studies, described in Exhibit B, delivered by OSI Pharmaceuticals to Pfizer, to notify OSI Pharmaceuticals of Pfizer's intention to continue development and commercialization of each Compound. If Pfizer notifies OSI Pharmaceuticals of its intention to continue development and commercialization of one or more of such Compounds, Pfizer shall have an exclusive, world-wide license, with the right to grant sublicenses, to make, use, sell, offer for sale and import Products under all of OSI Pharmaceuticals' right, title and interest in the Patent Rights and Program Technology with respect to such Compounds subject to the terms and conditions of this Agreement. 3.3. License granted to OSI Pharmaceuticals under the Patents and Program Technology. If Pfizer fails to notify OSI Pharmaceuticals that it intends to develop and commercialize any such Compound, such failure shall serve to grant to OSI Pharmaceuticals an exclusive, world-wide, royalty-bearing license, including the right to grant sublicenses, to manufacture, use, sell, offer for sale and import Products under all Pfizer's right, title and interest in the Patent Rights in such Compounds, subject to the terms and conditions of this Agreement; provided, however, that OSI Pharmaceuticals may, within three (3) months of the expiration of the three (3) month period described in Section 3.2, refuse to accept any or all such licenses in which case the parties shall have the rights and duties with respect to such Patent Rights set forth in the 1996 Agreement. 3.4 Term of Licenses. The term of the grant set forth in Section 3.1 shall commence on the Effective Date and shall terminate in each country on the date of the last to expire of the Patent Rights in that country. The term of the grant set forth in Section 3.2 and 3.3 shall begin when accepted in Section 3.2, or at the end of the refusal period in Section 3.3 and shall terminate in each country on the date of the last to expire of the Patent Rights in that country. 4. Milestone Payments, Royalties, Payments of Royalties, Accounting for Royalties, Records. 4.1.1 The Developing Party shall pay to the Licensor a royalty based on the Net Sales of each Product. Such royalty shall be paid with respect to each country of the world from the date of the first commercial sale (the date of the invoice of the Developing Party or any sublicensee of the Developing Party with respect to such sale) of such Product in each such country until the expiration of the last Patent Right to expire with respect to each such country and each such Product. 4

4.1.2 If the manufacture and sale of a Product takes place in countries which there are no Patent Rights, the Developing Party will pay to the Licensor a royalty based on the Net Sales of each Product in each such country for ten (10) years after the first commercial sale of such Product in such country. 4.2 Royalty Rates. 4.2.1 If Pfizer is the Developing Party, the royalty paid by Pfizer, to OSI Pharmaceuticals shall be ** percent ** of the Net Sales of each Product. It is understood that the royalty rate specified in this Section 4.2.1 is subject to reduction as provided in Sections 4.4 and 4.8 below. Those sections of this Agreement or any other sections to the contrary notwithstanding, the royalty paid to OSI Pharmaceuticals with respect to Net Sales of a Product shall not be reduced to less than ** percent ** of such Net Sales; provided, however, that if a Product is made and sold, in a country in which there are no Patent Rights, then the royalty paid by Pfizer to OSI Pharmaceuticals shall be ** percent ** of the Net Sales with respect to such Products, according to the term described in Section 4.1.2, and no reductions of royalties pursuant to Section 4.8 shall be made. 4.2.2 If OSI Pharmaceuticals is the Developing Party, the royalty paid by OSI Pharmaceuticals to Pfizer shall be ** percent ** of the Net Sales of each Product. If a Product is made or sold, in a country in which there are no Patent Rights, then the royalty paid by OSI Pharmaceuticals to Pfizer shall be ** percent ** of the Net Sales with respect to such Products, according to the term described in Section 4.1.2. 4.4 Renegotiation of Royalty Rates. The parties acknowledge that the royalty rates set forth in Section 4.1 are based on the expectation that Products will be administered to human patients. If Pfizer identifies or develops for animal patients with respect to a

4.1.2 If the manufacture and sale of a Product takes place in countries which there are no Patent Rights, the Developing Party will pay to the Licensor a royalty based on the Net Sales of each Product in each such country for ten (10) years after the first commercial sale of such Product in such country. 4.2 Royalty Rates. 4.2.1 If Pfizer is the Developing Party, the royalty paid by Pfizer, to OSI Pharmaceuticals shall be ** percent ** of the Net Sales of each Product. It is understood that the royalty rate specified in this Section 4.2.1 is subject to reduction as provided in Sections 4.4 and 4.8 below. Those sections of this Agreement or any other sections to the contrary notwithstanding, the royalty paid to OSI Pharmaceuticals with respect to Net Sales of a Product shall not be reduced to less than ** percent ** of such Net Sales; provided, however, that if a Product is made and sold, in a country in which there are no Patent Rights, then the royalty paid by Pfizer to OSI Pharmaceuticals shall be ** percent ** of the Net Sales with respect to such Products, according to the term described in Section 4.1.2, and no reductions of royalties pursuant to Section 4.8 shall be made. 4.2.2 If OSI Pharmaceuticals is the Developing Party, the royalty paid by OSI Pharmaceuticals to Pfizer shall be ** percent ** of the Net Sales of each Product. If a Product is made or sold, in a country in which there are no Patent Rights, then the royalty paid by OSI Pharmaceuticals to Pfizer shall be ** percent ** of the Net Sales with respect to such Products, according to the term described in Section 4.1.2. 4.4 Renegotiation of Royalty Rates. The parties acknowledge that the royalty rates set forth in Section 4.1 are based on the expectation that Products will be administered to human patients. If Pfizer identifies or develops for animal patients with respect to a Product or Products which represents a commercial opportunity for Pfizer in the area of animal health, the parties may negotiate a new royalty rate for such Product to account for development costs and changes in the cost of goods, selling price and projected annual Net Sales.

** This portion has been redacted pursuant to a request for confidential treatment. 5

4.5 Payment Dates. Royalties shall be paid on Net Sales within sixty (60) days after the end of each calendar quarter in which such Net Sales are made. Such payments shall be accompanied by a statement showing the Net Sales of each Product by the Developing Party or any sublicensee of such in each country, the applicable royalty rate for such Product, and a calculation of the amount of royalty due, including any offsets. 4.6 Accounting. The Net Sales used for computing the royalties payable to the Licensor by the Developing Party, shall be computed and paid in US dollars by wire transfer in immediately available funds to a U.S. account designated by the receiving party, or by other mutually acceptable means. For purposes of determining the amount of royalties due, the amount of Net Sales in any foreign currency shall be computed by (a) converting such amount into U.S. dollars at the prevailing commercial rate of exchange for purchasing dollars with such foreign currency as published in the Wall Street Journal for the close of the last business day of the calendar quarter for which the relevant royalty payment is to be made by the payor and (b) deducting the amount of any governmental tax, duty, charge, or other fee actually paid in respect of such conversion into, and remittance of U.S. dollars. 4.7 Records. The party that is paying such royalties shall keep for three (3) years from the date of each payment of royalties complete and accurate records of sales by such party of each Product in sufficient detail to allow the accruing royalties to be determined accurately. The receiving party shall have the right for a period of three (3) years after

4.5 Payment Dates. Royalties shall be paid on Net Sales within sixty (60) days after the end of each calendar quarter in which such Net Sales are made. Such payments shall be accompanied by a statement showing the Net Sales of each Product by the Developing Party or any sublicensee of such in each country, the applicable royalty rate for such Product, and a calculation of the amount of royalty due, including any offsets. 4.6 Accounting. The Net Sales used for computing the royalties payable to the Licensor by the Developing Party, shall be computed and paid in US dollars by wire transfer in immediately available funds to a U.S. account designated by the receiving party, or by other mutually acceptable means. For purposes of determining the amount of royalties due, the amount of Net Sales in any foreign currency shall be computed by (a) converting such amount into U.S. dollars at the prevailing commercial rate of exchange for purchasing dollars with such foreign currency as published in the Wall Street Journal for the close of the last business day of the calendar quarter for which the relevant royalty payment is to be made by the payor and (b) deducting the amount of any governmental tax, duty, charge, or other fee actually paid in respect of such conversion into, and remittance of U.S. dollars. 4.7 Records. The party that is paying such royalties shall keep for three (3) years from the date of each payment of royalties complete and accurate records of sales by such party of each Product in sufficient detail to allow the accruing royalties to be determined accurately. The receiving party shall have the right for a period of three (3) years after receiving any report or statement with respect to royalties due and payable to appoint at its expense an independent certified public accountant reasonably acceptable to the payor to inspect the relevant records of the payor to verify such report or statement. The payor shall make its records available for inspection by such independent certified public accountant during regular business hours at such place or places where such records are customarily kept, upon reasonable notice from the recipient of royalties, to the extent reasonably necessary, to verify the accuracy of the reports and payments. Such inspection right shall not be exercised more than once in any calendar year nor more than once with respect to sales in any given period. Both parties agree to hold in strict confidence all information concerning royalty payments and reports, and all information learned 6

in the course of any audit or inspection, except to the extent necessary for the payee to reveal such information in order to enforce its rights under this Agreement or if disclosure is required by law. The failure of the payee to request verification of any report or statement during said three-year period shall be considered acceptance of the accuracy of such report, and the payor shall have no obligation to maintain records pertaining to such report or statement beyond said three-year period. The results of each inspection, if any, shall be binding on both parties. 4.8 Milestone Payments. If Pfizer is the Developing Party, then Pfizer shall pay to OSI Pharmaceuticals, within sixty (60) days of the completion of each event set forth below ("Event"), the payment listed opposite that Event. Payments shall be made in US dollars by wire transfer in immediately available funds to a U.S. bank account designated by OSI Pharmaceuticals, or other mutually acceptable means. Pfizer shall be obligated to make each payment only once with respect to each Compound. All payments made by Pfizer pursuant to this Section 4.8 with respect to a Product are non-refundable but shall be credited against all sums due to OSI Pharmaceuticals pursuant to Section 4.2.1 of this Agreement with respect to Net Sales of such Product; provided, however, that the sums due pursuant to Section 4.2.1 in any calendar year with respect to such Product shall not be reduced by virtue of this credit by more than ** percent **:
Event ----Notification by Pfizer to OSI Pharmaceuticals of intent to develop and commercialize Product NDA/PLA Submission in any country NDA/PLA Approval in any country Amount ------

1.

** ** **

2. 3.

in the course of any audit or inspection, except to the extent necessary for the payee to reveal such information in order to enforce its rights under this Agreement or if disclosure is required by law. The failure of the payee to request verification of any report or statement during said three-year period shall be considered acceptance of the accuracy of such report, and the payor shall have no obligation to maintain records pertaining to such report or statement beyond said three-year period. The results of each inspection, if any, shall be binding on both parties. 4.8 Milestone Payments. If Pfizer is the Developing Party, then Pfizer shall pay to OSI Pharmaceuticals, within sixty (60) days of the completion of each event set forth below ("Event"), the payment listed opposite that Event. Payments shall be made in US dollars by wire transfer in immediately available funds to a U.S. bank account designated by OSI Pharmaceuticals, or other mutually acceptable means. Pfizer shall be obligated to make each payment only once with respect to each Compound. All payments made by Pfizer pursuant to this Section 4.8 with respect to a Product are non-refundable but shall be credited against all sums due to OSI Pharmaceuticals pursuant to Section 4.2.1 of this Agreement with respect to Net Sales of such Product; provided, however, that the sums due pursuant to Section 4.2.1 in any calendar year with respect to such Product shall not be reduced by virtue of this credit by more than ** percent **:
Event ----Notification by Pfizer to OSI Pharmaceuticals of intent to develop and commercialize Product NDA/PLA Submission in any country NDA/PLA Approval in any country Amount ------

1.

** ** **

2. 3.

** This portion has been redacted pursuant to a request for confidential treatment. 7

For the purposes of the foregoing, "NDA/PLA" shall mean a New Drug Application or Product License Application or other application for authority to market a Product filed with the U.S. FDA or a counterpart health regulatory agency in another country. 4.9 Development Costs. Upon written notification by Pfizer to OSI Pharmaceuticals of Pfizer's intent to develop and commercialize any Product, Pfizer shall reimburse to OSI Pharmaceuticals all reasonable costs associated with Phase I and Phase II clinical trials pursuant to the Development Program within sixty (60) days. 5. Legal Action. 5.1 Actual or Threatened Disclosure or Infringement. When information comes to the attention of the Developing Party to the effect that any Patent Rights relating to a Product have been or are threatened to be unlawfully infringed, the Developing Party shall have the right at its expense to take such action as it may deem necessary to prosecute or prevent such unlawful infringement, including the right to bring or defend any suit, action or proceeding involving any such infringement. The Developing Party shall notify the Licensor promptly of the receipt of any such information and of the commencement of any such suit, action or proceeding. If the Developing Party determines that it is necessary or desirable for the Licensor to join any such suit, action or proceeding, the Licensor shall, at the Developing Party's expense, execute all papers and perform such other acts as may be reasonably required to permit the Developing Party to commence such action, suit or proceeding in which case the Developing Party shall hold Licensor free, 8

clear and harmless from any and all costs and expenses of litigation, including attorneys fees. If the Developing

For the purposes of the foregoing, "NDA/PLA" shall mean a New Drug Application or Product License Application or other application for authority to market a Product filed with the U.S. FDA or a counterpart health regulatory agency in another country. 4.9 Development Costs. Upon written notification by Pfizer to OSI Pharmaceuticals of Pfizer's intent to develop and commercialize any Product, Pfizer shall reimburse to OSI Pharmaceuticals all reasonable costs associated with Phase I and Phase II clinical trials pursuant to the Development Program within sixty (60) days. 5. Legal Action. 5.1 Actual or Threatened Disclosure or Infringement. When information comes to the attention of the Developing Party to the effect that any Patent Rights relating to a Product have been or are threatened to be unlawfully infringed, the Developing Party shall have the right at its expense to take such action as it may deem necessary to prosecute or prevent such unlawful infringement, including the right to bring or defend any suit, action or proceeding involving any such infringement. The Developing Party shall notify the Licensor promptly of the receipt of any such information and of the commencement of any such suit, action or proceeding. If the Developing Party determines that it is necessary or desirable for the Licensor to join any such suit, action or proceeding, the Licensor shall, at the Developing Party's expense, execute all papers and perform such other acts as may be reasonably required to permit the Developing Party to commence such action, suit or proceeding in which case the Developing Party shall hold Licensor free, 8

clear and harmless from any and all costs and expenses of litigation, including attorneys fees. If the Developing Party brings a suit, it shall have the right first to reimburse itself out of any sums recovered in such suit or in its settlement for all costs and expenses, including attorney's fees, related to such suit or settlement, and twenty-five percent (25%) of any funds that shall remain from said recovery shall be paid to Licensor and the balance of such funds shall be retained by the Developing Party. If the Developing Party does not, within one hundred twenty (120) days after giving notice to the Licensor of the above-described information, notify the Licensor of the Developing Party's intent to bring suit against any infringer, the Licensor shall have the right to bring suit for such alleged infringement, but it shall not be obligated to do so, and may join the Developing Party as party plaintiff, if appropriate, in which event the Licensor shall hold the Developing Party free, clear and harmless from any and all costs and expenses of such litigation, including attorney's fees, and any sums recovered in any such suit or in its settlement shall belong to the Licensor. However, twenty-five percent (25%) of any such sums received by the Licensor, after deduction of all costs and expenses related to such suit or settlement, including attorney's fees paid, shall be paid to the Developing Party. Each party shall always have the right to be represented by counsel of its own selection and at its own expense in any suit instituted by the other for infringement under the terms of this Section. If the Developing Party lacks standing and the Licensor has standing to bring any such suit, action or proceeding, then the Licensor shall do so at the request of the Developing Party and at the Developing Party's expense. 5.2 Defense of Infringement Claims. The Licensor will cooperate with the Developing Party at the Developing Party's expense in the defense of any suit, action or proceeding against the Developing Party or any sublicensee of the Developing Party alleging the infringement of the intellectual property rights of a third party by reason of the use of Patent Rights in the manufacture, use or sale of a Product. The Developing Party shall give the Licensor prompt written notice of the commencement of any such suit, action or proceeding or claim of infringement and will furnish the Licensor a copy of each communication relating to the alleged infringement. The Licensor shall give to the Developing Party all authority (including the right to exclusive control of the defense of any such suit, action or proceeding and the exclusive right after consultation with the Licensor, to compromise, litigate, settle or otherwise dispose of any such suit, action or proceeding), at the Developing Party's expense, and shall provide all information and assistance necessary to defend or settle any such suit, action or proceeding; provided, however, the Developing Party shall obtain the Licensor's prior consent to such part of any settlement which contemplates payment or other action by the Licensor or has a material adverse effect on the Licensor's business. If the parties agree that the Licensor should institute or join any suit, action or proceeding pursuant to this Section, the Developing Party

clear and harmless from any and all costs and expenses of litigation, including attorneys fees. If the Developing Party brings a suit, it shall have the right first to reimburse itself out of any sums recovered in such suit or in its settlement for all costs and expenses, including attorney's fees, related to such suit or settlement, and twenty-five percent (25%) of any funds that shall remain from said recovery shall be paid to Licensor and the balance of such funds shall be retained by the Developing Party. If the Developing Party does not, within one hundred twenty (120) days after giving notice to the Licensor of the above-described information, notify the Licensor of the Developing Party's intent to bring suit against any infringer, the Licensor shall have the right to bring suit for such alleged infringement, but it shall not be obligated to do so, and may join the Developing Party as party plaintiff, if appropriate, in which event the Licensor shall hold the Developing Party free, clear and harmless from any and all costs and expenses of such litigation, including attorney's fees, and any sums recovered in any such suit or in its settlement shall belong to the Licensor. However, twenty-five percent (25%) of any such sums received by the Licensor, after deduction of all costs and expenses related to such suit or settlement, including attorney's fees paid, shall be paid to the Developing Party. Each party shall always have the right to be represented by counsel of its own selection and at its own expense in any suit instituted by the other for infringement under the terms of this Section. If the Developing Party lacks standing and the Licensor has standing to bring any such suit, action or proceeding, then the Licensor shall do so at the request of the Developing Party and at the Developing Party's expense. 5.2 Defense of Infringement Claims. The Licensor will cooperate with the Developing Party at the Developing Party's expense in the defense of any suit, action or proceeding against the Developing Party or any sublicensee of the Developing Party alleging the infringement of the intellectual property rights of a third party by reason of the use of Patent Rights in the manufacture, use or sale of a Product. The Developing Party shall give the Licensor prompt written notice of the commencement of any such suit, action or proceeding or claim of infringement and will furnish the Licensor a copy of each communication relating to the alleged infringement. The Licensor shall give to the Developing Party all authority (including the right to exclusive control of the defense of any such suit, action or proceeding and the exclusive right after consultation with the Licensor, to compromise, litigate, settle or otherwise dispose of any such suit, action or proceeding), at the Developing Party's expense, and shall provide all information and assistance necessary to defend or settle any such suit, action or proceeding; provided, however, the Developing Party shall obtain the Licensor's prior consent to such part of any settlement which contemplates payment or other action by the Licensor or has a material adverse effect on the Licensor's business. If the parties agree that the Licensor should institute or join any suit, action or proceeding pursuant to this Section, the Developing Party may, at the Developing Party's expense, join the Licensor as a defendant if necessary or desirable, and the Licensor shall execute all documents and take all other actions, including giving testimony, which may reasonably be required in connection with the prosecution of such suit, action or proceeding. 9

5.3 Hold Harmless. The Licensor agrees to defend, protect, indemnify and hold harmless the Developing Party and any sublicensee of the Developing Party, from and against any loss or expense arising from any proven claim of a third party that it has been granted rights by the Licensor that the Developing Party or any sublicensee of the Developing Party in exercising their rights granted to the Developing Party by the Licensor pursuant to this Agreement, has infringed upon such rights granted to such third party by the Licensor. 5.4 Third Party Licenses. If the manufacture, use or sale by the Developing Party of a Product in any country would, in the opinion of both the Developing Party and the Licensor, infringe a patent owned by a third party, the Developing Party and the Licensor, upon mutual consent, shall attempt to obtain a license under such patent at the Developing Party's expense. If such license is obtained under such patent, fifty percent (50%) of any payments made by the Developing Party to such third party shall be deductible from royalty payments due from the Developing Party to the Licensor pursuant to this Agreement; provided, however, that in no event shall royalties payable to the Licensor be lower than ** percent ** of Net Sales as a result of all such deductions. All such computations, payments, and adjustments shall be on a country by country and patent by patent basis.

5.3 Hold Harmless. The Licensor agrees to defend, protect, indemnify and hold harmless the Developing Party and any sublicensee of the Developing Party, from and against any loss or expense arising from any proven claim of a third party that it has been granted rights by the Licensor that the Developing Party or any sublicensee of the Developing Party in exercising their rights granted to the Developing Party by the Licensor pursuant to this Agreement, has infringed upon such rights granted to such third party by the Licensor. 5.4 Third Party Licenses. If the manufacture, use or sale by the Developing Party of a Product in any country would, in the opinion of both the Developing Party and the Licensor, infringe a patent owned by a third party, the Developing Party and the Licensor, upon mutual consent, shall attempt to obtain a license under such patent at the Developing Party's expense. If such license is obtained under such patent, fifty percent (50%) of any payments made by the Developing Party to such third party shall be deductible from royalty payments due from the Developing Party to the Licensor pursuant to this Agreement; provided, however, that in no event shall royalties payable to the Licensor be lower than ** percent ** of Net Sales as a result of all such deductions. All such computations, payments, and adjustments shall be on a country by country and patent by patent basis. 6. Representation and Warranty. The Developing Party and the Licensor represent and warrant to each other that it has the right to grant the licenses granted pursuant to this Agreement, and that the licenses so granted do not conflict with or violate the terms of any other agreements between the Licensor, or the Developing Party and any other third party. ** This portion has been redacted pursuant to a request for confidential treatment. 10

7. Treatment of Confidential Information. 7.1 Confidentiality. 7.1.1 Pfizer and OSI Pharmaceuticals each recognize that the other's Confidential Information constitutes highly valuable, confidential information. Subject to each party's rights and obligations pursuant to this Agreement, Pfizer and OSI Pharmaceuticals each agree that during the term of the Development Agreement and for five (5) years thereafter, it will keep confidential, and will cause its Affiliates or Sublicensees to keep confidential, all OSI Pharmaceuticals Confidential Information or Pfizer Confidential Information, as the case may be, that is disclosed to it or to any of its Affiliates pursuant to this Agreement. Neither Pfizer, its Affiliates nor OSI Pharmaceuticals shall use Confidential Information of the other party except as expressly permitted under this Agreement. For all purposes of this Section 7, it is understood that Program Technology shall be deemed Confidential Information of both parties. 7.1.2 Subject to Pfizer's rights and obligations pursuant to this Agreement, Pfizer and OSI Pharmaceuticals each agree that any disclosure of the other's Confidential Information to any officer, employee or agent of the other party or of any of its Affiliates shall be made only if and to the extent necessary to carry out its responsibilities under this Agreement and shall be limited to the maximum extent possible consistent with such responsibilities. Subject to each party's rights and obligations pursuant to this Agreement, Pfizer and OSI Pharmaceuticals each agree not to disclose the other's Confidential Information to any third parties under any circumstance without written permission from the other party. Each party shall take such action, and shall cause its Affiliates or Sublicensees to take such action, to preserve the confidentiality of each other's Confidential Information as it would customarily take to preserve the confidentiality of its own Confidential Information. Each party, upon the other's request, will return all the Confidential Information disclosed to it by the other party pursuant to this Agreement, including all copies and extracts of documents, within sixty (60) days of the request upon the termination of this Agreement except for one (1) copy which may be kept for the purpose of complying with continuing obligations under this Agreement.

7. Treatment of Confidential Information. 7.1 Confidentiality. 7.1.1 Pfizer and OSI Pharmaceuticals each recognize that the other's Confidential Information constitutes highly valuable, confidential information. Subject to each party's rights and obligations pursuant to this Agreement, Pfizer and OSI Pharmaceuticals each agree that during the term of the Development Agreement and for five (5) years thereafter, it will keep confidential, and will cause its Affiliates or Sublicensees to keep confidential, all OSI Pharmaceuticals Confidential Information or Pfizer Confidential Information, as the case may be, that is disclosed to it or to any of its Affiliates pursuant to this Agreement. Neither Pfizer, its Affiliates nor OSI Pharmaceuticals shall use Confidential Information of the other party except as expressly permitted under this Agreement. For all purposes of this Section 7, it is understood that Program Technology shall be deemed Confidential Information of both parties. 7.1.2 Subject to Pfizer's rights and obligations pursuant to this Agreement, Pfizer and OSI Pharmaceuticals each agree that any disclosure of the other's Confidential Information to any officer, employee or agent of the other party or of any of its Affiliates shall be made only if and to the extent necessary to carry out its responsibilities under this Agreement and shall be limited to the maximum extent possible consistent with such responsibilities. Subject to each party's rights and obligations pursuant to this Agreement, Pfizer and OSI Pharmaceuticals each agree not to disclose the other's Confidential Information to any third parties under any circumstance without written permission from the other party. Each party shall take such action, and shall cause its Affiliates or Sublicensees to take such action, to preserve the confidentiality of each other's Confidential Information as it would customarily take to preserve the confidentiality of its own Confidential Information. Each party, upon the other's request, will return all the Confidential Information disclosed to it by the other party pursuant to this Agreement, including all copies and extracts of documents, within sixty (60) days of the request upon the termination of this Agreement except for one (1) copy which may be kept for the purpose of complying with continuing obligations under this Agreement. 7.2 Publicity. Except as required by law, neither party may disclose the terms of this Agreement without the written consent of the other party, which consent shall not be unreasonably withheld. 11

7.3 Disclosure Required By Law. If either party is requested to disclose Confidential Information in connection with a legal or administrative proceeding or is otherwise required by law to disclose Confidential Information, such party will give the other party prompt notice of such request. The disclosing party may seek an appropriate protective order or other remedy or waive compliance with the provisions of this Agreement. If such party seeks a protective order or other remedy, the other party will cooperate. If such party fails to obtain a protective order or waive compliance with the relevant provisions of this Agreement, the other party will disclose only that portion of Confidential Information which its legal counsel determines it is required to disclose. 7.4 Disclosure of Inventions. Each party shall promptly inform the other about all inventions in the Area that are conceived, made or developed in the course of carrying out the Development Program by employees of, consultants to, either of them solely, or jointly with employees of, or consultants to the other. 7.5 Acquisition of Rights from Third Parties. During the Development Program, OSI Pharmaceuticals and Pfizer shall each promptly notify each other of any and all opportunities to acquire in any manner from third parties, technology or patents or information which may be useful in or relate to the Development Program. In each case, Pfizer and OSI Pharmaceuticals shall decide if such rights should be acquired in connection with the Development Program and, if so, whether by OSI Pharmaceuticals, Pfizer or both. If acquired such rights shall become part of the Confidential Information, Program Technology or Patent Rights, whichever is appropriate, of the acquiring party. Pfizer shall pay all costs of acquiring and maintaining rights to such intellectual property, at Pfizer's sole discretion, provided that OSI Pharmaceuticals shall have no obligation or liability hereunder with respect to such rights in the event Pfizer shall elect not to acquire such rights. 8. Provisions Concerning Filing, Prosecution and Maintenance of Patent Rights. The following provisions relate to the filing, prosecution and maintenance of Patent Rights during the Development Program:

7.3 Disclosure Required By Law. If either party is requested to disclose Confidential Information in connection with a legal or administrative proceeding or is otherwise required by law to disclose Confidential Information, such party will give the other party prompt notice of such request. The disclosing party may seek an appropriate protective order or other remedy or waive compliance with the provisions of this Agreement. If such party seeks a protective order or other remedy, the other party will cooperate. If such party fails to obtain a protective order or waive compliance with the relevant provisions of this Agreement, the other party will disclose only that portion of Confidential Information which its legal counsel determines it is required to disclose. 7.4 Disclosure of Inventions. Each party shall promptly inform the other about all inventions in the Area that are conceived, made or developed in the course of carrying out the Development Program by employees of, consultants to, either of them solely, or jointly with employees of, or consultants to the other. 7.5 Acquisition of Rights from Third Parties. During the Development Program, OSI Pharmaceuticals and Pfizer shall each promptly notify each other of any and all opportunities to acquire in any manner from third parties, technology or patents or information which may be useful in or relate to the Development Program. In each case, Pfizer and OSI Pharmaceuticals shall decide if such rights should be acquired in connection with the Development Program and, if so, whether by OSI Pharmaceuticals, Pfizer or both. If acquired such rights shall become part of the Confidential Information, Program Technology or Patent Rights, whichever is appropriate, of the acquiring party. Pfizer shall pay all costs of acquiring and maintaining rights to such intellectual property, at Pfizer's sole discretion, provided that OSI Pharmaceuticals shall have no obligation or liability hereunder with respect to such rights in the event Pfizer shall elect not to acquire such rights. 8. Provisions Concerning Filing, Prosecution and Maintenance of Patent Rights. The following provisions relate to the filing, prosecution and maintenance of Patent Rights during the Development Program: 8.1 Filing, Prosecution and Maintenance by OSI Pharmaceuticals. With respect to Patent Rights in which OSI Pharmaceuticals employees or consultants, alone or together with Pfizer 12

employees, or consultants are named as inventors, OSI Pharmaceuticals shall have the exclusive right and obligation: (a) to file applications for letters patent on patentable inventions included in Patent Rights; provided, however, that OSI Pharmaceuticals shall consult with Pfizer regarding countries in which such patent applications should be filed and shall file patent applications in those countries where Pfizer requests that OSI Pharmaceuticals file such applications; and, further provided, that OSI Pharmaceuticals, at its option and expense, may file in countries where Pfizer does not request that OSI Pharmaceuticals file such applications; (b) to take all reasonable steps to prosecute all pending and new patent applications included within Patent Rights; (c) to respond to oppositions, nullity actions, re-examinations, revocation actions and similar proceedings filed by third parties against the grant of letters patent for such applications; (d) to maintain in force any letters patent included in Patent Rights by duly filing all necessary papers and paying any fees required by the patent laws of the particular country in which such letters patent were granted; and OSI Pharmaceuticals shall notify Pfizer in a timely manner of any decision to abandon a pending patent application or an issued patent included in Patent Rights. Thereafter, Pfizer shall have the option, at its expense, of continuing to prosecute any such pending patent application or of keeping the issued patent in force. 8.1.1 Copies of Documents. OSI Pharmaceuticals and Pfizer shall provide to each other copies of all patent applications that are part of Patent Rights prior to filing, for the purpose of obtaining substantive comment of the other party's patent counsel. OSI Pharmaceuticals and Pfizer shall also provide to the other copies of all documents relating to prosecution of all such patent applications in a timely manner and shall provide to the other every six (6) months a report detailing the status of all patent applications that are a part of Patent Rights.

employees, or consultants are named as inventors, OSI Pharmaceuticals shall have the exclusive right and obligation: (a) to file applications for letters patent on patentable inventions included in Patent Rights; provided, however, that OSI Pharmaceuticals shall consult with Pfizer regarding countries in which such patent applications should be filed and shall file patent applications in those countries where Pfizer requests that OSI Pharmaceuticals file such applications; and, further provided, that OSI Pharmaceuticals, at its option and expense, may file in countries where Pfizer does not request that OSI Pharmaceuticals file such applications; (b) to take all reasonable steps to prosecute all pending and new patent applications included within Patent Rights; (c) to respond to oppositions, nullity actions, re-examinations, revocation actions and similar proceedings filed by third parties against the grant of letters patent for such applications; (d) to maintain in force any letters patent included in Patent Rights by duly filing all necessary papers and paying any fees required by the patent laws of the particular country in which such letters patent were granted; and OSI Pharmaceuticals shall notify Pfizer in a timely manner of any decision to abandon a pending patent application or an issued patent included in Patent Rights. Thereafter, Pfizer shall have the option, at its expense, of continuing to prosecute any such pending patent application or of keeping the issued patent in force. 8.1.1 Copies of Documents. OSI Pharmaceuticals and Pfizer shall provide to each other copies of all patent applications that are part of Patent Rights prior to filing, for the purpose of obtaining substantive comment of the other party's patent counsel. OSI Pharmaceuticals and Pfizer shall also provide to the other copies of all documents relating to prosecution of all such patent applications in a timely manner and shall provide to the other every six (6) months a report detailing the status of all patent applications that are a part of Patent Rights. 8.1.2 Reimbursement of Costs for Filing Prosecuting and Maintaining Patent Rights. Within thirty (30) days of receipt of invoices from OSI Pharmaceuticals, Pfizer shall reimburse OSI Pharmaceuticals for all the costs of filing, prosecuting, responding to opposition and maintaining patent applications and patents in countries where Pfizer requests that patent 13

applications be filed, prosecuted and maintained. Such reimbursement shall be in addition to other funding payments under this Agreement and shall include such costs of all activities described in 8.1 (a)-(e) above. However, Pfizer may, upon sixty (60) days notice, request that OSI Pharmaceuticals discontinue filing or prosecution of patent applications in any country and discontinue reimbursing OSI Pharmaceuticals for the costs of filing, prosecuting, responding to opposition or maintaining such patent application or patent in any country. OSI Pharmaceuticals shall pay all costs in those countries in which Pfizer requests that OSI Pharmaceuticals not file, prosecute or maintain patent applications and patents, but in which OSI Pharmaceuticals, at its option, elects to do so. 8.1.3 The Developing Party shall have the right to file on behalf of and as an agent for the Licensor all applications for, and take all actions necessary to obtain patent extensions pursuant to 35 USC Section 156 and foreign counterparts with respect to the Patent Rights to the extent that such extensions are available by reason of a Product under this Agreement during the period the Agreement is in effect. The Licensor shall have the obligation to sign, such further documents and take such further actions as may be requested by the Developing Party in this regard, at the Developing Party's expense 8.2 Filing, Prosecution and Maintenance by Pfizer. During the term of the Development Program, with respect to Patent Rights in which Pfizer employees or consultants alone are named as inventors, Pfizer shall have those rights and duties ascribed to OSI Pharmaceuticals in Section 8.1, except that Pfizer will bear all related expenses. 8.3 Filing, Prosecution and Maintenance by the Developing Party. During the term of the grant described in Section 3.2 and 3.3, the Developing Party shall have those rights and duties ascribed to OSI Pharmaceuticals in

applications be filed, prosecuted and maintained. Such reimbursement shall be in addition to other funding payments under this Agreement and shall include such costs of all activities described in 8.1 (a)-(e) above. However, Pfizer may, upon sixty (60) days notice, request that OSI Pharmaceuticals discontinue filing or prosecution of patent applications in any country and discontinue reimbursing OSI Pharmaceuticals for the costs of filing, prosecuting, responding to opposition or maintaining such patent application or patent in any country. OSI Pharmaceuticals shall pay all costs in those countries in which Pfizer requests that OSI Pharmaceuticals not file, prosecute or maintain patent applications and patents, but in which OSI Pharmaceuticals, at its option, elects to do so. 8.1.3 The Developing Party shall have the right to file on behalf of and as an agent for the Licensor all applications for, and take all actions necessary to obtain patent extensions pursuant to 35 USC Section 156 and foreign counterparts with respect to the Patent Rights to the extent that such extensions are available by reason of a Product under this Agreement during the period the Agreement is in effect. The Licensor shall have the obligation to sign, such further documents and take such further actions as may be requested by the Developing Party in this regard, at the Developing Party's expense 8.2 Filing, Prosecution and Maintenance by Pfizer. During the term of the Development Program, with respect to Patent Rights in which Pfizer employees or consultants alone are named as inventors, Pfizer shall have those rights and duties ascribed to OSI Pharmaceuticals in Section 8.1, except that Pfizer will bear all related expenses. 8.3 Filing, Prosecution and Maintenance by the Developing Party. During the term of the grant described in Section 3.2 and 3.3, the Developing Party shall have those rights and duties ascribed to OSI Pharmaceuticals in Section 8.1, and will bear all related expenses. 8.4 Neither party may disclaim a Valid Claim within Patent Rights without the consent of the other. 9. Other Agreements. This Agreement, and the 1996 Research Agreement are the sole agreements with respect to the subject matter and supersede all other agreements and understanding between the parties with respect to same. 14

10. Termination and Disengagement. 10.1 Events of Termination. The following events shall constitute events of termination ("Events of Termination"): (a) Any written representation or warranty by OSI Pharmaceuticals or Pfizer, or any of its officers, made under or in connection with this Agreement shall prove to have been incorrect in any material respect when made; (b) OSI Pharmaceuticals or Pfizer shall fail in any material respect to perform or observe any term, covenant or understanding contained in this Agreement or in any of the other documents or instruments delivered pursuant to, or concurrently with, this Agreement, and any such failure shall remain unremedied for thirty (30) days after written notice to the failing party. 10.2 Termination. Upon the occurrence of any Event of Termination, the party not responsible may, by notice to the other party, terminate this Agreement. 10.3 Upon the occurrence of any Event of Termination, if the Licensor terminates this Agreement, the license granted to the Developing Party will terminate. 10.4 Termination of this Agreement for any reason shall be without prejudice to: (a) the rights and obligations of the parties provided in all Sections (b) the Licensor's right to receive all royalty payments accrued hereunder; or

10. Termination and Disengagement. 10.1 Events of Termination. The following events shall constitute events of termination ("Events of Termination"): (a) Any written representation or warranty by OSI Pharmaceuticals or Pfizer, or any of its officers, made under or in connection with this Agreement shall prove to have been incorrect in any material respect when made; (b) OSI Pharmaceuticals or Pfizer shall fail in any material respect to perform or observe any term, covenant or understanding contained in this Agreement or in any of the other documents or instruments delivered pursuant to, or concurrently with, this Agreement, and any such failure shall remain unremedied for thirty (30) days after written notice to the failing party. 10.2 Termination. Upon the occurrence of any Event of Termination, the party not responsible may, by notice to the other party, terminate this Agreement. 10.3 Upon the occurrence of any Event of Termination, if the Licensor terminates this Agreement, the license granted to the Developing Party will terminate. 10.4 Termination of this Agreement for any reason shall be without prejudice to: (a) the rights and obligations of the parties provided in all Sections (b) the Licensor's right to receive all royalty payments accrued hereunder; or (c) any other remedies which either party may otherwise have. 11. Indemnification. Pfizer and OSI Pharmaceuticals will indemnify each other for damages, settlements, costs, legal fees and other expenses incurred in connection with a claim by a third party against either party based on any action or omission of the indemnifying party's agents, employees, or officers related to its obligations under this Agreement; provided, however, that the foregoing shall not apply (i) if the claim is found to be based upon the negligence, recklessness or willful misconduct of the party seeking indemnification; or (ii) if such party fails to give the other party prompt notice of any claim it receives and such failure materially prejudices the other party with respect to any claim or action to which its obligation pursuant to this Section applies. Notwithstanding the foregoing, Pfizer shall not indemnify OSI Pharmaceuticals for claims arising from the clinical trials performed by OSI Pharmaceuticals pursuant to this Development 15

Agreement and further, the Licensor shall not indemnify the Developing Party for claims arising from the sale of Products or the License Agreement (including without limitation product liability claims) and the Developing Party shall indemnify the Licensor with respect to such claims and to claims arising from Patent Rights and Program Technology. Each party, in its sole discretion, shall choose legal counsel, shall control the defense of such claim or action and shall have the right to settle same on such terms and conditions it deems advisable; provided however, it shall obtain the other party's prior consent to such part of any settlement which requires payment or other action by the other party or is likely to have a material adverse effect on the other party's business. 12. Notices and Reports. 12.1 All notices shall be in writing mailed via certified mail, return receipt requested, courier, or facsimile transmission addressed as follows, or to such other address as may be designated from time to time:
If to Pfizer: Pfizer Inc 235 East 42nd Street New York, NY 10017 Attention: President, Central Research with copy to: General Counsel

Agreement and further, the Licensor shall not indemnify the Developing Party for claims arising from the sale of Products or the License Agreement (including without limitation product liability claims) and the Developing Party shall indemnify the Licensor with respect to such claims and to claims arising from Patent Rights and Program Technology. Each party, in its sole discretion, shall choose legal counsel, shall control the defense of such claim or action and shall have the right to settle same on such terms and conditions it deems advisable; provided however, it shall obtain the other party's prior consent to such part of any settlement which requires payment or other action by the other party or is likely to have a material adverse effect on the other party's business. 12. Notices and Reports. 12.1 All notices shall be in writing mailed via certified mail, return receipt requested, courier, or facsimile transmission addressed as follows, or to such other address as may be designated from time to time:
If to Pfizer: Pfizer Inc 235 East 42nd Street New York, NY 10017 Attention: President, Central Research with copy to: General Counsel OSI Pharmaceuticals Inc. 106 Charles Lindbergh Blvd. Uniondale, New York 11553-3649 Attention: Dr. Colin Goddard

If to OSI Pharmaceuticals:

Notices shall be deemed given as of the date sent. 12.2 Reports. The Developing Party agrees to keep the Licensor informed with respect to activities and progress toward further research, development and commercialization of Products. The Developing Party agrees to provide to the Licensor every six months a summary 16

of such activities and progress. In addition, the Developing Party will provide to the Licensor copies of any data regarding the Products together with copies of any reports or summaries of such data. The Licensor agrees that all such information will be deemed Confidential Information belonging to the Developing Party. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 14. Miscellaneous. 14.1 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors and permitted assigns. 14.2 Headings. Paragraph headings are inserted for convenience of reference only and do not form a part of this Agreement. 14.3 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original. 14.4 Amendment; Waiver; etc. This Agreement may be amended, modified, superseded or canceled, and any of the terms may be waived, only by a written instrument executed by each party or, in the case of waiver, by the party or parties waiving compliance. The delay or failure of any party at any time or times to require performance of any provisions shall in no manner affect the rights at a later time to enforce the same. No waiver by any party of any condition or of the breach of any term contained in this Agreement, whether by conduct, or otherwise, in any one or more instances, shall be deemed to be, or considered as, a further or continuing waiver of any such condition or of the breach of such term or any other term of this Agreement.

of such activities and progress. In addition, the Developing Party will provide to the Licensor copies of any data regarding the Products together with copies of any reports or summaries of such data. The Licensor agrees that all such information will be deemed Confidential Information belonging to the Developing Party. 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 14. Miscellaneous. 14.1 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors and permitted assigns. 14.2 Headings. Paragraph headings are inserted for convenience of reference only and do not form a part of this Agreement. 14.3 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original. 14.4 Amendment; Waiver; etc. This Agreement may be amended, modified, superseded or canceled, and any of the terms may be waived, only by a written instrument executed by each party or, in the case of waiver, by the party or parties waiving compliance. The delay or failure of any party at any time or times to require performance of any provisions shall in no manner affect the rights at a later time to enforce the same. No waiver by any party of any condition or of the breach of any term contained in this Agreement, whether by conduct, or otherwise, in any one or more instances, shall be deemed to be, or considered as, a further or continuing waiver of any such condition or of the breach of such term or any other term of this Agreement. 14.5 No Third Party Beneficiaries. No third party including any employee of any party to this Agreement, shall have or acquire any rights by reason of this Agreement. Nothing contained in this Agreement shall be deemed to constitute the parties partners with each other or any third party. 14.6 Assignment and Successors. This Agreement may not be assigned by either party, except that each party may assign this Agreement and the rights and interests of such 17

party, in whole or in part, to any of its Affiliates, any purchaser of all or substantially all of its assets or to any successor corporation resulting from any merger or consolidation of such party with or into such corporations. 14.7 Force Majeure. Neither Pfizer nor OSI Pharmaceuticals shall be liable for failure of or delay in performing obligations set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Pfizer or OSI Pharmaceuticals. 14.8 Severability. If any provision of this Agreement is or becomes invalid or is ruled invalid by any court of competent jurisdiction or is deemed unenforceable, it is the intention of the parties that the remainder of the Agreement shall not be affected. 18

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
PFIZER INC OSI PHARMACEUTICALS, INC.

By: /s/ ---------------------------

By: /s/ ----------------------------------------

party, in whole or in part, to any of its Affiliates, any purchaser of all or substantially all of its assets or to any successor corporation resulting from any merger or consolidation of such party with or into such corporations. 14.7 Force Majeure. Neither Pfizer nor OSI Pharmaceuticals shall be liable for failure of or delay in performing obligations set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Pfizer or OSI Pharmaceuticals. 14.8 Severability. If any provision of this Agreement is or becomes invalid or is ruled invalid by any court of competent jurisdiction or is deemed unenforceable, it is the intention of the parties that the remainder of the Agreement shall not be affected. 18

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
PFIZER INC OSI PHARMACEUTICALS, INC.

By: /s/ --------------------------Title: Vice President

By: /s/ ---------------------------------------Title: President and Chief Executive Officer

cc: Pfizer Inc, Legal Division, Groton, CT 06340 19

Exhibit A ** ** This portion has been redacted pursuant to a request for confidential treatment. 20

Exhibit B ** ** This portion has been redacted pursuant to a request for confidential treatment. 21

AMENDMENT NO. 1 to the Collaborative Agreement dated as of April 19, 1995 between Novartis Pharma AG and OSI Pharmaceuticals, Inc. Novartis Pharma AG of Lichtstrasse 35, CH-4002 Basel, Switzerland and OSI Pharmaceuticals, Inc., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA agree to amend the above mentioned agreement (hereinafter referred to as "1995 Agreement") as follows: The four year time limit to exercise the option set forth in Section 5.7 of the 1995 Agreement will be extended until the end of May and such option right will therefore not expire until May 31, 1999.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
PFIZER INC OSI PHARMACEUTICALS, INC.

By: /s/ --------------------------Title: Vice President

By: /s/ ---------------------------------------Title: President and Chief Executive Officer

cc: Pfizer Inc, Legal Division, Groton, CT 06340 19

Exhibit A ** ** This portion has been redacted pursuant to a request for confidential treatment. 20

Exhibit B ** ** This portion has been redacted pursuant to a request for confidential treatment. 21

AMENDMENT NO. 1 to the Collaborative Agreement dated as of April 19, 1995 between Novartis Pharma AG and OSI Pharmaceuticals, Inc. Novartis Pharma AG of Lichtstrasse 35, CH-4002 Basel, Switzerland and OSI Pharmaceuticals, Inc., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA agree to amend the above mentioned agreement (hereinafter referred to as "1995 Agreement") as follows: The four year time limit to exercise the option set forth in Section 5.7 of the 1995 Agreement will be extended until the end of May and such option right will therefore not expire until May 31, 1999. BASEL April 13, 1999 UNIONDALE April 13, 1999 Novartis Pharma AG OSI Pharmaceuticals, Inc.
/s/ Dr. I. Csendes Head Licensing Drug Delivery & Out-Licensing /s/ G. Schelling Legal Counsel /s/ Dr. C. Goddard Vice President, Business Development

Exhibit A ** ** This portion has been redacted pursuant to a request for confidential treatment. 20

Exhibit B ** ** This portion has been redacted pursuant to a request for confidential treatment. 21

AMENDMENT NO. 1 to the Collaborative Agreement dated as of April 19, 1995 between Novartis Pharma AG and OSI Pharmaceuticals, Inc. Novartis Pharma AG of Lichtstrasse 35, CH-4002 Basel, Switzerland and OSI Pharmaceuticals, Inc., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA agree to amend the above mentioned agreement (hereinafter referred to as "1995 Agreement") as follows: The four year time limit to exercise the option set forth in Section 5.7 of the 1995 Agreement will be extended until the end of May and such option right will therefore not expire until May 31, 1999. BASEL April 13, 1999 UNIONDALE April 13, 1999 Novartis Pharma AG OSI Pharmaceuticals, Inc.
/s/ Dr. I. Csendes Head Licensing Drug Delivery & Out-Licensing /s/ G. Schelling Legal Counsel /s/ Dr. C. Goddard Vice President, Business Development

Portions of Exhibit 10.5 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

May 31, 1999 OSI PHARMACEUTICALS, INC. and NOVARTIS PHARMA AG AMENDMENT NO. 2 TO COLLABORATIVE AGREEMENT

Exhibit B ** ** This portion has been redacted pursuant to a request for confidential treatment. 21

AMENDMENT NO. 1 to the Collaborative Agreement dated as of April 19, 1995 between Novartis Pharma AG and OSI Pharmaceuticals, Inc. Novartis Pharma AG of Lichtstrasse 35, CH-4002 Basel, Switzerland and OSI Pharmaceuticals, Inc., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA agree to amend the above mentioned agreement (hereinafter referred to as "1995 Agreement") as follows: The four year time limit to exercise the option set forth in Section 5.7 of the 1995 Agreement will be extended until the end of May and such option right will therefore not expire until May 31, 1999. BASEL April 13, 1999 UNIONDALE April 13, 1999 Novartis Pharma AG OSI Pharmaceuticals, Inc.
/s/ Dr. I. Csendes Head Licensing Drug Delivery & Out-Licensing /s/ G. Schelling Legal Counsel /s/ Dr. C. Goddard Vice President, Business Development

Portions of Exhibit 10.5 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

May 31, 1999 OSI PHARMACEUTICALS, INC. and NOVARTIS PHARMA AG AMENDMENT NO. 2 TO COLLABORATIVE AGREEMENT

Amendment No. 2 THIS AMENDMENT is made as of the 31st day of May, 1999 between NOVARTIS PHARMA AG, successor-in-interest to the pharmaceutical business of CIBA-GEIGY LIMITED, of Lichtstrasse 35, CH-4002 Basel, Switzerland (hereinafter referred to as "NOVARTIS") and OSI PHARMACEUTICALS, INC., formerly known as ONCOGENE SCIENCE, INC., of 106 Charles Lindbergh Boulevard, Uniondale, New York

AMENDMENT NO. 1 to the Collaborative Agreement dated as of April 19, 1995 between Novartis Pharma AG and OSI Pharmaceuticals, Inc. Novartis Pharma AG of Lichtstrasse 35, CH-4002 Basel, Switzerland and OSI Pharmaceuticals, Inc., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA agree to amend the above mentioned agreement (hereinafter referred to as "1995 Agreement") as follows: The four year time limit to exercise the option set forth in Section 5.7 of the 1995 Agreement will be extended until the end of May and such option right will therefore not expire until May 31, 1999. BASEL April 13, 1999 UNIONDALE April 13, 1999 Novartis Pharma AG OSI Pharmaceuticals, Inc.
/s/ Dr. I. Csendes Head Licensing Drug Delivery & Out-Licensing /s/ G. Schelling Legal Counsel /s/ Dr. C. Goddard Vice President, Business Development

Portions of Exhibit 10.5 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

May 31, 1999 OSI PHARMACEUTICALS, INC. and NOVARTIS PHARMA AG AMENDMENT NO. 2 TO COLLABORATIVE AGREEMENT

Amendment No. 2 THIS AMENDMENT is made as of the 31st day of May, 1999 between NOVARTIS PHARMA AG, successor-in-interest to the pharmaceutical business of CIBA-GEIGY LIMITED, of Lichtstrasse 35, CH-4002 Basel, Switzerland (hereinafter referred to as "NOVARTIS") and OSI PHARMACEUTICALS, INC., formerly known as ONCOGENE SCIENCE, INC., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA (hereinafter referred to as "OSI"). WHEREAS, NOVARTIS and OSI are partners in a Collaborative Agreement dated as of April 19, 1995 (the "1995 Agreement"), pursuant to which OSI granted to NOVARTIS an exclusive license with the right to grant sublicenses to manufacture, have manufactured, use and sell products containing the Compound (as defined in Clause 1.3 of the 1995 Agreement) for the Licensed Indications (as defined in Clause 1.5 of the 1995 Agreement) (all capitalized items used herein but not defined shall have the meanings described thereto in the 1995 Agreement); and

Portions of Exhibit 10.5 have been redacted and are the subject of a confidential treatment request filed with the Secretary of the Securities and Exchange Commission.

May 31, 1999 OSI PHARMACEUTICALS, INC. and NOVARTIS PHARMA AG AMENDMENT NO. 2 TO COLLABORATIVE AGREEMENT

Amendment No. 2 THIS AMENDMENT is made as of the 31st day of May, 1999 between NOVARTIS PHARMA AG, successor-in-interest to the pharmaceutical business of CIBA-GEIGY LIMITED, of Lichtstrasse 35, CH-4002 Basel, Switzerland (hereinafter referred to as "NOVARTIS") and OSI PHARMACEUTICALS, INC., formerly known as ONCOGENE SCIENCE, INC., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA (hereinafter referred to as "OSI"). WHEREAS, NOVARTIS and OSI are partners in a Collaborative Agreement dated as of April 19, 1995 (the "1995 Agreement"), pursuant to which OSI granted to NOVARTIS an exclusive license with the right to grant sublicenses to manufacture, have manufactured, use and sell products containing the Compound (as defined in Clause 1.3 of the 1995 Agreement) for the Licensed Indications (as defined in Clause 1.5 of the 1995 Agreement) (all capitalized items used herein but not defined shall have the meanings described thereto in the 1995 Agreement); and WHEREAS, pursuant to the 1995 Agreement, OSI also granted to NOVARTIS an option to acquire from OSI a license to manufacture, use and sell products containing TGF-(beta)3 and other TGF-(beta)s for all other indications not now included in the Licensed Indications; and WHEREAS, the four year time limit to exercise the option was extended until May 31, 1999 by an amendment to the 1995 Agreement ("Amendment 1") dated April 13, 1999; and WHEREAS, OSI and NOVARTIS hereby wish to amend certain terms of the 1995 Agreement. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. References. All references in the 1995 Agreement to "CIBA-GEIGY" or "CG" shall be deemed to be references to "NOVARTIS". All references in the 1995 Agreement to "ONCOGENE SCIENCE" shall be deemed to be references to "OSI". 2. Recitals. The recital (F) in the 1995 Agreement shall be deleted in its entirety and replaced with the following: "NOVARTIS also wishes to have the opportunity to acquire from OSI a license to manufacture, use and sell products containing TGF-(beta)3 and other TGF-(beta)s for certain other indications not now included in the Licensed Indications".

3. Definitions. (a) Section 1.5 of the 1995 Agreement shall be deleted in its entirety and replaced with the following:

May 31, 1999 OSI PHARMACEUTICALS, INC. and NOVARTIS PHARMA AG AMENDMENT NO. 2 TO COLLABORATIVE AGREEMENT

Amendment No. 2 THIS AMENDMENT is made as of the 31st day of May, 1999 between NOVARTIS PHARMA AG, successor-in-interest to the pharmaceutical business of CIBA-GEIGY LIMITED, of Lichtstrasse 35, CH-4002 Basel, Switzerland (hereinafter referred to as "NOVARTIS") and OSI PHARMACEUTICALS, INC., formerly known as ONCOGENE SCIENCE, INC., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA (hereinafter referred to as "OSI"). WHEREAS, NOVARTIS and OSI are partners in a Collaborative Agreement dated as of April 19, 1995 (the "1995 Agreement"), pursuant to which OSI granted to NOVARTIS an exclusive license with the right to grant sublicenses to manufacture, have manufactured, use and sell products containing the Compound (as defined in Clause 1.3 of the 1995 Agreement) for the Licensed Indications (as defined in Clause 1.5 of the 1995 Agreement) (all capitalized items used herein but not defined shall have the meanings described thereto in the 1995 Agreement); and WHEREAS, pursuant to the 1995 Agreement, OSI also granted to NOVARTIS an option to acquire from OSI a license to manufacture, use and sell products containing TGF-(beta)3 and other TGF-(beta)s for all other indications not now included in the Licensed Indications; and WHEREAS, the four year time limit to exercise the option was extended until May 31, 1999 by an amendment to the 1995 Agreement ("Amendment 1") dated April 13, 1999; and WHEREAS, OSI and NOVARTIS hereby wish to amend certain terms of the 1995 Agreement. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. References. All references in the 1995 Agreement to "CIBA-GEIGY" or "CG" shall be deemed to be references to "NOVARTIS". All references in the 1995 Agreement to "ONCOGENE SCIENCE" shall be deemed to be references to "OSI". 2. Recitals. The recital (F) in the 1995 Agreement shall be deleted in its entirety and replaced with the following: "NOVARTIS also wishes to have the opportunity to acquire from OSI a license to manufacture, use and sell products containing TGF-(beta)3 and other TGF-(beta)s for certain other indications not now included in the Licensed Indications".

3. Definitions. (a) Section 1.5 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "1.5 "Licensed Indications" shall mean: (i) bone, cartilage and tendon repair, and (ii) additional indications deemed to be included in the Licensed Indications pursuant to Clause 5.7 and Clause 5.8, as amended." (b) Section 1.7 of the 1995 Agreement shall be amended so that the language immediately following subsection

Amendment No. 2 THIS AMENDMENT is made as of the 31st day of May, 1999 between NOVARTIS PHARMA AG, successor-in-interest to the pharmaceutical business of CIBA-GEIGY LIMITED, of Lichtstrasse 35, CH-4002 Basel, Switzerland (hereinafter referred to as "NOVARTIS") and OSI PHARMACEUTICALS, INC., formerly known as ONCOGENE SCIENCE, INC., of 106 Charles Lindbergh Boulevard, Uniondale, New York 11553-3649, USA (hereinafter referred to as "OSI"). WHEREAS, NOVARTIS and OSI are partners in a Collaborative Agreement dated as of April 19, 1995 (the "1995 Agreement"), pursuant to which OSI granted to NOVARTIS an exclusive license with the right to grant sublicenses to manufacture, have manufactured, use and sell products containing the Compound (as defined in Clause 1.3 of the 1995 Agreement) for the Licensed Indications (as defined in Clause 1.5 of the 1995 Agreement) (all capitalized items used herein but not defined shall have the meanings described thereto in the 1995 Agreement); and WHEREAS, pursuant to the 1995 Agreement, OSI also granted to NOVARTIS an option to acquire from OSI a license to manufacture, use and sell products containing TGF-(beta)3 and other TGF-(beta)s for all other indications not now included in the Licensed Indications; and WHEREAS, the four year time limit to exercise the option was extended until May 31, 1999 by an amendment to the 1995 Agreement ("Amendment 1") dated April 13, 1999; and WHEREAS, OSI and NOVARTIS hereby wish to amend certain terms of the 1995 Agreement. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. References. All references in the 1995 Agreement to "CIBA-GEIGY" or "CG" shall be deemed to be references to "NOVARTIS". All references in the 1995 Agreement to "ONCOGENE SCIENCE" shall be deemed to be references to "OSI". 2. Recitals. The recital (F) in the 1995 Agreement shall be deleted in its entirety and replaced with the following: "NOVARTIS also wishes to have the opportunity to acquire from OSI a license to manufacture, use and sell products containing TGF-(beta)3 and other TGF-(beta)s for certain other indications not now included in the Licensed Indications".

3. Definitions. (a) Section 1.5 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "1.5 "Licensed Indications" shall mean: (i) bone, cartilage and tendon repair, and (ii) additional indications deemed to be included in the Licensed Indications pursuant to Clause 5.7 and Clause 5.8, as amended." (b) Section 1.7 of the 1995 Agreement shall be amended so that the language immediately following subsection (v) shall be as follows: "all to the extent actually allowed, accrued or taken, and as determined in accordance with the standard accounting procedures of the party (i.e., NOVARTIS or OSI) making the Net Sales." (c) Section 1.11 of the 1995 Agreement shall be amended as follows: "1.11 "Products" shall mean pharmaceutical preparations containing the Compound designed for administration to human beings and animals which fall within the scope of the claims of the OSI Patents." 4. Supply of TGF-(beta)s.

3. Definitions. (a) Section 1.5 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "1.5 "Licensed Indications" shall mean: (i) bone, cartilage and tendon repair, and (ii) additional indications deemed to be included in the Licensed Indications pursuant to Clause 5.7 and Clause 5.8, as amended." (b) Section 1.7 of the 1995 Agreement shall be amended so that the language immediately following subsection (v) shall be as follows: "all to the extent actually allowed, accrued or taken, and as determined in accordance with the standard accounting procedures of the party (i.e., NOVARTIS or OSI) making the Net Sales." (c) Section 1.11 of the 1995 Agreement shall be amended as follows: "1.11 "Products" shall mean pharmaceutical preparations containing the Compound designed for administration to human beings and animals which fall within the scope of the claims of the OSI Patents." 4. Supply of TGF-(beta)s. (a) The second sentence of Section 3.3(d) of the 1995 Agreement shall be deleted and replaced with the following: "3.3(d) It is understood that NOVARTIS (i) shall not be obliged to scale up its manufacturing process solely to meet the requirements of OSI and OSI's licensees for research and development purposes and clinical trials, and (ii) shall only be obliged to supply Compound to OSI and OSI's licensees for such purposes as long as it has sufficient Compound for its own consumption. Provided NOVARTIS decides to initiate full development of a Product in the Licensed Indications, it is the intention of NOVARTIS to scale up such process to meet its estimated future requirements. NOVARTIS will use commercially reasonable efforts in designing its processing capacity so that it is adequate to also meet all of OSI's requirements and that of OSI's licensees for commercial quantities of the Compound foreseen at the time of such scale up. If such processing capacity proves to be adequate, NOVARTIS shall use reasonable efforts to also supply OSI and the licensees of OSI." (b) The third sentence of Section 3.3(d) of the 1995 Agreement shall be deleted and replaced with the following:

"3.3(d) Should NOVARTIS fail to do so, or if processing capacity should prove to be inadequate to meet all OSI actual requirements and NOVARTIS should be unwilling to invest in additional capacity, or if NOVARTIS decides not to initiate full development of a Product, it agrees if so requested to grant a license to OSI under the NOVARTIS Patents and NOVARTIS Know-How to produce the Compound on terms to be negotiated in good faith, the financial terms to be reasonable having regard to the cost of supplies of the Compound as at the date of the license negotiations, the cost to OSI of procuring the grant of licenses for any parts of the process covered by Third Party Patents, and the estimated production costs of OSI." (c) At the end of Section 3.3(e) of the 1995 Agreement the following language shall be added: "3.3(e) The parties furthermore agree that in case NOVARTIS decides not to continue the development of the Compound in the Licensed Indications NOVARTIS shall, upon the request of OSI, make available its remaining stock of Compound in accordance with the arrangements hereinafter, whereupon NOVARTIS shall no longer be required to produce further Compound for supply to OSI and OSI's licensees." (d) The second sentence of Section 3.3(f) of the 1995 Agreement shall be deleted and replaced with the following: "3.3(f) Except during the 36-month notification periods or in case of the discontinuance of the development of the Compound in the Licensed Indications as set forth in Sections 3.3(b) and 3.3(e), NOVARTIS shall, in the event that it is unable to supply the Compound to OSI for a period of 90 days by reason of force majeure or otherwise,

"3.3(d) Should NOVARTIS fail to do so, or if processing capacity should prove to be inadequate to meet all OSI actual requirements and NOVARTIS should be unwilling to invest in additional capacity, or if NOVARTIS decides not to initiate full development of a Product, it agrees if so requested to grant a license to OSI under the NOVARTIS Patents and NOVARTIS Know-How to produce the Compound on terms to be negotiated in good faith, the financial terms to be reasonable having regard to the cost of supplies of the Compound as at the date of the license negotiations, the cost to OSI of procuring the grant of licenses for any parts of the process covered by Third Party Patents, and the estimated production costs of OSI." (c) At the end of Section 3.3(e) of the 1995 Agreement the following language shall be added: "3.3(e) The parties furthermore agree that in case NOVARTIS decides not to continue the development of the Compound in the Licensed Indications NOVARTIS shall, upon the request of OSI, make available its remaining stock of Compound in accordance with the arrangements hereinafter, whereupon NOVARTIS shall no longer be required to produce further Compound for supply to OSI and OSI's licensees." (d) The second sentence of Section 3.3(f) of the 1995 Agreement shall be deleted and replaced with the following: "3.3(f) Except during the 36-month notification periods or in case of the discontinuance of the development of the Compound in the Licensed Indications as set forth in Sections 3.3(b) and 3.3(e), NOVARTIS shall, in the event that it is unable to supply the Compound to OSI for a period of 90 days by reason of force majeure or otherwise, use commercially reasonable endeavours to have an alternative plant for the production of the Compound validated within one year from the date of cessation of supply." 5. Development. (a) Section 4.1 of the 1995 Agreement (including subsections 4.1.1, 4.1.2, 4.1.3 and 4.1.4) shall be deleted in its entirety and replaced with the following: "4.1 NOVARTIS shall be solely responsible, at its own expense, for the development of the Products for the Licensed Indications. NOVARTIS shall use reasonable diligence to take all steps necessary for the development of such Products."

(b) The following language shall be added after Section 4.3 of the 1995 Agreement, Section 4.3 then becoming Section 4.3.1: 4.3.2 NOVARTIS hereby acknowledges and notifies OSI that as of May 31, 1999 (the "Discontinuance Date"), NOVARTIS has discontinued development of Products for the indications of oral mucositis and healing of soft tissue wound, including prevention of scarring and fibrosis (such indications being hereinafter referred to as the "Discontinued Indications"). NOVARTIS and OSI agree that all licenses heretofore granted to NOVARTIS with respect to the Discontinued Indications are terminated. With respect to the Discontinued Indications, upon and following the Discontinuance Date, NOVARTIS shall make available to OSI, as more specifically described below, for use by OSI and its licensees, the results of development work carried out up to the Discontinuance Date, including, without limitation, access to NOVARTIS' Investigational New Drug ("IND") filing made with the United States Food and Drug Administration and any equivalent filings made in countries other than the United States. It is understood that results relating to formulation of the Compound and analytical methods developed by NOVARTIS up to the Discontinuance Date shall be excluded from such transfer. NOVARTIS shall make a good faith effort to make available the results of NOVARTIS' development work by delivery of all written materials to OSI within 45 days following the Discontinuance Date and by meeting for one day with representatives of OSI and OSI's licensees at a place and on a date mutually convenient within 45 days following the receipt by NOVARTIS of an agenda of outstanding issues necessary for OSI and/or OSI's licensees to continue work in the Discontinued Indication. NOVARTIS hereby acknowledges and agrees that OSI and/or OSI's licensees may use any of the foregoing results for the purpose of continuing development for indications other than the Licensed Indications subject to the following terms and conditions: (a) with respect to development and sales of a Product for oral mucositis by OSI or a licensee of OSI, OSI shall

(b) The following language shall be added after Section 4.3 of the 1995 Agreement, Section 4.3 then becoming Section 4.3.1: 4.3.2 NOVARTIS hereby acknowledges and notifies OSI that as of May 31, 1999 (the "Discontinuance Date"), NOVARTIS has discontinued development of Products for the indications of oral mucositis and healing of soft tissue wound, including prevention of scarring and fibrosis (such indications being hereinafter referred to as the "Discontinued Indications"). NOVARTIS and OSI agree that all licenses heretofore granted to NOVARTIS with respect to the Discontinued Indications are terminated. With respect to the Discontinued Indications, upon and following the Discontinuance Date, NOVARTIS shall make available to OSI, as more specifically described below, for use by OSI and its licensees, the results of development work carried out up to the Discontinuance Date, including, without limitation, access to NOVARTIS' Investigational New Drug ("IND") filing made with the United States Food and Drug Administration and any equivalent filings made in countries other than the United States. It is understood that results relating to formulation of the Compound and analytical methods developed by NOVARTIS up to the Discontinuance Date shall be excluded from such transfer. NOVARTIS shall make a good faith effort to make available the results of NOVARTIS' development work by delivery of all written materials to OSI within 45 days following the Discontinuance Date and by meeting for one day with representatives of OSI and OSI's licensees at a place and on a date mutually convenient within 45 days following the receipt by NOVARTIS of an agenda of outstanding issues necessary for OSI and/or OSI's licensees to continue work in the Discontinued Indication. NOVARTIS hereby acknowledges and agrees that OSI and/or OSI's licensees may use any of the foregoing results for the purpose of continuing development for indications other than the Licensed Indications subject to the following terms and conditions: (a) with respect to development and sales of a Product for oral mucositis by OSI or a licensee of OSI, OSI shall pay to NOVARTIS (i) ** of any Net Sales made directly by OSI, and/or (ii) ** of any revenue received by OSI from its licensee(s) including, without limitation, revenue generated by licensing fees, milestone payments or royalties;

** This portion has been redacted pursuant to a request for confidential treatment.

(b) with respect to development and sales of a Product for any indications other than oral mucositis or other than any indication included within the Licensed Indications, OSI shall pay to NOVARTIS (i) ** of any Net Sales made directly by OSI, and/or (ii) ** of any revenue received by OSI from its licensee(s), including, without limitation, revenue generated by licensing fees, milestone payments or royalties; and (c) with respect to any indications other than oral mucositis or other than any indication included within the Licensed Indications, if OSI or its licensee(s) completes Phase II clinical trials with respect to a Product and, at such point, seeks a licensee to complete development of the Product and to commercialize the Product, OSI hereby grants to NOVARTIS a right of first negotiation with respect to such a license. OSI and NOVARTIS shall negotiate such a license in good faith taking into consideration the contributions of the parties up to the Discontinuance Date. If the parties fail to enter into such a license, OSI or its licensee may enter into such a license with a third party, provided that OSI or its licensee may not offer more favorable terms to a third party without first offering such favorable terms to NOVARTIS. (d) For the purpose of calculating the royalties Sections 5.2 and 5.3 shall be applicable and Sections 5.4, 5.5 and 5.6 shall apply to all payments made by OSI hereunder." (c) Section 4.5 of the 1995 Agreement shall be deleted in its entirety. 6. Payment of Royalties and for Rights Granted. (a) Section 5.2 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.2 NOVARTIS agrees to pay OSI a royalty of ** of Net Sales of the Products in the Licensed Indications made by NOVARTIS or its sub-licensees during the royalty period. OSI agrees to pay NOVARTIS a royalty of

(b) with respect to development and sales of a Product for any indications other than oral mucositis or other than any indication included within the Licensed Indications, OSI shall pay to NOVARTIS (i) ** of any Net Sales made directly by OSI, and/or (ii) ** of any revenue received by OSI from its licensee(s), including, without limitation, revenue generated by licensing fees, milestone payments or royalties; and (c) with respect to any indications other than oral mucositis or other than any indication included within the Licensed Indications, if OSI or its licensee(s) completes Phase II clinical trials with respect to a Product and, at such point, seeks a licensee to complete development of the Product and to commercialize the Product, OSI hereby grants to NOVARTIS a right of first negotiation with respect to such a license. OSI and NOVARTIS shall negotiate such a license in good faith taking into consideration the contributions of the parties up to the Discontinuance Date. If the parties fail to enter into such a license, OSI or its licensee may enter into such a license with a third party, provided that OSI or its licensee may not offer more favorable terms to a third party without first offering such favorable terms to NOVARTIS. (d) For the purpose of calculating the royalties Sections 5.2 and 5.3 shall be applicable and Sections 5.4, 5.5 and 5.6 shall apply to all payments made by OSI hereunder." (c) Section 4.5 of the 1995 Agreement shall be deleted in its entirety. 6. Payment of Royalties and for Rights Granted. (a) Section 5.2 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.2 NOVARTIS agrees to pay OSI a royalty of ** of Net Sales of the Products in the Licensed Indications made by NOVARTIS or its sub-licensees during the royalty period. OSI agrees to pay NOVARTIS a royalty of ** of Net Sales made directly by OSI of the Products outside the Licensed Indications in accordance with Section 4.3.2 during the royalty period. The royalty period shall be calculated on a country-by-country basis and shall commence on the date of the commercial launch of any of the Products either by NOVARTIS and/or OSI, as applicable, and shall end on the date of expiry of the Patents in the country." ** This portion has been redacted pursuant to a request for confidential treatment.

(b) Section 5.3 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.3 If OSI shall not have applied for any Patent in a particular country or if patent protection for a Product sold either by NOVARTIS and/or OSI, as applicable, is refused or revoked, the rate of royalty payable on Net Sales in that country shall be reduced **. Royalties under this Section 5.3 shall be payable for a period of ten years from the date of commercial launch in the country in question." (c) Section 5.4 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.4 No later than 60 days after the end of each Half Year NOVARTIS and/or OSI shall deliver to the other party a statement showing its and its (sub)licencees' Net Sales of Products invoiced during such Half Year, and in the case of OSI also any revenue from its licencee(s) and shall pay to the other party the amount due on such Net Sales and/or revenue, as applicable." (d) Section 5.5 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.5 NOVARTIS and OSI shall keep accurate records in sufficient detail to enable the amount of payments due hereunder to be calculated and shall maintain such records for a period of two Years after the end of the period to which they relate. NOVARTIS and OSI shall be entitled to have such records examined during normal working hours by an independent firm of accountants to which the other party has no reasonable objection so as to verify the correctness of any payment PROVIDED HOWEVER that such firm of accountants shall only report to the other party the correct amount of Net Sales and the amount of royalty due and in the case of OSI any revenue from licencee(s), and shall keep confidential all other information acquired in the course of such examination."

(b) Section 5.3 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.3 If OSI shall not have applied for any Patent in a particular country or if patent protection for a Product sold either by NOVARTIS and/or OSI, as applicable, is refused or revoked, the rate of royalty payable on Net Sales in that country shall be reduced **. Royalties under this Section 5.3 shall be payable for a period of ten years from the date of commercial launch in the country in question." (c) Section 5.4 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.4 No later than 60 days after the end of each Half Year NOVARTIS and/or OSI shall deliver to the other party a statement showing its and its (sub)licencees' Net Sales of Products invoiced during such Half Year, and in the case of OSI also any revenue from its licencee(s) and shall pay to the other party the amount due on such Net Sales and/or revenue, as applicable." (d) Section 5.5 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.5 NOVARTIS and OSI shall keep accurate records in sufficient detail to enable the amount of payments due hereunder to be calculated and shall maintain such records for a period of two Years after the end of the period to which they relate. NOVARTIS and OSI shall be entitled to have such records examined during normal working hours by an independent firm of accountants to which the other party has no reasonable objection so as to verify the correctness of any payment PROVIDED HOWEVER that such firm of accountants shall only report to the other party the correct amount of Net Sales and the amount of royalty due and in the case of OSI any revenue from licencee(s), and shall keep confidential all other information acquired in the course of such examination." ** This portion has been redacted pursuant to a request for confidential treatment.

(e) Section 5.6 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.6 (a) Royalties and any other payments due hereunder shall be made in US Dollars into such accounts as shall be nominated by the receiving party for that purpose. In the case of NOVARTIS Net Sales in currencies other than in US Dollars, such Net Sales shall first be calculated in the foreign currency, then converted to Swiss Francs and then converted to US Dollars, in each case using a ** exchange rate calculated on the basis of NOVARTIS' ** average exchange rates. NOVARTIS' monthly average exchange rates are currently calculated using the average of Reuters Daily Rates between 09:14 a.m. and 10:00 a.m. on the one hand and the official Frankfurt fixing of the German National Bank rates in the afternoon on the other hand. In the case of OSI Net Sales or revenue in currencies other than US Dollars, royalties and any other payments shall first be calculated in the foreign currency and then converted to US Dollars, in each case using for ** calculation the foreign currency exchange rate published in The Wall Street Journal on the last day of the preceding month. (b) If NOVARTIS or OSI are obliged to deduct withholding tax on any payments to be made hereunder, the payment shall be made net of withholding tax. NOVARTIS and OSI, as applicable, will deliver to the other party receipts or other evidence of payment issued by the relevant tax authorities to enable it to claim any available double taxation relief." (f) The second sentence of Section 5.7 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.7 NOVARTIS is hereby granted an exclusive option to include the treatment of transplant patients (e.g. graft protection), the treatment of ischemia (e.g., angina pectoris and peripheral vascular disease), the treatment of stroke patients, and the treatment of inflammatory bowel disease as additional indications and a nonexclusive option to include any other additional indications relating to the Compound (other than the Discontinued Indications and Licensed Indications) upon making the milestone payment or stock purchase set forth in Section 5.8, as amended, such option to be exercised, if at all, within sixty (60) days of the decision by NOVARTIS to initiate full development of the Product (i.e., Phase IIB or Phase III clinical trials for bone, cartilage or tendon repair, which decision shall be communicated promptly to OSI in writing) or by May 31,

(e) Section 5.6 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.6 (a) Royalties and any other payments due hereunder shall be made in US Dollars into such accounts as shall be nominated by the receiving party for that purpose. In the case of NOVARTIS Net Sales in currencies other than in US Dollars, such Net Sales shall first be calculated in the foreign currency, then converted to Swiss Francs and then converted to US Dollars, in each case using a ** exchange rate calculated on the basis of NOVARTIS' ** average exchange rates. NOVARTIS' monthly average exchange rates are currently calculated using the average of Reuters Daily Rates between 09:14 a.m. and 10:00 a.m. on the one hand and the official Frankfurt fixing of the German National Bank rates in the afternoon on the other hand. In the case of OSI Net Sales or revenue in currencies other than US Dollars, royalties and any other payments shall first be calculated in the foreign currency and then converted to US Dollars, in each case using for ** calculation the foreign currency exchange rate published in The Wall Street Journal on the last day of the preceding month. (b) If NOVARTIS or OSI are obliged to deduct withholding tax on any payments to be made hereunder, the payment shall be made net of withholding tax. NOVARTIS and OSI, as applicable, will deliver to the other party receipts or other evidence of payment issued by the relevant tax authorities to enable it to claim any available double taxation relief." (f) The second sentence of Section 5.7 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.7 NOVARTIS is hereby granted an exclusive option to include the treatment of transplant patients (e.g. graft protection), the treatment of ischemia (e.g., angina pectoris and peripheral vascular disease), the treatment of stroke patients, and the treatment of inflammatory bowel disease as additional indications and a nonexclusive option to include any other additional indications relating to the Compound (other than the Discontinued Indications and Licensed Indications) upon making the milestone payment or stock purchase set forth in Section 5.8, as amended, such option to be exercised, if at all, within sixty (60) days of the decision by NOVARTIS to initiate full development of the Product (i.e., Phase IIB or Phase III clinical trials for bone, cartilage or tendon repair, which decision shall be communicated promptly to OSI in writing) or by May 31, 2003, whichever is earlier."

** This portion has been redacted pursuant to a request for confidential treatment.

(g) Section 5.8 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.8 Within sixty (60) days after the earlier of: (a) the date of the decision by NOVARTIS to initiate full development (as defined in Section 5.7) of a Product for bone, cartilage or tendon repair, or (b) the exercise of the option set out in Section 5.7, NOVARTIS agrees to either make a milestone payment of ** in cash to OSI or to purchase ** of OSI common stock at a per share price equal to ** of the average closing price for the 30-day period ending on the date of purchase. Upon making this milestone payment or completion of the stock purchase, such additional indications relating to the Compound shall be deemed to be included in the Licensed Indications. The retention of the rights to such other indications shall be subject to the provisions of the Stock Purchase Agreement." 7. Termination. Section 9.4 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "9.4 Termination or expiry of this Agreement shall not affect the rights of any party against the other party in respect of any antecedent breach of the terms hereof, nor the rights or obligations of any party pursuant to the provisions of Clauses 4 and 5 with regard to, in each instance, royalty obligations in respect of the Net Sales and/or revenue from licensees up to the date of termination or expiry, Clause 7 in respect of confidentiality and Clause 10 in respect of indemnities."

(g) Section 5.8 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "5.8 Within sixty (60) days after the earlier of: (a) the date of the decision by NOVARTIS to initiate full development (as defined in Section 5.7) of a Product for bone, cartilage or tendon repair, or (b) the exercise of the option set out in Section 5.7, NOVARTIS agrees to either make a milestone payment of ** in cash to OSI or to purchase ** of OSI common stock at a per share price equal to ** of the average closing price for the 30-day period ending on the date of purchase. Upon making this milestone payment or completion of the stock purchase, such additional indications relating to the Compound shall be deemed to be included in the Licensed Indications. The retention of the rights to such other indications shall be subject to the provisions of the Stock Purchase Agreement." 7. Termination. Section 9.4 of the 1995 Agreement shall be deleted in its entirety and replaced with the following: "9.4 Termination or expiry of this Agreement shall not affect the rights of any party against the other party in respect of any antecedent breach of the terms hereof, nor the rights or obligations of any party pursuant to the provisions of Clauses 4 and 5 with regard to, in each instance, royalty obligations in respect of the Net Sales and/or revenue from licensees up to the date of termination or expiry, Clause 7 in respect of confidentiality and Clause 10 in respect of indemnities." 8. Schedules. Schedules 1 and 2 of the 1995 Agreement shall be deleted in their entirety and replaced with the Schedules attached hereto. 9. Miscellaneous. (a) Except as amended hereby, all terms and conditions of the 1995 Agreement shall remain in full force and effect. ** This portion has been redacted pursuant to a request for confidential treatment.

(b) This Amendment shall be construed and applied in accordance with the laws of the State of New York. (c) This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns. (d) This Amendment may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written. OSI PHARMACEUTICALS, INC.
By: /s/ -------------------------------------------Colin Goddard, Ph.D. President & Chief Executive Officer

NOVARTIS PHARMA AG

(b) This Amendment shall be construed and applied in accordance with the laws of the State of New York. (c) This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns. (d) This Amendment may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written. OSI PHARMACEUTICALS, INC.
By: /s/ -------------------------------------------Colin Goddard, Ph.D. President & Chief Executive Officer

NOVARTIS PHARMA AG
By: /s/ -------------------------------------------Gisela Schelling Legal Counsel Ivan Csendes, Ph.D. Head Licensing Drug-Delivery & Out-Licensing Business Development & Licensing

SCHEDULE 1 List of OSI Patents/Applications
Country ------Australia Australia Australia Australia Australia Australia Austria Austria Austria Belgium Belgium Belgium Canada Canada Canada Denmark EPO EPO EPO France France France Germany Germany Germany Application/Patent No. ---------------------600230 620795 668072 659415 657913 51628/93 E83152 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 1274471 549582-2 2084510 536275 (E) 200090 (E) 95109866.4 536275 (E) 200090 (E) 384494 (E) 536275 (E) P3637241.5-08 384494 (E) 536275 (E) Filing Date ----------21.04.1986 19.10.1987 17.05.1990 25.06.1991 25.06.1991 21.09.1993 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 18.04.1986 20.10.1987 25.06.1991 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 Expiry Date ----------21.04.2002 19.10.2003 17.05.2006 25.06.2007 25.06.2007 21.19.2009 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 18.04.2006 20.10.2007 25.06.2011 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written. OSI PHARMACEUTICALS, INC.
By: /s/ -------------------------------------------Colin Goddard, Ph.D. President & Chief Executive Officer

NOVARTIS PHARMA AG
By: /s/ -------------------------------------------Gisela Schelling Legal Counsel Ivan Csendes, Ph.D. Head Licensing Drug-Delivery & Out-Licensing Business Development & Licensing

SCHEDULE 1 List of OSI Patents/Applications
Country ------Australia Australia Australia Australia Australia Australia Austria Austria Austria Belgium Belgium Belgium Canada Canada Canada Denmark EPO EPO EPO France France France Germany Germany Germany Greece Greece Ireland Ireland Israel Israel Israel (Div.) Italy Italy Italy Japan Japan Application/Patent No. ---------------------600230 620795 668072 659415 657913 51628/93 E83152 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 1274471 549582-2 2084510 536275 (E) 200090 (E) 95109866.4 536275 (E) 200090 (E) 384494 (E) 536275 (E) P3637241.5-08 384494 (E) 536275 (E) 384494 (E) 536275 (E) 60059 2809/87 78546 84211 103617 20732BE/93 384494 (E) 536275 (E) 2065324 265201/87 Filing Date ----------21.04.1986 19.10.1987 17.05.1990 25.06.1991 25.06.1991 21.09.1993 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 18.04.1986 20.10.1987 25.06.1991 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 20.10.1987 25.06.1991 14.04.1986 19.10.1987 20.04.1986 19.10.1987 20.04.1986 15.04.1986 20.10.1987 25.06.1991 18.04.1986 20.10.1987 Expiry Date ----------21.04.2002 19.10.2003 17.05.2006 25.06.2007 25.06.2007 21.19.2009 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 18.04.2006 20.10.2007 25.06.2011 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 20.10.2007 25.06.2011 14.04.2006 19.10.2007 20.04.2006 19.10.2007 20.04.2006 15.04.2006 20.10.2007 25.06.2011

SCHEDULE 1 List of OSI Patents/Applications
Country ------Australia Australia Australia Australia Australia Australia Austria Austria Austria Belgium Belgium Belgium Canada Canada Canada Denmark EPO EPO EPO France France France Germany Germany Germany Greece Greece Ireland Ireland Israel Israel Israel (Div.) Italy Italy Italy Japan Japan Japan Liechtenstein Liechtenstein Liechtenstein Luxemborg Application/Patent No. ---------------------600230 620795 668072 659415 657913 51628/93 E83152 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 1274471 549582-2 2084510 536275 (E) 200090 (E) 95109866.4 536275 (E) 200090 (E) 384494 (E) 536275 (E) P3637241.5-08 384494 (E) 536275 (E) 384494 (E) 536275 (E) 60059 2809/87 78546 84211 103617 20732BE/93 384494 (E) 536275 (E) 2065324 265201/87 513051/91 200090 (E) 384494 (E) 536275 (E) 200090 (E) Filing Date ----------21.04.1986 19.10.1987 17.05.1990 25.06.1991 25.06.1991 21.09.1993 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 18.04.1986 20.10.1987 25.06.1991 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 20.10.1987 25.06.1991 14.04.1986 19.10.1987 20.04.1986 19.10.1987 20.04.1986 15.04.1986 20.10.1987 25.06.1991 18.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 Expiry Date ----------21.04.2002 19.10.2003 17.05.2006 25.06.2007 25.06.2007 21.19.2009 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 18.04.2006 20.10.2007 25.06.2011 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 20.10.2007 25.06.2011 14.04.2006 19.10.2007 20.04.2006 19.10.2007 20.04.2006 15.04.2006 20.10.2007 25.06.2011

15.04.2006 20.10.2007 25.06.2011 15.04.2006

Country ------Luxemborg Luxemborg Netherlands Netherlands Netherlands New Zealand New Zealand Spain Spain Spain Sweden Sweden Switzerland Switzerland Switzerland United Kingdom United Kingdom United Kingdom

Application/Patent No. ---------------------384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 215887 222168 554177 8702981 536275 (E) 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E)

Filing Date ----------20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 18.04.1986 14.10.1987 18.04.1986 19.10.1987 25.06.1991 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991

Expiry Date ----------20.10.2007 25.06.2001 15.04.2006 20.10.2007 25.06.2011 18.04.2002 14.10.2003 18.04.2006 19.10.2007 25.06.2011 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.1987 25.06.2011

Country ------Luxemborg Luxemborg Netherlands Netherlands Netherlands New Zealand New Zealand Spain Spain Spain Sweden Sweden Switzerland Switzerland Switzerland United Kingdom United Kingdom United Kingdom USA USA USA USA USA USA USA USA

Application/Patent No. ---------------------384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 215887 222168 554177 8702981 536275 (E) 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 200090 (E) 384494 (E) 536275 (E) 5262319 08/118197 08/2940641 5817625 5635489 5821297 5871724 08/457097

Filing Date ----------20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 18.04.1986 14.10.1987 18.04.1986 19.10.1987 25.06.1991 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 15.04.1986 20.10.1987 25.06.1991 25.06.1990 19.04.1985* 19.04.1985* 21.09.1992 21.09.1992 21.09.1992 21.09.1992 19.04.1985

Expiry Date ----------20.10.2007 25.06.2001 15.04.2006 20.10.2007 25.06.2011 18.04.2002 14.10.2003 18.04.2006 19.10.2007 25.06.2011 20.10.2007 25.06.2011 15.04.2006 20.10.2007 25.06.2011 15.04.2006 20.10.1987 25.06.2011 16.11.2010

06.10.2015 03.06.2014 20.10.2015 16.02.2016

* Effective filing date

SCHEDULE 2 List of Novartis Patents A. Case 4-17861
Country Application/Patent No. Filing Date Expiry Date -------------------------------------------------------------------------------Australia 638075 27.11.1990 27.11.2006 Austria 433225 (EP) 27.11.1990 27.11.2010 Belgium 433225 (EP) 27.11.1990 27.11.2010 Canada 2031430 04.12.1990 04.12.2010 Denmark 433225 (EP) 27.11.1990 27.11.2010 Finland 905956 03.12.1990 03.12.2010 France 433225 (EP) 27.11.1990 27.11.2010 Germany 433225 (EP) 27.11.1990 27.11.2010 Great Britain 89275465 06.12.1989 (priority application; now lapsed) Great Britain 433225 (EP) 27.11.1990 27.11.2010 Greece 433225 (EP) 27.11.1990 27.11.2010 Hungary 8084/1990 05.12.1990 05.12.2010 Ireland 4386/90 05.12.1990 05.12.2010 Israel 96549 05.12.1990 05.12.2010 Italy 433225 (EP) 27.11.1990 27.11.2010 Japan 330871/90 30.11.1990 Korea 9881/90 05.12.1990 Luxembourg 433225 (EP) 27.11.1990 27.11.2010 Mexico 172600 04.12.1990 04.12.2010 Netherlands 433225 (EP) 27.11.1990 27.11.2010 New Zealand 236333 04.12.1990 04.12.1990 Norway 301768 05.12.1990 05.12.2010 Pakistan 132484 10.11.1990 06.12.2005 Philippines 41681 05.12.1990 Philippines 47025 05.12.1990 Philippines 48001 05.12.1990 Portugal 96068 04.12.1990 South Africa 9762/90 05.12.1990 05.12.2010

SCHEDULE 2 List of Novartis Patents A. Case 4-17861
Country Application/Patent No. Filing Date Expiry Date -------------------------------------------------------------------------------Australia 638075 27.11.1990 27.11.2006 Austria 433225 (EP) 27.11.1990 27.11.2010 Belgium 433225 (EP) 27.11.1990 27.11.2010 Canada 2031430 04.12.1990 04.12.2010 Denmark 433225 (EP) 27.11.1990 27.11.2010 Finland 905956 03.12.1990 03.12.2010 France 433225 (EP) 27.11.1990 27.11.2010 Germany 433225 (EP) 27.11.1990 27.11.2010 Great Britain 89275465 06.12.1989 (priority application; now lapsed) Great Britain 433225 (EP) 27.11.1990 27.11.2010 Greece 433225 (EP) 27.11.1990 27.11.2010 Hungary 8084/1990 05.12.1990 05.12.2010 Ireland 4386/90 05.12.1990 05.12.2010 Israel 96549 05.12.1990 05.12.2010 Italy 433225 (EP) 27.11.1990 27.11.2010 Japan 330871/90 30.11.1990 Korea 9881/90 05.12.1990 Luxembourg 433225 (EP) 27.11.1990 27.11.2010 Mexico 172600 04.12.1990 04.12.2010 Netherlands 433225 (EP) 27.11.1990 27.11.2010 New Zealand 236333 04.12.1990 04.12.1990 Norway 301768 05.12.1990 05.12.2010 Pakistan 132484 10.11.1990 06.12.2005 Philippines 41681 05.12.1990 Philippines 47025 05.12.1990 Philippines 48001 05.12.1990 Portugal 96068 04.12.1990 South Africa 9762/90 05.12.1990 05.12.2010 Spain 433225 (EP) 27.11.1990 27.11.2010 Sweden 433225 (EP) 27.11.1990 27.11.2010 Switzerland 433225 (EP) 27.11.1990 27.11.2010 Taiwan 56999NI 13.11.1990 11.06.2007 USA 621502/07 03.12.1990 USA 960309/07 (Cont.) 13.10.1992 USA 201703/08 (Cont. 2) 25.02.1994 USA 5650494 (Cont. 3) 07.06.1995 22.07.2014 USA 789588/08 (Cont. 3/Div) 24.01.1997

SCHEDULE 2 continued B. Case 4-20038
Country Application/Patent No. Filing Date Expiry Date -------------------------------------------------------------------------------Australia 690311 12.07.1995 12.07.2015 Austria 95926857.4 (EP) 12.07.1995 12.07.2015 Belgium 95926857.4 (EP) 12.07.1995 12.07.2015 Canada 2194582 12.07.1995 12.07.2015 Denmark 95926857.4 (EP) 12.07.1995 12.07.2015 Europe 95926857.4 (EP) 12.07.1995 12.07.2015 Europe 94810438.5 (EP) 25.07.1994 (priority application; lapsed) Finland 970229 12.07.1995 12.07.2015 France 95926857.4 (EP) 12.07.1995 12.07.2015 Germany 95926857.4 (EP) 12.07.1995 12.07.2015 Great Britain 95926857.4 (EP) 12.07.1995 12.07.2015 Greece 95926857.4 (EP) 12.07.1995 12.07.2015

SCHEDULE 2 continued B. Case 4-20038
Country Application/Patent No. Filing Date Expiry Date -------------------------------------------------------------------------------Australia 690311 12.07.1995 12.07.2015 Austria 95926857.4 (EP) 12.07.1995 12.07.2015 Belgium 95926857.4 (EP) 12.07.1995 12.07.2015 Canada 2194582 12.07.1995 12.07.2015 Denmark 95926857.4 (EP) 12.07.1995 12.07.2015 Europe 95926857.4 (EP) 12.07.1995 12.07.2015 Europe 94810438.5 (EP) 25.07.1994 (priority application; lapsed) Finland 970229 12.07.1995 12.07.2015 France 95926857.4 (EP) 12.07.1995 12.07.2015 Germany 95926857.4 (EP) 12.07.1995 12.07.2015 Great Britain 95926857.4 (EP) 12.07.1995 12.07.2015 Greece 95926857.4 (EP) 12.07.1995 12.07.2015 Hungary P9700210 12.07.1995 12.07.2015 Ireland 95926857.4 (EP) 12.07.1995 12.07.2015 Israel 114701 24.07.1995 24.07.2015 Italy 95926857.4 (EP) 12.07.1995 12.07.2015 Japan 505400/96 12.07.1995 12.07.2015 Korea-South 700476/97 12.07.1995 12.07.2015 Luxembourg 95926857.4 (EP) 12.07.1995 12.07.2015 Mexico 970656 12.07.1995 12.07.2015 Monaco 95926857.4 (EP) 12.07.1995 12.07.2015 Netherlands 95926857.4 (EP) 12.07.1995 12.07.2015 New Zealand 290373 12.07.1995 12.07.2015 Norway P970325 12.07.1995 12.07.2015 Pakistan 395/95 23.07.1995 23.07.2011 Philippines 50939 18.07.1995 Portugal 95926857.4 (EP) 12.07.1995 12.07.2015 Singapore 37588 12.07.1995 12.07.2015 South Africa 6138/95 24.07.1995 24.07.2015 Spain 95926857.4 (EP) 12.07.1995 12.07.2015 Sweden 95926857.4 (EP) 12.07.1995 12.07.2015 Switzerland 95926857.4 (EP) 12.07.1995 12.07.2015 Taiwan 84107188 11.07.1995 11.07.2015 USA 08/776445 12.07.1995 12.07.2015 USA 09/123233 (Cont.) 28.07.1998 24.01.2017

SCHEDULE 2 continued C. Case 4-20039
Country Application/Patent No. Filing Date Expiry Date -------------------------------------------------------------------------------Australia 699879 12.07.1995 12.07.2015 Austria 95926858.2 12.07.1995 12.07. 2015 Belgium 95926858.2 12.07.1995 12.07. 2015 Canada 2194578 12.07.1995 12.07. 2015 Denmark 95926858.2 12.07.1995 12.07. 2015 Europe 95926858.2 12.07.1995 12.07. 2015 Europe 94810439.3 25.07.1994 (priority application; lapsed) Finland 970258 12.07.1995 12.07.2015 France 95926858.2 12.07.1995 12.07.2015 Germany 95926858.2 12.07.1995 12.07.2015 Great Britain 95926858.2 12.07.1995 12.07.2015 Greece 95926858.2 12.07.1995 12.07.2015 Hungary P9700211 12.07.1995 12.07.2015 Ireland 95926858.2 12.07.1995 12.07.2015 Israel 114702 24.07.1995 24.07.2015

SCHEDULE 2 continued C. Case 4-20039
Country Application/Patent No. Filing Date Expiry Date -------------------------------------------------------------------------------Australia 699879 12.07.1995 12.07.2015 Austria 95926858.2 12.07.1995 12.07. 2015 Belgium 95926858.2 12.07.1995 12.07. 2015 Canada 2194578 12.07.1995 12.07. 2015 Denmark 95926858.2 12.07.1995 12.07. 2015 Europe 95926858.2 12.07.1995 12.07. 2015 Europe 94810439.3 25.07.1994 (priority application; lapsed) Finland 970258 12.07.1995 12.07.2015 France 95926858.2 12.07.1995 12.07.2015 Germany 95926858.2 12.07.1995 12.07.2015 Great Britain 95926858.2 12.07.1995 12.07.2015 Greece 95926858.2 12.07.1995 12.07.2015 Hungary P9700211 12.07.1995 12.07.2015 Ireland 95926858.2 12.07.1995 12.07.2015 Israel 114702 24.07.1995 24.07.2015 Italy 95926858.2 12.07.1995 12.07.2015 Japan 505401/96 12.07.1995 12.07.2015 Korea-South 700477/97 12.07.1995 12.07.2015 Luxembourg 95926858.2 12.07.1995 12.07.2015 Mexico 970657 12.07.1995 12.07.2015 Monaco 95926858.2 12.07.1995 12.07.2015 Netherlands 95926858.2 12.07.1995 12.07.2015 New Zealand 290374 12.07.1995 12.07.2015 Norway P970326 12.07.1995 12.07.2015 Pakistan 396/95 23.07.1995 23.07.2011 Philippines 50956 19.07.1995 Portugal 95926858.2 12.07.1995 12.07.2015 Singapore 36546 12.07.1995 12.07.2015 South Africa 6139/95 24.07.1995 24.07.2015 Spain 95926858.2 12.07.1995 12.07.2015 Sweden 95926858.2 12.07.1995 12.07.2015 Switzerland 95926858.2 12.07.1995 12.07.2015 Taiwan 84107189 11.07.1995 11.07.2015 USA 08/776444 12.07.1995 12.07.2015

ARTICLE 5

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES

9 MOS SEP 30 1999 OCT 01 1998 JUN 30 1999 10,497,363 10,589,676 2,311,889 10,896 0 24,655,762 21,214,524 13,714,797 44,449,348 4,754,754 0 0 0 223,684 36,522,925 44,449,348 915,608 16,500,966

ARTICLE 5

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

9 MOS SEP 30 1999 OCT 01 1998 JUN 30 1999 10,497,363 10,589,676 2,311,889 10,896 0 24,655,762 21,214,524 13,714,797 44,449,348 4,754,754 0 0 0 223,684 36,522,925 44,449,348 915,608 16,500,966 1,239,443 23,464,625 54,060 0 3,101 (6,360,408) 0 (6,360,408) 0 0 0 (6,360,408) (0.30) (0.30)


								
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