1997 Stock Incentive Plan - SPECTRUM PHARMACEUTICALS INC - 4-2-2002 by SPPI-Agreements

VIEWS: 4 PAGES: 49

									EXHIBIT 10.8 NEOTHERAPEUTICS, INC. AMENDED AND RESTATED 1997 STOCK INCENTIVE PLAN This 1997 STOCK INCENTIVE PLAN (the "Plan") is hereby established by NeoTherapeutics, Inc. (the "Company"), and first adopted by its Board of Directors as of the 2nd day of May, 1997 (the "Effective Date"), as amended on March 19, 1999, May 6, 1999, December 15, 1999, March 24, 2000, November 2, 2000, March 19, 2001, October 9, 2001, February 11, 2002 and March 23, 2002. ARTICLE 1. PURPOSES OF THE PLAN 1.1 PURPOSES. The purposes of the Plan are (a) to enhance the Company's ability to attract and retain the services of qualified employees, officers and directors (including non-employee officers and directors), and consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of the Company's business largely depends, and (b) to provide additional incentives to such persons or entities to devote their utmost effort and skill to the advancement and betterment of the Company, by providing them an opportunity to participate in the ownership of the Company and thereby have an interest in the success and increased value of the Company. ARTICLE 2. DEFINITIONS For purposes of this Plan, the following terms shall have the meanings indicated: 2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board delegates responsibility for any matter to the Committee, the term Administrator shall mean the Committee. 2.2 AFFILIATED COMPANY. "Affiliated Company" means any "parent corporation" or "subsidiary corporation" of the Company, whether now existing or hereafter created or acquired, as those terms are defined in Sections 424(e) and 424(f) of the Code, respectively. 2.3 BOARD. "Board" means the Board of Directors of the Company. 2.4 CHANGE IN CONTROL. "Change in Control" shall mean (i) the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the beneficial ownership of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company; (ii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold, in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation; (iii) a

reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger; (iv) the sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or (v) the approval by the shareholders of a

reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company are transferred to or acquired by a person or persons different from the persons holding those securities immediately prior to such merger; (iv) the sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or (v) the approval by the shareholders of a plan or proposal for the liquidation or dissolution of the Company. 2.5 CODE. "Code" means the Internal Revenue Code of 1986, as amended from time to time. 2.6 COMMITTEE. "Committee" means a committee of two or more members of the Board appointed to administer and/or amend the Plan, as set forth in Sections 7.1 and 9.1, respectively, hereof. 2.7 COMMON STOCK. "Common Stock" means the Common Stock, no par value, of the Company, subject to adjustment pursuant to Section 4.2 hereof. 2.8 DISABILITY. "Disability" means permanent and total disability as defined in Section 22(e)(3) of the Code. The Administrator's determination of a Disability or the absence thereof shall be conclusive and binding on all interested parties. 2.9 EFFECTIVE DATE. "Effective Date" means the date on which the Plan is adopted by the Board, as set forth on the first page hereof. 2.10 EXERCISE PRICE. "Exercise Price" means the purchase price per share of Common Stock payable upon exercise of an Option. 2.11 FAIR MARKET VALUE. "Fair Market Value" on any given date means the value of one share of Common Stock, determined as follows: (a) If the Common Stock is then listed or admitted to trading on a NASDAQ market system or a stock exchange which reports closing sale prices, the Fair Market Value shall be the closing sale price on the date of valuation on such NASDAQ market system or principal stock exchange on which the Common Stock is then listed or admitted to trading, or, if no closing sale price is quoted on such day, then the Fair Market Value shall be the closing sale price of the Common Stock on such NASDAQ market system or such exchange on the next preceding day for which a closing sale price is reported. (b) If the Common Stock is not then listed or admitted to trading on a NASDAQ market system or a stock exchange which reports closing sale prices, the Fair Market Value shall be the average of the closing bid and asked prices of the Common Stock in the over-the-counter market on the date of valuation. (c) If neither (a) nor (b) is applicable as of the date of valuation, then the Fair Market Value shall be determined by the Administrator in good faith using any reasonable method of evaluation, which determination shall be conclusive and binding on all interested parties. 2

2.12 INCENTIVE OPTION. "Incentive Option" means any Option designated and qualified as an "incentive stock option" as defined in Section 422 of the Code. 2.13 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an Option Agreement with respect to an Incentive Option. 2.14 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member of the National Association of Securities Dealers, Inc. 2.15 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that is not an Incentive Option. To the extent that any Option designated as an Incentive Option fails in whole or in part to qualify as an Incentive Option, including, without limitation, for failure to meet the limitations applicable to a 10% Shareholder or

2.12 INCENTIVE OPTION. "Incentive Option" means any Option designated and qualified as an "incentive stock option" as defined in Section 422 of the Code. 2.13 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an Option Agreement with respect to an Incentive Option. 2.14 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member of the National Association of Securities Dealers, Inc. 2.15 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that is not an Incentive Option. To the extent that any Option designated as an Incentive Option fails in whole or in part to qualify as an Incentive Option, including, without limitation, for failure to meet the limitations applicable to a 10% Shareholder or because it exceeds the annual limit provided for in Section 5.6 below, it shall to that extent constitute a Nonqualified Option. 2.16 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement" means an Option Agreement with respect to a Nonqualified Option. 2.17 OFFEREE. "Offeree" means a Participant to whom a Right to Purchase has been offered or who has acquired Restricted Stock under the Plan. 2.18 OPTION. "Option" means any option to purchase Common Stock granted pursuant to the Plan. 2.19 OPTION AGREEMENT. "Option Agreement" means the written agreement entered into between the Company and the Optionee with respect to an Option granted under the Plan. 2.20 OPTIONEE. "Optionee" means a Participant who holds an Option. 2.21 PARTICIPANT. "Participant" means an individual or entity who holds an Option, a Right to Purchase or Restricted Stock under the Plan. 2.22 PURCHASE PRICE. "Purchase Price" means the purchase price per share of Restricted Stock payable upon acceptance of a Right to Purchase. 2.23 RESTRICTED STOCK. "Restricted Stock" means shares of Common Stock issued pursuant to Article 6 hereof, subject to any restrictions and conditions as are established pursuant to such Article 6. 2.24 RIGHT TO PURCHASE. "Right to Purchase" means a right to purchase Restricted Stock granted to an Offeree pursuant to Article 6 hereof. 2.25 SERVICE PROVIDER. "Service Provider" means a consultant or other person or entity who provides services to the Company or an Affiliated Company and who the Administrator authorizes to become a Participant in the Plan. 2.26 STOCK PURCHASE AGREEMENT. "Stock Purchase Agreement" means the written agreement entered into between the Company and the Offeree with respect to a Right to Purchase offered under the Plan. 3

2.27 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a relevant date, owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of an Affiliated Company. ARTICLE 3. ELIGIBILITY

2.27 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a relevant date, owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of an Affiliated Company. ARTICLE 3. ELIGIBILITY 3.1 INCENTIVE OPTIONS. Officers and other key employees of the Company or of an Affiliated Company (including members of the Board if they are employees of the Company or of an Affiliated Company) are eligible to receive Incentive Options under the Plan. 3.2 NONQUALIFIED OPTIONS AND RIGHTS TO PURCHASE. Officers and other key employees of the Company or of an Affiliated Company, members of the Board (whether or not employed by the Company or an Affiliated Company), and Service Providers are eligible to receive Nonqualified Options or Rights to Purchase under the Plan. 3.3 LIMITATION ON SHARES. In no event shall any Participant be granted Options or Rights to Purchase in any one calendar year pursuant to which the aggregate number of shares of Common Stock that may be acquired thereunder exceeds 740,000 shares. ARTICLE 4. PLAN SHARES 4.1 SHARES SUBJECT TO THE PLAN. A total of 6,000,000 shares of Common Stock may be issued under the Plan, subject to adjustment as to the number and kind of shares pursuant to Section 4.2 hereof. For purposes of this limitation, in the event that (a) all or any portion of any Option or Right to Purchase granted or offered under the Plan can no longer under any circumstances be exercised, or (b) any shares of Common Stock are reacquired by the Company pursuant to an Incentive Option Agreement, Nonqualified Option Agreement or Stock Purchase Agreement, the shares of Common Stock allocable to the unexercised portion of such Option or such Right to Purchase, or the shares so reacquired, shall again be available for grant or issuance under the Plan. 4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding shares of Common Stock are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, combination of shares, reclassification, stock dividend, or other change in the capital structure of the Company, then appropriate adjustments shall be made by the Administrator to the aggregate number and kind of shares subject to this Plan, and the number and kind of shares and the price per share subject to outstanding Option Agreements, Rights to Purchase and Stock Purchase Agreements in order to preserve, as nearly as practical, but not to increase, the benefits to Participants. ARTICLE 5. OPTIONS 4

5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall be evidenced by an Option Agreement which shall specify the number of shares subject thereto, the Exercise Price per share, and whether the Option is an Incentive Option or Nonqualified Option. As soon as is practical following the grant of an Option, an Option Agreement shall be duly executed and delivered by or on behalf of the Company to the Optionee to whom such Option was granted. Each Option Agreement shall be in such form and contain such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time, deem desirable, including, without limitation, the imposition of any rights of first refusal and resale obligations upon any shares of Common Stock acquired pursuant to an Option Agreement. Each Option

5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall be evidenced by an Option Agreement which shall specify the number of shares subject thereto, the Exercise Price per share, and whether the Option is an Incentive Option or Nonqualified Option. As soon as is practical following the grant of an Option, an Option Agreement shall be duly executed and delivered by or on behalf of the Company to the Optionee to whom such Option was granted. Each Option Agreement shall be in such form and contain such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time, deem desirable, including, without limitation, the imposition of any rights of first refusal and resale obligations upon any shares of Common Stock acquired pursuant to an Option Agreement. Each Option Agreement may be different from each other Option Agreement. 5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock covered by each Option shall be determined by the Administrator, subject to the following: (a) the Exercise Price of an Incentive Option shall not be less than 100% of Fair Market Value on the date the Incentive Option is granted, (b) the Exercise Price of a Nonqualified Option shall not be less than 85% of Fair Market Value on the date the Nonqualified Option is granted, and (c) if the person to whom an Incentive Option is granted is a 10% Shareholder on the date of grant, the Exercise Price shall not be less than 110% of Fair Market Value on the date the Option is granted. 5.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall be made upon exercise of an Option and may be made, in the discretion of the Administrator, subject to any legal restrictions, by: (a) cash; (b) check; (c) the surrender of shares of Common Stock owned by the Optionee that have been held by the Optionee for at least six (6) months, which surrendered shares shall be valued at Fair Market Value as of the date of such exercise; (d) the Optionee's promissory note in a form and on terms acceptable to the Administrator; (e) the cancellation of indebtedness of the Company to the Optionee; (f) the waiver of compensation due or accrued to the Optionee for services rendered; (g) provided that a public market for the Common Stock exists, a "same day sale" commitment from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the shares so purchased to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt of such shares to forward the Exercise Price directly to the Company; (h) provided that a public market for the Common Stock exists, a "margin" commitment from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such shares to forward the Exercise Price directly to the Company; or (i) any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by applicable corporate law. 5.4 TERM AND TERMINATION OF OPTIONS. The term and provisions for termination of each Option shall be as fixed by the Administrator, but no Option may be exercisable more than ten (10) years after the date it is granted. An Incentive Option granted to a person who is a 10% Shareholder on the date of grant shall not be exercisable more than five (5) years after the date it is granted. 5.5 VESTING AND EXERCISE OF OPTIONS. Each Option shall vest and become exercisable in one or more installments at such time or times and subject to such conditions, including without limitation the achievement of specified performance goals or objectives, as shall be determined by the Administrator. 5

5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for "incentive stock option" treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock shall not, with respect to which Incentive Options granted under this Plan and any other plan of the Company or any Affiliated Company become exercisable for the first time by an Optionee during any calendar year, exceed $100,000. 5.7 NONTRANSFERABILITY OF OPTIONS. No Option shall be assignable or transferable except by will or the laws of descent and distribution, and during the life of the Optionee shall be exercisable only by such Optionee; provided, however, that, in the discretion of the Administrator, any Option may be assigned or transferred in any manner which an "incentive stock option" is permitted to be assigned or transferred under the Code.

5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for "incentive stock option" treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock shall not, with respect to which Incentive Options granted under this Plan and any other plan of the Company or any Affiliated Company become exercisable for the first time by an Optionee during any calendar year, exceed $100,000. 5.7 NONTRANSFERABILITY OF OPTIONS. No Option shall be assignable or transferable except by will or the laws of descent and distribution, and during the life of the Optionee shall be exercisable only by such Optionee; provided, however, that, in the discretion of the Administrator, any Option may be assigned or transferred in any manner which an "incentive stock option" is permitted to be assigned or transferred under the Code. 5.8 RIGHTS AS SHAREHOLDER. An Optionee or permitted transferee of an Option shall have no rights or privileges as a shareholder with respect to any shares covered by an Option until such Option has been duly exercised and certificates representing shares purchased upon such exercise have been issued to such person. ARTICLE 6. RIGHTS TO PURCHASE 6.1 NATURE OF RIGHT TO PURCHASE. A Right to Purchase granted to an Offeree entitles the Offeree to purchase, for a Purchase Price determined by the Administrator, shares of Common Stock subject to such terms, restrictions and conditions as the Administrator may determine at the time of grant ("Restricted Stock"). Such conditions may include, but are not limited to, continued employment or the achievement of specified performance goals or objectives. 6.2 ACCEPTANCE OF RIGHT TO PURCHASE. An Offeree shall have no rights with respect to the Restricted Stock subject to a Right to Purchase unless the Offeree shall have accepted the Right to Purchase within ten (10) days (or such longer or shorter period as the Administrator may specify) following the grant of the Right to Purchase by making payment of the full Purchase Price to the Company in the manner set forth in Section 6.3 hereof and by executing and delivering to the Company a Stock Purchase Agreement. Each Stock Purchase Agreement shall be in such form, and shall set forth the Purchase Price and such other terms, conditions and restrictions of the Restricted Stock, not inconsistent with the provisions of this Plan, as the Administrator shall, from time to time, deem desirable. Each Stock Purchase Agreement may be different from each other Stock Purchase Agreement. 6.3 PAYMENT OF PURCHASE PRICE. Subject to any legal restrictions, payment of the Purchase Price upon acceptance of a Right to Purchase Restricted Stock may be made, in the discretion of the Administrator, by: (a) cash; (b) check; (c) the surrender of shares of Common Stock owned by the Offeree that have been held by the Offeree for at least six (6) months, which surrendered shares shall be valued at Fair Market Value as of the date of such exercise; (d) the Offeree's promissory note in a form and on terms acceptable to the Administrator; (e) the cancellation of indebtedness of the Company to the Offeree; (f) the waiver of compensation due or accrued to the Offeree for services rendered; or (g) any combination of the foregoing methods of payment or any other consideration or method of payment as shall be permitted by applicable corporate law. 6

6.4 RIGHTS AS A SHAREHOLDER. Upon complying with the provisions of Section 6.2 hereof, an Offeree shall have the rights of a shareholder with respect to the Restricted Stock purchased pursuant to the Right to Purchase, including voting and dividend rights, subject to the terms, restrictions and conditions as are set forth in the Stock Purchase Agreement. Unless the Administrator shall determine otherwise, certificates evidencing shares of Restricted Stock shall remain in the possession of the Company until such shares have vested in accordance with the terms of the Stock Purchase Agreement. 6.5 RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided in the Stock Purchase Agreement. In the event of

6.4 RIGHTS AS A SHAREHOLDER. Upon complying with the provisions of Section 6.2 hereof, an Offeree shall have the rights of a shareholder with respect to the Restricted Stock purchased pursuant to the Right to Purchase, including voting and dividend rights, subject to the terms, restrictions and conditions as are set forth in the Stock Purchase Agreement. Unless the Administrator shall determine otherwise, certificates evidencing shares of Restricted Stock shall remain in the possession of the Company until such shares have vested in accordance with the terms of the Stock Purchase Agreement. 6.5 RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided in the Stock Purchase Agreement. In the event of termination of a Participant's employment, service as a director of the Company or Service Provider status for any reason whatsoever (including death or disability), the Stock Purchase Agreement may provide, in the discretion of the Administrator, that the Company shall have the right, exercisable at the discretion of the Administrator, to repurchase (i) at the original Purchase Price, any shares of Restricted Stock which have not vested as of the date of termination, and (ii) at Fair Market Value, any shares of Restricted Stock which have vested as of such date, on such terms as may be provided in the Stock Purchase Agreement. 6.6 VESTING OF RESTRICTED STOCK. The Stock Purchase Agreement shall specify the date or dates, the performance goals or objectives which must be achieved, and any other conditions on which the Restricted Stock may vest. 6.7 DIVIDENDS. If payment for shares of Restricted Stock is made by promissory note, any cash dividends paid with respect to the Restricted Stock may be applied, in the discretion of the Administrator, to repayment of such note. 6.8 NONASSIGNABILITY OF RIGHTS. No Right to Purchase shall be assignable or transferable except by will or the laws of descent and distribution or as otherwise provided by the Administrator. ARTICLE 7. ADMINISTRATION OF THE PLAN 7.1 ADMINISTRATOR. Authority to control and manage the operation and administration of the Plan shall be vested in the Board, which may delegate such responsibilities in whole or in part to a committee consisting of two (2) or more members of the Board (the "Committee"). Members of the Committee may be appointed from time to time by, and shall serve at the pleasure of, the Board. As used herein, the term "Administrator" means the Board or, with respect to any matter as to which responsibility has been delegated to the Committee, the term Administrator shall mean the Committee. 7.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or authority conferred upon the Administrator elsewhere in the Plan or by law, the Administrator shall have full power and authority: (a) to determine the persons to whom, and the time or times at which, Incentive Options or Nonqualified Options shall be granted and Rights to Purchase shall be offered, the number of shares to be represented by each Option and Right to Purchase and the consideration to be received by the Company upon the exercise thereof; (b) to interpret the Plan; (c) to create, amend or rescind rules and regulations relating to the Plan; (d) to determine the terms, conditions and restrictions contained in, and the form of, Option Agreements and Stock Purchase Agreements; (e) to 7

determine the identity or capacity of any persons who may be entitled to exercise a Participant's rights under any Option or Right to Purchase under the Plan; (f) to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option Agreement or Stock Purchase Agreement; (g) to accelerate the vesting of any Option or release or waive any repurchase rights of the Company with respect to Restricted Stock; (h) to extend the exercise date of any Option or acceptance date of any Right to Purchase; (i) to provide for rights of first refusal and/or repurchase rights; (j) to amend outstanding Option Agreements and Stock Purchase Agreements to provide for, among other things, any change or modification which the Administrator could have provided for upon the grant of an Option or Right to Purchase or in furtherance of the powers provided for

determine the identity or capacity of any persons who may be entitled to exercise a Participant's rights under any Option or Right to Purchase under the Plan; (f) to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option Agreement or Stock Purchase Agreement; (g) to accelerate the vesting of any Option or release or waive any repurchase rights of the Company with respect to Restricted Stock; (h) to extend the exercise date of any Option or acceptance date of any Right to Purchase; (i) to provide for rights of first refusal and/or repurchase rights; (j) to amend outstanding Option Agreements and Stock Purchase Agreements to provide for, among other things, any change or modification which the Administrator could have provided for upon the grant of an Option or Right to Purchase or in furtherance of the powers provided for herein; and (k) to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. Any action, decision, interpretation or determination made in good faith by the Administrator in the exercise of its authority conferred upon it under the Plan shall be final and binding on the Company and all Participants. 7.3 LIMITATION ON LIABILITY. No employee of the Company or member of the Board or Committee shall be subject to any liability with respect to duties under the Plan unless the person acts fraudulently or in bad faith. To the extent permitted by law, the Company shall indemnify each member of the Board or Committee, and any employee of the Company with duties under the Plan, who was or is a party, or is threatened to be made a party, to any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, by reason of such person's conduct in the performance of duties under the Plan. ARTICLE 8. CHANGE IN CONTROL 8.1 CHANGE IN CONTROL. In order to preserve a Participant's rights in the event of a Change in Control of the Company, (i) the time period relating to the exercise or realization of all outstanding Options, Rights to Purchase and Restricted Stock shall automatically accelerate immediately prior to the consummation of such Change in Control, and (ii) with respect to Options and Rights to Purchase, the Administrator in its discretion may, at any time an Option or Right to Purchase is granted, or at any time thereafter, take one or more of the following actions: (A) provide for the purchase or exchange of each Option or Right to Purchase for an amount of cash or other property having a value equal to the difference, or spread, between (x) the value of the cash or other property that the Participant would have received pursuant to such Change in Control transaction in exchange for the shares issuable upon exercise of the Option or Right to Purchase had the Option or Right to Purchase been exercised immediately prior to such Change in Control transaction and (y) the Exercise Price of such Option or the Purchase Price under such Right to Purchase, (B) adjust the terms of the Options and Rights to Purchase in a manner determined by the Administrator to reflect the Change in Control, (C) cause the Options and Rights to Purchase to be assumed, or new rights substituted therefor, by another entity, through the continuance of the Plan and the assumption of outstanding Options and Rights to Purchase, or the substitution for such Options and Rights to Purchase of new options and new rights to purchase of comparable value covering shares of a successor corporation, with appropriate adjustments as to the number and kind of shares and Exercise Prices, in which event the Plan and such Options and Rights to Purchase, or the new options and rights to purchase substituted therefor, shall continue in the manner and under the terms so provided, or (D) make such other provision as the Administrator may consider equitable. If the Administrator 8

does not take any of the forgoing actions, all Options and Rights to Purchase shall terminate upon the consummation of the Change in Control and the Administrator shall cause written notice of the proposed transaction to be given to all Participants not less than fifteen (15) days prior to the anticipated effective date of the proposed transaction. ARTICLE 9. AMENDMENT AND TERMINATION OF THE PLAN 9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend or terminate the Plan in such respects as the Board may deem advisable. In addition, the Board may delegate such power in whole or in part

does not take any of the forgoing actions, all Options and Rights to Purchase shall terminate upon the consummation of the Change in Control and the Administrator shall cause written notice of the proposed transaction to be given to all Participants not less than fifteen (15) days prior to the anticipated effective date of the proposed transaction. ARTICLE 9. AMENDMENT AND TERMINATION OF THE PLAN 9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend or terminate the Plan in such respects as the Board may deem advisable. In addition, the Board may delegate such power in whole or in part to the Committee. No such alteration, amendment, suspension or termination shall be made which shall substantially affect or impair the rights of any Participant under an outstanding Option Agreement or Stock Purchase Agreement without such Participant's consent. The Board and/or Committee may alter or amend the Plan to comply with requirements under the Code relating to Incentive Options or other types of options which give Optionees more favorable tax treatment than that applicable to Options granted under this Plan as of the date of its adoption. Upon any such alteration or amendment, any outstanding Option granted hereunder may, if the Administrator so determines and if permitted by applicable law, be subject to the more favorable tax treatment afforded to an Optionee pursuant to such terms and conditions. 9.2 PLAN TERMINATION. Unless the Plan shall theretofore have been terminated, the Plan shall terminate on the tenth (10th) anniversary of the Effective Date and no Options or Rights to Purchase may be granted under the Plan thereafter, but Option Agreements, Stock Purchase Agreements and Rights to Purchase then outstanding shall continue in effect in accordance with their respective terms. ARTICLE 10. TAX WITHHOLDING 10.1 WITHHOLDING. The Company shall have the power to withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any applicable Federal, state, and local tax withholding requirements with respect to any Options exercised or Restricted Stock issued under the Plan. To the extent permissible under applicable tax, securities and other laws, the Administrator may, in its sole discretion and upon such terms and conditions as it may deem appropriate, permit a Participant to satisfy his or her obligation to pay any such tax, in whole or in part, up to an amount determined on the basis of the highest marginal tax rate applicable to such Participant, by (a) directing the Company to apply shares of Common Stock to which the Participant is entitled as a result of the exercise of an Option or as a result of the purchase of or lapse of restrictions on Restricted Stock or (b) delivering to the Company shares of Common Stock owned by the Participant. The shares of Common Stock so applied or delivered in satisfaction of the Participant's tax withholding obligation shall be valued at their Fair Market Value as of the date of measurement of the amount of income subject to withholding. 9

ARTICLE 11. MISCELLANEOUS 11.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits under the Plan may not be assigned or alienated, whether voluntarily or involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other disposition shall be without effect. 11.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract between the Company and any Participant to be consideration for, or an inducement to, or a condition of, the employment of any Participant. Nothing contained in the Plan shall be deemed to give the right to any Participant to be retained as an employee of the Company or any Affiliated Company or to limit the right of the Company or any Affiliated Company to discharge any Participant at any time.

ARTICLE 11. MISCELLANEOUS 11.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits under the Plan may not be assigned or alienated, whether voluntarily or involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other disposition shall be without effect. 11.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a voluntary undertaking on the part of the Company and shall not be deemed to constitute a contract between the Company and any Participant to be consideration for, or an inducement to, or a condition of, the employment of any Participant. Nothing contained in the Plan shall be deemed to give the right to any Participant to be retained as an employee of the Company or any Affiliated Company or to limit the right of the Company or any Affiliated Company to discharge any Participant at any time. 11.3 APPLICATION OF FUNDS. The proceeds received by the Company from the sale of Common Stock pursuant to Option Agreements and Stock Purchase Agreements, except as otherwise provided herein, will be used for general corporate purposes. 10

EXHIBIT 10.18 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. WARRANT NO. NEOG001 NEOGENE TECHNOLOGIES, INC. WARRANT Dated: September 21, 2000 NeoGene Technologies, Inc., a California corporation (the "Company"), hereby certifies that, for value received, BRIGHTON CAPITAL, LTD., or its registered assigns ("Holder"), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of Five Thousand Five Hundred Fifty-five (5,555) shares of the common stock, no par value per share (the "Common Stock"), of the Company (each such share, a "Warrant Share" and all such shares, the "Warrant Shares") at an exercise price equal to $45.00 per share (as adjusted from time to time as provided in Section 7, the "Exercise Price"), at any time and from time to time from and after the date hereof and through and including September 21, 2003 (the "Expiration Date"), and subject to the following terms and conditions: 1. Registration of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the "Warrant Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, and the Company shall not be affected by notice to the contrary. 2. Registration of Transfers and Exchanges.

EXHIBIT 10.18 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. WARRANT NO. NEOG001 NEOGENE TECHNOLOGIES, INC. WARRANT Dated: September 21, 2000 NeoGene Technologies, Inc., a California corporation (the "Company"), hereby certifies that, for value received, BRIGHTON CAPITAL, LTD., or its registered assigns ("Holder"), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of Five Thousand Five Hundred Fifty-five (5,555) shares of the common stock, no par value per share (the "Common Stock"), of the Company (each such share, a "Warrant Share" and all such shares, the "Warrant Shares") at an exercise price equal to $45.00 per share (as adjusted from time to time as provided in Section 7, the "Exercise Price"), at any time and from time to time from and after the date hereof and through and including September 21, 2003 (the "Expiration Date"), and subject to the following terms and conditions: 1. Registration of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the "Warrant Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, and the Company shall not be affected by notice to the contrary. 2. Registration of Transfers and Exchanges. (a) This Warrant or the Warrant Shares issued upon any exercise hereof may only be transferred pursuant to an effective registration statement under the Securities Act, to the Company or pursuant to an available exemption from or in a transaction not subject to the registration requirements of the Securities Act. In connection with any transfer of this Warrant or any Warrant Shares, other than pursuant to an effective registration statement or to the Company, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred securities under the Securities Act. Holder agrees to the imprinting, so long as is required by this Section 2(a), of a legend substantially similar to that first above written on any New Warrant (as defined in Section 2(b) below). Any such transferee shall agree in writing to be bound by the terms of this Warrant and shall have the rights of Holder under this Warrant.

(b) The Company shall register the transfer of any portion of this Warrant in conformance with Section 2(a) in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at the office specified in or pursuant to Section 11. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the

(b) The Company shall register the transfer of any portion of this Warrant in conformance with Section 2(a) in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at the office specified in or pursuant to Section 11. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant. (c) This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company pursuant to Section 3(b), for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder. 3. Duration and Exercise of Warrant. (a) This Warrant shall be exercisable by the then registered Holder on any business day before 5:00 P.M., California time, at any time and from time to time on or after the date hereof to and including the Expiration Date. At 5:00 P.M., California time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. (b) Subject to Sections 2(c) and 4, upon surrender of this Warrant, with the Form of Election to Purchase attached hereto duly completed and signed, to the Company at its address for notice set forth in Section 11 and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, in the manner provided hereunder, all as specified by the Holder in the Form of Election to Purchase, the Company shall promptly issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise. Any person so designated by the Holder to receive Warrant Shares shall be deemed to have become the holder of record of such Warrant Shares as of the Date of Exercise of this Warrant. A "Date of Exercise" means the date on which the Company shall have received (i) this Warrant (or any New Warrant, as applicable), with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares so indicated by the holder hereof to be purchased. (c) This Warrant shall be exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be purchased under this Warrant are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant. (d) Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights as a stockholder of the Company with respect to the Warrant Shares, including (without limitation) the right to vote such shares, receive dividends or other distributions thereon or be notified of stockholder meetings (except as otherwise set forth in Section 7(g) herein). 2

4. Payment of Taxes. The Company will pay any documentary stamp taxes attributable to the issuance of Warrant Shares upon the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 5. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such

4. Payment of Taxes. The Company will pay any documentary stamp taxes attributable to the issuance of Warrant Shares upon the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 5. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe. 6. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of its authorized but unissued Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 7). The Company covenants that all Warrant Shares that shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 7. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 7. (a) If the Company, at any time while this Warrant is outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on outstanding preferred stock as of the date hereof which contain a stated dividend rate) or otherwise make a distribution or distributions on shares of its Common Stock (or on any other class of capital stock and not the Common Stock) payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger number of shares, or (iii) combine outstanding shares of Common Stock into a smaller number of shares, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately before such event by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding after such event. The number of Warrant shares issuable upon exercise of this Warrant shall be adjusted upon such adjustment of the Exercise Price by multiplying the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment by a fraction of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations. 3

(b) In case of any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification or share exchange, and the Holder shall be entitled upon such exercise to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification or share exchange. The terms of any such reclassification or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 7(b) upon any exercise following any such reclassification or share exchange.

(b) In case of any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification or share exchange, and the Holder shall be entitled upon such exercise to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification or share exchange. The terms of any such reclassification or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 7(b) upon any exercise following any such reclassification or share exchange. (c) If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to holders of this Warrant) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security (excluding those referred to in Sections 7(a), (b) and (d)) and other than with respect to rights granted pursuant to a stockholders rights plan adopted by the Company, then in each such case the Exercise Price shall be determined by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the fair market value of a Warrant Share determined in accordance with Section 8(b), below, as of the record date mentioned above, and of which the numerator shall be such fair market value of a Warrant Share less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of Common Stock as determined by the Company's independent certified public accountants that regularly examine the financial statements of the Company (the "Appraiser"). (d) In case of the closing of any (1) merger or consolidation of the Company with or into another Person, or (2) sale by the Company of more than one-half of the assets of the Company (on a book value basis) in one or a series of related transactions, or (3) tender or other offer or exchange (whether by the Company or another Person) pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, stock, cash or property of the Company or another Person; then the Holder shall have the right thereafter to (A) exercise this Warrant for the shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of Common Stock following such merger, consolidation or sale, and the Holder shall be entitled upon exercise of this Warrant to receive such amount of securities, cash and property as the Common Stock for which this Warrant could have been exercised immediately prior to such merger, consolidation or sale would have been entitled, or (B) in the event of an exchange or tender offer or other transaction contemplated by clause (3) of this Section, tender or exchange this Warrant for such securities, stock, cash and other property receivable upon or deemed to be held by holders of Common Stock that have tendered or exchanged their shares of Common Stock following such tender or exchange, and the Holder shall be entitled upon such exchange or tender to receive such amount of securities, cash and property as the shares of Common Stock for which this Warrant could have been exercised immediately prior to such tender or exchange would have been entitled as would have been issued. The terms of any such merger, sale, consolidation, tender or exchange shall include such terms so as continue to give the Holder the right to receive the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This provision shall similarly apply to successive such events. 4

(e) For the purposes of this Section 7, the number of shares of Common Stock outstanding at any time shall be deemed to include the aggregate maximum number of shares of Common Stock deliverable upon exercise, conversion or exchange, as applicable (assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability, as applicable, including, without limitation, the passage of time), of any options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities then outstanding. (f) All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.

(e) For the purposes of this Section 7, the number of shares of Common Stock outstanding at any time shall be deemed to include the aggregate maximum number of shares of Common Stock deliverable upon exercise, conversion or exchange, as applicable (assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability, as applicable, including, without limitation, the passage of time), of any options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities then outstanding. (f) All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. (g) If: (i) the Company shall declare a dividend (or any other distribution) on its Common Stock; or (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock; or (iii) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; or (iv) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock of the Company, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or (v) the Company shall authorize the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall cause to be mailed to each Holder at such Holder's last address as it shall appear upon the Warrant Register, at least 15 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up; provided, however, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. 5

8. Payment of Exercise Price. The Holder shall pay the Exercise Price in one of the following manners: (a) Cash Exercise. The Holder may deliver immediately available funds by certified check or bank draft payable to the order of the Company or by wire transfer to an account designated by the Company; or (b) Cashless Exercise. The Holder may surrender this Warrant to the Company together with a notice of cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows: Y (A - B) X = --------A Where X = The number of Warrant Shares to be issued to the Holder.

8. Payment of Exercise Price. The Holder shall pay the Exercise Price in one of the following manners: (a) Cash Exercise. The Holder may deliver immediately available funds by certified check or bank draft payable to the order of the Company or by wire transfer to an account designated by the Company; or (b) Cashless Exercise. The Holder may surrender this Warrant to the Company together with a notice of cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows: Y (A - B) X = --------A Where X = The number of Warrant Shares to be issued to the Holder. Y = The number of Warrant Shares with respect to which this Warrant is being exercised. A = The fair market value of one Warrant Share on the Date of Exercise. B = The Exercise Price. For purposes of this Section 8(b), the fair market value of a Warrant Share on the Date of Exercise shall mean: (i) if the exercise is in connection with an initial public offering of the Company's Common Stock, and if the Company's registration statement relating to such public offering has been declared effective by the Securities and Exchange Commission, then the fair market value per share shall be the initial "Price to Public" specified in the final prospectus with respect to the offering; (ii) if this Warrant is exercised after, and not in connection with, the Company's initial public offering, and if the Company's Common Stock is traded on a securities exchange or The Nasdaq Stock Market or actively traded over-the-counter: (A) if the Company's Common Stock is traded on a securities exchange or The Nasdaq Stock Market, the fair market value shall be deemed to be the average of the closing sale prices of the Common Stock for the five (5) trading days immediately prior to (but not including) the Date of Exercise; or (B) if the Company's Common Stock is actively traded over-the-counter, the fair market value shall be deemed to be average of the closing bid or sales price (whichever is applicable) for the five (5) trading days immediately prior to (but not including) the Date of Exercise; or (iii) if neither (i) nor (ii) is applicable, the fair market value of a Warrant Share shall be at the highest price per share which the Company could obtain on the date of calculation from a willing buyer (not a current employee or director) for shares of Common Stock sold by the Company, from authorized but unissued shares, as determined in good faith by the Board 6

of Directors, unless the Company is at such time subject to an acquisition including the sale, conveyance or disposal of all or substantially all of the Company's property or business or the Company's merger into or consolidation with any other corporation (other than a wholly-owned subsidiary corporation) or any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, other than a merger effected exclusively for the purpose of changing the domicile of the Company, in which case the fair market value of a Warrant Share shall be deemed to be the value received by the holders of Common Stock pursuant to such acquisition. 9. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares

of Directors, unless the Company is at such time subject to an acquisition including the sale, conveyance or disposal of all or substantially all of the Company's property or business or the Company's merger into or consolidation with any other corporation (other than a wholly-owned subsidiary corporation) or any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, other than a merger effected exclusively for the purpose of changing the domicile of the Company, in which case the fair market value of a Warrant Share shall be deemed to be the value received by the holders of Common Stock pursuant to such acquisition. 9. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. The number of full Warrant Shares which shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of this Warrant so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 9, be issuable on the exercise of this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by such fraction. 10. Representations and Warranties of Holder. By accepting this Warrant, the Holder hereby represents and warrants as follows: (a) Purchase for Own Account. Holder represents and warrants that it is acquiring the Warrant and the Warrant Shares (collectively, the "Securities") solely for its own account for investment and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act. Holder further represents that it does not have any present intention of selling, offering to sell or otherwise disposing of or distributing the Securities or any portion thereof and that the entire legal and beneficial interest of the Securities it is acquiring is being acquired for, and will be held for the account of, Holder only and neither in whole nor in part for any other person. (b) Accredited Investor; Informed and Knowledgeable Decision. Holder is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. Holder hereby agrees, represents and warrants that it is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Holder further represents and warrants that it has discussed the Company and its plans, operations and financial condition with its officers, has received all such information as he deems necessary and appropriate to enable it to evaluate the financial risk inherent in making an investment in the Securities. (c) Company Disclosure. Holder hereby agrees, represents and warrants that the Company has disclosed to Holder that the Securities have not been registered under the Securities Act or under any state securities laws and must be held indefinitely unless a transfer of it is subsequently registered under the Securities Act or an exemption from such registration is available. (d) Rule 144. The Holder hereby agrees, represents and warrants that the Holder is aware of the provisions of Rule 144, promulgated under the Securities Act. 11. Notices. Any and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified 7

in this Section prior to 5:00 p.m. (California time) on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:00 p.m. (California time) on any date and earlier than 11:59 p.m. (California time) on such date, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to 157 Technology Drive, Irvine, CA 92618, Attention: Chief Financial Officer, or to facsimile no. (949) 788-6706, with a copy to Latham & Watkins, 650 Town Center

in this Section prior to 5:00 p.m. (California time) on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:00 p.m. (California time) on any date and earlier than 11:59 p.m. (California time) on such date, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to 157 Technology Drive, Irvine, CA 92618, Attention: Chief Financial Officer, or to facsimile no. (949) 788-6706, with a copy to Latham & Watkins, 650 Town Center Drive, Suite 2000, Costa Mesa, California 92626, attention Alan W. Pettis, Esq., or (ii) if to the Holder, to the Holder at the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section 10. 12. Warrant Agent. The Company shall serve as warrant agent under this Warrant. The Company may appoint a new warrant agent upon notice to the Holder in accordance with Section 10. Any corporation into which the Company may be merged or any corporation resulting from any consolidation to which the Company shall be a party or any corporation to which the Company transfers substantially all of its corporate assets shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register. 13. Miscellaneous. (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns. (b) Subject to Section 12(a), above, nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the Company and the Holder. (c) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of law thereof. The Company and the Holder hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the County of Orange, State of California, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waive, and agree not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such suit, action or proceeding is improper. Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices to it under this instrument and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. 8

(d) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. (e) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

(d) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. (e) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above. NEOGENE TECHNOLOGIES, INC.
By: /s/ Sam Gulko --------------------------Samuel Gulko Chief Financial Officer

9

FORM OF ELECTION TO PURCHASE (To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant) To NeoGene Technologies, Inc.: In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase __________ shares of the common stock ("Common Stock"), no par value per share, of NeoGene Technologies, Inc. and such Holder (i) ___ is utilizing the Cashless Exercise provisions set forth in the Warrant, or (ii) ___ encloses herewith $__________ in cash, certified or official bank check or checks, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. The undersigned hereby acknowledges that it has reviewed the representations and warranties contained in Section 10 of the Warrant and by its signature below hereby makes such representations and warranties to the Company as of the date hereof. The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER

(Please print name and address) If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant (as defined in the Warrant) evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to: (Please print name and address)

FORM OF ELECTION TO PURCHASE (To be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant) To NeoGene Technologies, Inc.: In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase __________ shares of the common stock ("Common Stock"), no par value per share, of NeoGene Technologies, Inc. and such Holder (i) ___ is utilizing the Cashless Exercise provisions set forth in the Warrant, or (ii) ___ encloses herewith $__________ in cash, certified or official bank check or checks, which sum represents the aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. The undersigned hereby acknowledges that it has reviewed the representations and warranties contained in Section 10 of the Warrant and by its signature below hereby makes such representations and warranties to the Company as of the date hereof. The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER

(Please print name and address) If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant (as defined in the Warrant) evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to: (Please print name and address)

Dated:

__________, ____

Name of Holder: (Print) ------------------------------------(By:) ------------------------------------(Name:) (Title:) (Signature must conform in all respects to name of holder as specified on the face of the Warrant)

FORM OF ASSIGNMENT [To be completed and signed only upon transfer of Warrant] FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________

Dated:

__________, ____

Name of Holder: (Print) ------------------------------------(By:) ------------------------------------(Name:) (Title:) (Signature must conform in all respects to name of holder as specified on the face of the Warrant)

FORM OF ASSIGNMENT [To be completed and signed only upon transfer of Warrant] FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________ the right represented by the Warrant enclosed with this Form of Assignment to purchase __________ shares of the common stock of NeoGene Technologies, Inc. to which the Warrant relates and appoints ____________________ attorney to transfer said right on the books of NeoGene Technologies, Inc. with full power of substitution in the premises. Dated: __________, ____ (Signature must conform in all respects to name of holder as specified on the face of the Warrant) Address of Transferee

In the presence of:

EXHIBIT 10.35 EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of December 1, 2000 by and between, Dr. Rajesh C. Shrotriya, currently residing at 24571 Santa Clara Avenue, Dana Point, California 92629 (hereinafter referred to as "Executive"), and NeoTherapeutics, Inc. (hereinafter referred to as "Corporation"). WHEREAS: A. The Corporation is a corporation organized under the laws of the State of Delaware, and is engaged in the business of developing and manufacturing pharmaceutical products and services; and B. Executive is a person whose skills, experience and training are required by the Corporation; and C. Executive wishes to accept the employment offered by the Corporation on the terms and conditions hereinafter set forth. NOW THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows:

FORM OF ASSIGNMENT [To be completed and signed only upon transfer of Warrant] FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________ the right represented by the Warrant enclosed with this Form of Assignment to purchase __________ shares of the common stock of NeoGene Technologies, Inc. to which the Warrant relates and appoints ____________________ attorney to transfer said right on the books of NeoGene Technologies, Inc. with full power of substitution in the premises. Dated: __________, ____ (Signature must conform in all respects to name of holder as specified on the face of the Warrant) Address of Transferee

In the presence of:

EXHIBIT 10.35 EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of December 1, 2000 by and between, Dr. Rajesh C. Shrotriya, currently residing at 24571 Santa Clara Avenue, Dana Point, California 92629 (hereinafter referred to as "Executive"), and NeoTherapeutics, Inc. (hereinafter referred to as "Corporation"). WHEREAS: A. The Corporation is a corporation organized under the laws of the State of Delaware, and is engaged in the business of developing and manufacturing pharmaceutical products and services; and B. Executive is a person whose skills, experience and training are required by the Corporation; and C. Executive wishes to accept the employment offered by the Corporation on the terms and conditions hereinafter set forth. NOW THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows: 1. EMPLOYMENT 1.1 Position and Duties The Corporation does hereby employ Executive and Executive hereby accepts such employment as President of Corporation upon the terms and provisions set forth in this Agreement. Executive shall report to the Chief Executive Officer of the Corporation subject to the directions of the Chief Executive Officer. Executive shall devote his full working time and effort to the business and affairs of the Corporation as necessary to faithfully discharge the duties and responsibilities of his office. Executive may participate in other business and act as a director of any profit or nonprofit corporation, so long as such activity is not competitive with the business of the Corporation in any material respect and does not materially detract from the performance of his duties as a full time executive of the Corporation.

EXHIBIT 10.35 EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of December 1, 2000 by and between, Dr. Rajesh C. Shrotriya, currently residing at 24571 Santa Clara Avenue, Dana Point, California 92629 (hereinafter referred to as "Executive"), and NeoTherapeutics, Inc. (hereinafter referred to as "Corporation"). WHEREAS: A. The Corporation is a corporation organized under the laws of the State of Delaware, and is engaged in the business of developing and manufacturing pharmaceutical products and services; and B. Executive is a person whose skills, experience and training are required by the Corporation; and C. Executive wishes to accept the employment offered by the Corporation on the terms and conditions hereinafter set forth. NOW THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows: 1. EMPLOYMENT 1.1 Position and Duties The Corporation does hereby employ Executive and Executive hereby accepts such employment as President of Corporation upon the terms and provisions set forth in this Agreement. Executive shall report to the Chief Executive Officer of the Corporation subject to the directions of the Chief Executive Officer. Executive shall devote his full working time and effort to the business and affairs of the Corporation as necessary to faithfully discharge the duties and responsibilities of his office. Executive may participate in other business and act as a director of any profit or nonprofit corporation, so long as such activity is not competitive with the business of the Corporation in any material respect and does not materially detract from the performance of his duties as a full time executive of the Corporation. 2. TERM This Agreement shall continue in full force and effective for a period (the "Term") which shall commence as of December 1, 2000 (the "effective date") and shall continue until December 31, 2003 unless sooner terminated as hereafter provided. Thereafter, this Agreement will automatically renew for one (1) year periods, unless 1

either party gives to the other written notice at least ninety (90) days prior to the commencement of the next year, of such party's intent not to renew this Agreement. 3. COMPENSATION 3.1 Base Salary As compensation for the services to be performed by Executive during the continuance of this Agreement, the Corporation shall pay Executive a base salary of not less than $260,000 per year for each year of his employment hereunder, payable in accordance with Corporation practices in effect from time to time, but not less often than monthly (the "Base Salary"). Base Salary shall be payable in substantially equal installments and reduced on a pro rata basis for any fraction of a year or month during which Executive is not so employed. 3.2 Bonus

either party gives to the other written notice at least ninety (90) days prior to the commencement of the next year, of such party's intent not to renew this Agreement. 3. COMPENSATION 3.1 Base Salary As compensation for the services to be performed by Executive during the continuance of this Agreement, the Corporation shall pay Executive a base salary of not less than $260,000 per year for each year of his employment hereunder, payable in accordance with Corporation practices in effect from time to time, but not less often than monthly (the "Base Salary"). Base Salary shall be payable in substantially equal installments and reduced on a pro rata basis for any fraction of a year or month during which Executive is not so employed. 3.2 Bonus The Board of Directors of the Corporation may, at its sole discretion, award bonuses of cash or stock from time to time. Any such Bonus earned by Executive shall be paid at least annually within ninety (90) days after the conclusion of the Corporation's fiscal year or, upon mutual agreement of the parties, in another fashion. 3.3 Additional Benefits Executive shall be entitled to all rights and benefits for which Executive is otherwise entitled under any pension plan, profit sharing plan, life, medical, dental, or benefit the Corporation may provide for senior executives generally and for employees of the Corporation generally from time to time in effect during the term of this Agreement (collectively, "Additional Benefits"). Executive shall receive participation in the Executive Medical Plan and shall commence such participation immediately. 3.4 Stock Options As an additional element of compensation to Executive in consideration of the services to be rendered hereunder, Employer shall grant to Executive options to acquire shares of Corporation's common stock at the sole discretion of the Board of Directors as follows: (A) The specific terms of stock options awarded to Executives shall be as set forth in the separate option agreements. To the extent that Corporation does not have available options in its option plans to grant to Executive as contractually committed herein above, Corporation agrees to amend its plans and/or adopt new plans as promptly as possible to provide sufficient options for such option grants. Corporation shall use its best 2

efforts to prepare and submit for approval by its directors and its stockholders at the 2001 Annual Meeting of Stockholders a new option plan which would provide sufficient options to allow Corporation to meet its contractual obligations to Executive herein and to provide for potential grants of stock options to other key employees. (B) Executive shall be considered for additional grants of options, SAR's, phantom stock rights and any similar option or securities compensation when and as such grants are considered for other executives or employees of the Corporation, but any grant is wholly at the discretion of the Board. (C) For all purposes of this Agreement, a "change of control" shall mean and shall be deemed to have occurred if: (1) There shall be consummated (x) any consolidation or merger of the Corporation with another corporation or entity and as a result of such consolidation or merger, a majority of the outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by persons who were not stockholders of the Corporation prior to the merger or consolidation (excluding the affiliates of the acquiror who acquired their shares within one hundred eighty (180) days prior to such merger or transfer (or in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Corporation, or

efforts to prepare and submit for approval by its directors and its stockholders at the 2001 Annual Meeting of Stockholders a new option plan which would provide sufficient options to allow Corporation to meet its contractual obligations to Executive herein and to provide for potential grants of stock options to other key employees. (B) Executive shall be considered for additional grants of options, SAR's, phantom stock rights and any similar option or securities compensation when and as such grants are considered for other executives or employees of the Corporation, but any grant is wholly at the discretion of the Board. (C) For all purposes of this Agreement, a "change of control" shall mean and shall be deemed to have occurred if: (1) There shall be consummated (x) any consolidation or merger of the Corporation with another corporation or entity and as a result of such consolidation or merger, a majority of the outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by persons who were not stockholders of the Corporation prior to the merger or consolidation (excluding the affiliates of the acquiror who acquired their shares within one hundred eighty (180) days prior to such merger or transfer (or in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Corporation, or (2) The stockholders of the Corporation shall have approved any plan or proposal for the liquidation or dissolution of the Corporation; or (3) Any "person" (as such term is used in the Sections 13(d) and 14 (d) (2) of the Securities Exchange Act of 1934), shall have become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of forty percent (40%) or more of the Corporation's outstanding common stock, without the prior approval of the Board, or (4) During any period of two (2) consecutive years, individuals who at the beginning of such period constituted the entire Board of Directors shall have ceased for any reason to constitute a majority thereof unless the election, or the nomination for election by the Corporation's stockholders, of each new Director was approved by vote of the Directors then still in office who were Directors at the beginning of the period. 3

(D) Retirement of Executive Any options held by Executive will become fully vested at the time that Executive terminates employment due to his retirement. Retirement is defined as the voluntary termination of employment by the Executive as a result of the Executive having reached the retirement age as established by the Corporation or age 65, whichever occurs first or, subsequent to thereto, voluntarily terminates his employment. 3.5 Periodic Review The Corporation shall review Executive's Base Salary bonus, Stock Options, and Additional Benefits then being provided to Executive not less frequently than every twelve (12) months. Following such review, the Corporation may, in its discretion, increase the Base Salary, award a Bonus, grant Stock Options and Additional Benefits. 3.6 Reimbursements 3.6.1 General. Subject to approval of his/her superior, Executives shall be promptly reimbursed by the Corporation for amounts actually expended by Executive in the course of performing duties for the Corporation where Executive tenders receipts or other documentation reasonably substantiating the amounts as required by the Corporation. As a condition of employment hereunder, Executive shall entertain business prospects, provide and maintain an appropriate automobile, maintain and improve Executive's professional skills by participating in continuing education courses and seminars, and maintain memberships in civic groups and professional societies and Corporation agrees to reimburse Executive therefore consistent with criteria under the Internal Revenue Code, subject to approval by their superior.

(D) Retirement of Executive Any options held by Executive will become fully vested at the time that Executive terminates employment due to his retirement. Retirement is defined as the voluntary termination of employment by the Executive as a result of the Executive having reached the retirement age as established by the Corporation or age 65, whichever occurs first or, subsequent to thereto, voluntarily terminates his employment. 3.5 Periodic Review The Corporation shall review Executive's Base Salary bonus, Stock Options, and Additional Benefits then being provided to Executive not less frequently than every twelve (12) months. Following such review, the Corporation may, in its discretion, increase the Base Salary, award a Bonus, grant Stock Options and Additional Benefits. 3.6 Reimbursements 3.6.1 General. Subject to approval of his/her superior, Executives shall be promptly reimbursed by the Corporation for amounts actually expended by Executive in the course of performing duties for the Corporation where Executive tenders receipts or other documentation reasonably substantiating the amounts as required by the Corporation. As a condition of employment hereunder, Executive shall entertain business prospects, provide and maintain an appropriate automobile, maintain and improve Executive's professional skills by participating in continuing education courses and seminars, and maintain memberships in civic groups and professional societies and Corporation agrees to reimburse Executive therefore consistent with criteria under the Internal Revenue Code, subject to approval by their superior. 3.6.2 Business Expenses. During the term of this Agreement to the extent that such expenditures satisfy the criteria under the Internal Revenue Code for deductibility by the Corporation (whether or not fully deductible by the Corporation) for federal income tax purposes as ordinary and necessary business expenses, Corporation agrees to and shall reimburse Executive promptly for all reasonable business expenditures including travel, entertainment, parking, business meetings, professional dues and the costs of and dues associated with maintaining club memberships and expenses of education, made or substantiated in accordance with policies, practices and procedures established from time to time by the Corporation generally with respect to other senior executives/managers and other employees of the Corporation and incurred in the pursuit and furtherance of the Corporation's business and good will. 4

3.6.3 Travel. In connection with any travel by Executive in the performance of his duties hereunder, Corporation shall advance to Executive an amount equivalent to the reasonable and necessary expenses of such travel and appropriate to Executive's position in Corporation pursuant to the policies and procedures established for this purpose by this Corporation. 3.6.4 Automobile Expenses. During the term of this Agreement, Corporation shall provide Executive with a monthly vehicle allowance. In addition, Corporation shall pay or reimburse Executive for reasonable and necessary costs of all automobile insurance (liability or otherwise), fuel, lubricants and automobile maintenance and repair incurred by Executive hereunder. 3.6.5 Entertainment. Executive shall be expected to entertain those with whom the Corporation conducts business both at Executives' home and at public restaurants, theatres, etc. The Corporation shall pay Executive for or promptly reimburse Executive for the reasonable and necessary costs of such entertainment. 3.6.6 Credit Cards. To Assist Executive in the performance of his duties, Corporation shall provide Executive with a Corporation credit card or cards for use in paying for any and all reimbursable expenses. 3.7 Deductions There shall be deducted from Executive's gross compensation appropriate amounts for standard employee deductions (e.g., income tax withholding, social security and state disability insurance) and any other amounts

3.6.3 Travel. In connection with any travel by Executive in the performance of his duties hereunder, Corporation shall advance to Executive an amount equivalent to the reasonable and necessary expenses of such travel and appropriate to Executive's position in Corporation pursuant to the policies and procedures established for this purpose by this Corporation. 3.6.4 Automobile Expenses. During the term of this Agreement, Corporation shall provide Executive with a monthly vehicle allowance. In addition, Corporation shall pay or reimburse Executive for reasonable and necessary costs of all automobile insurance (liability or otherwise), fuel, lubricants and automobile maintenance and repair incurred by Executive hereunder. 3.6.5 Entertainment. Executive shall be expected to entertain those with whom the Corporation conducts business both at Executives' home and at public restaurants, theatres, etc. The Corporation shall pay Executive for or promptly reimburse Executive for the reasonable and necessary costs of such entertainment. 3.6.6 Credit Cards. To Assist Executive in the performance of his duties, Corporation shall provide Executive with a Corporation credit card or cards for use in paying for any and all reimbursable expenses. 3.7 Deductions There shall be deducted from Executive's gross compensation appropriate amounts for standard employee deductions (e.g., income tax withholding, social security and state disability insurance) and any other amounts authorized for deduction by Executive. 4. VACATION Executive shall be entitled to not less than four weeks per year of paid vacation for each twelve (12) month period of employment which shall accrue on a pro rata basis from the date employment commences under this Agreement. Subject to the foregoing minimum vacation, Executive shall be entitled to paid vacation, holidays and leave time in accordance with the plans, policies, programs and practices in effect generally with respect to other senior employees of the Corporation. Executive shall not forfeit or cease to accrue any paid vacation, if he is unable to or does not use it, in any year or period of years during the term hereof, or any extensions thereof. 5. INDEMNIFICATION 5

The Corporation shall, to the maximum extent permitted by law, indemnify and hold Executive harmless from and against any expenses, including reasonable attorney's fees, judgements, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising out of, or related to, Executive's employment by the Corporation. The Corporation shall advance to Executive any expenses, including reasonable attorneys' fees and costs of settlement, reasonably incurred in defending any such proceeding to the maximum extent permitted by law. The Corporation will include Executive under all directors' and officers' liability insurance policies and will use its best efforts to maintain existing coverage levels, assuming continuation of insurance availability at commercially reasonable rates. 6. TERMINATION OF EMPLOYMENT Employment shall terminate upon the occurrence of any of the following events: 6.1 Expiration of Term Upon at least ninety (90) days prior written notice by Corporation to Executive terminating this Agreement prior to the expiration of the original term or an extended term as specified in Section 2; upon such termination, Executive shall be entitled to the compensation provided in paragraph 6.4 payable as provided therein. 6.2 Mutual Agreement

The Corporation shall, to the maximum extent permitted by law, indemnify and hold Executive harmless from and against any expenses, including reasonable attorney's fees, judgements, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising out of, or related to, Executive's employment by the Corporation. The Corporation shall advance to Executive any expenses, including reasonable attorneys' fees and costs of settlement, reasonably incurred in defending any such proceeding to the maximum extent permitted by law. The Corporation will include Executive under all directors' and officers' liability insurance policies and will use its best efforts to maintain existing coverage levels, assuming continuation of insurance availability at commercially reasonable rates. 6. TERMINATION OF EMPLOYMENT Employment shall terminate upon the occurrence of any of the following events: 6.1 Expiration of Term Upon at least ninety (90) days prior written notice by Corporation to Executive terminating this Agreement prior to the expiration of the original term or an extended term as specified in Section 2; upon such termination, Executive shall be entitled to the compensation provided in paragraph 6.4 payable as provided therein. 6.2 Mutual Agreement Whenever the Corporation and Executive mutually agree in writing to termination; 6.3 Termination for Cause At any time for cause. For purposes of this Agreement,"cause" shall be defined as any of the following, provided however, that the board of directors of the Corporation by a duly adopted resolution has determined the presence of such cause in good faith: (i) Executive's material breach of any of his duties and responsibilities under this Agreement (other than as a result of incapacity due to disability); (ii) Executive's conviction by, or entry of a plea of guilty in, a court of competent jurisdiction for a felony; or, (iii) Executive's commission of an act of fraud or willful misconduct or gross negligence in the performance of his duties Notwithstanding the foregoing, Executive shall not be terminated for "cause pursuant to the clauses above, unless and until Executive has received notice of the proposed termination for cause including details on the bases for such termination and has had an opportunity to be heard before at least a majority of members of the board of directors of the Corporation. Executive shall be deemed to have had such an opportunity if written or telephonic notice is given at least ten (10) days in advance of a meeting. 6

6.4 Termination Without Cause Without cause. Notwithstanding any other provision of this section, the Corporation shall have the right to terminate Executive's employment with the Corporation without cause at any time, but any such termination shall be without prejudice to Executive's rights to receive Base Salary and Additional Benefits provided; under this Agreement for the greater of two (2) years or the remaining term, as set forth in paragraph 2 above, of this Agreement and, except as provided in the proviso below, Executive shall be vested in all options granted to him, and shall have one (1) month for each month of Executive's tenure, with a minimum of six (6) months and a maximum of one (1) year, to exercise all vested options; provided, further, if the Board determines that Executive's employment is being terminated for the reason that the shared expectations of Executive and the Board are not being met; in the Board's judgement, then Executive's vesting as shall occur during a period following the date of termination of Executive's employment equal to the number of months of Executive's tenure with the Corporation, with a minimum of six (6) months and a maximum of one (1) year, with the right to exercise for the same period plus thirty (30) days. The continued vesting and exercise rights relative to all options granted to Executive shall be subject to the same limitations as set forth in the immediately preceding sentence. If

6.4 Termination Without Cause Without cause. Notwithstanding any other provision of this section, the Corporation shall have the right to terminate Executive's employment with the Corporation without cause at any time, but any such termination shall be without prejudice to Executive's rights to receive Base Salary and Additional Benefits provided; under this Agreement for the greater of two (2) years or the remaining term, as set forth in paragraph 2 above, of this Agreement and, except as provided in the proviso below, Executive shall be vested in all options granted to him, and shall have one (1) month for each month of Executive's tenure, with a minimum of six (6) months and a maximum of one (1) year, to exercise all vested options; provided, further, if the Board determines that Executive's employment is being terminated for the reason that the shared expectations of Executive and the Board are not being met; in the Board's judgement, then Executive's vesting as shall occur during a period following the date of termination of Executive's employment equal to the number of months of Executive's tenure with the Corporation, with a minimum of six (6) months and a maximum of one (1) year, with the right to exercise for the same period plus thirty (30) days. The continued vesting and exercise rights relative to all options granted to Executive shall be subject to the same limitations as set forth in the immediately preceding sentence. If Executive is terminated without cause, Executive may elect to receive a lump sum payment representing the aggregate cash compensation (including salary, bonus, auto allowance and any other cash or equivalent compensation, other than continued vacation accrual). Such lump sum payment shall be made not later than ten (10) days after Executive makes such election. In the event of such lump sum election, all insurance and other noncash benefits shall cease. 6.5 Death/Disability The death or disability of Executive. For the purposes of this Agreement, disability shall mean the absence of Executive performing Executive's duties with the Corporation on a full time basis for a period of six (6) consecutive months, as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Corporation or its insurers and reasonably acceptable to Executive or Executive's legal representative. If Executive shall become disabled, Executive's employment may be terminated; by written notice to Executive. In the event of the death of Executive, all compensation hereunder shall be paid based on value at time of death. 6.6 By Executive Without Cause By Executive at any time upon ninety (90) days' notice to Corporation. Executive shall not be entitled to any severance in the event of such a termination. 7. CHANGE OF CONTROL 7

If there should occur a "change of control" of the Corporation (or any successor), as defined in paragraph 3.4 (C) hereof, and Executive's employment is terminated (other than by Executive) or Executive is adversely affected in terms of overall compensation, benefits, title, authority, reports reporting relationships, location of employment or similar matters, then Executive, without limitation on any other rights hereunder, may, within six (6) months after receiving notice of such event, elect to resign from full time service to the Corporation. In the event of such election by Executive, Executive shall be provided with senior executive outplacement services at an outplacement or executive search firm of Executive's selection (and reasonably acceptable to Corporation), and the cash compensation and all benefits to which Executive is entitled hereunder shall be discontinued twentyfour (24) months after the date of election (or earlier, if a lump sum payment of cash compensation is specified). Executive, at his election, shall have the right to request and, if requested, shall be paid the full cash value of all amounts of cash compensation due for the 24-month period (including salary, approved bonus, auto allowance, and any other cash or equivalent compensation) in a lump sum, such lump sum payment shall be made not later than ten (10) days after Executive gives notice to the Corporation of his lump sum election. In the event of such election, all insurance and noncash benefits shall cease. All options granted to Executive shall vest to the extent provided in paragraph 6.4 above. In addition, if an acquirer of 100% of the Corporation stock is itself a publicly held company, the Corporation shall make reasonable efforts to negotiate that Executive shall have the right, but not the obligation, to convert all his Corporation vested options into options on the acquirer's stock and shall have

If there should occur a "change of control" of the Corporation (or any successor), as defined in paragraph 3.4 (C) hereof, and Executive's employment is terminated (other than by Executive) or Executive is adversely affected in terms of overall compensation, benefits, title, authority, reports reporting relationships, location of employment or similar matters, then Executive, without limitation on any other rights hereunder, may, within six (6) months after receiving notice of such event, elect to resign from full time service to the Corporation. In the event of such election by Executive, Executive shall be provided with senior executive outplacement services at an outplacement or executive search firm of Executive's selection (and reasonably acceptable to Corporation), and the cash compensation and all benefits to which Executive is entitled hereunder shall be discontinued twentyfour (24) months after the date of election (or earlier, if a lump sum payment of cash compensation is specified). Executive, at his election, shall have the right to request and, if requested, shall be paid the full cash value of all amounts of cash compensation due for the 24-month period (including salary, approved bonus, auto allowance, and any other cash or equivalent compensation) in a lump sum, such lump sum payment shall be made not later than ten (10) days after Executive gives notice to the Corporation of his lump sum election. In the event of such election, all insurance and noncash benefits shall cease. All options granted to Executive shall vest to the extent provided in paragraph 6.4 above. In addition, if an acquirer of 100% of the Corporation stock is itself a publicly held company, the Corporation shall make reasonable efforts to negotiate that Executive shall have the right, but not the obligation, to convert all his Corporation vested options into options on the acquirer's stock and shall have two (2) years to exercise those options, but Corporation shall have no obligation to Executive if it fails to secure such rights or concludes that pursuing such rights would materially prejudice the interest of the stockholders of the Corporation. 8. BREAKUP AND DISPOSITION OF CORPORATION ASSETS If within the first year of Executive's employment, the Board determines to maximize stockholder value through disposition of a significant amount of assets or business units of the Corporation, Executive shall assist Corporation through such disposition and shall thereafter be entitled to terminate this Agreement within six (6) months of such event (completion of such disposition) and receive all benefits provided under section 6.4 hereof. As used herein, the term "significant amount of assets or business units of the Corporation" shall mean either fifty percent (50%) or more of the gross revenues of Corporation or, in the absence of gross revenues, 50% of the gross assets of the Corporation including intellectual properties, as determined by an independent appraisal, or fifty percent (50%) or more of the operating income by excluding losses from business units of the Corporation which are operating at a loss.) 9. BUSINESS DISCLOSURES AND SOLICITATION OF EMPLOYEES Executive agrees during the term of his employment by the Corporation and thereafter that he will not disclose, other than to an authorized employee, officer, director or agent of the Corporation, any information relating to the Corporation's business, trade, 8

practices, trade secrets or know-how or proprietary information without the Corporation's prior express written consent. Following termination of Executive's employment, Executive shall be permitted to continue in his usual occupation and shall not be prohibited from competing with the Corporation except during the two (2) year severance period and in the specific industry market segments in which the Corporation competes and which represent twenty percent (20%) or more of its revenues. Executive agrees that for a period of one (1) year following the termination of Executive's employment with the Corporation for any reason, Executive shall not directly or indirectly solicit, induce, recruit or encourage any of the Corporation's employees to leave their employment or take away such employees to leave their employment or take away such employees or attempts to solicit, induce, recruit, encourage or take away employees of the Corporation. 10. MISCELLANEOUS 10.1 Arbitration Any dispute, controversy or claim arising out of or in respect of this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall, at the request of either party, be

practices, trade secrets or know-how or proprietary information without the Corporation's prior express written consent. Following termination of Executive's employment, Executive shall be permitted to continue in his usual occupation and shall not be prohibited from competing with the Corporation except during the two (2) year severance period and in the specific industry market segments in which the Corporation competes and which represent twenty percent (20%) or more of its revenues. Executive agrees that for a period of one (1) year following the termination of Executive's employment with the Corporation for any reason, Executive shall not directly or indirectly solicit, induce, recruit or encourage any of the Corporation's employees to leave their employment or take away such employees to leave their employment or take away such employees or attempts to solicit, induce, recruit, encourage or take away employees of the Corporation. 10. MISCELLANEOUS 10.1 Arbitration Any dispute, controversy or claim arising out of or in respect of this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall, at the request of either party, be settled by binding arbitration in Orange County, California in accordance with the Commercial Arbitration Rules of the American Arbitration Association and judgement upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The parties shall have rights to discovery as provided in section 1283.05 of the California Code of Civil Procedure. The prevailing party in any such matter shall recover all of its costs and expenses, including reasonable attorney's fees. 10.2 No Third-Party Beneficiaries This Agreement shall not confer any rights or remedies upon any person other than the parties and their respective successors and permitted assigns. 10.3 Entire Agreement This Agreement (including the documents referred to herein) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations between the parties, written or oral, to the extent they have related in any way to the subject matter hereof. 10.4 Succession and Assignment This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. No party may assign either the Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the Corporation and Executive; provided, however, that the Corporation may (i) assign any or all of its 9

rights and interests hereunder to one or more of its affiliates and (ii) designate one or more of its affiliates to perform its obligations hereunder (in any or all of which cases the Corporation nonetheless shall remain responsible for the performance of all of its obligations hereunder). 10.5 Counterparts This Agreement may be executed in one or more Counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 10.6 Headings The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this agreement. 10

rights and interests hereunder to one or more of its affiliates and (ii) designate one or more of its affiliates to perform its obligations hereunder (in any or all of which cases the Corporation nonetheless shall remain responsible for the performance of all of its obligations hereunder). 10.5 Counterparts This Agreement may be executed in one or more Counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 10.6 Headings The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this agreement. 10

10.7 Notices All notices, requests, demands, claims, and other communications required or permitted hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: If to Corporation: NEOTHERAPEUTICS, INC. 157 TECHNOLOGY DRIVE IRVINE, CA 92618 If to Executive: RAJESH SHORTRIYA, M.D. 24571 SANTA CLARA AVENUE DANA POINT, CA 92629 Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving notice in the manner herein set forth. 10.8 Governing Law This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. 10.9 Amendments and Waivers No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Corporation and the Executive. No waiver by any party of any default, misrepresentation, or breach of warranty or convenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or convenant 11

10.7 Notices All notices, requests, demands, claims, and other communications required or permitted hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: If to Corporation: NEOTHERAPEUTICS, INC. 157 TECHNOLOGY DRIVE IRVINE, CA 92618 If to Executive: RAJESH SHORTRIYA, M.D. 24571 SANTA CLARA AVENUE DANA POINT, CA 92629 Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving notice in the manner herein set forth. 10.8 Governing Law This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. 10.9 Amendments and Waivers No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Corporation and the Executive. No waiver by any party of any default, misrepresentation, or breach of warranty or convenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or convenant 11

hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 10.10 Severability Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. IN WITNESS THEREOF, the parties hereto have executed this Agreement as of the date first above written. "CORPORATION"
By: /s/ Alvin J. Glasky -------------------------------------Alvin J. Glasky

hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 10.10 Severability Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. IN WITNESS THEREOF, the parties hereto have executed this Agreement as of the date first above written. "CORPORATION"
By: /s/ Alvin J. Glasky -------------------------------------Alvin J. Glasky

Its: CEO "EXECUTIVE"
By: /s/ Rajesh Shrotriya -------------------------------------Rajesh Shrotriya, M.D. Title: President -----------------------------------

12

EXHIBIT 10.39 August 10, 2001 Alvin J. Glasky, PhD Chairman, Chief Executive Officer & Chief Scientific Officer NeoTherapeutics, Inc. 157 Technology Drive Irvine, CA 92618 Dear Dr. Glasky: This letter acknowledges and confirms the terms of the corporate finance agreement ("Agreement") between NeoTherapeutics, Inc. and its subsidiaries (collectively, the "Company") and Gruntal & Co., L.L.C. ("Gruntal"). 1. Gruntal shall act as investment banker and financial advisor for the Company in connection with corporate finance and mergers and acquisition matters. As such, Gruntal will provide the Company with advice on the most appropriate time to access the capital markets and on the nature of the security to be sold, as well as the appropriate investor base to approach. 2. The Company will furnish Gruntal with such information as Gruntal believes appropriate to its assignment (the "Information"). The Company recognizes and confirms that Gruntal (a) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the duties contemplated by this Agreement without having independently verified the same, (b) does not assume responsibility for the accuracy or completeness of the Information and such other information and (c) will not make an appraisal of any of the assets of the Company. 3. Either party shall have the right to terminate, in writing, this Agreement after twenty-four (24) months from the

EXHIBIT 10.39 August 10, 2001 Alvin J. Glasky, PhD Chairman, Chief Executive Officer & Chief Scientific Officer NeoTherapeutics, Inc. 157 Technology Drive Irvine, CA 92618 Dear Dr. Glasky: This letter acknowledges and confirms the terms of the corporate finance agreement ("Agreement") between NeoTherapeutics, Inc. and its subsidiaries (collectively, the "Company") and Gruntal & Co., L.L.C. ("Gruntal"). 1. Gruntal shall act as investment banker and financial advisor for the Company in connection with corporate finance and mergers and acquisition matters. As such, Gruntal will provide the Company with advice on the most appropriate time to access the capital markets and on the nature of the security to be sold, as well as the appropriate investor base to approach. 2. The Company will furnish Gruntal with such information as Gruntal believes appropriate to its assignment (the "Information"). The Company recognizes and confirms that Gruntal (a) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the duties contemplated by this Agreement without having independently verified the same, (b) does not assume responsibility for the accuracy or completeness of the Information and such other information and (c) will not make an appraisal of any of the assets of the Company. 3. Either party shall have the right to terminate, in writing, this Agreement after twenty-four (24) months from the signing hereof. Any termination of this Agreement shall not affect the Company's obligation to pay Gruntal's fees and expenses as set forth in paragraphs 4 and 6 below, and to indemnify Gruntal and certain related entities as provided in paragraph 8. 4. The Company agrees to pay Gruntal, for its services, a monthly retainer of five thousand dollars ($5,000) per month, payable upon the signing of this agreement and thereafter on the first day of each month beginning September 1, 2001 through July 1, 2002 and seven thousand five hundred dollars ($7,500) per month payable each month beginning August 1, 2002 through July 1, 2003. Additionally, the Company agrees to issue to Gruntal warrants to acquire 125,000 shares of the Company's Common Stock at an exercise price of $3.80 per share. The warrants will be exercisable at any time before the fifth anniversary of the date of execution of this Agreement. The warrants shall, among other things: (i) be transferable to officers, directors and employees of Gruntal, (ii) permit exercise on a cashless basis, and (iii) contain such other terms as are customarily included in warrants of this type. The Company shall register the shares underlying the Warrants upon the earlier of the first anniversary of the signing of this Agreement or the closing of a financing for which Gruntal has acted as underwriter or placement agent.

Alvin J. Glasky, PhD August 10, 2001 Page 2 5. During the term of this Agreement, Gruntal shall have the right to participate as a managing underwriter or placement agent with respect to any offering or placement, by the Company or any of its subsidiaries, of equity or equity-related securities for which the services of an investment banker are required, for customary investment banking fees to be mutually negotiated. 6. The Company agrees to reimburse Gruntal for its reasonable out-of-pocket expenses related to this engagement, including, without limitation, items such as transportation, lodging, meals, postage, telephone expenses and legal fees incurred in connection with Gruntal's services described herein. The Company's

Alvin J. Glasky, PhD August 10, 2001 Page 2 5. During the term of this Agreement, Gruntal shall have the right to participate as a managing underwriter or placement agent with respect to any offering or placement, by the Company or any of its subsidiaries, of equity or equity-related securities for which the services of an investment banker are required, for customary investment banking fees to be mutually negotiated. 6. The Company agrees to reimburse Gruntal for its reasonable out-of-pocket expenses related to this engagement, including, without limitation, items such as transportation, lodging, meals, postage, telephone expenses and legal fees incurred in connection with Gruntal's services described herein. The Company's responsibility to reimburse Gruntal for such fees shall be limited to $50,000. The aforementioned expenses shall be billed and will be payable by the Company as and when incurred. 7. Any financial advice or opinion rendered by Gruntal pursuant to this Agreement may not be disclosed publicly in any manner without the prior written approval of Gruntal. 8. The Company hereby agrees to indemnify and hold harmless Gruntal and its affiliates, and the respective directors, officers, partners, controlling persons (within the meaning of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934), agents, counsel and employees of Gruntal or any of its affiliates (Gruntal and each such other person or entity being referred to individually as an "Indemnified Person" and, collectively, as "Indemnified Persons"), to the full extent lawful, from and against any and all claims, liabilities, losses, damages, penalties, judgments, awards and expenses incurred by any Indemnified Person (including fees and disbursements of counsel) which (a) relate to or arise out of (i) actions taken or omitted to be taken (including any untrue statements made or alleged to have been made or any statements omitted or alleged to have been omitted or any other oral or written statements) by the Company, its affiliates, directors, employees or agents, or (ii) actions taken or omitted to be taken by an Indemnified Person with the Company's consent or in conformity with its instructions or its actions or omissions, or (b) otherwise relate to or arise out of Gruntal's activities on the Company's behalf in connection with the engagement. In addition, the Company will reimburse Gruntal and any other Indemnified Person for all costs and expenses, including counsel fees and disbursements, as they are incurred, in connection with investigating, preparing and defending any action, formal or informal claim, investigation, inquiry or other proceeding, whether or not in connection with pending or threatened litigation, caused by or arising out of or in connection with Gruntal Acting pursuant to the letter of intent whether or not Gruntal or any Indemnified Person is named as a party thereto and whether or not any liability results therefrom. The Company will not, however, be responsible for any claim, liabilities, losses, damages or expenses pursuant to clause (b) of the preceding sentence which are finally judicially determined by a court of competent jurisdiction (not subject to further review) to have resulted primarily from Gruntal's willful misconduct or gross negligence. The Company also agrees that neither Gruntal nor any other Indemnified Person shall have any liability to the Company for or in connection with such engagement except for any such liability for claims, liabilities, losses, damages, or expenses incurred by the Company which is finally judicially determined to have resulted primarily from Gruntal's willful misconduct or gross negligence.

Alvin J. Glasky, PhD August 10, 2001 Page 3 In order to provide for just and equitable contribution, if a claim for indemnification is made pursuant to these provisions but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification is not available for any reason even though the express provisions hereof provide for indemnification in such case, then the Company, on the one hand, and Gruntal on the other hand, shall contribute to such claim, liability, loss, damage or expense for which such indemnification or reimbursement is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand,

Alvin J. Glasky, PhD August 10, 2001 Page 3 In order to provide for just and equitable contribution, if a claim for indemnification is made pursuant to these provisions but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification is not available for any reason even though the express provisions hereof provide for indemnification in such case, then the Company, on the one hand, and Gruntal on the other hand, shall contribute to such claim, liability, loss, damage or expense for which such indemnification or reimbursement is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and Gruntal on the other hand, in connection with the actions contemplated by the engagement, subject to the limitation that in any event the aggregate contribution of Gruntal and all Indemnified Persons to all losses, claims, damages, liabilities and expenses to which contribution is available hereunder shall not exceed the amount of fees actually received by Gruntal pursuant to the Engagement Letter. The foregoing right to indemnity and contribution shall be in addition to any rights that Gruntal or any other Indemnified Person may have at common law or otherwise and shall remain in full force and effect following the completion or any termination of Gruntal's engagement and shall be binding on and inure to the benefit of the successors, assigns, heirs and personal representatives of the Company and Gruntal and any other Indemnified Party. The Company hereby consents to personal jurisdiction and to service and venue in any court in which any claim which is subject to this is brought against Gruntal or any other Indemnified Person and in any court in which Gruntal or another Indemnified Person brings such a claim against the Company. Neither termination nor completion of the engagement of Gruntal referred to above shall affect these provisions, which shall remain operative and in full force and effect. 9. The Company and Gruntal acknowledge and agree that no brokers, representatives or other persons have an interest in any of the fees to be paid to Gruntal by the Company in connection with any Transaction or any other matter contemplated herein. 10. This Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and supersedes and cancels any prior communications, understandings and agreements between the parties relating to the subject matter hereof. This Agreement cannot be modified, or changed, nor can any of its provisions be waived, except by written agreement signed by all parties. 11. The benefits of this Agreement shall inure to the parties hereto and their respective successors and assigns, and the obligations and liabilities assumed in this Agreement shall be binding upon the parties hereto and their respective successors and assigns. 12. Any dispute between the parties to this Agreement shall be settled by arbitration before the facilities of the New York Stock Exchange, Inc. or the National Association of Securities Dealers, Inc. in the City of New York and will be conducted pursuant to applicable federal laws, the laws of the State of New York, without regard to conflicts of laws, and the rules of the selected arbitral facility. The parties understand that

Alvin J. Glasky, PhD August 10, 2001 Page 4 the award of the arbitrators, or of a majority of them, will be final and that a judgment upon any award rendered may be entered in any court having jurisdiction. 13. Each of the Company and Gruntal represents and warrants to the other that it is authorized to execute the Agreement on its behalf. Please confirm that the foregoing correctly sets forth our understanding by signing the enclosed copy of this letter

Alvin J. Glasky, PhD August 10, 2001 Page 4 the award of the arbitrators, or of a majority of them, will be final and that a judgment upon any award rendered may be entered in any court having jurisdiction. 13. Each of the Company and Gruntal represents and warrants to the other that it is authorized to execute the Agreement on its behalf. Please confirm that the foregoing correctly sets forth our understanding by signing the enclosed copy of this letter where provided and returning it to us. Very truly yours, GRUNTAL & CO., L.L.C.
/s/ Andrew M. Sadosky -----------------------------------Andrew M. Sadosky Managing Director

Agreed and accepted on the 13 day of August 2001 NEOTHERAPEUTICS, INC.
By: /s/ Alvin J. Glasky --------------------------------------Alvin J. Glasky, Ph.D. Chairman, Chief Executive Officer & Chief Scientific Officer

EXHIBIT 10.46 STOCK PURCHASE AGREEMENT This agreement is dated December 10, 2001 between ____________ ("Purchaser"), and NeoTherapeutics, Inc. ("Company"), whereby the parties agree as follows: The Purchaser shall buy and the Company agrees to sell _______ shares ("Shares") of the Company's Common Stock at a price of $3.85 per share for a total amount of $___________. The Shares have been registered on a Form S-3, File No. 333-53108, which registration statement has been declared effective by the Securities and Exchange Commission. The Shares are free of restrictive legends and are free of any resale restrictions. The Company is delivering herewith a prospectus supplement on Form 424 (b)(2) regarding the sale of the Shares prior to funding. The Purchaser shall wire the purchase amount to the Company to the account set forth below. Company Wire Transfer Instructions: Chase Manhattan Bank 1 Chase Plaza New York, NY 10004

EXHIBIT 10.46 STOCK PURCHASE AGREEMENT This agreement is dated December 10, 2001 between ____________ ("Purchaser"), and NeoTherapeutics, Inc. ("Company"), whereby the parties agree as follows: The Purchaser shall buy and the Company agrees to sell _______ shares ("Shares") of the Company's Common Stock at a price of $3.85 per share for a total amount of $___________. The Shares have been registered on a Form S-3, File No. 333-53108, which registration statement has been declared effective by the Securities and Exchange Commission. The Shares are free of restrictive legends and are free of any resale restrictions. The Company is delivering herewith a prospectus supplement on Form 424 (b)(2) regarding the sale of the Shares prior to funding. The Purchaser shall wire the purchase amount to the Company to the account set forth below. Company Wire Transfer Instructions: Chase Manhattan Bank 1 Chase Plaza New York, NY 10004 ABA # 021 000 021 FBO Salomon Smith Barney A/C # 066-198038 For Further Credit to: Neotherapeutics, Inc. A/C # 561-04051-19-103 The Company shall cause its transfer agent to transmit the Shares electronically to the Purchaser by crediting the account set forth below through the Deposit Withdrawal Agent Commission system. Purchaser DWAC Instructions: DTC #____ 2 AGREED AND ACCEPTED: NeoTherapeutics, Inc. By: Name:

Title: PURCHASER: [Purchaser Name] By: Name:

2 AGREED AND ACCEPTED: NeoTherapeutics, Inc. By: Name:

Title: PURCHASER: [Purchaser Name] By: Name:

Title:

EXHIBIT 10.47 BRIGHTON CAPITAL, LTD. 1888 CENTURY PARK EAST SUITE 1900 LOS ANGELES, CA 90211 (310) 277-6095; FAX: (310) 277-6097 March 11, 2002 Mr. Sam Gulko, Chief Financial Officer NeoTherapeutics, Inc. 157 Technology Drive Irvine, CA 92618 Re: NeoTherapeutics, Inc. Dear Mr. Gulko: This letter shall confirm the non-exclusive finder's arrangement between Brighton Capital, Ltd. ("Brighton") and NeoTherapeutics, Inc. ("NEOT") in the event that NEOT proceeds with a debt and/or equity transaction ("Transaction(s)") with a party introduced or procured by Brighton, even though NEOT may have been previously introduced to that party by another. There is no obligation to consummate any Transaction and NEOT can choose to accept or reject any Transaction in its sole and absolute discretion. NEOT acknowledges that there is no guaranty or assurance that any Transaction will take place and that the final legal documentation may contain terms that vary with those set forth on any term sheets. In the event that a Transaction(s) occurs, NEOT agrees to pay Brighton the following at each close (or at Brighton's request, NEOT shall direct the investor to pay the fees directly to Brighton) in cash (a) 6% (six) of all cash amounts received and (b) 10,000 warrants per $1,000,000 funded. The terms and conditions of the warrants including the exercise price and registration rights shall be identical to those of the investor. NEOT agrees to pay one-half of the fees each to Brighton and Atwood Capital, Ltd. NEOT agrees to indemnify and hold harmless Brighton and its affiliates, directors, officers, shareholders,

EXHIBIT 10.47 BRIGHTON CAPITAL, LTD. 1888 CENTURY PARK EAST SUITE 1900 LOS ANGELES, CA 90211 (310) 277-6095; FAX: (310) 277-6097 March 11, 2002 Mr. Sam Gulko, Chief Financial Officer NeoTherapeutics, Inc. 157 Technology Drive Irvine, CA 92618 Re: NeoTherapeutics, Inc. Dear Mr. Gulko: This letter shall confirm the non-exclusive finder's arrangement between Brighton Capital, Ltd. ("Brighton") and NeoTherapeutics, Inc. ("NEOT") in the event that NEOT proceeds with a debt and/or equity transaction ("Transaction(s)") with a party introduced or procured by Brighton, even though NEOT may have been previously introduced to that party by another. There is no obligation to consummate any Transaction and NEOT can choose to accept or reject any Transaction in its sole and absolute discretion. NEOT acknowledges that there is no guaranty or assurance that any Transaction will take place and that the final legal documentation may contain terms that vary with those set forth on any term sheets. In the event that a Transaction(s) occurs, NEOT agrees to pay Brighton the following at each close (or at Brighton's request, NEOT shall direct the investor to pay the fees directly to Brighton) in cash (a) 6% (six) of all cash amounts received and (b) 10,000 warrants per $1,000,000 funded. The terms and conditions of the warrants including the exercise price and registration rights shall be identical to those of the investor. NEOT agrees to pay one-half of the fees each to Brighton and Atwood Capital, Ltd. NEOT agrees to indemnify and hold harmless Brighton and its affiliates, directors, officers, shareholders, employees and agents (the "Indemnified Parties") against any and all losses, claims, damages or liabilities, joint or several, including attorney's fees, to which the Indemnified Parties may become subject, arising out of or related to actions taken or omitted to be taken by an Indemnified Parties in connection with any service rendered, or any Transaction or proposed Transaction contemplated, or any Indemnified Party's role in connection therewith. In this regard, and without limitation, NEOT acknowledges that Brighton is not responsible for the actions of the investor or its agents. NEOT acknowledges that none of the Indemnified Parties is acting as attorney, accountant, or financial advisor to NEOT and that NEOT will seek its own professional advice with respect to the Transaction. Brighton and NEOT agree that the obligations of each of the parties are solely corporate obligations, and that no officer, director, employee, agent or shareholder of either party shall be subjected to any personal liability whatsoever to any person, nor will any claim for liability or suit be asserted by, or on behalf of, either Brighton or NEOT. In the event of any dispute between the parties hereto, the parties

Mr. Sam Gulko March 11, 2002 Page 2 of 2 agree to resolve all matters in binding arbitration before the American Arbitration Association in Los Angeles, CA with the prevailing party entitled to reasonable attorney's fees and costs.

Mr. Sam Gulko

Mr. Sam Gulko March 11, 2002 Page 2 of 2 agree to resolve all matters in binding arbitration before the American Arbitration Association in Los Angeles, CA with the prevailing party entitled to reasonable attorney's fees and costs.

Mr. Sam Gulko March 11, 2002 Page 2 of 2 This agreement supercedes all other prior agreements between the parties named herein. NEOT agrees not to mention the name of Brighton or its agents in any press release or new announcement without the written consent of Brighton. Please acknowledge your agreement to the terms of this letter by executing a copy of this letter where indicated below and returning it to us by fax at 310-277-6097. Please call me on my private line at 310-277-6092 if you have any questions.
By: Brighton Capital, Ltd. By: NeoTherapeutics, Inc.

/s/Jeffrey Wolin --------------------------Jeffrey B. Wolin, President

/s/Sam Gulko -------------------------------------Sam Gulko, Chief Financial Officer

EXHIBIT 10.48 SECURITIES PURCHASE AGREEMENT This Securities Purchaser Agreement (the "Agreement") is made as of March __, 2002 by and between _________________ ("Purchaser"), and NeoTherapeutics, Inc. ("Company"), whereby the parties agree as follows:

Mr. Sam Gulko March 11, 2002 Page 2 of 2 This agreement supercedes all other prior agreements between the parties named herein. NEOT agrees not to mention the name of Brighton or its agents in any press release or new announcement without the written consent of Brighton. Please acknowledge your agreement to the terms of this letter by executing a copy of this letter where indicated below and returning it to us by fax at 310-277-6097. Please call me on my private line at 310-277-6092 if you have any questions.
By: Brighton Capital, Ltd. By: NeoTherapeutics, Inc.

/s/Jeffrey Wolin --------------------------Jeffrey B. Wolin, President

/s/Sam Gulko -------------------------------------Sam Gulko, Chief Financial Officer

EXHIBIT 10.48 SECURITIES PURCHASE AGREEMENT This Securities Purchaser Agreement (the "Agreement") is made as of March __, 2002 by and between _________________ ("Purchaser"), and NeoTherapeutics, Inc. ("Company"), whereby the parties agree as follows:

EXHIBIT 10.48 SECURITIES PURCHASE AGREEMENT This Securities Purchaser Agreement (the "Agreement") is made as of March __, 2002 by and between _________________ ("Purchaser"), and NeoTherapeutics, Inc. ("Company"), whereby the parties agree as follows: The Purchaser shall buy from the Company and the Company agrees to sell to the Purchaser: (i) _______ shares (the "Shares") of the Company's common stock, par value $.001 per share (the "Common Stock"), at a price of $2.00 per share for an aggregate purchase price of $_________ (the "Purchase Price"), and (ii) a five-year warrant to purchase up to __________ shares of Common Stock (the "Warrant"), at an exercise price of $2.75 per share, in the form attached hereto as Exhibit A. The Shares and the Warrant are being issued and sold pursuant to a registration statement on Form S-3, File No. 333-53108, which registration statement has been declared effective by the Securities and Exchange Commission. The Company is delivering herewith a prospectus supplement on Form 424(b)(5) regarding the issuance and sale of the Shares and the Warrant prior to funding, a copy of which is attached hereto as Exhibit B. The Shares and Warrant are free of restrictive legends and the Shares and the shares of Common Stock issuable upon exercise of the Warrant, when issued upon exercise of the Warrant in accordance with its terms and as described in the prospectus supplement, will be free of any resale restrictions. Prior to the close of business on the date hereof: 1. The Purchaser shall wire the Purchase Price to the Company to the account set forth below. Company Wire Transfer Instructions: Chase Manhattan Bank 1 Chase Plaza New York, NY 10004 ABA # 021 000 021 FBO Salomon Smith Barney A/C # 066-198038 For Further Credit to:

Neotherapeutics, Inc. A/C # 561-04051-19-103 2. The Company shall (A) deliver a facsimile copy of the Warrant to the Purchaser at the address for notices set forth below, with the original Warrant to be delivered to such address on the next following business day, and (B) cause its transfer agent to transmit the Shares electronically to the Purchaser by crediting the account set forth below through the Deposit Withdrawal Agent Commission system.

Purchaser DWAC Instructions: DTC No.: Account No.: Reference: Notices to the Company shall be delivered to: NeoTherapeutics, Inc.

Purchaser DWAC Instructions: DTC No.: Account No.: Reference: Notices to the Company shall be delivered to: NeoTherapeutics, Inc. Attention: Samuel Gulko Senior Vice President Finance, Chief Financial Officer, Secretary and Treasurer 157 Technology Drive, Irvine, California 92618 Facsimile: (949) 788-6706 Notices to Purchaser shall be delivered to: Purchaser Name: Attn: Address: Facsimile: Delivery of an executed copy of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed copy of this Agreement and shall be effective and enforceable as the original. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement shall be governed and construed in accordance with the internal laws of the State of California without giving effect to the conflicts of law principles thereunder.

AGREED AND ACCEPTED, as of the date indicated above: NeoTherapeutics, Inc. By: Name: Title: Purchaser Name: By: Name: Title:

EXHIBIT 21 SCHEDULE 21 SUBSIDIARIES OF REGISTRANT
SUBSIDIARY NAME ---------------NeoTherapeutics GmbH INCORPORATION ------------Switzerland DATE ---04-26-97

AGREED AND ACCEPTED, as of the date indicated above: NeoTherapeutics, Inc. By: Name: Title: Purchaser Name: By: Name: Title:

EXHIBIT 21 SCHEDULE 21 SUBSIDIARIES OF REGISTRANT
SUBSIDIARY NAME ---------------NeoTherapeutics GmbH NeoGene Technologies, Inc. NeoOncoRx, Inc. NeoTravel, Inc. INCORPORATION ------------Switzerland California California California DATE ---04-26-97 10-01-99 11-16-00 04-05-01

Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference into the Company's previously filed Registration Statements of Forms S-1 (Nos. 333-89153, 333-79935), Forms S-3 (Nos. 33364444, 333-64432, 333-60966, 333-53108, 333-51388, 333-42852, 333-38710, 333-37180, 333-92855, 333-73009, 333-52331, 333-37585) and Forms S-8 (Nos. 333-54246, 333-30345, 333-30321), of our report dated March 27, 2002, included in NeoTherapeutics, Inc.'s Form 10-K for the year ended December 31, 2001. Orange County, California April 1, 2002

Exhibit 99.1 Letter of Arthur Andersen Representation Exhibit 99.1 Letter of Arthur Andersen Representation To the Securities and Exchange Commission: We received a letter from Arthur Andersen, dated April 1, 2002, representing that the audit was subject to their quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards, that there was appropriate continuity of

EXHIBIT 21 SCHEDULE 21 SUBSIDIARIES OF REGISTRANT
SUBSIDIARY NAME ---------------NeoTherapeutics GmbH NeoGene Technologies, Inc. NeoOncoRx, Inc. NeoTravel, Inc. INCORPORATION ------------Switzerland California California California DATE ---04-26-97 10-01-99 11-16-00 04-05-01

Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference into the Company's previously filed Registration Statements of Forms S-1 (Nos. 333-89153, 333-79935), Forms S-3 (Nos. 33364444, 333-64432, 333-60966, 333-53108, 333-51388, 333-42852, 333-38710, 333-37180, 333-92855, 333-73009, 333-52331, 333-37585) and Forms S-8 (Nos. 333-54246, 333-30345, 333-30321), of our report dated March 27, 2002, included in NeoTherapeutics, Inc.'s Form 10-K for the year ended December 31, 2001. Orange County, California April 1, 2002

Exhibit 99.1 Letter of Arthur Andersen Representation Exhibit 99.1 Letter of Arthur Andersen Representation To the Securities and Exchange Commission: We received a letter from Arthur Andersen, dated April 1, 2002, representing that the audit was subject to their quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards, that there was appropriate continuity of Andersen personnel working on the audit and availability of national office consultation, and availability of personnel at foreign affiliates of Andersen to conduct the relevant portions of the audit. Very truly yours,
/s/ Samuel Gulko

Samuel Gulko Chief Financial Officer Irvine, California April 1, 2002

Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference into the Company's previously filed Registration Statements of Forms S-1 (Nos. 333-89153, 333-79935), Forms S-3 (Nos. 33364444, 333-64432, 333-60966, 333-53108, 333-51388, 333-42852, 333-38710, 333-37180, 333-92855, 333-73009, 333-52331, 333-37585) and Forms S-8 (Nos. 333-54246, 333-30345, 333-30321), of our report dated March 27, 2002, included in NeoTherapeutics, Inc.'s Form 10-K for the year ended December 31, 2001. Orange County, California April 1, 2002

Exhibit 99.1 Letter of Arthur Andersen Representation Exhibit 99.1 Letter of Arthur Andersen Representation To the Securities and Exchange Commission: We received a letter from Arthur Andersen, dated April 1, 2002, representing that the audit was subject to their quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards, that there was appropriate continuity of Andersen personnel working on the audit and availability of national office consultation, and availability of personnel at foreign affiliates of Andersen to conduct the relevant portions of the audit. Very truly yours,
/s/ Samuel Gulko

Samuel Gulko Chief Financial Officer Irvine, California April 1, 2002

Exhibit 99.1 Letter of Arthur Andersen Representation Exhibit 99.1 Letter of Arthur Andersen Representation To the Securities and Exchange Commission: We received a letter from Arthur Andersen, dated April 1, 2002, representing that the audit was subject to their quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards, that there was appropriate continuity of Andersen personnel working on the audit and availability of national office consultation, and availability of personnel at foreign affiliates of Andersen to conduct the relevant portions of the audit. Very truly yours,
/s/ Samuel Gulko

Samuel Gulko Chief Financial Officer Irvine, California April 1, 2002


								
To top