Document:

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                                                                    EXHIBIT 10.1

         Portions of this Exhibit have been redacted and are the subject of a
confidential treatment request filed with the Secretary of the Securities and
Exchange Commission.
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                DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

                                     BETWEEN

                            OSI PHARMACEUTICALS, INC.

                                       AND

                                 GENENTECH, INC.

                                 JANUARY 8, 2001
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         DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

         This Development and Marketing Collaboration Agreement ("Agreement") is
made as of January 8, 2001 by and between OSI Pharmaceuticals, Inc., a Delaware
corporation with its principal office at 106 Charles Lindbergh Blvd., Uniondale,
New York 11553-3649 (together with its Affiliates permitted hereunder unless the
context otherwise requires "OSI") and Genentech, Inc., a Delaware corporation
with its principal office at 1 DNA Way, South San Francisco, California 94080
(together with its Affiliates permitted hereunder unless the context otherwise
requires "Genentech"). OSI and Genentech are sometimes referred to herein
individually as a "Party" and collectively as the "Parties."

                                    RECITALS

         1. OSI has participated in the development of a certain molecule known
as OSI-774 (defined below) and has certain intellectual property rights related
thereto.

         2. Genentech and OSI each wish to conduct development and
commercialization of OSI-774 in a collaborative fashion so that the resources
and expertise of each is put to good use, and under such collaborative efforts
each Party is willing to expend up to $100 million as may be agreed upon by the
Parties.

         3. By combining the development and commercialization experience and
expertise of both Genentech and OSI, the Parties wish to expedite the regulatory
approval and marketing of OSI-774 as a significant new therapeutic.

         4. OSI wishes to grant to Genentech, and Genentech wishes to obtain, a
license under OSI's intellectual property rights to permit Genentech to
participate in collaborative OSI-774 product development, and marketing and
promotion efforts, under the terms and conditions set forth below.

         5. Simultaneous with the Closing Date hereof, Genentech will purchase
shares of common stock of OSI for a purchase price of $35 million according to
the terms and conditions of a Stock Purchase Agreement (the "Stock Purchase
Agreement") of even date herewith.

         6. Pursuant to that certain Tripartite Agreement of even date herewith
(the "Tripartite Agreement"), the Parties have made certain agreements with
F.Hoffmann-La Roche Ltd, a Swiss corporation with its principal office at
Grenzacher Strasse 24, CH-4070-Basel Switzerland ("Roche") regarding, among
other things, cost sharing, for development of OSI-774.

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                                    AGREEMENT

       NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties,
intending to be legally bound hereby, do hereby agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         The following capitalized terms, whether used in the singular or the
plural, shall have the following meanings as used in this Agreement unless
otherwise specifically indicated:

         1.1 "ADJUVANT ONCOLOGY INDICATION" shall mean use of Licensed Product
as a systemic therapy administered after local therapy or treatment of a primary
tumor (e.g. by surgery, or surgery and radiotherapy) to reduce the risk of
recurrence or progression.

         1.2 "AFFILIATE" shall mean any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement. For the
purposes of this Section 1.2, "control" means ownership, directly or through one
or more Affiliates, of fifty percent (50%) or more of the shares of stock
entitled to vote for the election of directors, in the case of a corporation, or
fifty percent (50%) or more of the equity interests in the case of any other
type of legal entity, status as a general partner in any partnership, or any
other arrangement whereby a party controls or has the right to control the Board
of Directors or equivalent governing body of a corporation or entity. For the
purposes of this Agreement, Roche shall be deemed to not be an Affiliate of
Genentech.

         1.3 "ALLOCABLE OVERHEAD" shall have the meaning defined in Exhibit B
attached hereto and incorporated herein.

         1.4 "cGMP" shall mean the regulatory requirements for current good
manufacturing practices promulgated by the United States Food and Drug
Administration ("FDA") under the U.S. Food, Drug and Cosmetic Act ("FD&C Act")
and the regulations promulgated thereunder, particularly 21 C.F.R.Section 210 et
seq., and 21 C.F.R.Sections 600-610, as the same may be amended from time
to time.

         1.5 "CLINICAL SUPPLIES" shall mean supplies of Licensed Product,
manufactured, packaged and labeled in compliance with cGMP, in such form and
strength as agreed by the Parties, and ready to be used for the conduct of
pre-clinical and/or human clinical trials of the Licensed Product in the Field
by the Parties pursuant to the Development Budget/Plan.

         1.6 "CLOSING" shall mean, subject to the satisfaction or waiver of the
conditions set forth in Section 6.2, the closing of the transactions
contemplated by this Agreement.

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         1.7 "CLOSING DATE" shall mean the earlier of: (i) the fifth (5th) day,
unless the fifth (5th) day falls on a weekend or holiday, in which case it shall
be the next business day, after the earlier of (a) receipt of written notice (a
copy of which has been furnished to Genentech) of the U.S. Federal Trade
Commission's (the "FTC") approval of the transaction contemplated by this
Agreement under the Hart-Scott-Rodino filings to be made by OSI and Genentech
(or the parent company of each Party) and (b) the expiration or termination of
all applicable waiting periods, requests for information (and any extensions
thereof) under the Hart-Scott Rodino Antitrust Improvements Act of 1976 for such
Hart-Scott Rodino filings and (ii) the fifth (5th) day, unless the fifth (5th)
day falls on a weekend or holiday, in which case it shall be the next business
day, after the joint determination (by certification from each Party to the
other) that such Hart Scott Rodino filing is not required. In the case of
Genentech, such certification, if made, shall be made by its parent company,
Roche, which is responsible for such filing with respect to Genentech.

         1.8 "COLLABORATION INVENTION" shall mean any invention (whether
patentable or not) or Know-how made after the Effective Date during the course
of, in furtherance of, and as a direct result of the activities of the Parties
hereunder or under the Tripartite Agreement and which relates to any Licensed
Product, its manufacture or its use. A "Collaboration Invention" may be made by
employees of OSI solely or jointly with a Third Party, including Roche (an "OSI
Collaboration Invention"), by employees of Genentech solely or jointly with a
Third Party, including Roche (a "Genentech Collaboration Invention"), or jointly
by employees of OSI and Genentech alone or together with a Third Party,
including Roche (a "Joint Collaboration Invention"). In addition, any invention
is a Collaboration Invention to the extent that it consists of or comprises an
Improvement made under this Agreement.

         1.9 "COMMERCIALLY REASONABLE AND DILIGENT EFFORTS" shall mean, with
respect to development and commercialization, a Party's use of best efforts and
resources consistent with the exercise of prudent scientific and business
judgment, as applied by such Party to other pharmaceutical products of similar
potential, market size and competitive environment, and with respect to
marketing, consistent with the exercise of prudent business judgment as applied
by such Party to other pharmaceutical products of similar potential and market
size.

         1.10 "COMMERCIAL SUPPLIES" shall mean supplies of Licensed Product,
manufactured, packaged and labeled in compliance with cGMP, in such form and
strength as agreed by the Parties, and ready to be offered for commercial sale
for use in the Field in the Territory by Genentech and OSI, pursuant to the
terms of this Agreement.

         1.11 "CONTROLLED" with respect to Licensed Product Patents or Know-how
shall mean the ability of a Party to grant a license or sublicense to such
Licensed Product Patents or Know-how as provided for herein without violating
the terms of any agreement or other arrangement with any Third Party existing
and in effect at the time such Party would be required hereunder to grant the
other Party such license or sublicense.

         1.12 "COST OF SALES" shall have the meaning set forth in Exhibit B.

         1.13 "COVER" (including variations such as "Covered", "Covering" and
the like) shall mean that the use, manufacture, sale, offer for sale or
importation of a particular product would

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infringe a claim of a patent or patent application (if that claim were to issue
in a patent) in the absence of rights under such patent, as determined on a
country-by-country basis.

         1.14 "DEVELOPMENT BUDGET/PLAN" shall mean the comprehensive plan for
the development of Licensed Products, designed to generate the development,
clinical and regulatory information required for filing INDs and Drug Approval
Applications and to further support the development and commercialization of
Licensed Products in the Territory. The Development Budget/Plan shall initially
be the Global Development Plan (hereafter defined), and is attached hereto as
Exhibit C and incorporated herein, but may be modified pursuant to Section 2.3
below and which will be updated at least annually by the Joint Project Team.
Development shall refer to all activities related to preclinical testing,
toxicology, formulation, process development, manufacturing/quality
assurance/quality control pursuant to Section 7.1(a) hereof, clinical studies
and regulatory affairs for a Licensed Product in connection with obtaining
Regulatory Approvals of such Licensed Product. The development budget included
as part of the Development Budget/Plan for a particular calendar year shall
constitute the maximum costs to be incurred thereunder during such calendar
year, unless such budget is modified by the Joint Project Team, as approved by
the JSC, in accordance with the terms hereinbelow. The Development Budget/Plan
may be modified from time to time by the Joint Project Team, as approved by the
JSC, as necessary in accordance with the terms herein below.

         1.15 "DISTRIBUTION COSTS" shall have the meaning defined in Exhibit B.

         1.16 "DIVESTITURE AGREEMENT" shall mean that agreement, related to the
Base Patents (as hereafter defined in Section 1.39) and dated May 23, 2000
between OSI and Pfizer Inc., a Delaware corporation having an office at 235 East
42nd Street, New York, New York 10017.

         1.17 "DRUG APPROVAL APPLICATION" shall mean an application for
Regulatory Approval required for commercial sale or use of a Licensed Product as
a drug in the Field in the Territory.

         1.18 "EFFECTIVE DATE" shall mean the date first written above.

         1.19 "FIELD" shall mean the treatment or prophylaxis of any human
disease or condition.

         1.20 "FULLY BURDENED MANUFACTURING COST" shall have the meaning defined
in Exhibit B.

         1.21 "GENENTECH KNOW-HOW" shall mean Know-how which: (a) is Controlled
by Genentech as of the Closing Date or hereafter during the Term of this
Agreement, and (b) is necessary or useful for OSI to perform its tasks directly
relating to Licensed Products under the Development Budget/Plan and to use,
make, have made, sell, offer for sale and/or import Licensed Products, pursuant
to this Agreement, for use in the Field in the Territory.

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         1.22 "GENENTECH PATENTS" shall mean any and all Licensed Product
Patents to the extent Controlled by Genentech as of the Closing Date or
hereafter during the Term of this Agreement, including, without limitation,
Genentech's interest in any Joint Patents.

         1.23 "GENERAL AND ADMINISTRATIVE COSTS" shall have the meaning defined
in Exhibit B.

         1.24 "GLOBAL DEVELOPMENT PLAN" shall mean the plan for development of
OSI-774, which is attached as Exhibit A to the Tripartite Agreement and attached
hereto as Exhibit C, as may be amended from time to time.

         1.25 "GROSS PROFIT" shall have the meaning set forth in Exhibit B.

         1.26 "GROSS SALES" shall have the meaning defined in Exhibit B.

         1.27 "IMPROVEMENT(S)" shall mean a selective inhibitor of epidermal
growth factor receptor Controlled by OSI or Genentech whose primary mechanism of
action is initiated by binding to epidermal growth factor receptor, and such
binding is with higher binding affinity to epidermal growth factor receptor
(also known as erbB1 and HER1) than to other members of the epidermal growth
factor receptor family (e.g. HER2, HER3, HER4) as demonstrated in receptor
binding assays. By way of illustration, and without limitation, Improvements do
not include any Genentech anti-HER2 antibodies, for example the antibodies known
as Herceptin and 2C4.

         1.28 "IND" shall mean an effective Notice of a Claimed Investigational
New Drug Exemption, as defined in Title 21 of the U.S. Code of Federal
Regulations, on file with the FDA before the commencement of clinical trials of
Licensed Products in humans, or any comparable filing with any relevant
regulatory agencies or other governmental entities in any country in the
Territory.

         1.29 "JOINT COLLABORATION INVENTION" shall have the meaning set forth
in Section 1.8.

         1.30 "JOINT PATENTS" shall mean any and all Licensed Product Patents
claiming a Joint Collaboration Invention.

         1.31 "JOINT PROJECT TEAM" shall mean that body established pursuant to
Section 3.2 below.

         1.32 "JOINT STEERING COMMITTEE," or "JSC," shall mean that committee
established pursuant to Section 3.1 below.

         1.33 "KNOW-HOW" shall mean all proprietary information, trade secrets,
techniques and data of a Party (including Confidential Information as defined in
Article 10 below) directly relating to the Licensed Products and that are
Controlled by such Party as of the Closing Date or hereafter during the Term of
this Agreement, including, but not limited to, discoveries, formulae, materials,
practices, methods, knowledge, know-how, processes, experience, test data
(including pharmacological, toxicological and clinical information and test
data), analytical and quality

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control data, marketing, pricing, distribution, cost and sales data or
descriptions. "Know-how" may be made prior to the Closing Date or after the
Closing Date during the course of, in furtherance of, and as a direct result of
the activities of the Parties hereunder or under the Tripartite Agreement.
Know-how may be made by employees of OSI, solely or jointly with a Third Party,
including Roche, by employees of Genentech, solely or jointly with a Third
Party, including Roche, or jointly by employees of OSI and Genentech, alone or
together with a Third Party, including Roche.

         1.34 "LICENSED PRODUCT" shall mean any pharmaceutical formulation
containing a selective inhibitor of epidermal growth factor receptor Controlled
by OSI, including, without limitation, OSI-774 and inhibitors having the same
mechanism of action as OSI-774, variants and derivatives thereof (including,
without limitation, prodrugs, salts, solvates and polymorphs thereof) and
Improvements as defined in Section 1.27 above. Licensed Product shall not
include any pharmaceutical formulation containing a compound Controlled by
Genentech that is not an Improvement or a compound Controlled by OSI that is not
a selective inhibitor of epidermal growth factor receptor.

         1.35 "LICENSED PRODUCT PATENTS" shall mean any and all patents, patent
applications and any patents issuing therefrom, together with any extensions
(including supplementary protection certificates), registrations, reissues,
continuations, divisions, continuations-in-part, re-examinations, substitutions
or renewals thereof, that contain one or more claims Covering a Licensed Product
in the Field in the Territory.

         1.36 "MARKETING COSTS" shall have the meaning defined in Exhibit B.

         1.37 "METASTATIC ONCOLOGY INDICATION" shall mean the use of Licensed
Product as a therapy for the spread of a malignancy from its site of origin to
noncontiguous sites, most commonly to other organs; treatment will also involve
the primary tumor, if present.

         1.38 "NDA" shall mean the New Drug Application, as defined in the FDA
regulations in the U.S. Code of Federal Regulations, filed with the FDA for the
purpose of obtaining Regulatory Approval for Licensed Product in the Field in
the Territory.

         1.39 "NET SALES" shall have the meaning defined in Exhibit B.

         1.40 "OPERATING PROFITS OR LOSSES" shall have the meaning defined in
Exhibit B.

         1.41 "OTHER OPERATING INCOME/EXPENSE" shall have the meaning set forth
in Exhibit B.

         1.42 "OSI/GNE DEVELOPMENT COSTS" shall have the meaning defined in
Exhibit B.

         1.43 "OSI KNOW-HOW" shall mean Know-how which: (a) is Controlled by OSI
as of the Closing Date or hereafter during the Term of this Agreement, and (b)
is necessary or useful for Genentech to perform its tasks directly relating to
Licensed Products under the Development

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Budget/Plan and to use, sell, offer for sale and/or import Licensed Products,
pursuant to this Agreement, for use in the Field in the Territory.

         1.44 "OSI PATENTS" shall mean any and all Licensed Product Patents to
the extent Controlled by OSI as of the Closing Date or hereafter during the Term
of this Agreement, including, without limitation, OSI's interest in any Joint
Patents. The OSI Patents as of the Closing Date are set forth on Exhibit D
attached hereto and incorporated herein ("Base Patents").

         1.45 "OSI-774" shall mean the selective inhibitor of epidermal growth
factor receptor having the IUPAC name
[6,7-bis(2-methoxyethoxy)quinazolin-4-yl]-(3-ethynylphenyl)-amine and having the
U.S. Approved Name erlotinib.

         1.46 "PARTY" shall mean Genentech or OSI, and, when used in the plural,
shall mean both of them.

         1.47 "PATENT AND TRADEMARK COSTS" shall have the meaning set forth in
Exhibit B.

         1.48 "PHASE II CLINICAL TRIAL" shall mean studies in humans of the
safety, dose ranging and efficacy of a Licensed Product which are conducted
after Phase I clinical studies of such Licensed Product.

         1.49 "PHASE III ENABLING CLINICAL TRIAL" shall mean a Phase I or Phase
II Clinical Trial which has generated sufficient data to commence Phase III
Clinical Trials.

         1.50 "REFRACTORY ONCOLOGY INDICATION" shall mean the use of Licensed
Product as a therapy for the progression of a malignancy after therapy or
treatment that is accepted, under generally accepted good medical practices, to
have some degree of effectiveness; or for a malignancy for which there is no
generally accepted effective medical therapy.

         1.51 "REGULATORY APPROVAL" shall mean any approvals (including pricing
and reimbursement approvals), licenses, registrations or authorizations of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the manufacture and sale of a Licensed
Product in a regulatory jurisdiction in the Territory.

         1.52 "SALES COSTS" shall have the meaning defined in Exhibit B.

         1.53 "SALES RETURNS AND ALLOWANCES" shall have the meaning set forth in
Exhibit B.

         1.54 "TERRITORY" shall mean the United States of America, its
territories and possessions, and the Commonwealth of Puerto Rico.

         1.55 "THIRD PARTY" shall mean any entity other than OSI or Genentech or
their permitted sublicensees, and shall include Roche.

         1.56 "THIRD PARTY ROYALTIES" shall mean royalties payable to a Third
Party (other than Roche) in connection with the manufacture, use, sale, offer
for sale or importation of Licensed Products.

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                                    ARTICLE 2

                           SCOPE OF THE COLLABORATION

         2.1 COLLABORATION GOALS. The Parties agree, pursuant and subject to the
terms of this Agreement, to develop Licensed Products, with the goal of
obtaining Regulatory Approval of Licensed Products in commercially significant
indications as soon as reasonably practicable for commercial marketing and sale
in the Field in the Territory, pursuant to this Agreement. Each Party shall use
Commercially Reasonable and Diligent Efforts to perform its respective tasks and
obligations in conducting all development work ascribed to it in the Development
Budget/Plan, and each Party shall cooperate with and provide reasonable support
to the other Party in such other Party's conduct of such development and
commercialization work as provided in the Development Budget/Plan.

         2.2 PARTICIPATION IN GLOBAL DEVELOPMENT. Each Party acknowledges that
simultaneously with this Agreement, OSI will be entering into a Development
Collaboration and Licensing Agreement with Roche regarding development of
OSI-774 outside the Territory (the "OSI-Roche Agreement"). The Parties hereto,
simultaneously with this Agreement, will enter into the Tripartite Agreement
with Roche governing certain development activities and cost sharing.

         2.3 INITIAL DEVELOPMENT BUDGET/PLAN; MODIFICATIONS. The Parties have
attached as Exhibit C hereto the initial Development Budget/Plan (which
initially is the Global Development Plan), the goals of which are, among other
things: (a) the timely and strategic development, including clinical testing, of
OSI-774 to seek Regulatory Approval in multiple indications as promptly as
commercially practicable; (b) the acquisition of Regulatory Approval of Licensed
Product allowing the commercial promotion, marketing and sale of the Licensed
Product in the Territory for use in the Field; (c) the identification of the
activities to be performed by each Party to accomplish such development
(including clinical testing) and Regulatory Approval; and (d) the manufacture
and supply of Clinical Supplies and Commercial Supplies of the Licensed Product
for such development and commercialization pursuant to Section 7.1 hereof. The
Development Budget/Plan includes development activities to be undertaken in
accordance with the Global Development Plan and also includes activities outside
the Global Development Plan which may be undertaken under this Agreement.
Hereafter, the Development Budget/Plan (including the work, budget and timeline
therefor) shall not be modified except upon formal decision by the Joint Project
Team and approval by the JSC as described in Section 3.1(c) below, which formal
approval shall automatically constitute a valid binding amendment to Exhibit C
attached hereto.

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                                    ARTICLE 3

                         MANAGEMENT OF THE COLLABORATION

         3.1 JOINT STEERING COMMITTEE.

                  (a) ESTABLISHMENT OF JOINT STEERING COMMITTEE. The Parties
hereby establish a Joint Steering Committee, or JSC, to oversee and manage the
product development and commercialization collaboration contemplated by this
Agreement. The JSC will be composed of up to three (3) representatives of each
Party, who shall be appointed (and may be replaced at any time) by such Party on
written notice to the other Party in accordance with this Agreement. Such
representatives shall include individuals within the senior management of each
Party with expertise in drug development and commercialization. The initial JSC
members from each Party are listed on Exhibit A attached hereto. Any member of
the JSC may designate a substitute to attend and perform the functions of that
member at any meeting of the JSC. The JSC will meet at least twice each year
during the Term of this Agreement, or at any frequency agreed by the JSC, to
conduct the activities described in Section 3.1(b) below. The representatives
from each Party will collectively have one vote in decisions, with decisions for
overall product development strategy made by unanimous vote.

                  (b) JOINT STEERING COMMITTEE RESPONSIBILITIES. The JSC shall
perform the following functions:

                         (i) approve the overall strategy for the collaboration
hereunder and provide direction to the Joint Project Team as provided herein;

                         (ii) review and approve development, clinical trial
strategies and the Development Budget/Plans, the division of responsibilities
between the Parties, the multiyear expense forecasts formulated by the Joint
Project Team, and the financial results of the collaboration hereunder;

                         (iii) review and approve the selection by the Joint
Project Team of development decision criteria, and of indications for which
Licensed Products are developed;

                         (iv) review and approve activities related to
manufacturing and the identification of manufacturer(s);

                         (v) review and approve annual marketing and sales
budgets for the Licensed Product based on the Commercialization Plan, and Phase
IV clinical support (including scope and strategic direction);

                         (vi) serve as the first forum for attempted settlement
of disputes or disagreements that are unresolved by the Joint Project Team,
unless otherwise indicated in this Agreement;

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                         (vii) perform such other functions as appropriate to
further the purposes of this Agreement as determined by the Parties; and

                         (viii) coordinate and approve global development
strategy and global development budgets with the Global Development Committee,
as described in Section 3.4 below.

                  (c) JOINT STEERING COMMITTEE CO-CHAIRPERSONS; PROCEDURES. One
Co-Chairperson of the JSC shall be designated annually by each Party. The two
Co-Chairpersons shall send notices and agendas for all regular JSC meetings to
all JSC members. The location of regularly scheduled JSC meetings shall
alternate between the offices of the Parties, unless otherwise agreed. Meetings
may be held telephonically. The Party hosting any JSC meeting shall appoint one
person (who need not be a member of the JSC) to attend the meeting and record
the minutes of the meeting in writing. Such minutes shall be circulated to the
Parties promptly following the meeting for review, comment and distribution. Any
modifications to the Development Budget/Plan (including the work, budget and
timeline therefor) approved at a JSC meeting shall be considered approved and
shall constitute an amendment to Exhibit C upon JSC ratification of the meeting
minutes related thereto.

                  (d) DISPUTE RESOLUTION. Issues that come before the JSC that
require action, approval or resolution and for which the JSC is unable to reach
agreement shall be resolved by the Parties under the terms of Article 16 below.
For issues regarding study implementation coming before the JSC for which the
Parties' JSC members have disagreement, ultimate decision making authority will
rest with the Party primarily responsible for conducting the activities at
issue, provided, however, for issues that materially change the scope of a
study, the deciding Party shall give prompt notice of such issue to the other
Party and shall give due consideration to the input of the other Party on such
issue.

         3.2 JOINT PROJECT TEAM.

                  (a) ESTABLISHMENT OF JOINT PROJECT TEAM. The Parties shall
establish a Joint Project Team no later than thirty (30) days after the
Effective Date to coordinate all activities for the development and
commercialization of Licensed Products in the Field in the Territory, within the
budget approved by the JSC, including pre-clinical research, clinical research,
manufacturing, regulatory filings, and post-approval development studies. The
Joint Project Team shall consist of such number of representatives of each Party
as are reasonably necessary to accomplish the goals of the Team hereunder. Such
representatives will include individuals with expertise and responsibilities in
the areas of preclinical development, clinical development, process sciences,
manufacturing, regulatory affairs or product development and marketing, as
applicable to the stage of development or commercialization of the Licensed
Product. One such representative from each Party shall be designated as that
Party's "Project Team Leader" to act as the primary Joint Project Team contact
for that Party. Either Party may replace any or all of its representatives at
any time upon written notice to the other Party. Any member of the Joint Project
Team may designate a substitute to attend and perform the functions of that
member at

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any meeting of the Joint Project Team. The Joint Project Team will meet once
each calendar quarter or as agreed by the Joint Project Team.

                  (b) JOINT PROJECT TEAM RESPONSIBILITIES. The Joint Project
Team shall be responsible for formulating overall development plans and an
annual budget, for making overall decisions regarding the priority and design of
all clinical trials for new indications, for determining which Party will be
responsible for implementing clinical studies for each indication, for
developing a publication strategy and a calendar of key scientific and clinical
meetings and other events for Licensed Products, for exchanging information and
facilitating cooperation and coordination between the Parties as they exercise
their respective rights and meet their respective obligations under this
Agreement, for determining the priority with respect to seeking Regulatory
Approval of Licensed Products, for approving third party manufacturing and
supply agreements, and for implementing all activities approved by the JSC. In
addition, the Joint Project Team may designate subteams as appropriate to
facilitate coordination and cooperation in key areas. Specifically, the Joint
Project Team will designate a Joint Regulatory Subteam to coordinate efforts as
may be necessary for NDA filing and other regulatory activities. The Joint
Project Team will prepare a draft Development Budget/Plan, and draft annual
development and joint marketing and sales budgets, as applicable, by August 15
of the then-current calendar year, and a final Development Budget/Plan, for JSC
approval, by September 15 of the then-current calendar year. In addition, the
Joint Project Team Leaders will participate in the OSI-774 Liaison Team,
described in Section 3.4 below, to exchange information, and facilitate
cooperation and coordination, between the Parties and Roche, pursuant to the
Tripartite Agreement.

                  (c) JOINT PROJECT TEAM DECISION-MAKING. As a general
principle, the Joint Project Team will operate by consensus. In the event that
the Joint Project Team members do not reach consensus with respect to a matter
that is within the purview of the Joint Project Team herein, including, without
limitation, with respect to the development of a Licensed Product and of the
capabilities and facilities for its manufacturing, supply and testing during the
Term of this Agreement, the Joint Project Team representatives of each Party
shall collectively have one vote for purposes of decision-making hereunder with
respect to such matters, with decisions made by unanimous vote. For issues
regarding study implementation for which the Parties' Joint Project Team members
cannot agree, ultimate decision-making authority shall rest with the Party
responsible for implementing the activities at issue, provided, however, for
such issues that materially change the scope of a study, the deciding Party
shall give prompt notice of such issue to the other Party and shall give due
consideration to the input of the other Party on such issue. If the Joint
Project Team is unable to resolve a dispute regarding overall strategy and
project development issues, however, such dispute shall be resolved in
accordance with Article 16 below.

                  (d) CEASING OF JOINT PROJECT TEAM OPERATIONS. The Joint
Project Team will cease operations and have no further function hereunder on the
later of (i) the date on which the Parties are no longer developing or
commercializing any Licensed Product in the Territory, or (ii) the date on which
the Parties are no longer sharing Operating Profits or Losses with respect to
any Licensed Product in the Territory.

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                  (e) ANNUAL PRODUCTION REQUIREMENTS. The Joint Project Team
shall be responsible for submitting annual Licensed Product production
requirement reports to the JSC for approval. Such report shall include the
forecasted requirements for Clinical Supplies, Licensed Product placebo and
Commercial Supplies, pursuant to a Manufacturing and Supply Agreement to be
entered into by the Parties in accordance with Section 7.1 hereof, for the
Territory for the subsequent five (5) years, and any other related information
mutually agreed upon. Each such report shall be submitted to the JSC with the
annual Development Budget/Plan for the subsequent calendar year.

         3.3 ACCOUNTING AND FINANCIAL REPORTING; JOINT FINANCE SUB-COMMITTEE.
Each Party will appoint two representatives with expertise in the areas of
accounting, cost allocation, budgeting and financial reporting. Such
representatives shall comprise the Joint Finance Sub-Committee and work under
the direction of the JSC to provide services to and consult with the Joint
Project Team in order to address the financial, budgetary and accounting issues
which arise in connection with the Development Budget/Plan and the Financial
Planning, Accounting and Reporting Procedures attached hereto as Exhibit B, and
updates thereto. Each representative may designate a substitute to perform such
functions, or may be replaced at any time by the represented Party by providing
notice thereof to the other Party.

         3.4 GLOBAL DEVELOPMENT COMMITTEE. Pursuant to the terms of the
Tripartite Agreement, the Parties have established with Roche a Global
Development Committee ("GDC") to, among other things, direct development of
OSI-774. In addition, the Parties and Roche have established a OSI-774 Liaison
Team to coordinate the development activities of the Joint Project Team and the
Roche Project Team as more fully described in the Tripartite Agreement. Members
of the JSC hereunder will serve as the OSI and Genentech members of the GDC. The
GDC will meet, review and approve a Global Development Plan, pursuant to the
terms of the Tripartite Agreement.

                                    ARTICLE 4

                                   DEVELOPMENT

         4.1 DEVELOPMENT EFFORTS. OSI and Genentech each agree to collaborate
diligently in the development of Licensed Products for use in the Field and to
use Commercially Reasonable and Diligent Efforts to develop and bring Licensed
Products to market in the Field as soon as practicable. Each Party further
agrees to execute and substantially perform its respective activities under the
Development Budget/Plan and to cooperate with each other in carrying out the
Development Budget/Plan.

         4.2 DEVELOPMENT RESPONSIBILITIES. Consistent with its responsibilities
under this Agreement and the Development Budget/Plan, each Party agrees to:

                         (a) share with and provide copies, at its own cost, to
the other Party all preclinical data, assays and associated materials,
protocols, procedures and any other information

                                       13
<PAGE>   15
and Know-how in such Party's possession that the Joint Project Team deems
reasonably necessary to initiate clinical development of Licensed Products; and

                         (b) use Commercially Reasonable and Diligent Efforts to
conduct all IND-enabling studies and human clinical studies for Licensed
Products for which it is responsible under the Development Budget/Plan, and to
make all filings with and supporting all communications with the relevant
regulatory agencies or other governmental entities necessary to conduct such
studies.

         4.3 CLINICAL TRIALS. The Parties will each conduct clinical trials for
indications for Licensed Products in accordance with, and as assigned in, the
Development Budget/Plan. All clinical data and reports related to clinical
trials for Licensed Products shall be jointly owned by the Parties, and each
Party shall have full use, for any purpose, of all such data and reports related
to clinical trials for Licensed Products. All data, database information and
safety reports from such clinical trials for Licensed Products shall be
centralized and held at a contract research organization ("CRO") mutually agreed
upon by the Parties, or held as otherwise agreed upon by the Parties. All such
clinical trial data and information and final reports shall be accessible to the
Parties, and to Roche pursuant to the Tripartite Agreement. If a Party itself
conducts a clinical trial hereunder, it shall transfer all of the clean, final
data for such trial to the CRO no later than six (6) months after the date that
the last trial data has been collected under the trial protocol for the last
clinical trial subject.

         4.4 INDS AND DRUG APPROVAL APPLICATIONS.

                  (a) Consistent with the Development Budget/Plan, for each
indication for Licensed Products in the Territory, the Joint Project Team, as
approved by the JSC, will determine which Party will own and be responsible for
filing the IND and Drug Approval Application and seeking Regulatory Approvals
for such indication. Notwithstanding anything to the contrary in the prior
sentence, with respect to indications for Licensed Products in the Territory,
(i) OSI shall own and be responsible for filing the first NDA for Licensed
Product containing OSI-774, (ii) OSI, at its sole option, shall own and be
responsible for filing the first supplemental NDA for Licensed Product
containing OSI-774, and (iii) the JSC shall determine which Party shall own and
be responsible for filing thereafter any subsequent supplemental NDA's or new
NDA's for all Licensed Products. Prior to submitting any IND or Drug Approval
Application, the Parties, through the Joint Project Team, shall consult with the
other Party regarding the scope and general content of such IND or Drug Approval
Application. Each Party shall have the right to review and comment on all INDs
and Drug Approval Applications in accordance with specific timelines or other
arrangements agreed upon by the Joint Project Team, and such comments will be
given all due consideration by the other Party. Regulatory documents for each
filing shall be centralized and held at the offices of the Party primarily
responsible for such filing.

                  (b) Neither Party shall transfer title or otherwise attempt in
any manner to dispose of any such INDs or Drug Approval Applications for
Licensed Products in the Territory, or otherwise impair the other Party's rights
in such INDs or Drug Approval Applications,

                                       14
<PAGE>   16
without the prior written consent of such other Party, except that Genentech
will have the right to require OSI to permit Genentech's sublicensee to
reference or cross-reference any such INDs or Drug Approval Applications held by
OSI, provided, however, that any such sublicense shall not impair OSI's rights
in such INDs or Drug Approval Applications as set forth in this Agreement.

                  (c) If a Party is primarily responsible for any regulatory
filing, such Party shall provide the other Party with a copy of any documents or
reports filed with the FDA or any other regulatory authority under this
Agreement, including any INDs or Drug Approval Applications. Each Party shall
have the right to cross reference, in any regulatory document, the INDs, NDAs,
and any other Drug Approval Applications of the other Party for the purpose of
conducting clinical trials and seeking Regulatory Approvals under this
Agreement.

         4.5 REGULATORY MEETINGS AND COMMUNICATIONS. Consistent with the
Development Budget/Plan, for each indication for Licensed Products in the
Territory the Party primarily responsible for conducting the clinical studies
for such indication shall be primarily responsible for conducting meetings and
discussions, and routine telephone communications, with the FDA related to
clinical studies for such indication for Licensed Product. The Parties will
coordinate their efforts through the Joint Regulatory Subteam. Both Parties will
participate in all substantive discussions and meetings with regulatory
authorities which relate to such indication, including, but not limited to, with
respect to any Drug Approval Applications. The Party not primarily responsible
for conducting a study will send only a reasonable number of representatives to
any such discussion and meeting. The Parties shall cooperate in good faith with
respect to the conduct of any inspections by any regulatory authority of a
Party's site and facilities related to Licensed Products, and each Party shall
at a minimum be given the opportunity to attend the summary, or wrap up, meeting
related to Licensed Products with such regulatory authority at the conclusion of
such site inspection. Each Party shall consider the attendance of the other
Party at any such regulatory inspections, but shall not be obligated to accept
the other Party's attendance at such inspections if such attendance would result
in the disclosure to the other Party of confidential information or trade
secrets unrelated to the Licensed Products. To the extent either Party receives
written or material oral communication from the FDA or any other regulatory
authority relating to Licensed Products, the Party receiving such communication
shall notify the other Party and provide a copy of any written communication as
soon as reasonably practicable.

         4.6 DEVELOPMENT COSTS FOR OSI AND GENENTECH. **

         4.7 DEVELOPMENT COST SHARING FOR GLOBAL DEVELOPMENT. Development costs
for activities agreed upon by the Parties and Roche and conducted in certain
countries under the Tripartite Agreement shall be shared equally by each of
Genentech, OSI and Roche (i.e. Genentech, OSI and Roche each shall pay one third
of such costs) pursuant to the terms of the Tripartite Agreement.

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                                       15
<PAGE>   17
         4.8 TRANSFER OF MATERIALS. During the collaboration hereunder, each
Party may transfer certain of its proprietary materials to the other Party. Each
Party agrees that it will use such materials of the other Party only for the
purposes of the collaboration hereunder, and will not transfer such materials to
any Third Party without the prior written consent of the other Party hereunder.
Except as expressly provided in this Agreement, the transfer of any such
proprietary materials by one Party to another shall not be deemed to be a grant
of any rights in the proprietary material. All right, title and interest in and
to all such proprietary materials (and any patent rights relating thereto) shall
remain in the Party transferring such materials. Proprietary materials made or
assembled by a Party during and in furtherance of the collaboration hereunder,
and which are directly related to Licensed Product, shall be considered
jointly-owned proprietary material. Each Party shall have the right to use such
jointly-owned proprietary materials solely for the purposes of the collaboration
hereunder or for internal research purposes and shall not transfer, license or
sublicense any such proprietary materials to any Third Party without the prior
written consent of the other Party.

         4.9 THIRD PARTY ACADEMIC RESEARCHERS/INSTITUTIONS.

                  (a) Each Party acknowledges that, as of the Effective Date,
the other Party may have certain existing material transfer agreements and
collaboration agreements for research of OSI-774 or Improvements in the Field
with academic investigators or governmental research institutions ("Third Party
Research Agreements"). Each Party acknowledges that the other Party is required
to fulfill its respective obligations under such Third Party Research
Agreements. Such obligations may include providing investigators with research
quantities of OSI-774. Each Party agrees that, to the extent contemplated by the
applicable Third Party Research Agreement, the other Party may continue its
existing obligations under such Third Party Research Agreements for the current
term of such Agreements. Subject to the obligations set forth in Section 13.1
below and the Third Party Research Agreements, and with the consent of the
appropriate Third Party, if required and obtainable, each Party agrees to
promptly provide the other Party with all data, reports and information related
to the Field that such Party receives under such Third Party Research
Agreements. After the Effective Date, the Parties shall agree upon and
coordinate subsequent Third Party material transfer and collaboration agreements
relating to OSI-774 and Improvements with academic or governmental research
institutions, and amendments or extensions of the Third Party Research
Agreements, through the Joint Project Team, in a manner to conserve the
available quantities of the Parties' research materials and to avoid compromise
of the Parties' abilities to fulfill their obligations under the Development
Budget/Plan. Any such Third Party agreements shall be substantially in a form of
a "Material Transfer Agreement" or "Collaboration Agreement" to be agreed upon
by the Parties.

                  (b) In the event that any Third Party Research Agreement, or
Material Transfer Agreement or Collaboration Agreement entered into after the
Effective Date among the Parties and an academic or governmental Third Party,
results in an invention or know-how made, jointly or solely, by a Third Party
that relates to Licensed Products, the Parties shall determine whether a license
(exclusive or non-exclusive) can and should be obtained under the rights of such
Third Party to such invention or know-how. If the Parties determine that such
license can

                                       16
<PAGE>   18
and should be obtained, then the Parties will enter into a license agreement to
jointly license such rights. Any royalties payable to such Third Party due to
license terms provided in a Third Party Research Agreement entered into prior to
the Effective Date shall be chargeable to the collaboration, in accordance with
Exhibit B, up to ** of net sales by the Parties of Licensed Products. Any
milestone payments, and any royalties greater than ** of net sales of Licensed
Products, payable to such Third Party under such license terms shall be borne
solely by the Party which originally entered into such Third Party Research
Agreement prior to the Effective Date, unless otherwise agreed by the Parties.
Milestone payments and royalties payable to a Third Party, due to a license
granted pursuant to a Material Transfer Agreement or Collaboration Agreement
entered into by the Parties and a Third Party academic or governmental
institution after the Effective Date, shall be chargeable in full to the
collaboration as in accordance with Exhibit B.

         4.10 RESEARCH COLLABORATION. The Parties currently intend to discuss a
collaboration with respect to joint research efforts in cancer therapeutics.
Such research collaboration if agreed to, will be governed by a written
amendment hereto or a separate research collaboration and shall be subject to
any agreement OSI or Genentech each has previously entered into with Third
Parties.

         4.11 CONTRACTS WITH THIRD PARTIES. In addition to agreements made with
academic researchers and governmental research institutions as provided in
Section 4.9 above, during the Term the Parties may jointly or individually enter
into written contracts with other Third Parties for activities to be performed
in furtherance of the activities of the Parties hereunder, including, without
limitation, Third Party consultants and clinical investigators. In addition to
the confidentiality obligations required under Section 10.2 below, OSI and
Genentech each shall use commercially reasonable efforts to require, as an
obligation under such contracts, that: (a) such Third Party consultants assign
to OSI and Genentech as joint owners all inventions made by such consultants
during the course of their consulting services, and (b) such Third Party
clinical investigators assign to OSI and Genentech as joint owners, or grant an
option to OSI and Genentech to co-exclusively license, all inventions made by
such clinical investigators during the course of conducting clinical trials
hereunder.

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

                                       17
<PAGE>   19
                                    ARTICLE 5

                       COMMERCIALIZATION IN THE TERRITORY

         5.1 COMMERCIALIZATION. The Parties acknowledge that Genentech is the
Party that has established the infrastructure and expertise for the marketing
and sales of therapeutic drugs, and that except as set forth hereinbelow, in
order to maximize Operating Profits Genentech shall have the responsibility for
the design and implementation of all product launch activities and the
promotion, marketing and sales of Licensed Product in the Territory. OSI shall
be kept apprised of the commercialization activity by and through the Joint
Project Team and OSI shall be permitted to have observer status of the
commercialization activities of the meetings at which it is intended that
decisions will be made to effect overall strategy. Within thirty (30) days after
NDA submission, Genentech shall submit to the Joint Project Team a detailed
annual plan and budget (the "Commercialization Plan") for the commercialization
of the Licensed Product in the Territory, for JSC approval of the budget.
Thereafter, Genentech shall update the Commercialization Plan on a yearly basis
on or before such anniversary date of the NDA submission and present the budget
for such updated Commercialization Plan to the JSC for approval.

         5.2 MARKETING AND SALES BY OSI. OSI shall have the right to co-promote
a Licensed Product in the Territory provided that: **

         5.3 COMMERCIALIZATION EFFORTS. Each Party, to the extent that such
Party is participating in the marketing of Licensed Products, shall use
Commercially Reasonable and Diligent Efforts in marketing Licensed Product in
the Territory in accordance with the Commercialization Plan developed by
Genentech. Genentech shall have the responsibility for design of Licensed
Product promotional materials, and shall file such promotional materials with
the FDA as required under applicable law. Genentech will be designated by OSI as
the Party responsible for filing such materials to OSI's NDA. Genentech shall
have the final decision making authority with respect to commercialization
matters. Genentech will also be solely responsible for the following with
respect to Licensed Product: booking sales, handling all returns, handling all
aspects of order processing, invoicing and collection, receivables, providing
customer medical information, collection of data of sales to hospitals and other
end users, distribution, inventory, and warehousing. Notwithstanding the
foregoing, OSI shall have the right to co-promote Licensed Products to the
extent provided in Section 5.2 of this Agreement.

         5.4 COMMERCIALIZATION COSTS. Except as otherwise provided herein, all
costs related to the commercialization of Licensed Product in the Territory
shall be shared by the Parties as provided in Exhibit B.

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                                       18
<PAGE>   20
         5.5 TRADEMARKS. It is the intent of the Parties that a single product
trademark shall be developed for use on and in connection with Licensed Products
both in the Territory and worldwide ("Product Trademark"). The Parties have
agreed to use the trademark ** as such Product Trademark for Licensed Product
containing OSI-774. Any final decision or change regarding the choice of Product
Trademark will be made by the JSC. If the JSC determines that it is not possible
to register or otherwise use the Product Trademark in the Territory, then the
Parties shall agree on an appropriate Product Trademark for use in the
Territory. In addition, registration use problems with respect to the Product
Trademark in the Global Development Countries (as defined in the Tripartite
Agreement) will be discussed by the Joint Project Team and the Roche project
team. Any decisions or disagreements concerning the desire for a global
trademark will be approved or resolved by the Parties and Roche. Subject to
Section 9.3 below, the Joint Project Team will determine the use of the Product
Trademark for a Licensed Product before Regulatory Approval of such Licensed
Product in the Territory. OSI shall own the Product Trademark for Licensed
Products containing OSI-774, and shall be responsible for procurement and
maintenance of a trademark registration for such Product Trademark in connection
with Licensed Products in the Territory. The costs for such procurement and
maintenance of trademark registration in the Territory shall be shared by the
Parties as provided in Exhibit B.

                                    ARTICLE 6

                 CLOSING, GENENTECH PAYMENTS AND PROFIT SHARING

         6.1 COVENANTS PENDING CLOSING.

                  (a) REASONABLE EFFORTS. Subject to the terms and conditions of
this Agreement, each of the Parties agrees to use all reasonable efforts to
take, or cause to be taken, all reasonable actions and to do, or cause to be
done, all things necessary and appropriate to satisfy all conditions of and to
consummate the transactions contemplated by this Agreement.

                  (b) FILINGS. The Parties shall cooperate with one another in
the preparation, execution and filing of all documents that are required or
permitted to be filed on or before the Closing, including, without limitation,
filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act").

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                                       19
<PAGE>   21
         6.2 CONDITIONS TO CLOSING.

                  (a) The obligation of OSI to close shall be subject to the
satisfaction on or before the Closing of the following conditions, any or all of
which may be waived in whole or in part by OSI:

                         (i) the approval of the transaction by the FTC under
the HSR Act or the expiration or termination of all applicable waiting periods,
requests for information (and any extensions thereof) under the HSR Act, unless
a joint determination is made by OSI and Roche (by certification from OSI and
Roche to each other and to Genentech) that such approval is not required;

                         (ii) the representations and warranties made by
Genentech in Article 12 shall be true and correct in all material respects as of
the Closing Date with the same force and effect as if they had been made as of
the Closing Date, and Genentech shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to
Closing;

                         (iii) payments of $25 million, in the aggregate, to OSI
under this Agreement and the OSI-Roche Agreement by Genentech and Roche,
respectively;

                         (iv) payments of $70 million, in the aggregate, to OSI
under the Stock Purchase Agreement and the Stock Purchase Agreement between OSI
and Roche by Genentech and Roche, respectively;

                         (v) the execution and delivery of the Tripartite
Agreement and the OSI-Roche Agreement; and

                         (vi) closing shall have occurred (or shall occur
simultaneously with the Closing hereunder) under the OSI-Roche Agreement.

                  (b) The obligation of Genentech to close shall be subject to
the satisfaction on or before the Closing of the following conditions any or all
of which may be waived in whole or in part by Genentech:

                         (i) the approval of the transaction by the FTC under
the HSR Act or the expiration or termination of all applicable waiting periods,
requests for information (and any extensions thereof) under the HSR Act, unless
a joint determination is made by OSI and Roche (by certification from OSI and
Roche to each other and to Genentech) that such approval is not required;

                                       20
<PAGE>   22
                         (ii) the representations and warranties made by OSI in
Article 12 shall be true and correct in all material respects as of the Closing
Date with the same force and effect as if they had been made as of the Closing
Date, and OSI shall have performed all obligations and conditions herein
required to be performed or observed by them on or prior to Closing;

                         (iii) delivery to Genentech by OSI of the OSI common
stock under the Stock Purchase Agreement; and

                         (iv) the execution and delivery of the Tripartite
Agreement.

         6.3 GENENTECH PAYMENTS. Simultaneous with the Closing, and in
satisfaction of its portion of the Closing Conditions under Sections 6.2(a)(iii)
and (iv), Genentech shall make the following non-refundable (except as otherwise
set forth in this Agreement) and non-creditable payments to OSI:

                  (a) ** and

                  (b) Thirty-five million dollars ($35,000,000) to purchase
shares of OSI common stock as set forth in the Stock Purchase Agreement.

         6.4 SHARE OF OPERATING PROFITS OR LOSSES OSI and Genentech shall share
in Operating Profits or Losses from sales of Licensed Products in the Territory
as provided in Exhibit B. The Parties shall share Operating Profits or Losses
hereunder until the date the Parties mutually agree to terminate this
collaboration, or the Agreement expires or is otherwise terminated as provided
in Article 14 below.

         6.5 GENENTECH MILESTONE PAYMENTS. Subject to the other terms and
conditions of this Agreement, and as consideration for the license rights
granted to Genentech by OSI under this Agreement, Genentech shall pay to OSI the
following non-refundable and non-creditable amounts only once, upon the first
occurrence of such event with respect to the first Licensed Product covered by
an OSI Patent to reach such event:
<TABLE>
<CAPTION>

EVENT                                                   PAYMENT
-----                                                   -------
<S>                                                     <C>
  **                                                      **
</TABLE>

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

                                       21
<PAGE>   23
                                    ARTICLE 7

                             MANUFACTURE AND SUPPLY

         7.1 MANUFACTURE OF LICENSED PRODUCTS

                  (a) CLINICAL SUPPLIES. OSI shall provide or cause to be
provided all pre-clinical and Clinical Supplies of Licensed Product for the
completion of pre-clinical work and human clinical trials for the indications
for Licensed Products in the Territory. OSI will enter into one or more
manufacturing and supply agreement(s) with a Third Party contract
manufacturer(s) (one of which may be Roche) covering manufacture, supply and
quality control of pre-clinical and Clinical Supplies as soon as practicable
after execution of this Agreement by the Parties. Such Third Party contract
manufacturer(s), and the manufacturing and supply agreement, shall be approved
by the Joint Project Team prior to execution of such agreement. If the members
of the Joint Project Team have a disagreement regarding the Third Party contract
manufacturer(s) or the manufacturing and supply agreement, such dispute shall be
referred to the JSC for resolution with ultimate decision making authority
resting with OSI. The cost of such manufacture of Clinical Supplies will be
shared by the Parties as provided in Exhibit B. The detailed terms of the supply
of pre-clinical and Clinical Supplies by OSI will be governed by a manufacturing
and supply agreement negotiated in good faith and entered into between the
Parties (the "Manufacturing and Supply Agreement") as soon as practicable after
the execution of this Agreement. In the event OSI is unable to supply adequate
materials for Clinical Supplies, Genentech shall have the right, subject and
pursuant to the Manufacturing and Supply Agreement, to supply or cause to be
supplied such materials as more fully detailed in such Manufacturing and Supply
Agreement.

                  (b) COMMERCIAL SUPPLIES. OSI shall be responsible for
establishing a commercial manufacturing process and for supplying or causing to
be supplied Commercial Supplies of Licensed Product, at the scale and in the
amounts required to meet demand for Licensed Product in the Territory. OSI will
enter into a supply agreement with a Third Party contract manufacturer(s)
covering the manufacture, supply and quality control of Commercial Supplies as
soon as practicable after the completion of the first Phase III Enabling
Clinical Trial. Such agreement shall be approved by Genentech prior to execution
which approval shall not be unreasonably withheld. If the members of the Joint
Project Team have a disagreement regarding choice of the Third Party contract
manufacturer(s), such dispute shall be referred to the JSC for resolution. In
the event OSI is unable to supply adequate materials for Commercial Supplies,
Genentech shall have the right, subject and pursuant to the Manufacturing and
Supply Agreement, to supply or cause to be supplied Commercial Supplies as more
fully detailed in such Manufacturing and Supply Agreement. The cost of such
manufacture of Commercial Supplies will be shared by the Parties as provided in
Exhibit B.

                                       22
<PAGE>   24
                                    ARTICLE 8

                                    LICENSES

         8.1 LICENSE TO GENENTECH. Subject to the other terms of this Agreement
and upon the Closing Date, OSI hereby grants to Genentech a ** nontransferable
(except pursuant to Section 17.1), non-sublicensable (except pursuant to Section
8.4), co-exclusive license under the OSI Patents and OSI Know-how to use, sell,
offer for sale and import Licensed Products in the Field in the Territory. Such
license shall be co-exclusive with OSI in the Territory.

         8.2 LICENSE TO OSI. Subject to the other terms of this Agreement and
upon the Closing Date, Genentech hereby grants to OSI a ** nontransferable
(except pursuant to Section 17.1), non-sublicensable (except pursuant to Section
8.4), co-exclusive license under the Genentech Know-how and Genentech Patents to
use, make, have made, sell, offer for sale and import Licensed Products in the
Field in the Territory. Such license shall be co-exclusive with Genentech in the
Territory.

         8.3 LICENSE TO OSI AND ROCHE. Subject to the terms of this Agreement
and upon the Closing Date, Genentech hereby grants to OSI and Roche a **
non-transferable (except pursuant to Section 17.1), non-sublicensable (except
pursuant to Section 8.4), co-exclusive license (co-exclusive between OSI and
Roche) outside the Territory under the Genentech Patents and Genentech Know-how
to make, have made, use, sell, offer for sale and import Licensed Products (in
the case of Roche, sole and exclusive for Licensed Product as that term is
defined in the OSI-Roche Agreement, and in the case of OSI, sole and exclusive
for Licensed Product as that term is defined in this Agreement, but excluding
Licensed Product as that term is defined in the OSI-Roche Agreement) in
accordance with the OSI-Roche Agreement and this Agreement. Roche shall be a
third party beneficiary with respect to the rights granted to it in the previous
sentence.

         8.4 SUBLICENSES. Except as expressly provided in Section 17.1, for **
after the Closing Date, neither Party may sublicense any of its rights hereunder
to any Third Party without the prior written consent of the other Party which
shall be at the other Party's sole discretion. Beginning ** after the Closing
Date, such prior written consent of the other Party shall not be unreasonably
withheld. If any Party grants a sublicense permitted by this Agreement, all of
the terms and conditions of this Agreement shall apply to the sublicensee to the
same extent as they apply to such Party for all purposes. The sublicensing Party
assumes full responsibility for the performance of all obligations so imposed on
such sublicensee, including, without limitation, all payments due under this
Agreement by reason of the operation of any such sublicense.

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

                                       23
<PAGE>   25
                                    ARTICLE 9

                                   TRADEMARKS

         9.1 PRODUCT TRADEMARKS. All Licensed Products shall be sold in the
Territory under Product Trademarks, as described in Section 5.5 above.

         9.2 GRANT OF LICENSE. OSI hereby grants to Genentech, subject to
compliance with the other terms and conditions of this Agreement, a
co-exclusive, non-transferable (except pursuant to Section 17.1)
non-sublicensable (except pursuant to Section 8.4) license and right to use the
Product Trademarks solely within the Territory and solely in connection with
Licensed Product containing OSI-774. Such license shall be co-exclusive with OSI
in the Territory.

         9.3 QUALITY CONTROL. Genentech shall comply with all requirements that
the Licensed Products conform with the appropriate standards of quality as
required under this Agreement. From time to time, and upon reasonable request,
with prior written notice, of OSI, Genentech shall provide to OSI copies of its
marketing materials related to Licensed Products containing OSI-774 for quality
review by OSI. If at any time, such Licensed Products shall, in the reasonable
opinion of OSI, fail to conform with the appropriate standards of quality as
required under this Agreement from the time at which Genentech takes possession
of the Licensed Product, OSI or its authorized representatives shall notify
Genentech. Upon such notification, Genentech shall promptly cease to use the
Product Trademark until the standards of quality have been met to the reasonable
satisfaction of OSI.

         9.4 ACKNOWLEDGMENT OF OWNERSHIP RIGHTS. Genentech acknowledges and
agrees that OSI is the exclusive owner of all right, title, and interest in and
to the Product Trademarks and that all use of the Product Trademarks by
Genentech will inure to the exclusive benefit of OSI. Genentech undertakes to
make use of the Product Trademarks and in such a way that the rights of OSI in
said marks will not be jeopardized or compromised in any way. Genentech shall
not use the Product Trademarks as all or part of any corporate name, trade name,
trademark, service mark, certification mark, collective membership mark, domain
name, or any other designation confusingly similar to the Product Trademarks in
any way that damages the Product Trademarks. If any application for registration
is or has been filed on the behalf of Genentech in any country and relates to
any mark which, in the reasonable opinion of OSI, is confusingly similar,
deceptive, or misleading with respect to, or dilutes or in any other way damages
the Product Trademarks, Genentech shall, at OSI's request, abandon all use of
such mark and any registration or application for registration and shall
reimburse OSI for all costs and expenses, including attorneys' fees, associated
with any successful opposition or related proceeding instigated by OSI or its
authorized representative in response to such filings.

         9.5 USE OF TRADEMARK DESIGNATIONS. Genentech agrees to use its
reasonable best efforts to use the (TM) designation in conjunction with
Genentech's use of the Product Trademarks within the Territory until such time
as U.S. registrations issue. Once the U.S. registrations issue, Genentech may
use the (R) designation with Genentech's uses of the Product Trademarks.

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<PAGE>   26
         9.6 INFRINGEMENT OF PRODUCT TRADEMARKS. Each Party shall notify the
Joint Project Team promptly upon learning of any actual, alleged or threatened
infringement of a Product Trademark applicable to a Licensed Product in the
Territory, or of any unfair trade practices, trade dress imitation, passing off
of counterfeit goods, or like offenses in the Territory. Upon learning of such
offenses from a Party regarding a Product Trademark, the Joint Project Team
shall confer with the Parties regarding the defense of the Product Trademark.
The ultimate decision whether and how to defend such Product Trademark will rest
with OSI, and OSI shall have the first right to respond to and defend any such
infringement or offense. In the event that OSI elects, within ninety (90) days,
not to respond to or defend any such infringement or offense or abandons such
defense, then, in such event, Genentech shall have the option to respond to and
to defend against such infringement or offense. The Party defending the Product
Trademark shall take all reasonable and appropriate steps to protect, defend and
maintain the Product Trademark for use by the Parties in the Territory in
connection with the Licensed Product. The Parties shall cooperate in good faith
with respect to all Product Trademark enforcement actions hereunder, and each
Party shall notify the other Party promptly of all substantive developments with
respect to such Product Trademark enforcement actions, including, but not
limited to, all material filings, court papers and other related documents. Each
Party shall consider the timely given, reasonable comments and advice of the
other Party with respect to the strategy employed and submissions made relative
to any Product Trademark enforcement actions. In addition, the Party bringing
suit to enforce any trademark shall also have the right to control settlement of
such claim; provided, however, that no settlement shall be entered into without
the written consent of the other Party if such settlement would materially and
adversely affect the interests of such other Party. If there is no agreement
between the Parties regarding such settlement, then the dispute will be resolved
pursuant to Article 16 below.

         9.7 COSTS OF DEFENSE OF TRADEMARKS. All of the costs, expenses and
legal fees in bringing, maintaining and prosecuting any action to maintain,
protect or defend a Product Trademark in the Territory, and any recovery, shall
be included in collaboration expenses in accordance with Exhibit B.

                                   ARTICLE 10

                                 CONFIDENTIALITY

         10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement, or otherwise agreed in writing, the Parties agree that, for the Term
of this Agreement and for five (5) years thereafter, the receiving Party shall
keep confidential and shall not publish or otherwise disclose or use for any
purpose other than as permitted under this Agreement any Know-how and other
proprietary information and materials furnished to it by the other Party
pursuant to this Agreement (collectively, "Confidential Information"), except to
the extent that it can be established by the receiving Party that such
Confidential Information:

                  (a) was already known to the receiving Party, other than under
an obligation of confidentiality, at the time of disclosure by the other Party
as demonstrated by competent written records;

                                       25
<PAGE>   27
                  (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Party;

                  (c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement;

                  (d) was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others; or

                  (e) was subsequently developed by the receiving Party without
use of the Confidential Information as demonstrated by competent written
records.

         The Parties may disclose Confidential Information to Roche in
furtherance of and under confidentiality provisions of the Tripartite Agreement.

         10.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information hereunder to the extent such disclosure is required to comply with
applicable governmental regulations or conduct pre-clinical or clinical trials
or to the extent ordered by a court of competent jurisdiction (subject to entry
of an appropriate protective order), provided that if a Party is required by law
or regulation to make any such disclosure of the other Party's Confidential
Information it will give reasonable advance notice to the other Party of such
disclosure requirement and will use its reasonable best efforts to secure
confidential treatment of such Confidential Information required to be
disclosed. In addition, each Party shall be entitled to disclose, under a binder
of confidentiality containing provisions substantially as protective as those of
this Article 10, Confidential Information to its consultants, clinical
investigators, and contract manufacturer, but only for any purposes provided for
in this Agreement.

         10.3 SURVIVAL. This Article 10 shall survive the termination or
expiration of this Agreement for a period of ** .

         10.4 TERMINATION OF PRIOR AGREEMENT. As of the Effective Date, this
Agreement supersedes the Confidentiality Agreement between the Parties dated
August 4, 2000 but only insofar as such Confidentiality Agreement relates to the
subject matter of this Agreement. All Confidential Information (as defined in
such Confidentiality Agreement) exchanged between the Parties under such
Confidentiality Agreement relating to the subject matter of this Agreement shall
be deemed Confidential Information hereunder and shall be subject to the terms
of this Article 10.

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

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<PAGE>   28
         10.5 PUBLICATIONS. Prior to the launch of any Licensed Product in the
Territory, the Joint Project Team will determine the overall strategy for
publication in support of such Licensed Products in the Territory. All proposed
publications and presentations shall be in accordance with such strategy. Except
as required by law, and except as set forth in the Tripartite Agreement, each
Party agrees that it shall not publish or present the results of studies or
clinical trials carried out by such Party as part of the collaboration without
the opportunity for prior review by the other Party. Each Party shall provide to
the other Party the opportunity to review any of the submitting Party's proposed
abstracts, manuscripts or presentations (including information to be presented
verbally), or those submitted by a Third Party under a Third Party Research
Agreement, Material Transfer Agreement or Collaboration Agreement, which relate
to the Field at least thirty (30) days prior to their intended submission for
publication, and such submitting Party agrees, upon written request from the
other Party, not to submit such abstract or manuscript for publication or to
make such presentation until the other Party is given up to forty-five (45) days
from the date of such written request to seek appropriate patent protection for
any material in such publication or presentation which it reasonably believes is
patentable. Once such abstracts, manuscripts or presentations have been reviewed
by each Party and have been approved for publication, the same abstracts,
manuscripts or presentations do not have to be provided again to the other Party
for review for a later submission for publication. Expedited reviews for
abstract and poster presentations within ten (10) days of receipt by the other
Party may be arranged by sending a prior written notice to such other Party,
requesting such expedited review, unless another arrangement is mutually agreed
upon by the Parties. Each Party also shall have the right to require that its
Confidential Information that may be disclosed in any such proposed publication
be deleted prior to such publication. In the event that either Party submits any
manuscript or other publication relating to any Licensed Product, it will
consider and acknowledge the contributions of the other Party, including, as
appropriate, co-authorship.

                                   ARTICLE 11

              OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

         11.1 OWNERSHIP OF INTELLECTUAL PROPERTY.

         (a) COLLABORATION INVENTIONS. Each Party will promptly disclose to the
other all Collaboration Inventions made by it during the Term of this Agreement.
Subject to Section 11.1(b), as between the Parties, OSI shall own all OSI
Collaboration Inventions and Genentech shall own all Genentech Collaboration
Inventions. As between the Parties, all Joint Collaboration Inventions shall be
owned jointly by OSI and Genentech. OSI and Genentech each shall require all of
its employees to assign all Collaboration Inventions made by them during the
Term of this Agreement to OSI or Genentech, respectively, as the case may be.

         (b) PATENTED COLLABORATION INVENTIONS. Notwithstanding the foregoing,
and subject to the provisions of Section 14.8, any Collaboration Invention that
is the subject of a patent application or patent and that is made solely by
employee(s) of OSI or solely by employee(s) of Genentech, shall be jointly owned
by OSI and Genentech during the Term of this Agreement; provided, however, that
the Party whose employee(s) were not named inventors shall not assign, license,
sublicense, transfer, or otherwise dispose of or encumber any portion of its
interest in

                                       27
<PAGE>   29
any such jointly-owned patent application or patent without the prior written
consent of the other Party which shall be at such other Party's sole discretion.
OSI and Genentech each shall require all of its employees, to assign all
Collaboration Inventions made by them during the Term of this Agreement that are
the subject of patent applications to OSI and Genentech as joint owners.

         (c) OTHER INVENTIONS. During the Term of this Agreement, inventions may
be made by employees of either Party, solely or jointly, which are not
Collaboration Inventions. As between the Parties, OSI shall own all such
inventions made by its employees solely or jointly with Third Parties, and
Genentech shall own all such inventions made by its employees solely or jointly
with Third Parties. As between the Parties, all such inventions made jointly by
employees of OSI and Genentech will be jointly owned by OSI and Genentech. Each
Party, at its sole discretion and responsibility, may file, prosecute and
maintain patent applications and patents covering such solely owned inventions.
For such inventions which are made jointly by employees of OSI and Genentech,
the Parties shall jointly decide on a patent application filing and prosecution
strategy.

         (d) RESTRICTIONS ON JOINTLY-OWNED KNOW-HOW AND COLLABORATION
INVENTIONS. During the Term of this Agreement, no Party shall license,
sublicense, assign, dispose of, encumber or otherwise impair any portion of its
interest in any Joint Collaboration Invention, without the prior written consent
of the other Party, which consent shall not be unreasonably withheld.

         (e) INVENTORSHIP. The determination of inventorship for Collaboration
Inventions shall be made in accordance with applicable laws relating to
inventorship set forth in the patent laws of the United States (Title 35, United
States Code). All such determinations shall be documented to ensure that any
divisional or continuation patent applications reflect appropriate inventorship
and that inventions and patent rights are assigned to the appropriate Party. The
Parties' patent counsel shall determine inventorship, and failing that, refer
the same to mutually acceptable outside counsel.

         11.2 DISCLOSURE OF PATENT APPLICATIONS. In addition to the disclosures
required under Article 13 below, each Party shall provide to the other Party a
copy of any patent applications filed by the Party for Collaboration Inventions.

         11.3 THIRD PARTY PATENTS. Each Party agrees to bring to the attention
of the other Party in a timely manner any Third Party patent or patent
application (a) that has been brought to its attention by such Third Party and
the Party believes would have a material effect on the operations to be
conducted by or on behalf of the Parties under this Agreement, or (b) for which
it has obtained a written legal opinion from patent counsel. In addition, as of
the Effective Date, to its knowledge (without investigation), neither Party has
received notice from any Third Party that OSI-774 infringes on any patent or
patent application owned by such Third Party that would have a material effect
on the operations to be conducted by or on behalf of the Parties under the
collaboration. For purposes of this Section 11.3, the knowledge of OSI shall
mean the knowledge of the Chief Executive Officer, Vice President Business
Development and Director of Intellectual Property of OSI. For purposes of this
Section 11.3, the knowledge of Genentech

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<PAGE>   30
shall mean the knowledge of the Chief Executive Officer and Vice President of
Intellectual Property of Genentech.

         11.4 PATENT FILINGS.

                  (a) The Parties acknowledge that the Divestiture Agreement
governs the responsibility for filing, prosecuting and maintaining the Base
Patents, and responsibility for all material actions relating to the prosecution
or maintenance of the Base Patents in the Territory, including patent
interferences, reexaminations, reissuances, oppositions and revocation
proceedings. OSI shall not amend this Divestiture Agreement as it relates to the
prosecution, maintenance or enforcement of the Base Patents without the prior
written consent of Genentech, which consent shall not be unreasonably withheld.
To the extent permitted by the Divestiture Agreement, OSI shall (i) keep
Genentech apprised of the status of each such patent and patent application in
the United States, (ii) share with Genentech all material information (including
correspondence with the United States Patent and Trademark Office) relating
thereto promptly after receipt of such information, and (iii) at Genentech's
timely request and expense, intervene in such matters as may be reasonably
requested by Genentech.

                  (b) At its discretion, OSI shall file, prosecute, and maintain
Licensed Product Patents for OSI Collaboration Inventions, and Genentech shall
file, prosecute and maintain Licensed Product Patents for Genentech
Collaboration Inventions, in such countries worldwide as each may determine.
Outside patent counsel acceptable to OSI and Genentech shall file, prosecute and
maintain Licensed Product Patents for any Joint Collaboration Inventions (in
such countries worldwide as the Parties may determine). If either Party as
described above elects not to file, prosecute or maintain any such patent
worldwide, it shall promptly inform the other Party no later than ten (10)
months after the priority filing. If any Party at any time elects not to further
prosecute or maintain any such patent in any country in the Territory, it shall
so inform the other Party immediately. The other Party may then file, prosecute
and maintain any such patents in the Territory or in countries worldwide as it
may determine at its own expense. The Party which is responsible for filing a
patent application for such a Collaboration Invention will be termed the "filing
Party." The filing Party shall keep the other Party apprised of the status of
each such patent application and patent and shall seek the advice of the other
Party with respect to patent strategy and draft patent applications and shall
give reasonable consideration to any suggestions or recommendations promptly
provided by the other Party concerning the preparation, filing, prosecution and
maintenance thereof. The Parties shall cooperate reasonably in the prosecution
of all such patent applications and patents and shall share all material
information relating thereto promptly after receipt of such information. If,
during the Term of this Agreement, the filing Party intends to allow any patent
or patent application for a Collaboration Invention to lapse or become abandoned
without having first filed a substitute, (e.g., a continuation,
continuation-in-part, or divisional application), the filing Party shall make
reasonable efforts to notify the other Party of such intention at least sixty
(60) days prior to the date upon which such patent application or patent shall
lapse or become abandoned, and the other Party shall thereupon have the right,
but not the obligation, to assume responsibility for the prosecution and
maintenance thereof at its own expense.

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<PAGE>   31
         11.5 PATENT INTERFERENCES. In the event that an interference is
declared by the U.S. Patent and Trademark Office between a claim in one or more
patents or patent applications owned or exclusively licensed by OSI for
Collaboration Inventions, and a claim in one or more patents or patent
applications owned solely by Genentech for Collaboration Inventions, or any of
the above and one or more patents or patent applications owned jointly by the
Parties pursuant to the collaboration, and such declared interference does not
involve any patents or patent applications for Collaboration Inventions owned by
a Third Party and not exclusively licensed to OSI, then the Parties shall in
good faith establish within thirty (30) days of the declaration of such
interference or such other time as agreed upon a mutually agreeable process to
resolve such interference in a reasonable manner in conformance with all
applicable legal standards.

         11.6 INITIAL FILINGS IF MADE OUTSIDE OF THE U.S. The Parties agree to
use reasonable efforts to ensure that any patent filed outside of the U.S. prior
to a U.S. filing will be in a form sufficient to establish the date of original
filing as a priority date for the purposes of a subsequent U.S. filing.

         11.7 PATENT COSTS. Patent costs arising in the Territory shall be
chargeable to the collaboration in accordance with Exhibit B.

         11.8 ENFORCEMENT RIGHTS.

                  (a) NOTIFICATION OF INFRINGEMENT. If either Party learns of
any infringement or threatened infringement by a Third Party of a Licensed
Product Patent, such Party shall promptly notify the other Party in writing and
shall provide such other Party with available evidence of such infringement.

                  (b)      ENFORCEMENT.

                         (i) GENENTECH PATENTS. Genentech shall have the right,
but not the obligation, to institute, prosecute and control any action or
proceeding with respect to infringement of any Genentech Patent that is not a
Joint Patent, by counsel of its own choice, and OSI shall have the right, at its
own expense, to be represented in any such action by counsel of its own choice.
If Genentech chooses not to bring an action or proceeding with respect to such
patent within sixty (60) days (thirty (30) days in the case of an action brought
under the Hatch-Waxman Act (or any foreign equivalent)) of being notified of
such infringement, then OSI shall have the right (but not the obligation) to
bring such action. The Party not prosecuting the action may elect to contribute
** of the costs and expenses of such action or proceeding by providing written
notice to the controlling Party within forty-five (45) days of the date such
action or proceeding is first brought. Otherwise, the controlling Party shall
bring such action or proceeding at its own cost and expense. The party not
bringing such action or proceeding agrees to be joined as a party plaintiff if
necessary to prosecute the action or proceeding and to give

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                                       30
<PAGE>   32
reasonable assistance and authority to file and prosecute the action or
proceeding. Any damages or other monetary awards recovered from settlement or
judgment from such an action or proceeding shall be allocated first to reimburse
the costs and expenses of the controlling Party, then to reimburse the costs and
expenses, if any, of the other Party (except for costs associated with the other
Party being represented by counsel of its own choice). If a single Party has
paid the cost and expense of such action or proceeding, any amounts remaining
shall be paid to such Party. Alternatively, if both Parties have paid the costs
and expense of such action or proceeding, any amounts remaining shall be shared
equally by the Parties

                         (ii) OSI PATENTS FOR COLLABORATION INVENTIONS. OSI
shall have the right, but not the obligation, to institute, prosecute and
control any action or proceeding with respect to infringement of any Licensed
Product Patent for OSI Collaboration Inventions, by counsel of its own choice,
and Genentech shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice. If OSI chooses not to bring an action
or proceeding with respect to such OSI Patents for OSI Collaboration Inventions
within sixty (60) days (thirty (30) days in the case of an action brought under
the Hatch-Waxman Act (or any foreign equivalent)) of being notified of such
infringement, then Genentech shall have the right (but not the obligation) to
bring such action. The Party not prosecuting the action may elect to contribute
** of the costs and expenses of such action or proceeding by providing written
notice to the controlling Party within forty-five (45) days of the date such
action or proceeding is first brought. Otherwise, the controlling Party shall
bring such action or proceeding at its own cost and expense. The party not
bringing such action or proceeding agrees to be joined as a party plaintiff if
necessary to prosecute the action or proceeding and to give reasonable
assistance and authority to file and prosecute the action or proceeding. Any
damages or other monetary awards recovered from settlement or judgment from such
an action or proceeding shall be allocated first to reimburse the costs and
expenses of the controlling Party, then to reimburse the costs and expenses, if
any, of the other Party (except for costs associated with the other Party being
represented by counsel of its own choice). If a single Party has paid the costs
and expense of such action or proceeding, any amounts remaining shall be paid to
such Party. Alternatively, if both Parties have paid the costs and expense of
such action, any amounts remaining shall be shared equally by the Parties.

                         (iii) JOINT PATENTS. In the event of an infringement of
a Joint Patent, the JSC shall decide the best way for the Parties to proceed.
The costs of patent enforcement, and recovery from any settlement or judgment
from an action to enforce any such jointly-owned Licensed Product Patents, shall
be allocated to the collaboration in accordance with Exhibit B. If the JSC
chooses not to bring an action or proceeding with respect to jointly owned
Collaboration Inventions within sixty (60) days (thirty (30) days in the case of
an action brought under the Hatch-Waxman Act (or any foreign equivalent)) of
being notified of such infringement, then either Party may bring an action or
proceeding with respect to such jointly owned patents for Collaboration
Inventions at its own expense. If either Party brings any action or proceeding

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

                                       31
<PAGE>   33
alone, the other Party agrees to be joined as a party plaintiff if necessary to
prosecute the action or proceeding and to give the first Party reasonable
assistance and authority to file and prosecute the suit. This Section
11.8(b)(iii) shall not apply to OSI-Genentech-Roche Joint Patents which shall be
governed by Section 9.3 of the Tripartite Agreement.

(iv) BASE PATENTS. The Parties acknowledge that the Divestiture Agreement
governs responsibility for enforcing the Base Patents. To the extent permitted
by the Divestiture Agreement, and only to the extent permitted by the
Divestiture Agreement, the Parties agree that as between OSI and Genentech, the
provision of this Section 11.8(b)(iv) shall apply. OSI shall have the right, but
not the obligation, to institute, prosecute and control any action or proceeding
with respect to infringement of any of the Base Patents by counsel of its own
choice. If OSI chooses not to bring an action or proceeding in the Territory
with respect to such a Base Patent within sixty (60) days of being notified of
such infringement (thirty (30) days in the case of an action brought under the
Hatch-Waxman Act (or any foreign equivalent)), then, to the extent permitted by
the Divestiture Agreement, Genentech shall have the right (but not the
obligation) to bring such action in the Territory. If Genentech is not permitted
to bring such action under the Divestiture Agreement and requests OSI to bring
such actions on Genentech's behalf, then OSI shall bring such action to the
extent permitted by the Divestiture Agreement at Genentech's sole cost and
expense. The Party not prosecuting the action may elect to contribute ** of the
costs and expenses of such action or proceeding by providing written notice to
the controlling Party within forty-five (45) days of the date such action or
proceeding is first brought. Otherwise, the controlling Party shall bring such
action or proceeding at its own cost and expense. The party not bringing such
action or proceeding agrees to be joined as a party plaintiff if necessary to
prosecute the action or proceeding and to give reasonable assistance and
authority to file and prosecute the action or proceeding. Any damages or other
monetary awards recovered from settlement or judgment from such an action or
proceeding shall be allocated first to reimburse the costs and expenses of the
controlling Party, then to reimburse the costs and expenses, if any, of the
other Party (except for costs associated with the other Party being represented
by counsel of its own choice). If a single Party has paid the costs and expense
of such action or proceeding, any amounts remaining shall be paid to such Party.
Alternatively, if both Parties have paid the costs and expense of such action or
proceeding, any amounts remaining shall be equally shared by the Parties.

                  (c) HATCH-WAXMAN ACT LITIGATION. Notwithstanding anything
herein to the contrary, should a Party receive a certification for a Licensed
Product pursuant to the Drug Price Competition and Patent Term Restoration Act
of 1984 (Public Law 98-417), as amended (the "Hatch-Waxman Act"), or its
equivalent in a country other than the United States of America, then such Party
shall immediately provide the other Party with a copy of such certification. The
Party with the right to bring suit under the Hatch-Waxman Act on account of such
certification shall have thirty (30) days from the date on which it receives or
provides a copy of such

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

                                       32
<PAGE>   34
certification to provide written notice to the other Party ("H-W Suit Notice")
stating whether it will bring suit, at its expense, within a forty-five (45) day
period from the date of such certification. Should such thirty (30) day period
expire without the Party bringing such suit or providing such H-W Suit Notice,
then the other Party shall be free immediately to bring suit in its name.

                  (d) SETTLEMENT WITH A THIRD PARTY. The Party that brings suit
to enforce a given Licensed Product Patent shall also have the right to control
settlement of such claim; provided, however, that if one Party controls, no
settlement shall be entered into without the written consent of the other Party
if such settlement would materially and adversely affect the interests of such
other Party. If there is no agreement between the Parties regarding such
settlement, then the dispute will be resolved pursuant to Article 16 below. If
the dispute is not resolved pursuant to Article 16, then the case may not be
settled.

         11.9 INFRINGEMENT DEFENSE. If a Third Party asserts that a patent or
other right owned by it is infringed by any Licensed Product in the Territory,
the JSC shall establish a plan for a common defense and select the Party
responsible for managing such plan. The costs of any such action incurred by one
or both of the Parties at the direction of the JSC (including the costs of any
judgment, award, decree or settlement) will be chargeable to the collaboration
as Other Operating Income/Expense.

         11.10 THIRD PARTY PATENTS. The Parties shall cooperate to obtain such
license(s) under any Third Party patent(s) that the Parties jointly determine
are necessary or desirable to manufacture, use, sell, offer for sale or import
Licensed Products in the Territory. Any such license shall only be entered into
if both OSI and Genentech give their prior written consent. The cost of any such
license(s), including without limitation, fees, royalties and milestone
payments, will be chargeable to the collaboration in accordance with Exhibit B.
The cost of any Third Party patent rights that are included in the definition of
"Genentech Patents" or "OSI Patents" (e.g. on account of royalty payments and/or
milestones payable to Third Parties) will be chargeable to the collaboration in
accordance with Exhibit B.

                                   ARTICLE 12

                         REPRESENTATIONS AND WARRANTIES

         12.0 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby
represents and warrants as follows:

                  (a) This Agreement is a legal and valid obligation binding
upon such Party and enforceable in accordance with its terms. The execution,
delivery and performance of the Agreement by such Party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
Party or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.

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<PAGE>   35
         (b) Such Party has not, and during the Term of the Agreement will not,
grant any rights related to Licensed Products to any Third Party which would
conflict with the rights granted to the other Party hereunder or under the
OSI-Roche Agreement, Tripartite Agreement, or Divestiture Agreement, whether by
execution of or amendment to any agreement or otherwise.

         (c) That such Party has the right to grant the licenses granted herein.

                                   ARTICLE 13
                             INFORMATION AND REPORTS

         13.1 INFORMATION. Genentech and OSI will disclose and make available to
each other in a timely manner all preclinical, clinical, regulatory, commercial
and other information concerning Licensed Products known by Genentech or OSI at
any time during the Term of this Agreement. Each Party will use Commercially
Reasonable and Diligent Efforts to disclose to the other Party all significant
information directly related to Licensed Products promptly after it is learned
or its significance is appreciated. The maintenance of a database of serious
adverse drug experience information for all Licensed Products, both before and
after Regulatory Approval, will be determined in accordance with the Tripartite
Agreement with respect to OSI-774. OSI shall own and maintain a database of
serious adverse drug experience information for all Licensed Products, both
before and after Regulatory Approval, with respect to any other compound or
molecule Controlled by OSI as set forth in Section 1.27. As soon as reasonably
possible after the execution of this Agreement, the Parties will enter into one
or more separate safety and adverse event reporting agreements which will govern
the reporting and other procedures related to adverse drug experiences under
this collaboration between OSI and Genentech, and under the activities in the
Tripartite Agreement between the Parties and Roche.

         13.2 PRODUCT COMPLAINTS. Genentech will take all medical and
non-medical Licensed Product related customer complaints and will maintain a
record of such complaints, and will notify OSI of any complaint in sufficient
time to allow OSI to comply with any regulatory requirements it may have with
respect to such complaints and to address any manufacturing issues with respect
to such complaints. OSI shall address any manufacturing issues with respect to
such complaints as provided in the Manufacturing and Supply Agreement.

         13.3 ADVERSE DRUG EVENTS. The Parties recognize that the Party that is
the holder of an IND and a Drug Approval Application will be required to submit
or cause the submission of information and file or cause the filing of reports
to various governmental agencies on compounds under clinical investigation,
compounds proposed for marketing, or marketed drugs. Information must be
submitted at the time of initial filing for investigational use in humans and at
the time of a request for market approval of a new drug. In addition,
supplemental information must be provided on compounds at periodic intervals and
adverse drug experiences must be reported at more frequent intervals depending
on the severity of the experience. The specific obligations of each Party with
respect to adverse drug experiences will be governed by the safety and adverse
event reporting agreement(s) described in Section 13.1 above.

                                       34

<PAGE>   36

         13.4 RECORDS OF NET SALES AND COSTS. Each Party will maintain complete
and accurate records which are relevant to costs, expenses, and payments (and
Genentech will maintain such records with respect to sales) under this Agreement
and such records shall be open during reasonable business hours for a period of
** from creation of individual records for examination at the other Party's
expense and not more often than once each year by an independent certified
public accountant selected by the other Party as described in Section B.5 of
Exhibit B. Any records or accounting information received from the other Party
shall be Confidential Information for purposes of Article 10. Results of any
such audit shall be provided to both Parties, subject to Article 10.

         13.5 CONTRIBUTION OF INFORMATION. It is the intention of the Parties
that each will bring to the collaboration such information in its possession
that is useful to the development and commercialization of Licensed Products,
subject to contractual obligations of the Parties entered into prior to the
execution of this Agreement by the Parties.

         13.6 PUBLICITY REVIEW. The Parties agree that the public announcement
of the execution of this Agreement shall be in the form of a press release to be
agreed upon on or before the Effective Date and thereafter each Party shall be
entitled to make or publish any public statement consistent with the contents
thereof. Thereafter, except as may be set forth in the Tripartite Agreement, OSI
and Genentech will jointly discuss and agree, based on the principles of this
Section 13.6, on any statement to the public regarding this Agreement or any
aspect of this Agreement, and (subject to Section 10.5 above) the results of
clinical studies conducted hereunder, subject in each case to disclosure
otherwise required by law or regulation as determined in good faith by each
Party. When a Party elects to make any such statement it will give the other
Party at least five (5) days' notice to review and comment on such statement. In
the event of a public disclosure required by law prior to the end of such five
(5) day period, the Party required to make such disclosure, if it legally may,
shall give the other Party at least two (2) business days to review and comment
on such disclosure. If a Party was not legally able to give notice under the
previous sentence, it will furnish the other Party with a copy of its disclosure
as soon as practicable after the making thereof. The Parties acknowledge the
importance of supporting each other's efforts to publicly disclose results and
significant developments regarding Licensed Products. The principles to be
observed by OSI and Genentech in such public disclosures will be: accuracy, the
requirements for confidentiality under Article 10, compliance with FDA
regulations and other FDA guidance documents, the advantage a competitor of OSI
or Genentech may gain from any public statements under this Section 13.6, and
the standards and customs in the biotechnology and pharmaceutical industries for
such disclosures by companies comparable to OSI and Genentech. The terms of this
Agreement may also be disclosed to: (a) government agencies where required by
law, including filings required to be made by law with the United States
Securities and Exchange Commission ("SEC"), the New York Stock Exchange, or any
national exchange, or (b) Third Parties with the prior written consent of the
other Party, which consent shall not be unreasonably withheld, so

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

                                       35

<PAGE>   37

long as such disclosure in (b) above is made under a binder of confidentiality
at least as restrictive as the confidentiality provisions in Section 10.1 above,
so long as highly sensitive terms and conditions such as financial terms are
extracted from the Agreement (including in any disclosure required by law or the
SEC) or deleted upon the request of the other Party, and so long as the
disclosing Party gives reasonable advance notice of the disclosure under the
circumstances requiring the disclosure. In certain cases public disclosure may
be made in conjunction with Roche, but only under the terms and conditions
governing such disclosures in the Tripartite Agreement.

                                   ARTICLE 14
                              TERM AND TERMINATION

         14.1 TERM. This Agreement shall commence as of the Effective Date. The
Parties have specifically provided elsewhere in this Agreement the term during
which certain rights and obligations hereunder shall apply. Unless sooner
terminated as provided in this Article 14, the remaining provisions of this
Agreement relating to activities in the Territory shall continue in effect until
the date on which the Parties are no longer entitled to receive a share of
Operating Profits or Loss on any Licensed Product (the "Term").

         14.2     TERMINATION FOR BREACH.

                  (a) MATERIAL BREACH. If either Party materially breaches this
Agreement at any time, which breach is not cured within ninety (90) days after
written notice thereof from the non-breaching Party specifying the nature of
such breach, the non-breaching Party shall have the right to terminate this
Agreement immediately upon written notice to the breaching Party. Upon such
termination, the Parties shall have no further rights or obligations under this
Agreement except as set forth in this Section 14 or as otherwise specifically
provided in this Agreement. The Parties acknowledge and agree that failure to
exercise any right or option with respect to any Licensed Product or to take any
action expressly within the discretion of a Party shall not be deemed to be a
material breach hereunder.

                  (b) FAILURE OF GENENTECH TO MAKE PAYMENT. Notwithstanding
Section 14.2(a), if Genentech materially breaches this Agreement by failure to
make any of the payments required under Sections 6.3 or 6.5 within thirty (30)
days after such payment becomes payable, and such failure is not remedied within
thirty (30) days after Genentech's receipt of written notice from OSI of such
breach, then OSI shall have the right to terminate this Agreement, provided
however, that if the Parties disagree as to the achievement of any milestone
event applicable to such payment, then Genentech will not be obligated to make
such payment pending resolution of such disagreement, and the Parties will
resolve such disagreement pursuant to the dispute resolution procedures in
Sections 16.1, 16.2 and 16.3.

                  (c)      BREACHING PARTY OBLIGATIONS.   **

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

                                       36

<PAGE>   38

         14.3 ADDITIONAL EFFECTS OF TERMINATION FOR MATERIAL BREACH.

                             **

         14.4 UNILATERAL TERMINATION BY LICENSEE.

                (a) Beginning two (2) years after the Effective Date,
Genentech shall have the unilateral right to provide six (6) months written
notice to OSI to terminate this Agreement, provided, however:

                    (i) Genentech shall use its reasonable best efforts to
effect a smooth and orderly transition of any already on-going clinical studies,
Regulatory Approval or pre-marketing efforts to OSI (including all data and
reports in the possession of Genentech);

                    (ii) Genentech shall make its personnel and other resources
reasonably available to the other Party as necessary to effect an orderly
transition of development responsibilities, with the reasonable cost of such
personnel and resources to be borne by Genentech after the effective date of
termination;

                    (iii) Genentech, for no additional consideration, shall pay
its share of the costs for the completion of any of the on-going clinical trials
of Licensed Product, but only for such costs directly incurred for those
patients already enrolled in the study at the time of giving the termination
notice;

                    (iv) all rights and licenses granted herein to Genentech
shall revert to OSI, ** and immediately terminate. Thereafter, OSI shall have
the sole and exclusive right and license (exclusive even as to Genentech) to
make, have made, use, sell, offer for sale and import Licensed Product in the
Territory under Genentech Patent Rights and a non-exclusive right and license
under Genentech Know-how to make, have made, use, sell, offer for sale and
import Licensed Product in the Territory; and

                    (v) Genentech shall provide and assign to OSI, at
Genentech's expense, all clinical data, INDs, NDAs, Regulatory Approvals and all
other regulatory documentation specifically covering Licensed Product (but only
to the extent they cover only Licensed Product and not other products or
matters) that Genentech may have developed in its collaboration activities under
this Agreement.

                (b) Genentech shall have the unilateral right to terminate
this Agreement at any time upon thirty (30) days written notice to OSI if the
JSC imposes a clinical hold for at least

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

                                       37
<PAGE>   39

six (6) months or there has been an FDA clinical hold for at least six (6)
months, provided, however:

                    (i) Genentech shall use its reasonable best efforts to
effect a smooth and orderly transition of any already on-going clinical studies,
Regulatory Approval or pre-marketing efforts to OSI (including all data and
reports in the possession of Genentech);

                    (ii) Genentech shall make its personnel and other resources
reasonably available to the other Party as necessary to effect an orderly
transition of development responsibilities, with the reasonable cost of such
personnel and resources to be borne by Genentech after the effective date of
termination;

                    (iii) Genentech, for no additional consideration, shall pay
its share of the costs for the completion of any of the on-going clinical trials
of Licensed Product, but only for such costs directly incurred for those
patients already enrolled in the study at the time of giving the termination
notice;

                    (iv) all rights and licenses granted herein to Genentech
shall revert to OSI, **, and immediately terminate. Thereafter, OSI shall have
the sole and exclusive right and license (exclusive even as to Genentech) to
make, have made, use, sell, offer for sale and import Licensed Product in the
Territory under Genentech Patent Rights and a non-exclusive right and license
under Genentech Know-how to make, have made, use, sell, offer for sale and
import Licensed Product in the Territory; and

                    (v) Genentech shall provide and assign to OSI, at
Genentech's expense, all clinical data, INDs, NDAs, Regulatory Approvals and all
other regulatory documentation specifically covering Licensed Product (but only
to the extent they cover only Licensed Product and not other products or
matters) that Genentech may have developed in its collaboration activities under
this Agreement.

         14.5     TERMINATION WITHOUT CAUSE.

         (a) Subject to Section 6.1, either Party may terminate this Agreement,
upon ten (10) days' prior written notice to the other Party if the FTC does not
approve the transaction under the HSR Act or if all applicable waiting periods,
requests for information (and any extensions thereof) under the HSR Act have not
expired or otherwise been terminated by June 1, 2001, in which case this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of OSI or Genentech or their respective affiliates,
officers, directors or shareholders except (i) with respect to Article 10 and
(ii) that no such termination shall relieve any Party from liability for a
material breach hereof.

         (b) OSI may terminate this Agreement, upon ten (10) days' prior written
notice to Genentech, if the conditions under Section 6.2(a)(iii)-(vi) are not
satisfied (but with respect to 6.2(a)(v), only if OSI complied) and the
conditions under Section 6.2(a)(i) and 6.2(b)(i) have been satisfied or waived.
In such case, OSI shall be entitled to any remedy it may have in

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

                                       38

<PAGE>   40

addition to those rights under this Agreement. Genentech may terminate this
Agreement upon ten (10) days' prior written notice to OSI, if the conditions
under Sections 6.2(b)(iii) or 6.2(b)(iv) are not satisfied (but only if
Genentech has complied with respect to Section 6.2(a)(iv) or with Section
6.2(b)(iv), respectively) and the conditions under Section 6.2(a)(i) and
6.2(b)(i) have been satisfied or waived. In such case, Genentech shall be
entitled to any remedy it may have in addition to those rights under this
Agreement. If either OSI or Genentech terminates this Agreement in accordance
with this Section 14.6(b) and Genentech has made payments under Section
6.2(a)(iii) and/or (iv), then Genentech shall be entitled to a prompt refund to
such payments.

         14.6 EFFECT OF TERMINATION ON SUBLICENSES. Except with respect to
sublicenses under Section 17.1, upon termination of this Agreement for any
reason, all sublicenses granted in accordance with the terms of this Agreement
shall be immediately terminated unless otherwise assented to in writing by the
Party in Control of the intellectual property that is the subject of such
sublicense.

         14.7 BANKRUPTCY. Either Party may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement, in whole or in
part as the terminating Party may determine, by written notice to the other
Party in the event the other Party shall have become bankrupt, or shall have
made an assignment for the benefit of its creditors or there shall have been
appointed a trustee or receiver of the other Party or for all or a substantial
part of its property or any case or proceeding shall have been commenced or
other action taken by or against the other Party in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up, arrangement, composition
or readjustment of its debts or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any jurisdiction now
or hereafter in effect and any such event shall have continued for ninety (90)
days undismissed, unbonded and/or undischarged. All rights and licenses granted
under to this Agreement by one Party to the other Party are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses
of rights to "intellectual property" as defined under Section 101 (56) of the
Bankruptcy Code. The Parties agree that the licensor under this Agreement shall
retain and may fully exercise all of its rights and elections under the
Bankruptcy Code in the event of a bankruptcy by the other Party. The Parties
further agree that in the event of the commencement of a bankruptcy proceeding
by or against one Party under the Bankruptcy Code, the other Party shall be
entitled to complete access to any such intellectual property pertaining to the
rights granted in the licenses hereunder of the Party by or against whom a
bankruptcy proceeding has been commenced and all embodiments of such
intellectual property.

         14.8 EFFECT OF EXPIRATION/TERMINATION ON INTELLECTUAL PROPERTY. Within
thirty (30) days after the expiration or any other termination of this Agreement
by either Party for any reason (but effective immediately prior to such
termination), the Parties shall assign all jointly owned U.S. and foreign patent
applications and patents covered by Section 11.1(b) above to each Party in
accordance with its relationship to the named inventors. For example, patent
applications and patents naming only OSI employees ("OSI Inventors") as
inventors shall be assigned to OSI. Similarly, patent applications and patents
naming only Genentech employees ("Genentech Inventors") as inventors shall be
assigned to Genentech. The assignments in this

                                       39

<PAGE>   41

Section 14.8 shall not limit the rights of any Party resulting from any
termination hereunder (for example, in the event of breach under Section 14.2).

         14.9 SURVIVING RIGHTS. Except as modified in this Article 14, the
obligations and rights of the Parties under Articles 10, 14, and 15 and Sections
4.3 (last sentence), 4.8, 8.3 (only with respect to Roche), 11.1(a) and (c),
11.2, 11.6, 13.4, 13.6 (but only regarding disclosures required by law), 16.2,
16.3, 17.4, 17.7, 17.8, 17.10(a), 17.11, 17.12, 17.17, Section B.1 of Exhibit B
(only with respect to Section 14.3 and as to any outstanding reconciliation of
operating profits or losses accrued prior to the date of termination) and
Section B.2 of Exhibit B (only with respect to Section 14.3 and as to any
outstanding reconciliation of operating profits or losses accrued prior to the
date of termination) of this Agreement will survive any termination or
expiration of this Agreement.

         14.10 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Termination,
relinquishment or expiration of the Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either Party
prior to such termination, relinquishment or expiration, including damages
arising from any breach hereunder. Such termination, relinquishment or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of the Agreement

                                   ARTICLE 15
                                 INDEMNIFICATION

         15.1 INDEMNIFICATION BY GENENTECH. Genentech hereby agrees to save,
defend and hold OSI and its agents and employees harmless from and against any
and all losses, damages, liabilities, settlements, penalties, fines, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) (collectively, "Losses") resulting from, directly or indirectly, (a)
Genentech's breach of any term of this Agreement, (b) any violation of
applicable law or regulation by Genentech, its Affiliates or sublicensees, (c)
the manufacture, handling, use, storage, distribution or sale of Licensed
Products by Genentech, its Affiliates, sublicensees and agents (including
Genentech's Third Party contract manufacturer if Genentech manufactures Licensed
Product under this Agreement), except to the extent such Losses result from the
negligence or willful misconduct of OSI or its employees, Affiliates,
sublicensees or agents. This indemnification provision shall include any
reasonable attorney's fees incurred by OSI in connection with enforcing this
indemnification.

         15.2 INDEMNIFICATION BY OSI. OSI hereby agrees to save, defend and hold
Genentech and its agents and employees harmless from and against any and all
Losses resulting or alleged to result from, directly or indirectly: (a) OSI's
breach of any term of this Agreement, (b) any violation of applicable law or
regulation by OSI, its Affiliates or sublicensees, (c) the manufacture,
handling, use, storage, distribution or sale of Licensed Products by OSI, its
Affiliates, sublicensees and agents (including OSI's Third Party contract
manufacturer of Licensed Product) except to the extent such Losses result from
the negligence or willful misconduct of Genentech or its employees or agents.
This indemnification provision shall

                                       40

<PAGE>   42

include any reasonable attorney's fees incurred by Genentech in connection with
enforcing this indemnification.

         15.3 OTHER LIABILITIES. Any other Losses resulting directly or
indirectly from the manufacture, use, handling, storage, sale or other
disposition of Licensed Products in the Territory shall be charged to the
collaboration as an Other Operating Income/Expense at the time such claim is
finally determined, whether by judgment, award, decree or settlement.

         15.4 INDEMNIFICATION CONDITIONS. In the event that a Party is seeking
indemnification under Section 15.1 or 15.2 above, it shall inform the
indemnifying Party of a claim as soon as reasonably practicable after it
receives notice of the claim, shall permit the indemnifying Party to assume
direction and control of the defense of the claim (including the right to settle
the claim solely for monetary consideration), shall cooperate as requested (at
the expense of the indemnifying Party) in the defense of the claim, and shall
not settle or compromise the claim without the express written consent of the
indemnifying Party.

         15.5 DEFENSE. In the event that either Party receives notice of a claim
with respect to a Licensed Product in the Territory, such Party shall inform the
other Party as soon as reasonably practicable. If a Party is not indemnified by
the other Party for such claim, then the Parties shall confer how to respond to
the claim and how to handle the claim in an efficient manner.

                                   ARTICLE 16
                               DISPUTE RESOLUTION

         16.1 DISPUTES. The Parties recognize that disputes as to certain
matters may from time to time arise during the Term of this Agreement which
relate to either Party's rights and/or obligations hereunder. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. To accomplish this objective, the
Parties agree to follow the procedures set forth in this Article 16 if and when
a dispute arises under this Agreement.

         Unless otherwise specifically recited in this Agreement, disputes among
members of the Joint Project Team will be resolved as recited in this Article
16. Any disputes relating to the collaboration hereunder shall be first referred
to the JSC by either Party at any time after such dispute has arisen and such
Party believes that there has been sufficient discussion of the matter at the
Joint Project Team level. If the JSC is unable to resolve such a dispute within
sixty (60) days of being requested by a Party to resolve the dispute or the JSC
is unable to resolve a dispute among its members, the matter shall be presented
to the chief executive officer of Genentech and OSI, or their respective
designee, for resolution. In the event that the chief executive officer of
Genentech and OSI, or their respective designees, cannot resolve the dispute
within thirty (30) days of being requested by a Party to resolve a dispute,
either Party may, by written notice to the other, invoke the provisions of
Section 16.2 hereinafter.

                                       41

<PAGE>   43

         16.2 ARBITRATION. Subject to Section 16.3 below, the Parties agree that
any dispute, controversy or claim arising out of or relating to this Agreement,
or the breach, termination, or invalidity thereof, shall be resolved through
binding arbitration. If the dispute arises between the Parties, and if such
dispute cannot be resolved pursuant to Section 16.1 above, any unresolved
controversy or claim between the Parties shall be resolved by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association as presently in effect, except as modified herein. Each
such arbitration shall be conducted by a panel of three arbitrators appointed in
accordance with the Commercial Arbitration Rules as presently in effect;
provided that at least one such arbitrator shall have had, by the time of the
actual arbitration, at least ten (10) years of experience as an attorney and
experience in the pharmaceuticals industry so as to better understand the legal,
business and scientific issues addressed in the arbitral proceeding. A reasoned
arbitration decision shall be rendered in writing within thirty (30) days of the
conclusion of the arbitration hearing and shall be binding and not be appealable
to any court in any jurisdiction. The prevailing Party may enter such decision
in any court having competent jurisdiction. Unless otherwise mutually agreed
upon by the Parties, the arbitration proceedings shall be conducted at the
location of the Party not originally requesting the resolution of the dispute.
Each Party must bear its own attorneys' fees and associated costs and expenses.
The arbitrators shall have the authority to grant specific performance and
allocate costs between the Parties (excluding attorney's fees).

         16.3 DETERMINATION OF PATENTS AND OTHER INTELLECTUAL PROPERTY.
Notwithstanding the foregoing, any dispute relating to the determination of
validity of claims, infringement or claim interpretation relating to a Party's
patents shall be submitted exclusively to federal court.

                                   ARTICLE 17
                                  MISCELLANEOUS

         17.1 ASSIGNMENT. (a) Neither Party may assign this Agreement or
otherwise transfer its rights and interests, nor delegate its responsibilities
hereunder, without the prior written consent of the other Party, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, (i) for **
after the Closing Date, neither Party may assign this Agreement or otherwise
transfer its rights and interests, nor delegate its responsibilities hereunder,
without the prior written consent of the other Party, which consent shall be at
the other Party's sole discretion, and (ii) beginning ** after the Closing Date,
either Party may, without the consent of the other Party, assign this Agreement
or otherwise transfer its rights and interests and delegate its responsibilities
hereunder to any purchaser of all or substantially all of such Party's assets,
or all of its capital stock, or to any successor corporation resulting from any
merger or consolidation of such Party with or into such corporation. If a Party
elects to assign its rights or delegate its responsibilities pursuant to Section
17.1(a)(ii) above, such Party, at its own cost, shall promptly

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                                       42

<PAGE>   44

assign all NDA's and supplemental NDA's owned by such electing Party as a result
of its activities under this Agreement to the other Party. In addition, the
non-assigning Party shall have the right to sublicense its rights and interests
and delegate its responsibilities hereunder to a Third Party at any time,
without the consent of the assigning Party or its successor, provided that the
responsibilities of the sublicensing Party shall continue as more fully set
forth in Section 8.4.

         (b) This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the Parties. Any attempt to assign or
delegate any portion of this Agreement in violation of this Section 17.1 shall
be void. Subject to the foregoing, any reference to OSI and Genentech hereunder
shall be deemed to include the successors and permitted assigns thereof.

         17.2 LEGAL COMPLIANCE. Each Party shall comply in all material respects
with all laws, rules and regulations applicable to the conduct of its business
in the Territory pursuant to this Agreement.

         17.3 CONSENTS NOT UNREASONABLY WITHHELD. Whenever provision is made in
this Agreement for either Party to secure the consent or approval of the other,
unless expressly stated otherwise, that consent or approval shall not
unreasonably be withheld, delayed or conditioned, and whenever in this Agreement
provision is made for one Party to object to or disapprove a matter, such
objection or disapproval shall not unreasonably be exercised.

         17.4 RETAINED RIGHTS. Nothing in this Agreement shall limit in any
respect the right of either Party to conduct research and development with
respect to and market products other than Licensed Products using such Party's
own technology.

         17.5 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other cause beyond the control and without the fault or negligence of the
defaulting Party, provided that the Party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure; provided, however,
that in no event shall a Party be required to settle any labor dispute or
disturbance. Such excuse shall continue as long as the condition preventing the
performance continues. Upon cessation of such condition, the affected Party
shall promptly resume performance hereunder. Each Party agrees to give the other
Party prompt written notice of the occurrence of any such condition, the nature
thereof, and the extent to which the affected Party will be unable to perform
its obligations hereunder. Each Party further agrees to use all reasonable
efforts to correct the condition as quickly as possible and to give the other
Party prompt written notice when it is again fully able to perform its
obligations.

         17.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

                                       43

<PAGE>   45

       17.7 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no
right, express or implied, is granted by the Agreement to use in any manner the
name "OSI," "Genentech" or any other trade name or trademark of the other Party
or its Affiliates in connection with the performance of the Agreement.

         17.8 NOTICES. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).

         If to OSI:            OSI Pharmaceuticals, Inc.
                               106 Charles Lindbergh Blvd.
                               Uniondale, NY 11553
                               Attention:  Chief Executive Officer
                               Telecopy: (516) 745-6429

         with a copy to:       Mintz Levin Cohn Ferris Glovsky and Popeo, P.C.
                               666 Third Avenue
                               25th Floor
                               New York,  NY 10017
                               Attention:   Joel I. Papernik, Esq.
                               Telecopy: (212) 983-3115

         If to Genentech:      Genentech, Inc.
                               1 DNA Way
                               South San Francisco, CA 94080
                               Attention:        Corporate Secretary
                               Telecopy:         (650) 952-9881

         17.9 WAIVER. Except as specifically provided for herein, the waiver
from time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of same or of any other of such Party's rights or remedies provided in
this Agreement.

         17.10 SEVERABILITY. If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (a) the remainder of this
Agreement, or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or

                                       44
<PAGE>   46
condition of this Agreement or the application thereof that is invalid or
unenforceable, it being the intent of the Parties that the basic purposes of
this Agreement are to be effectuated.

         17.11 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with, the laws of the State of New York.

         17.12 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authorized the ambiguous provision.

         17.13 HEADINGS. All headings are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.

         17.14 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         17.15 NON-SOLICITATION. The Parties recognize that each Party has a
substantial interest in preserving and maintaining confidential its Confidential
Information hereunder. Each Party recognizes that certain of the other Party's
employees, including those engaged in development, marketing and sale of any
Licensed Product, may have access to such Confidential Information of the other
Party. The Parties therefore agree, to the extent permitted by applicable law or
regulation, not to solicit or otherwise induce or attempt to induce for purposes
of employment, any employees from the other Party involved in the development,
marketing or sales of any Licensed Product during the period in which any Party
is developing or commercializing a Licensed Product in the Territory hereunder.

         17.16 ENTIRE AGREEMENT. Except for those certain provisions of the
Tripartite Agreement expressly referred to hereinabove, this Agreement,
including all Exhibits attached hereto which are hereby incorporated herein by
reference, sets forth all the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto with
respect to the subject matter hereof and supersedes and terminates all prior
agreements and understandings between the Parties, subject to Section 10.4 above
with respect to prior Confidentiality Agreements. Except for such Tripartite
Agreement provisions referred to above, there are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties with respect to the subject matter hereof
other than as set forth herein and therein. No subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the Parties hereto
unless reduced to writing and signed by the respective authorized officers of
the Parties. If any provision of this Agreement conflicts with the provisions of
the Tripartite Agreement with respect to development of OSI-774, the provisions
of the Tripartite Agreement shall govern such conflict.

                                       45

<PAGE>   47

         17.17 NO THIRD PARTY BENEFICIARY. Except as expressly provided herein,
this Agreement shall not confer any rights or remedies upon any Third Party
other than the Parties and their respective successors and permitted assigns.

                    [This space is intentionally left blank.]

                                       46

<PAGE>   48

         IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first above
written.

<TABLE>
<S>                                            <C>
OSI PHARMACEUTICALS, INC.                      GENENTECH, INC.

By:    /s/ COLIN GODDARD                       By:    /s/ ARTHUR D. LEVINSON
       -----------------------------------            ----------------------------------

Name:  Colin Goddard                           Name:  Arthur D. Levinson
       -----------------------------------            ----------------------------------

Title: Chairman & Chief Executive Officer      Title: Chairman & Chief Executive Officer
       -----------------------------------            ----------------------------------
</TABLE>

                                       47

<PAGE>   49

                                    EXHIBIT A

             LIST OF INITIAL MEMBERS OF THE JOINT STEERING COMMITTEE

         OSI

         Nicholas Bacopoulos
         Paul Nadler
         John Slack

         GENENTECH

         Stephen Dilly
         Susan Hellmann
         (TBA)

                                      A-1

<PAGE>   50
                                    EXHIBIT B

       FINANCIAL PLANNING, ACCOUNTING AND REPORTING FOR THE OSI/GENENTECH
           OSI-774 DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

         This Exhibit B to the OSI-774 Development and Marketing Collaboration
Agreement (the "Agreement") made as of January 8, 2001 , between OSI
Pharmaceuticals, Inc. ("OSI") and Genentech, Inc. ("Genentech") covers financial
planning, accounting policies and procedures to be followed in determining
OSI/GNE Development Costs and Operating Profits or Losses and related sharing of
revenue and expenses pursuant to the Agreement.

         For such purpose, this Exhibit B sets forth the principles for
reporting actual results and budgeted plans of the combined operations in the
Territory, the frequency of reporting, the methods of determining payments to
the Parties, auditing of accounts and other matters.

         For purposes of this Exhibit B only, the consolidated accounting of
operations for the collaboration of the Parties hereunder shall be referred to
as the "Collaboration". The Collaboration is not a legal entity, pass through or
otherwise, for financial accounting or income tax reporting purposes, and has
been defined for identification purposes only.

         This Exhibit B also provides agreed upon definitions of financial terms
applicable to the Parties for purposes of the Agreement; provided, however, that
the definition of "Fully Burdened Manufacturing Cost" shall apply to OSI, to the
extent it manufactures or causes to be manufactured any Licensed Product under
the Agreement or to Genentech if, and only if Genentech becomes responsible for
manufacturing under the Agreement or the manufacturing agreement referred to in
the Agreement. The definition of "OSI/GNE Development Costs" shall apply to the
development work by both Parties under the Agreement. All capitalized terms used
herein without definition shall have the meanings ascribed thereto in the
Agreement, unless otherwise expressly provided herein. References in this
Exhibit B to a "Party" or "Parties" shall be construed to mean Genentech or OSI,
as the case may be, and in every case shall be deemed to include a Party's
permitted sublicensees and assigns under the Agreement.

         The contents of this Exhibit B are hereby incorporated into the
Agreement and are governed by the terms and conditions of the Agreement,
including, without limitation, the confidentiality provisions set forth therein.

                                      B-1

<PAGE>   51

B.1      PRINCIPLES OF REPORTING.

         (a) SHARING OSI/GNE DEVELOPMENT COSTS. OSI/GNE Development Costs shall
be shared by OSI and Genentech as provided in Section 4.6 of the Agreement. The
JSC will approve the balancing payments by one Party to reimburse the other
Party's OSI/GNE Development Costs for purposes of the sharing of such costs
under the Agreement.

         The presentation of results of operations of the Parties in the
Territory will be based on each Party's respective financial information
presented separately and on a consolidated basis in the reporting format
depicted as follows:

           **

         It is the intention of the Parties that the interpretation of these
definitions will be consistent with generally accepted accounting principles
("GAAP") in the U.S.

         If necessary, a Party will make the appropriate adjustments to the
financial information it supplies under the Agreement to conform to the above
format of reporting results of operations. Without limiting the foregoing, prior
to the time that Gross Sales are obtained the Parties may eliminate the above
line items related to sales and the support of sales, and the costs thereof, and
use only those terms relevant to the sharing of OSI/GNE Development Costs.

B.2      FREQUENCY OF REPORTING.

         The fiscal year of the Collaboration will be a calendar year but OSI
shall be furnished with the information it requires to enable it to report in a
timely manner to its stockholders on a September 30 fiscal year basis.

         Reporting by each Party for Collaboration revenues and expenses will be
performed as follows:

  **

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

                                      B-2

<PAGE>   52

         Reports of actual results compared to budget will be made to the Joint
Project Team on a quarterly basis. After approval by the Joint Project Team as
to amounts, the Joint Project Team will forward the report to the JSC for its
approval. Variances from the total overall budgets, and significant variances in
budget line items, will only be included in the calculation of OSI/GNE
Development Costs or Operating Profits and Losses when approved by the JSC.

         Genentech will be responsible for the preparation of consolidated
reporting of the Collaboration (including GNE/OSI Development Costs and any
Operating Profit or Loss), calculation of the sharing and determination of the
cash settlement (subject to dispute resolution by the JSC or arbitration as the
case may be). Genentech will provide the financial representatives from each
Party within ** days of quarter end a statement showing the consolidated results
and calculations of the Operating Profit or Loss sharing (or calculation of
expenses to be shared) and cash settlement required in a format substantially
listed above.

         Genentech shall record sales in the U.S. **

         The financial representatives from the Parties (i.e. the Joint Finance
Subcommittee members) will meet as appropriate but at least quarterly to review
and approve the following:

              -        OSI/GNE Development Costs
              -        actual results
              -        forecasts
              -        budgets
              -        inventory levels
              -        Sales Returns and Allowances
              -        other financial matters, including each
                       Party's methodologies for charging costs to
                       the Collaboration, for determination of
                       actuals, forecasts, budgets and long range
                       plans and the results of applying such
                       methodologies.

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

                                      B-3

<PAGE>   53

B.3      BUDGET AND LONG RANGE PLAN.

         Budgets will be prepared annually. Responsibility for the budget and
long range plan will rest with the Joint Project Team, which will develop
budgets for development and commercialization, subject to final approval by the
JSC.

         Budgets will be supplemented with detailed business plans for clinical
trials, drug approval applications, and plans for product introduction, sales
and promotion efforts as determined by the Joint Project Team. Budgets, once
approved by the JSC, can only be changed with the approval of the JSC, as
provided in the Agreement.

         The Joint Project Team, with the assistance of the Joint Finance
Subcommittee, will be responsible for identifying, analyzing and reporting all
significant line item budget variances and all overall, total budget variances.
Only the JSC may approve materially unfavorable line item budget variations, as
defined by the Joint Project Team, and all overall, total budget variations,
chargeable to the Collaboration during the course of the year.

         A ** long range plan for the Collaboration will be established on a
yearly basis under the direction of the JSC and submitted to Genentech and OSI
by ** each year.

B.4      DEFINITIONS.

         B.4.1 "ALLOCABLE OVERHEAD" means costs incurred by a Party or for its
account which are attributable to a Party's supervisory, services, occupancy
costs, corporate bonus (to the extent not charged directly to department), and
its payroll, information systems, human relations or purchasing functions and
which are allocated to company departments based on space occupied or headcount
or other activity-based method consistently applied by a Party, or a standard
rate if agreed to by the Parties. Allocable Overhead shall not include any costs
attributable to general corporate activities including, by way of example,
executive management, investor relations, business development, legal affairs
and finance, and shall not duplicate G&A hereunder.

         B.4.2 "COST OF SALES" shall mean the sum of (i) Fully Burdened
Manufacturing Cost (as defined below), (ii) freight, insurance and other costs
of shipping Licensed Product to customers, (iii) any Third Party royalties
payable with respect to the manufacture, use or sale of Licensed Product,
excluding any royalties already accounted for in Fully Burdened Manufacturing
Cost and (iv) the cost of free Licensed Product for indigent persons.

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

                                      B-4

<PAGE>   54

         B.4.3. "OSI/GNE DEVELOPMENT COSTS" means the development costs incurred
(including accruals) by Genentech or OSI from the Effective Date of the
Agreement through the later of (a) the date of Regulatory Approval (including
thereafter costs to maintain or expand such Regulatory Approval) in the
Territory, or (b) the date of termination of development efforts of the final
indication for which Regulatory Approval is sought in the Territory. Such costs
shall comprise those costs required to obtain, maintain and/or expand the
authorization and/or ability to manufacture, formulate, fill, ship and/or sell a
Licensed Product in commercial quantities to Third Parties in the Territory. Any
Global Development Costs, as defined in and shared with Roche under the
Tripartite Agreement, shall not be reflected hereunder.

         "OSI/GNE Development Costs" shall include, but are not limited to,
costs of research or development including costs of studies on the
toxicological, pharmacokinetical, metabolical or clinical aspects of a Licensed
Product conducted internally or by individual investigators, or consultants
necessary for the purpose of obtaining, maintaining and/or expanding marketing
approval of a Licensed Product, process development, process improvement, and
recovery costs, qualification lots, costs for preparing, submitting, reviewing
or developing data or information for the purpose of submission to a
governmental authority to obtain, maintain and/or expand marketing approval of a
Licensed Product, and applicable Allocable Overhead.

         "OSI/GNE Development Costs" shall include expenses for data management,
CROs, statistical designs and studies, document preparation, and other
administration expenses associated with the clinical testing program or
post-marketing studies required to maintain product approvals. In determining
"OSI/GNE Development Costs" chargeable under this Agreement, each Party will use
its respective project accounting systems, and will review and approve its
respective project accounting systems and methodologies with the other Party.

         B.4.4 "DISTRIBUTION COSTS" means **

         B.4.5 "FULLY BURDENED MANUFACTURING COST" means one hundred percent
(100%) of a Party's manufacturing cost (as defined in the Party's accounting
policies consistently applied), which shall comprise the sum of:

                  (a) the cost of goods produced as determined by the Party
manufacturing or contracting with a Third Party for each stage of the
manufacturing process in accordance with GAAP consistently applied by
such Party, including product quality assurance/control costs,
applicable Allocable Overhead, and other costs borne by the Party for
transport, customs clearance and storage of product at the request of
the other Party prior to the time of sale (i.e. freight, customs, duty
and insurance); and

                  (b) all of the Party's allocable intellectual property
acquisition and licensing costs (including royalties) paid to Third Parties as
it relates to the manufacture of Licensed Product.

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

                                      B-5

<PAGE>   55

         Either Party holding inventory for Commercial sales shall be permitted
to bill the collaboration a reasonable and customary carrying charge to
compensate it for its financing and logistical product support, which amount
shall be further defined and agreed upon in the Manufacturing and Supply
Agreement.

         B.4.6 "GENERAL AND ADMINISTRATIVE COSTS" means **

         B.4.7 "GROSS PROFIT" means Net Sales less Cost of Sales of a Licensed
Product by a Party to Third Parties in the Territory.

         B.4.8 "GROSS SALES" means the gross amount invoiced by either Party,
their Affiliates and/or their permitted sublicensees for sales of a Licensed
Product to Third Parties in the Territory.

         B.4.9 "MARKETING COSTS" means the direct costs of marketing, promotion,
advertising, Licensed Product promotional materials, professional education,
product related public relations, relationships with opinion leaders and
professional societies, market research (before and after product approval),
healthcare economics studies, post-marketing studies not required to maintain
product approvals, and other similar activities related to the Licensed
Products, with ultimate decision making authority in Genentech with respect to
marketing activities. Such costs will include both internal costs (e.g.,
salaries, benefits, travel, supplies and materials, etc.), applicable Allocable
Overhead, and outside services and expenses (e.g., consultants, agency fees,
meeting costs, etc.). "Marketing Costs" shall also include activities related to
obtaining reimbursement from payers and costs of sales and marketing data.
"Marketing Costs" will specifically exclude the costs of activities which
promote either Party's business as a whole without being product specific (such
as corporate image advertising).

         B.4.10 "NET SALES" means Gross Sales of a Licensed Product less
applicable Sales Returns and Allowances.

         B.4.11 "OPERATING PROFITS OR LOSSES" means Net Sales of all Licensed
Products less the following items with respect to each Product, all for a given
period: Cost of Sales, Marketing Costs, Sales Costs, OSI/GNE Development Costs
(to the extent chargeable to the Collaboration), General and Administrative
Costs, Distribution Costs, and Other Operating Income/Expense.

         B.4.12 "OTHER OPERATING INCOME/EXPENSE" means **

         B.4.13 "PATENT AND TRADEMARK COSTS" means the fees and expenses paid to
outside legal counsel and experts, and filing and maintenance expenses, incurred
after the Effective Date in connection with the establishment and maintenance of
rights for Collaboration Inventions and under Licensed Product Patents covering
any Licensed Product, and similar costs with respect to Product Trademarks (to
the extent chargeable to the Collaboration under the Agreement), including costs
of patent interference, reexamination, reissue, opposition and revocation
proceedings and similar costs with respect to registration of Product
Trademarks.

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

                                      B-6

<PAGE>   56

         B.4.14 "SALES COSTS" means costs, including Allocable Overhead,
approved by the Joint Project Team with the annual budget, incurred by the
Parties or for their account and specifically identifiable to the sales efforts
of Licensed Products to all markets in the Territory including the managed care
market. "Sales Costs" shall include costs associated with sales representatives
for Licensed Product, including compensation, benefits and travel, supervision
and training of the sales representatives, sales meetings, and other sales
expenses. "Sales Costs" will not include the start-up costs associated with
either Party's sales force, including recruiting, relocation and other similar
costs.

         B.4.15 "SALES RETURNS AND ALLOWANCES" means the sum of (a) and (b),
where: (a) is a provision, determined by a Party under GAAP for sales of
Licensed Products in the Territory for (i) trade, cash and quantity discounts or
rebates on Licensed Products (other than price discounts granted at the time of
invoicing and which are included in the determination of Gross Sales), (ii)
credits or allowances given or made for rejection or return of, and for
uncollectable amounts on, previously sold Licensed Products or for retroactive
price reductions (including Medicare and similar types of rebates and
chargebacks), (iii) taxes, duties or other governmental charges levied on or
measured by the billing amount for Licensed Products, as adjusted for rebates
and refunds, (iv) charges for freight and insurance directly related to the
distribution of Licensed Products, to the extent included in Gross Sales, (v)
credits for allowances given or made for wastage replacement, and (vi) other
special sales programs agreed to by the Parties for Licensed Products; and (b)
is a periodic adjustment of the provision determined in (a) to reflect amounts
actually incurred by a Party in the Territory for items (i), (ii), (iii), (iv),
(v) and (vi) in clause (a). The provision allowed in clause (a) and adjustments
made in clause (b) (if any) will be reviewed by the Joint Finance Subcommittee,
subject to approval by the JSC.

B.5      AUDITS AND INTERIM REVIEWS.

         Either Party shall have the right to request that its independent
accounting firm perform an audit of the other Party's books of accounts, no more
than once in a calendar year, for the sole purpose of verifying compliance with
this Agreement. In such audit the firm may review books of accounts covering no
more than the ** just prior to such audit. Such audits will be conducted at the
expense of the requesting Party and with reasonable prior written notice to the
other Party. The audited Party shall have the right to participate in scope
determination in accordance with generally accepted auditing standards. Audit
results will be shared with both Parties. If accounting errors found greater
than net ** in the items sampled such that the Party audited has been overpaid,
then the costs of such audit shall be borne by the Party audited, and such Party
shall return to the requesting Party the amount of money received in error plus
interest at a rate equal the rate of interest ** In addition, OSI shall at its
expense and with reasonable prior written notice to Genentech, be permitted to
have its auditors perform such audits and tests as are

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

                                      B-7

<PAGE>   57

reasonably necessary. Similarly Genentech shall at its expense and with
reasonable prior notice to OSI be permitted to have its auditors perform such
audits and tests as are reasonably necessary.

B.6      PAYMENTS BETWEEN THE PARTIES.

         Payments to each Party of the agreed upon percentages of Operating
Profit or Loss as provided under Section B.9 below will be made quarterly, based
on actual results within ** days after the end of each quarter, adjusted for
reimbursement of the net expenses or income incurred or received by each Party.
A report specifying how each payment was calculated shall also be submitted with
each payment to the non-paying Party. Balancing payments by one Party to
reimburse the other Party's OSI/GNE Development Costs for purposes of the
sharing of such costs under the Agreement will be approved by the JSC. Within **
days of the end of each calendar quarter, there shall be reconciliation of the
OSI/GNE Development Costs which are to be shared and which are incurred during
that quarter by Genentech and OSI, with a payment by one Party to the other to
the extent necessary so that each Party bears its appropriate percentage of such
shared OSI/GNE Development Costs. In the event any payment is made after ** days
after the end of a calendar quarter, the paying Party shall increase the amount
otherwise due and payable by adding interest thereon, computed at the **
Genentech will perform the consolidation and settlement calculations for
submission to the JSC.

B.7      RESPONSIBILITY FOR REPORTING.

         The responsibility for the consolidated reporting of the Collaboration
to the JSC shall be with Genentech in close cooperation with OSI and the Joint
Finance Subcommittee. This will be the basis for Collaboration accounting and
determining of payments to the Parties. Genentech shall provide OSI with a copy
of Collaboration consolidated reporting and the calculation serving as the basis
of determining payments to the Parties. OSI will provide Genentech with
financial statements within ** days after the end of the Quarter for their
activities in the Territory, prepared in accordance with the terms contained in
this Exhibit B in order for Genentech to prepare the consolidated reports.

B.8      ACCOUNTING FOR OSI/GNE DEVELOPMENT COSTS, MARKETING COSTS AND SALES
         COSTS.

         All OSI/GNE Development Costs, Marketing Costs and Sales Costs will be
based on the appropriate costs definition stated in Section B.4 of this Exhibit
B.

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

                                      B-8

<PAGE>   58

         Each Party shall report OSI/GNE Development Costs within ** days after
the end of each quarter in a manner consistent with its project cost system. In
general, these project cost systems report actual time spent on specific
projects, apply the actual labor costs, capture actual costs of specific
projects and allocate other expenses to projects. For Marketing and Sales Costs,
Genentech (and OSI if OSI markets Licensed Product pursuant to the Agreement)
will report costs based on spending in Marketing and Sales departments in
accordance with the approved budget. The Parties acknowledge that the
methodologies used will be based on systems in place.

B.9      OPERATING PROFITS AND LOSS SHARING.

         Genentech and OSI agree to share the Operating Profit or Loss in the
Territory resulting from the Agreement in the following manner:

             (a)  Genentech shall be allocated fifty percent (50%) of the
                  Operating Profits or Losses from the sale of Licensed Products
                  and

             (b)  OSI shall be allocated fifty percent (50%) of the Operating
                  Profits or Losses from the sale of Licensed Products.

B.10     DEVELOPMENT COST SHARING.

         Genentech and OSI agree to equally share the OSI/GNE Development Costs
in the Territory resulting from the Agreement as provided in Section 4.6 of the
Agreement and this Exhibit B.

B.11     START OF OPERATIONS AND EFFECTIVE ACCOUNTING DATE TERMINATION.

         Operation of the Collaboration will be deemed to have commenced as of
the Closing Date of the Agreement. Costs and expenses incurred prior to such
date are not chargeable to the Collaboration.

         For reporting and accounting purposes with respect to the
Collaboration, the effective termination date of the Agreement with regard to
the last detailing year in the Territory will be the nearest month end to which
such termination takes place.

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

                                      B-9

<PAGE>   59

                                    EXHIBIT C

                             GLOBAL DEVELOPMENT PLAN

                                       **

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

                                      C-1

<PAGE>   60
                                    EXHIBIT D

                                   OSI PATENTS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
        Pfizer                               Coverage                                            Status
     designation
--------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                                                   <C>
       PC 8836           Claims `774 and pharmaceutically acceptable salts     Filed in approximately 73 countries. Issued
                          thereof (composition-of-matter-COM), processes        in US as US patent 5,747,498. Pending in
                              for preparing `774, methods of treating                       Europe and Japan.
                         hyperproliferative disorders (such as cancer) by
                        administering `774 and pharmaceutical compositions
                                          containing `774
--------------------------------------------------------------------------------------------------------------------------
       PC 10074             Claims anhydrous and hydrate forms of the          Pending in approximately 30 countries
                          mesylate salt of `774 (COM), methods of treating      (this will expand as national stage
                         hyperproliferative disorders by administering the     applications are filed from the PCT).
                              `774 mesylate forms, and pharmaceutical            Not yet issued or granted in US,
                          compositions containing the `774 mesylate forms                Europe or Japan.
--------------------------------------------------------------------------------------------------------------------------
       PC 10188             Claims a process for preparing `774 and an         Pending in approximately 70 countries. Not
                              intermediate (COM) used in the process          yet issued or granted in US, Europe or Japan.
--------------------------------------------------------------------------------------------------------------------------
       PC 10676              Claims a method of treating disorders not        Filed as US provisional patent application on
                          specifically disclosed or claimed in prior `774            3/30/00. Not yet foreign filed.
                           cases (non-small cell lung cancer, pediatric
                         malignancies, cervical and other tumors caused or
                        promoted by human papilloma virus (HPV), melanoma,
                           Barrett's esophagus (pre-malignant syndrome),
                         adrenal and skin cancers, auto immune neoplastic
                            cutaneous diseases and atherosclerosis) by
                          administering `774. Also claims chemoprevention
                          of basal or squamos cell carcinoma of the skin
--------------------------------------------------------------------------------------------------------------------------
       PC 10677         Claims two polymorphs of the hydrochloride salt of       Filed as US provisional application on
                         `774 (COM), methods of preparing the polymorphs,            11/11/99. Not yet foreign filed
                        method of treating hyperproliferative disorders by
                         administering the polymorphs, and pharmaceutical
                              compositions containing the polymorphs
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      D-1<PAGE>   1
                                                                    EXHIBIT 10.2

         Portions of this Exhibit have been redacted and are the subject of a
confidential treatment request filed with the Secretary of the Securities and
Exchange Commission.
<PAGE>   2
                DEVELOPMENT COLLABORATION AND LICENSING AGREEMENT

                                     BETWEEN

                            OSI PHARMACEUTICALS, INC.

                                       AND

                             F.HOFFMANN-LA ROCHE LTD

                                 JANUARY 8, 2001
<PAGE>   3
                DEVELOPMENT COLLABORATION AND LICENSING AGREEMENT

         This Development Collaboration And Licensing Agreement ("Agreement")
dated as of January 8, 2001 by and between OSI Pharmaceuticals, Inc., a Delaware
corporation, with its principal office at 106 Charles Lindbergh Blvd.,
Uniondale, New York 11553-3632 (together with its Affiliates (as hereinafter
defined) unless the context otherwise requires, "OSI") and F.Hoffmann-La Roche
Ltd, a Swiss corporation, with its principal office at Grenzacher strasse 124,
CH-4070-Basel Switzerland (together with its Affiliates (as hereafter defined)
unless the context otherwise requires, "Roche"). OSI and Roche are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."

                                    RECITALS

         1. OSI has participated in the development of a certain molecule known
as OSI-774 (defined below) and has certain intellectual property rights related
thereto.

         2. Roche and OSI each wish to conduct development of OSI-774 in a
collaborative fashion so that the resources and expertise of each is put to good
use, and under such collaborative efforts each Party is willing to expend up to
$100 million as may be agreed upon by the Parties.

         3. By combining the development experience and expertise of both Roche
and OSI, the Parties wish to expedite the regulatory approval of OSI-774 as a
significant new therapeutic.

         4. OSI wishes to grant to Roche, and Roche wishes to obtain, a license
under OSI's intellectual property rights with respect to OSI-774 to permit Roche
to participate in collaborative OSI-774 product development, and to be able to
market in all of the world outside of the United States and its territories
under the terms and conditions set forth below.

         5. Simultaneous with the Effective Date hereof, Roche will purchase
shares of common stock of OSI for a purchase price of $35 million according to
the terms and conditions of a Stock Purchase Agreement (the "Stock Purchase
Agreement") of even date herewith.

         6. Pursuant to a Tripartite Agreement of even date herewith (the
"Tripartite Agreement"), the Parties have made certain agreements with
Genentech, Inc., a Delaware corporation with its principal office at 1 DNA Way,
South San Francisco, California 94080 ("Genentech") regarding, among other
things, development of OSI-774.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties, intending to be legally bound hereby, do hereby agree as follows:
<PAGE>   4
                                   ARTICLE 1.
                                   DEFINITIONS

         The following capitalized terms, whether used in the singular or the
plural, shall have the following meanings as used in this Agreement unless
otherwise specifically indicated:

         1.1 "ADJUVANT ONCOLOGY INDICATION" shall mean use of Licensed Product
as a systemic therapy administered after local therapy or treatment of a primary
tumor (e.g. by surgery, or surgery and radiotherapy) to reduce the risk of
recurrence or progression.

         1.2 "AFFILIATE" shall mean any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement. For the
purposes of this Section 1.2, "control" means ownership, directly or through one
or more Affiliates, of fifty percent (50%) or more or the shares of stock
entitled to vote for the election of directors, in the case of a corporation, or
fifty percent (50%) or more of the equity interests in the case of any other
type of legal entity, status as a general partner in any partnership, or any
other arrangement whereby a party controls or has the right to control the Board
of Directors or equivalent governing body of a corporation or entity. For the
purposes of this Agreement, Genentech shall be deemed to not be an Affiliate of
Roche.

         1.3 "cGMP" shall mean the regulatory requirements for current good
manufacturing practices promulgated (1) under the Common Technical Document for
the Registration of Pharmaceuticals for Human Use (ICH CTD) Guidelines and the
ICH Good Manufacturing Practice Guide (ICH-GMP.doc), as the same may be amended
from time to time, and (2) by the United States Food and Drug Administration
("FDA") under the U.S. Food, Drug and Cosmetic Act ("FD&C Act") and the
regulations promulgated thereunder, particularly 21 C.F.R. Section 210 et seq.
and 21 C.F.R. Sections 600-610, respectively, as the same may be amended
from time to time.

         1.4 "CLINICAL SUPPLIES" shall mean supplies of Licensed Product,
manufactured, packaged and labeled in compliance with cGMP, in such form and
strength as agreed by the Parties, and ready to be used for the conduct of
pre-clinical and/or human clinical trials of the Licensed Product in the Field
by the Parties pursuant to the Global Development Plan.

         1.5 "CLOSING" shall mean, subject to the satisfaction or waiver of the
conditions set forth in Section 6.2, the closing of the transactions
contemplated by this Agreement.

         1.6 "CLOSING DATE" shall mean the earlier of: (i) the fifth (5th) day,
unless the fifth (5th) day falls on a weekend or holiday, in which case it shall
be the next business day, after the earlier of (a) receipt of written notice (a
copy of which has been furnished to Genentech) of the U.S. Federal Trade
Commission's (the "FTC") approval of the transaction contemplated by this
Agreement under the Hart-Scott-Rodino filings to be made by OSI and Genentech
(or the parent company of each Party) and (b) the expiration or termination of
all applicable waiting periods, requests for information (and any extensions
thereof) under the Hart-Scott Rodino Antitrust Improvements Act of 1976 for such
Hart-Scott Rodino filings and (ii) the fifth (5th) day, unless the fifth (5th)
day falls on a weekend or holiday, in which case it shall be the next business
day, after the joint determination (by certification from each Party to the
other) that such Hart Scott

                                       2
<PAGE>   5
Rodino filing is not required. In the case of Genentech, such certification, if
made, shall be made by its parent company, Roche, which is responsible for such
filing with respect to Genentech.

         1.7 "COMMERCIALLY REASONABLE AND DILIGENT EFFORTS" shall mean with
respect to development and commercialization, a Party's use of best efforts and
resources consistent with the exercise of prudent scientific and business
judgment, as applied to other pharmaceutical products of similar potential and
market size by the Party in question, and reflecting the competitive environment
for the development and marketing of OSI-774.

         1.8 "CONTROLLED" with respect to Licensed Product Patents or Know-how
shall mean the ability of a Party to grant a license or sublicense to such
Licensed Product Patents or Know-how as provided for herein without violating
the terms of any agreement or other arrangement with any Third Party existing
and in effect at the time such Party would be required hereunder to grant the
other Party such license or sublicense.

         1.9 "COVER" (including variations such as "Covered", "Covering" and the
like) shall mean that the manufacture, use, sale, offer for sale, or importation
of a particular product would infringe a claim of a patent or patent application
(if that claim were to issue in a patent) in the absence of rights under such
patent, as determined on a country-by-country basis.

         1.10 "DIVESTITURE AGREEMENT" shall mean that agreement, related to the
Base Patents and dated May 23, 2000 between OSI and Pfizer Inc., a Delaware
Corporation having an office at 235 East 42nd Street, New York, New York 10017.

         1.11 "DRUG APPROVAL APPLICATION" shall mean an application for
Regulatory Approval required for commercial sale or use of a Licensed Product as
a drug in the Field in the Territory.

         1.12 "EFFECTIVE DATE" shall mean the Closing Date.

         1.13 "FIELD" shall mean the treatment or prophylaxis of any human
disease or condition.

         1.14 "FIRST COMMERCIAL SALE" shall mean the first sale, in any
particular country, by Roche or its Affiliates or sublicensees of Licensed
Product for use by the general public after all required marketing and pricing
approval has been granted by the governing authorities of that country or, if no
such approval is required, the date of first commercial sale of Licensed Product
in such country.

         1.15 "GLOBAL DEVELOPMENT COSTS" shall have the meaning set forth in
Exhibit A to the Tripartite Agreement.

         1.16 "GLOBAL DEVELOPMENT PLAN" shall mean the plan for development of
OSI-774 which is attached as Exhibit A to the Tripartite Agreement as such plan
may be amended from time to time.

         1.17 "IND" shall mean an effective Notice of a Claimed Investigational
New Drug Exemption, as defined in Title 21 of the U.S. Code of Federal
Regulations, on file with the FDA before the commencement of clinical trials of
Licensed Products in humans, or any comparable

                                       3
<PAGE>   6
filing with any relevant regulatory agencies or other governmental entities in
any country in the Territory.

         1.18 "INVENTION" shall mean any invention (whether or not patentable)
or Know-how made after the Effective Date during the course of, in furtherance
of, and as a direct result of the activities of the Parties hereunder and under
the Tripartite Agreement, and which relates to any Licensed Product, its
manufacture or its use in the Field in the Territory. An "Invention" may be made
by employees of OSI solely or jointly with a Third Party, including Genentech
(an "OSI Invention"), by employees of Roche solely or jointly with a Third
Party, including Genentech (a "Roche Invention"), or jointly by employees of OSI
and Roche with or without a Third Party (a "Joint Invention").

         1.19 "JOINT PATENTS" shall mean any and all Licensed Product Patents
claiming a Joint Invention.

         1.20 "KNOW-HOW" shall mean all proprietary information, trade secrets,
techniques and data of a Party (including Confidential Information as defined in
Article 10 below), directly relating to the Licensed Products that are
Controlled by such Party as of the Effective Date or hereafter during the Term
of this Agreement, including, but not limited to, discoveries, formulae,
materials, practices, methods, knowledge, know-how, processes, experience, test
data (including pharmacological, toxicological and clinical information and test
data), analytical and quality control data, marketing, pricing, distribution,
cost and sales data or descriptions. "Know-how" may be made, prior to the
Effective Date or may be an Invention.

         1.21 "LICENSED PRODUCT" shall mean pharmaceutical formulations of
OSI-774 (including, without limitation, prodrugs, salts, solvates and polymorphs
of all the above in any form or formulation).

         1.22 "LICENSED PRODUCT PATENTS" shall mean any and all patents, patent
applications and any patents issuing therefrom, together with any extensions
(including supplementary protection certificates), registrations, reissues,
continuations, divisions, continuations-in-part, re-examinations, substitutions
or renewals thereof, that contain one or more claims Covering a Licensed Product
in the Field in the Territory.

         1.23 "METASTATIC ONCOLOGY INDICATION" shall mean the use of Licensed
Product as a therapy for the spread of a malignancy from its site of origin to
non-contiguous sites, most commonly to other organs; treatment will also involve
the primary tumor, if present.

         1.24 "NET SALES" and the related term "ADJUSTED GROSS SALES" mean:

         (a) "Adjusted Gross Sales"means the amount of gross invoiced sales of
any Licensed Product (only in finished product form) charged by Roche, its
Affiliates and sublicensees, at arm's length to independent Third Parties, less
deductions of returns (including allowances actually given for spoiled, damaged,
out-dated, rejected, returned Product sold, withdrawals and recalls), rebates
(price reductions, rebates to social and welfare systems, chargebacks,
government mandated rebates and similar types of rebates e.g., P.P.R.S.,
Medicaid), volume (quantity) discounts, taxes (value added or sales taxes,
government mandated exceptional taxes and other taxes directly linked to the
gross sales amount), as computed on a product by product basis in the Roche's
Swiss Francs Sales Statistics for the countries concerned, using for internal

                                       4
<PAGE>   7
foreign currency translation the Roche's then current standard practices
actually used on a consistent basis in preparing its audited financial
statements.

         (b) "Net Sales" means the amount calculated by subtracting from the
amount of Adjusted Gross Sales a lump sum deduction of ** of Adjusted Gross
Sales in lieu of those sales related deductions which are not accounted for on a
product by product basis (e.g. outward freights, postage charges, transportation
insurance, packaging materials for dispatch of goods, custom duties, bad debt,
discounts granted later than at the time of invoicing, cash discounts and other
direct sales expenses).

Notwithstanding the foregoing, amounts received by Roche, its Affiliates and
sublicensees for the sale of any Licensed Product among Roche, its Affiliates
and sublicensees for resale shall not be included in the computation of Adjusted
Gross Sales and Net Sales.

         1.25 "OSI KNOW-HOW" shall mean Know-how which: (a) is Controlled by OSI
as of the Effective Date or hereafter during the Term of this Agreement, and (b)
is necessary or useful for Roche to use, sell, offer for sale and/or import
Licensed Products.

         1.26 "OSI-774"shall mean the selective inhibitor of epidermal growth
factor receptor having the IUPAC name
[6,7-bis(2-methoxyethoxy)quinazolin-4-yl]-(3-ethynylphenyl)-amine and having the
U.S. Approved Name erlotinib.

         1.27 "OSI PATENTS" shall mean any and all Licensed Product Patents to
the extent Controlled by OSI as of the Effective Date or hereafter during the
Term of this Agreement, including, without limitation, OSI's interest in any
Joint Patent. The OSI Patents as of the Effective Date are set forth on Exhibit
A attached hereto and incorporated herein ("Base Patents").

         1.28 "OSI/ROCHE DEVELOPMENT COSTS" shall have the meaning defined in
Exhibit C.

         1.29 "PARTY" shall mean Roche or OSI, and, when used in the plural,
shall mean both of them.

         1.30 "PHASE II CLINICAL TRIAL" shall mean studies in humans of the
safety, dose ranging and efficacy of a Licensed Product which are conducted
after Phase I clinical studies of such Licensed Product.

         1.31 "PHASE III ENABLING CLINICAL TRIAL" shall mean a Phase I or Phase
II Clinical Trial which has generated sufficient data to commence Phase III
Clinical Trials.

         1.32 "REFRACTORY ONCOLOGY INDICATION" shall mean the use of Licensed
Product as a therapy for the progression of a malignancy after therapy or
treatment that is accepted, under generally accepted good medical practices, to
have some degree of effectiveness has failed; or as a therapy for a malignancy
for which there is no generally accepted effective medical therapy.

         1.33 "REGULATORY APPROVAL" shall mean any approvals (including pricing
and reimbursement approvals), licenses, registrations or authorizations of any
national or international or local regulatory agency, department, bureau or
other governmental entity,

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                                       5
<PAGE>   8
necessary for the manufacture and sale of a Licensed Product in a regulatory
jurisdiction in the Territory.

         1.34 "ROCHE KNOW-HOW" shall mean Know-how which: (a) is Controlled by
Roche as of the Effective Date or hereafter during the Term of this Agreement,
and (b) is necessary or useful for OSI to (i) use, make, have made, sell, offer
for sale and/or import Licensed Products, or (ii) use Licensed Products in the
Field in the Territory in accordance with Section 8.3.

         1.35 "ROCHE PATENTS" shall mean any and all Licensed Product Patents to
the extent Controlled by Roche as of the Effective Date or hereafter during the
Term of this Agreement, including, without limitation, Roche's interest in any
Joint Patents.

         1.36 "ROCHE PROJECT TEAM" shall mean that body established pursuant to
Section 3.1 below.

         1.37 "TERRITORY" shall mean the World other than the United States of
America, its territories and possessions, and the Commonwealth of Puerto Rico.

         1.38 "THIRD PARTY" shall mean any entity other than OSI or Roche or
their permitted sublicensees, and shall include Genentech.

         1.39 "TRIPARTITE AGREEMENT" shall have the meaning provided in the
recitals.

         1.40 "VALID CLAIM" shall mean a claim of the OSI Patents which has not
been withdrawn, cancelled, disclaimed, abandoned, or held invalid, unpatentable
or unenforceable by a tribunal of competent jurisdiction in a final decision (i)
which is unappealable or (ii) from which all appeals have been exhausted. If a
Valid Claim is the subject of a final decision holding it not invalid,
unpatentable or unenforceable, the scope of the Valid Claim shall be interpreted
so as to reflect the construction placed upon it in the final decision.

                                   ARTICLE 2.
                           SCOPE OF THE COLLABORATION

         2.1 GLOBAL GOALS. The Parties agree, pursuant and subject to the terms
of this Agreement and the Tripartite Agreement, to further develop Licensed
Products, with the goal of obtaining Regulatory Approval of Licensed Products in
commercially significant indications as soon as reasonably practicable for
commercial marketing and sale in the Field in the Territory, Roche shall use
Commercially Reasonable and Diligent Efforts (as defined in Section 4.1 below)
to perform its tasks and obligations in conducting all development work pursuant
to the Global Development Plan, and each Party shall cooperate with and provide
reasonable support to the other Party in such other Party's conduct of such
development as provided in the Global Development Plan.

         2.2 PARTICIPATION IN GLOBAL DEVELOPMENT. Each Party acknowledges that
simultaneously with this Agreement, OSI will be entering into an agreement with
Genentech regarding, among other things, development of OSI-774 outside the
Territory. The Parties hereto, simultaneously with this Agreement, will enter
into the Tripartite Agreement with Genentech governing development activities
and cost sharing.

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<PAGE>   9
         2.3 GLOBAL DEVELOPMENT PLAN. The Parties have attached as Exhibit B
hereto the Global Development Plan.

                                   ARTICLE 3.
                         MANAGEMENT OF THE COLLABORATION

         3.1 ESTABLISHMENT OF ROCHE PROJECT TEAM. No later than thirty (30) days
after the Effective Date, Roche will establish a Roche Project Team to
coordinate all activities for the development of Licensed Products in the Field
in the Territory, including pre-clinical research, clinical research,
manufacturing, regulatory filings, and post-approval development studies. OSI
will have the right to appoint an observer (the "OSI Observer") to the Roche
Project Team. The Roche Project Team will meet at least once each calendar
quarter, or more frequently, as agreed by the Roche Project Team. Notice of any
such meeting shall be given to the OSI Observer no later than ten (10) days
before any such meeting.

         3.2 CEASING OF ROCHE PROJECT TEAM OPERATIONS. The Roche Project Team
will cease operations and have no further function hereunder on the date on
which Roche is no longer developing any Licensed Product in the Territory.

         3.3 GLOBAL DEVELOPMENT COMMITTEE. Pursuant to the terms of the
Tripartite Agreement, the Parties have established with Genentech a Global
Development Committee to, among other things, direct development of OSI-774. In
addition, the Parties and Genentech have established an OSI-774 Liaison Team to
coordinate the development activities of the OSI-Genentech Project Team and the
Roche Project Team as more fully described in the Tripartite Agreement.

                                   ARTICLE 4.
                                  DEVELOPMENT

         4.1 DEVELOPMENT AND MARKETING AND EFFORTS. OSI and Roche each agree to
(1) collaborate diligently in the development of Licensed Products for use in
the Field, (2) cooperate with each other in carrying out the Tripartite
Agreement, (3) use Commercially Reasonable and Diligent Efforts to develop and
bring Licensed Products to market in the Field as soon as practicable.
Furthermore, Roche agrees to use Commercially Reasonable and Diligent Efforts to
market Licensed Products in the Territory. Each Party further agrees to execute
and substantially perform its activities under the Global Development Plan.

         4.2 TRANSFER OF MATERIALS. During the development of OSI-774, each
Party may transfer certain of its proprietary materials to the other Party. Each
Party agrees that it will use such materials of the other Party only for the
purposes of this Agreement, the Tripartite Agreement or the OSI-Genentech
Agreement, and will not transfer such materials to any Third Party other than
Genentech without the prior written consent of the other Party hereunder. Except
as expressly provided in this Agreement, the Tripartite Agreement or the
OSI-Genentech Agreement, the transfer of any such proprietary materials by one
Party to another shall not be deemed to be a grant of any rights in the
proprietary material. All right, title and interest in and to all such
proprietary materials (and any patent rights relating thereto) shall remain in
the Party transferring such materials.

                                       7
<PAGE>   10
         4.3 DEVELOPMENT COSTS FOR OSI AND ROCHE. All OSI/Roche Development
Costs, shall be shared between Roche and OSI so that Roche bears ** of such
costs and OSI bears ** of such costs. There shall be a reconciliation of such
OSI/Roche Development Costs which are to be shared hereunder and which are
incurred by a Party, with a prompt payment by one Party to the other to the
extent necessary so that each Party bears its appropriate percentage of such
shared OSI/Roche Development Costs, all as more fully set forth in Exhibit C.

                                   ARTICLE 5.
                    TRADEMARK AND PACKAGING IN THE TERRITORY

         5.1 TRADEMARKS. It is the intent of the Parties that a single product
trademark shall be developed for use on and in connection with Licensed Products
worldwide (the "Product Trademark"). The Parties have agreed to use the
trademark ** as such Product Trademark. If it is determined that it is not
possible to register or otherwise use the Product Trademark in any country
within the Territory, then the Parties shall agree on an appropriate trademark
to use in each such country, provided that the trademark used in the Major
European Countries (as defined hereafter) and Japan is intended to be the same
as whatever trademark is used in the U.S. In addition, registration use problems
with respect to the Product Trademark in the Global Development Countries (as
defined in the Tripartite Agreement) will be discussed by the OSI/Genentech
project team and the Roche Project Team. Any decisions or disagreements
concerning the desire for a global trademark will be approved or resolved by the
Parties and Genentech. OSI shall own the Product Trademark, and shall be
responsible for procurement and maintenance of a trademark registration for such
trademark in connection with Licensed Products in the Territory. If OSI elects
not to procure or maintain a trademark registration for such trademark in
connection with Licensed Product in a country of the Territory, it shall so
inform Roche in writing in a reasonable time before any action is due thereon.
Roche shall then have the right but not the obligation to procure and maintain
such trademark in such country. The cost of prosecution for trademarks in the
Territory shall be shared equally between the Parties.

         5.2 PACKAGING. Roche agrees that OSI shall be identified as licensor on
the packaging of all Licensed Products sold by Roche or its sublicensees,
subject to legal and commercial requirements on a country-by-country basis and
in a manner in accordance with such legal and commercial requirements. Such
marking shall further conform to the laws and practices of the jurisdiction, in
which the Products are manufactured, sold and/or delivered. **

                                   ARTICLE 6.
                             CLOSING/ROCHE PAYMENTS

         6.1 COVENANTS PENDING CLOSING.

         (a) REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement, each of the Parties agrees to use all reasonable efforts to take, or
cause to be taken, all reasonable actions and to do, or cause to be done, all
things necessary and appropriate to satisfy all

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                                       8
<PAGE>   11
conditions of and to consummate the transactions contemplated by this Agreement
in accordance with the terms hereof.

         (b) FILINGS. The Parties shall cooperate with one another in the
preparation, execution and filing of all documents that are required or
permitted to be filed on or before the Closing, including, without limitation,
filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act").

         6.2 CONDITIONS TO CLOSING.

         (a) The obligation of OSI to close shall be subject to the satisfaction
on or before the Closing of the following conditions, any or all of which may be
waived in whole or in part by OSI:

              (i) the approval of the transaction by the FTC under the HSR Act
or the expiration or termination of all applicable waiting periods, requests for
information (and any extensions thereof) under the HSR Act, unless a joint
determination is made by the Parties (by certification from each Party to the
other) that such approval is not required;

              (ii) the representations and warranties made by Roche in Article
12 shall be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing Date,
and Roche shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to Closing;

              (iii) payments of $25 million in the aggregate, to OSI under this
Agreement and the Development and Marketing Collaboration Agreement between OSI
and Genentech (the "OSI-Genentech Agreement") by Roche and Genentech,
respectively;

              (iv) payments of $70 million, in the aggregate, to OSI under the
Stock Purchase Agreement and the Stock Purchase Agreement between OSI and
Genentech by Roche and Genentech, respectively;

              (v) the execution and delivery of the Tripartite Agreement and the
OSI-Genentech Agreement; and

              (vi) closing shall have occurred (or shall occur simultaneously
with the Closing hereunder) under the OSI-Genentech Agreement.

         (b) The obligation of Roche to close shall be subject to the
satisfaction on or before the Closing of the following conditions any or all of
which may be waived in whole or in part by Roche:

              (i) the approval of the transaction by the FTC under the HSR Act
or the expiration or termination of all applicable waiting periods, requests for
information (and any extensions thereof) under the HSR Act, unless a joint
determination is made by the Parties (by certification from each Party to the
other) that such approval is not required;

                                       9
<PAGE>   12
              (ii) the representations and warranties made by OSI in Article 12
shall be true and correct in all material respects as of the Closing Date with
the same force and effect as if they had been made as of the Closing Date, and
OSI shall have performed all obligations and conditions herein required to be
performed or observed by them on or prior to Closing;

              (iii) delivery to Roche of the OSI common stock under the Stock
Purchase Agreement; and

              (iv) the execution and delivery of the Tripartite Agreement.

         6.3 PAYMENTS UPON THE EFFECTIVE DATE. Simultaneous with the Closing,
Roche shall make the following non-refundable and non-creditable payments to
OSI, except as otherwise set forth in this Agreement:

         (a) ** and

         (b) Thirty-five million dollars ($35,000,000) to purchase shares of OSI
common stock as set forth in the Stock Purchase Agreement.

         6.4 ROYALTIES.

         (a) ROYALTY.

              (i) As consideration for the license rights granted to Roche and
its sublicensees by OSI under this Agreement, Roche shall pay to OSI a royalty
at the rate of ** of Net Sales of Licensed Product sold by Roche, its Affiliates
and sublicensees. Roche shall pay royalties with respect to each Licensed
Product on a country by country basis until the date of expiration or revocation
or complete rejection of the last to expire or to be revoked or to be completely
rejected of any Valid Claim of an OSI Patent covering such Licensed Product in
such country. In a country where there is no Valid Claim of an OSI Patent
covering Licensed Product either issued or pending, Roche shall pay royalties
with respect to such country for ten (10) years from the First Commercial Sale
of Licensed Product in such country.

              (ii) Notwithstanding the above, if commencing on the date that is
ten (10) years from the First Commercial Sale of a given Licensed Product in a
country, the only remaining Valid Claim(s) of an OSI Patent in the country is of
a Joint Patent, the royalty rate for the country set forth above shall be
reduced by **

              (iii) If a Third Party not under license from Roche sells a
product containing as an active ingredient an epidermal growth factor receptor
inhibitor that is Covered by an issued OSI Patent in a country or countries in
which Roche, its Affiliates or sublicensee is selling a Licensed Product, then
the royalty payable by Roche to OSI in such country shall be reduced by **.

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                                       10
<PAGE>   13
         The royalty reduction shall be inapplicable during any period of time
that OSI diligently investigates, institutes, prosecutes and/or controls
litigation to enforce the OSI Patents to stop the sale of the products by the
Third Party in the country. The royalty reduction shall be applicable if within
sixty (60) days from the time Roche notifies OSI in writing of OSI's failure to
diligently prosecute, OSI does not promptly investigate, institute, prosecute
and/or control litigation to enforce the OSI Patents to stop the sale of the
products by the Third Party in the country.

         (b) THIRD PARTY PAYMENTS. If Roche, in good faith and after the
approval of OSI, pays consideration under patent rights or know-how owned or
controlled by a Third Party, which, after receiving an opinion of competent
counsel, could reasonably be considered to be required to allow Roche to use,
sell, offer for sale, have sold, manufacture and import a Licensed Product in a
given country, Roche may deduct ** of such consideration from the royalty
payments payable by Roche to OSI under this Agreement, provided that such
royalty shall not be reduced by more than ** from the royalty rate under Section
6.4(a)(i).

         (c) ROYALTY PAYMENT DATES. Royalties paid by Roche pursuant to Section
6.4(a) shall be paid by Roche within ** after the end of each calendar quarter
in which Net Sales are made. All such payments shall be accompanied by a
statement showing the source of such revenues, including the Net Sales of each
Licensed Product in each country and a calculation of the amount of payment due
for each such jurisdiction. In the event royalties are not paid within the time
period set forth in this Section 6.4(c), such royalties shall bear interest, to
the extent permitted by applicable law, at the average one-month European
Interbank Offered Rate (=EURIBOR) as reported by Datastream (or a successor or
similar organization) from time to time, calculated on the number of days such a
payment is overdue.

         (d) ACCOUNTING. All payments due to OSI by Roche and royalties owed to
OSI shall be paid in U.S. Dollars. Whenever for the purpose of calculating
royalties conversion from any foreign currency shall be required, such
conversion shall be made as follows:

              (i) when calculating the Adjusted Gross Sales, the amount of such
sales in foreign currencies shall be converted into Swiss Francs as computed in
the central Roche's Swiss Francs Sales Statistics for the countries concerned,
using for internal foreign currency translation the Roche's then current
standard practices actually used on a consistent basis in preparing its audited
financial statements.

              (ii) when calculating the royalties on Net Sales, such conversion
shall be at the average rate of the Swiss Franc to the U.S. Dollars as retrieved
from the Reuters System (or any other source agreed upon in writing by the
parties) for the applicable calendar quarter.

         (e) TAXES. All amounts owing to OSI specified in this Agreement shall
be paid net of all applicable taxes, fees, and other charges excluding only
taxes on Roche's income. In particular, any tax required to be withheld by Roche
under the laws of any country for the account of OSI (withholding taxes), shall
be promptly paid by Roche for and on behalf of OSI to the appropriate
governmental authority, and Roche shall furnish OSI with proof of payment of

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                                       11
<PAGE>   14
such tax. Any such tax actually paid on OSI's behalf shall be deducted from
royalty payments due to OSI or promptly reimbursed to Roche if no further
payments are due to OSI. Roche will assist OSI in minimizing the withholding
taxes applicable to any payment made by Roche and in claiming tax refund at
OSI's request.

         6.5 MILESTONE PAYMENTS. Subject to the other terms and conditions of
this Agreement, and as consideration for the license rights granted to Roche by
OSI under this Agreement, Roche shall pay to OSI the following ** and ** amounts
only once, upon the first occurrence of such event, with respect to the first
Licensed Product Covered by an OSI Patent to reach such event:

<TABLE>
<CAPTION>
                EVENT                                   PAYMENT
                -----                                   -------
                                               Europe                Japan
                                               ------                -----
<S>                                        <C>                    <C>
  **                                       **                     **
</TABLE>

         Milestone Payments shall be paid by Roche to OSI within thirty (30)
days after any filing or approval date.

         6.6 PAID-UP LICENSE. Provided that Roche has satisfied all of its
obligations to make payments hereunder with respect to a particular Licensed
Product, Roche shall have a paid-up, exclusive, perpetual royalty-free license
to use, import, offer for sale, and sell such Licensed Product in each country
after the expiration of Roche's last obligation to make payments (including
royalties) with respect to Net Sales of such Licensed Product in such country.

         6.7 VALUE OF RIGHTS. OSI and Roche understand and acknowledge that the
value of each of the rights granted by this Agreement might fluctuate while this
Agreement is in effect. Notwithstanding any such fluctuation, OSI and Roche have
agreed to allocate the value of these rights in the manner represented by the
royalties and other payments contemplated hereunder and intend such allocation
to be binding and unchanging.

                                   ARTICLE 7.
                             MANUFACTURE AND SUPPLY

         7.1 MANUFACTURE OF LICENSED PRODUCTS.

         (a) CLINICAL SUPPLIES. Unless otherwise agreed, OSI shall provide or
cause to be provided all pre-clinical and Clinical Supplies of Licensed Product
for the completion of pre-clinical work and human clinical trials for the
indications for the Licensed Product in the Territory unless and until Roche
decides and is able to supply such Licensed Product. OSI will enter into one or
more "manufacturing and supply agreement(s)," with Third Party contract

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                                       12
<PAGE>   15
manufacturer(s) and/or Roche for Clinical Supplies as soon as practicable after
execution of this Agreement by the Parties. The cost of such manufacture of
Clinical Supplies will be shared by the Parties in accordance with the
Tripartite Agreement for Clinical Supplies which are part of Global Development
Costs, and in accordance with this Agreement and Exhibit C hereto for Clinical
Supplies which are part of OSI/Roche Development Costs.

         (b) COMMERCIAL SUPPLIES. Roche shall be entitled to supply Commercial
Supplies of Licensed Product in the Territory, at the scale and in the amounts
required to meet demand for Licensed Product in the Territory, if (i) within two
(2) months after the Effective Date, Roche notifies OSI in writing that it is
committed to do so and (ii) within six (6) months after such notification, OSI
and Roche enter, after good faith negotiations, into an "OSI-Roche Manufacturing
and Supply Agreement" for no additional consideration. Notwithstanding the
foregoing, nothing is intended to preclude the Parties from negotiating an
agreement with respect to the supply of Commercial Supplies of Licensed Product
outside the Territory at a cost to be defined in such agreement (with OSI having
audit rights with respect to the calculation of such costs). If OSI and Roche do
not enter into the OSI-Roche Manufacturing and Supply Agreement in accordance
with this Section 7.1(b), then Roche shall no longer be entitled to supply
Commercial Supplies of Licensed Product in the Territory. In addition, OSI shall
then be responsible for establishing a commercial manufacturing process and for
supply of the Commercial Supplies of Licensed Products in the Territory, at the
scale and in the amounts required to meet demand for Licensed Product in the
Territory. In such case, as soon as practicable after the completion of the
first Phase III Enabling Clinical Trial, OSI will enter into a supply agreement
with a Third Party contract manufacturer(s) for Commercial Supplies wherein the
costs of manufacture and supply of Commercial Supplies of Licensed Products for
the Territory shall be no greater than the costs of manufacture and supply of
Commercial Supply of Licensed Products outside the Territory. The cost of such
manufacture and supply of Commercial Supplies for the Territory will be borne by
Roche(with Roche having audit rights with respect to the calculation of such
costs for the Territory). The detailed terms of the supply of Commercial
Supplies by OSI will be governed by a "Manufacturing and Supply Agreement"
entered into between the Parties as soon as practicable.

                                   ARTICLE 8.
                                    LICENSES

         8.1 LICENSE TO ROCHE. Subject to the terms hereof and upon the Closing
Date, OSI hereby grants to Roche a royalty-bearing, non-transferable (except
pursuant to Section 17.1), non-sublicensable (except pursuant to Section 8.4),
sole and exclusive license under the OSI Patents and OSI Know-how, to use, sell,
offer for sale, and import Licensed Products in the Field in the Territory.

         8.2 LICENSE TO OSI AND GENENTECH. Subject to the terms hereof and upon
the Closing Date, Roche hereby grants to OSI and Genentech, ** non-transferable
(except pursuant to

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Section 17.1), non-sublicensable (except pursuant to Section 8.4), co-exclusive
license (co-exclusive between OSI and Genentech) outside the Territory under the
Roche Patents and Roche Know-how to make, have made, use, sell, offer for sale
and import Licensed Products (as defined in the OSI-Genentech Agreement) in
accordance with the OSI-Genentech Agreement and this Agreement. Genentech shall
be a third party beneficiary with respect to the rights granted in the previous
sentence.

         8.3 RETENTION OF RIGHTS. Notwithstanding the license granted to Roche
in Section 8.1, OSI shall retain the right within the Territory (i) to carry out
any and all activities contemplated under the OSI-Genentech Agreement and the
Tripartite Agreement, (ii) to conduct research and development relating to the
Licensed Products, or (iii) to use the OSI Know-how for its own internal use and
for non-commercial purposes.

         8.4 SUBLICENSES. For the first ** after the Effective Date, neither
Party may sublicense any of its rights hereunder to a Third Party without the
prior written consent of the other Party. Beginning ** after the Effective Date,
such prior written consent of the other Party shall not be unreasonably
withheld. The Party requesting consent shall fully disclose to the other Party
all material terms of the proposed sublicense in connection with such request.
If any Party grants a sublicense permitted by this Agreement, all of the terms
and conditions of this Agreement shall apply to the sublicensee to the same
extent as they apply to such Party for all purposes. The sublicensing Party
assumes full responsibility for the performance of all obligations so imposed on
such sublicensee and will itself pay and account to the other Party for all
payments due under this Agreement by reason of the operation of any such
sublicense.

                                   ARTICLE 9.
                                   TRADEMARKS

         9.1 PRODUCT TRADEMARK. All Licensed Products shall be sold in the
Territory under the Product Trademark or described in Section 5.1.

         9.2 GRANT OF LICENSE. OSI grants to Roche, subject to compliance with
the other terms and conditions of this Agreement including, without limitation,
Section 8.4, a sole and exclusive, royalty-free license, with the right to
sublicense, to use the Product Trademark solely within the Territory and solely
in connection with the Licensed Products.

         9.3 QUALITY CONTROL. Roche shall apply the Product Trademark only to
the Licensed Products in accordance with the terms of this Agreement. OSI shall
have the right, at any time during regular business hours but no more than one
time per calendar year, to conduct an examination of the Licensed Products to
determine the quality of such Products. If at any time, such Licensed Products
shall, in the reasonable opinion of OSI, fail to conform with the appropriate
standards of quality as required under this Agreement, OSI or its authorized
representatives shall notify Roche. Upon such notification, the Parties shall
discuss and implement actions to meet standards of quality to the complete
satisfaction of OSI.

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         9.4 ACKNOWLEDGMENT OF OWNERSHIP RIGHTS. Roche acknowledges and agrees
that OSI is the exclusive owner of all right, title, and interest in and to the
Product Trademark and that all use of the Product Trademark by Roche will inure
to the exclusive benefit of OSI. Roche undertakes to make use of the Product
Trademark only in such a way that the rights of OSI in said mark will not be
diminished in any way. Roche shall not use the Product Trademark as all or part
of any corporate name, trade name, trademark, service mark, certification mark,
collective membership mark, domain name, or any other designation confusingly
similar to the Product Trademark. If any application for registration is or has
been filed on behalf of Roche in any country and relates to any mark which, in
the reasonable opinion of OSI, is confusingly similar, deceptive, or misleading
with respect to, or dilutes or in any other way damages the Product Trademark,
Roche shall, at OSI's request, abandon all use of such mark and any registration
or application for registration and shall reimburse OSI for all costs and
expenses, including attorneys' fees, associated with any successful opposition
or related proceeding instigated by OSI or its authorized representative in
response to such filings. Use of Trademark Designations. Roche, at its option,
will use the (TM) designation in conjunction with any use of the Product
Trademark within the Territory until such time as the foreign registrations
issue, unless required by local trademark law. Once the foreign registrations
issue, Roche, at its option, will use the (R) designation with all uses of the
Product Trademark and any other similar designation, unless required by local
trademark law.

         9.5 ACTIONS FOR INFRINGEMENT. Each Party shall notify the other
promptly upon learning of any actual, alleged, or threatened infringement of the
Product Trademark applicable to a Licensed Product in the Territory or of any
unfair trade practices, trade dress imitation, passing off of counterfeit goods,
or like offenses in the Territory. Upon learning of such offense from a Party,
the Parties shall confer regarding the defense of the Product Trademark. OSI
shall have the first right to respond to and defend any such infringement or
offense. In the event OSI elects to do so, Roche will cooperate with and provide
assistance to OSI. OSI will keep Roche reasonably informed at all times as to
the status of the infringement or offense. In the event that OSI elects, within
ninety (90) days, not to respond to or defend any such infringement or offense
or abandons such defense, then, in such event, Roche shall have the option to do
so, provided that OSI will cooperate with and provide assistance to Roche.

         9.6 COSTS OF DEFENSE OF TRADEMARKS. The Party not bringing the action
may elect to contribute ** of the costs and expenses of such action by providing
written notice to the Party bringing the action within ninety (90) days of the
date such action is first brought. Otherwise, the Party bringing the action
shall bring such action or proceeding at its own cost and expense. The Party not
bringing such action agrees to be joined as a party plaintiff if necessary to
prosecute the action and to give reasonable assistance and authority to file and
prosecute the action. Any damages or other monetary awards recovered from
settlement or judgment from such an action shall be allocated first to reimburse
the costs and expenses of the Party bringing the action, then to reimburse the
costs and expenses, if any, of the other Party (except for costs associated with
the other Party being represented by counsel of its own choice). If a single
Party

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<PAGE>   18
has paid the costs and expense of such action, any amounts remaining shall
be paid to such Party. **

                                  ARTICLE 10.
                                 CONFIDENTIALITY

         10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement, the Tripartite Agreement, or otherwise agreed in writing, the Parties
agree that, for the Term of this Agreement and for five (5) years thereafter,
the receiving Party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as permitted under this Agreement any
Know-how and other proprietary information and materials furnished to it by the
other Party pursuant to this Agreement (collectively, "Confidential
Information"), except to the extent that it can be established by the receiving
Party that such Confidential Information:

         (a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party as
demonstrated by competent written records;

         (b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;

         (c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;

         (d) was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others; or

         (e) was subsequently developed by the receiving Party without use of
the Confidential Information as demonstrated by competent written records.

         The Parties may disclose Confidential Information to Genentech in
furtherance of and under the terms of the Tripartite Agreement.

         10.2 AUTHORIZED DISCLOSURE.

         (a) Each Party may disclose Confidential Information hereunder to the
extent such disclosure is required to comply with applicable governmental
regulations or conduct pre-clinical or clinical trials or to the extent ordered
by a court of competent jurisdiction (subject to entry of an appropriate
protective order), provided that if a Party is required by law or regulation to
make any such disclosure of the other Party's Confidential Information it will
give reasonable advance notice to the other Party of such disclosure requirement
and will use its reasonable best efforts to secure confidential treatment of
such Confidential Information required to be disclosed. In addition, each Party
shall be entitled to disclose, under a binder of confidentiality containing
provisions substantially as protective as those of this Article 10, Confidential
Information to its consultants, clinical investigators and contract
manufacturer, if any, but only for any purposes provided for in this Agreement.

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         (b) The restrictions set forth in this Article 10 shall not prevent
Roche from disclosing any technical information to the extent reasonably
necessary to promote the use and sale of Licensed Product in a country upon
actual Regulatory Approval of Licensed Product in the country.

         10.3 SURVIVAL. This Article 10 shall survive the termination or
expiration of this Agreement for a period of five (5) years; except Section
10.2(b) shall perpetually survive termination of this Agreement by Roche under
Section 14.2 or 14.7, or expiration of this Agreement.

         10.4 TERMINATION OF PRIOR AGREEMENT. As of the Effective Date hereof,
this Agreement supersedes the Confidentiality Agreement between the Parties
dated September 25, 2000 but only insofar as such Confidentiality Agreement
relates to the subject matter of this Agreement. All Confidential Information
(as defined in such Confidentiality Agreement) exchanged between the Parties
under such Confidentiality Agreement relating to the subject matter of this
Agreement shall be deemed Confidential Information hereunder and also shall be
subject to the terms of this Article 10.

         10.5 PUBLICATIONS. Except as required by law, and except as set forth
in the Tripartite Agreement, each Party agrees that it shall not publish or
present the results of studies or clinical trials carried out by such Party as
part of the collaboration without the opportunity for prior review by the other
Party. Each Party shall provide to the other Party the opportunity to review any
of the submitting Party's proposed abstracts, manuscripts or presentations
(including information to be presented verbally) which relate to the Field at
least thirty (30) days prior to their intended submission for publication, and
such submitting Party agrees, upon written request from the other Party, not to
submit such abstract or manuscript for publication or to make such presentation
until the other Party is given up to forty-five (45) days from the date of such
written request to seek appropriate patent protection for any material in such
publication or presentation which it reasonably believes is patentable. Once
such abstracts, manuscripts or presentations have been reviewed by each Party
and have been approved for publication, the same abstracts, manuscripts or
presentations do not have to be provided again to the other Party for review for
a later submission for publication. Expedited reviews for abstract and poster
presentations within ten (10) days of receipt by the other Party may be arranged
by sending a prior written notice to such other Party requesting such expedited
review, unless another arrangement is mutually agreed upon by the Parties. Each
Party also shall have the right to require that its Confidential Information
that may be disclosed in any such proposed publication be deleted prior to such
publication. In the event that either Party submits any manuscript or other
publication relating to any Licensed Product, it will consider and acknowledge
the contributions of the other Party, including, as appropriate, co-authorship.

                                  ARTICLE 11.
              OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

         11.1 OWNERSHIP OF INTELLECTUAL PROPERTY.

         (a) INVENTIONS. Each Party will promptly disclose to the other all
Inventions made by it during the Term of this Agreement. As between the Parties,
OSI shall own all OSI Inventions,

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<PAGE>   20
Roche shall own all Roche Inventions, and all Joint Inventions shall be owned
jointly by OSI and Roche. OSI and Roche each shall require all of its employees
to assign all inventions related to Licensed Products made by them to Roche and
OSI, as the case may be.

         (b) OTHER INVENTIONS. During the Term of this Agreement, inventions may
be made by employees of either Party, solely or jointly, which are not
Inventions. As between the Parties, OSI shall own all such inventions made by
its employees solely or jointly with Third Parties, Roche shall own all such
inventions made by its employees solely or jointly with Third Parties and all
such inventions made jointly by employees of OSI and Roche shall be jointly
owned by OSI and Roche. Each Party, at its sole discretion and responsibility,
may file, prosecute and maintain patent applications and patents covering such
solely owned inventions. For inventions that are jointly owned by the Parties,
the Parties shall jointly decide on a patent application filing and prosecution
strategy.

         (c) INVENTORSHIP PROCEDURE. The determination of inventorship for
Inventions shall be made in accordance with applicable laws in the Territory
relating to inventorship on a country-by-country basis. If the Parties cannot
agree as to inventorship, the Parties' patent counsel shall attempt to resolve
the issue of inventorship, and failing that, refer the same to outside counsel.

         11.2 DISCLOSURE OF PATENT APPLICATIONS. In addition to the disclosures
required under Article 13 below, each Party shall provide to the other Party a
copy of any patent applications filed by the Party for Inventions.

         11.3 THIRD PARTY PATENTS. Each Party agrees to bring to the attention
of the other Party in a timely manner any Third Party patent or patent
application that has been brought to its attention by such Third Party that it
believes would have a material affect on the operations to be conducted by or on
behalf of the Parties under this Agreement. In addition, as of the Effective
Date, neither Party has knowledge, without investigation, of any Third Party
patent or patent application that would be reasonably expected to have a
materially adverse effect on the business and operations to be conducted in the
Territory as contemplated by this Agreement by the Parties under this Agreement.
Additionally, as of the Effective Date, to its knowledge (without
investigation), neither Party (i) has received notice from any Third Party that
OSI-774 infringes on any patent or patent application owed by such Third Party
that would have a material effect on the operations to be conducted by or on
behalf of the Parties under this Agreement, or (ii) has received an adverse
written legal opinion from competent outside patent counsel that has not been
disclosed to the other Party. For purposes of this Section 11.3, the knowledge
of OSI shall mean the knowledge of the Chief Executive Officer, Vice President
Business Development and Director of Intellectual Property of OSI.

         11.4 PATENT FILINGS.

         (a) The Parties acknowledge that the Divestiture Agreement governs
responsibility for filing, prosecuting and maintaining the Base Patents, and
responsibility for all material actions relating to the prosecution or
maintenance of the Base Patents in the Territory, including patent oppositions
and revocation proceedings. OSI shall not amend the Divestiture Agreement as it
relates to the prosecution, maintenance or enforcement of the Base Patents
without the prior written consent of Roche, which consent shall not be
unreasonably withheld. To the extent and

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<PAGE>   21
only to the extent permitted by the Divestiture Agreement, OSI shall (i) keep
Roche apprised of the status of each such patent and patent application in Major
European Countries and Japan, (ii) share with Roche all material information
(including correspondence with the various patent offices) relating thereto
promptly after receipt of such information and (iii) at Roche's timely request
intervene in such matters as may be reasonably requested by Roche.

         (b) At its discretion and sole expense, each party shall file,
prosecute, and maintain its patents for its solely owned Inventions in such
countries worldwide as it may determine. OSI and Roche shall agree on which
Party shall file, prosecute and maintain patents in the Territory for any
jointly-owned Inventions on a case-by-case basis. If either Party as described
above elects not to file, prosecute or maintain any such patent in any country
worldwide, it shall so inform the other Party no later than nine (9) months
after the priority filing. If any Party at any time elects not to further
prosecute or maintain any such patent in any country in the Territory, it shall
so inform the other Party immediately. The other Party may then file, prosecute
and maintain any such patents in such countries as it may determine at its own
expense and discretion. The Party which is responsible for filing a patent
application for such an Invention will be termed the "filing Party." For the
U.S., the Major European Countries and Japan and as otherwise requested by the
other Party, the filing Party shall keep the other Party apprised of the status
of each such patent application and patent and shall seek the advice of the
other Party with respect to patent strategy and draft patent applications and
shall give reasonable consideration to any suggestions or recommendations
promptly provided by the other Party concerning the preparation, filing,
prosecution, and maintenance thereof. The Parties shall cooperate reasonably in
the prosecution of all such patent applications and patents and shall share all
material information relating thereto promptly after receipt of such
information. If, during the Term of this Agreement, the filing Party intends to
allow any patent or patent application for an Invention in any country of the
World to lapse or become abandoned without having first filed a substitute, the
filing Party shall make reasonable efforts to notify the other Party of such
intention at least sixty (60) days prior to the date upon which such patent
application or patent shall lapse or become abandoned, and the other Party shall
thereupon have the right, but not the obligation, to assume responsibility for
the prosecution and maintenance thereof at its own expense.

         11.5 INITIAL FILINGS IF MADE OUTSIDE OF THE U.S. The Parties agree to
use reasonable efforts to ensure that any patent filed outside of the U.S. prior
to a U.S. filing will be in a form sufficient to establish the date of original
filing as a priority date for the purposes of a subsequent U.S. filing.

         11.6 ENFORCEMENT RIGHTS.

         (a) NOTIFICATION OF INFRINGEMENT. If either Party learns of any
infringement or threatened infringement by a Third Party of a Licensed Product
Patent in any country of the Territory, such Party shall promptly notify the
other Party in writing and shall provide such other Party with available
evidence of such infringement.

         (b) ENFORCEMENT.

              (i) ROCHE PATENTS. Roche shall have the right, but not the
obligation, to institute, prosecute and control (collectively, "bring") any
action of any Roche Patent that is not a Joint Patent, by counsel of its own
choice, and OSI shall have the right, at its own expense, to be

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represented in any such action by counsel of its own choice. If Roche chooses
not to bring an action or proceeding with respect to such a Roche Patent within
sixty (60) days of being notified of such infringement, then OSI shall have the
right (but not the obligation) to bring such action. The Party not in control
may elect to contribute ** of the costs and expenses of such action or
proceeding by providing written notice to the controlling Party within
forty-five (45) days of the date such action or proceeding is first brought.
Otherwise, the controlling Party shall bring such action or proceeding at its
own cost and expense. The Party not bringing such action or proceeding agrees to
be joined as a party plaintiff if necessary to prosecute the action or
proceeding and to give reasonable assistance and authority to file and prosecute
the action or proceeding. Any damages or other monetary awards recovered from
settlement or judgment from such an action or proceeding shall be allocated
first to reimburse the costs and expenses of the controlling Party, then to
reimburse the costs and expenses, if any, of the other Party (except for costs
associated with the other Party being represented by counsel of its own choice).
If a single Party has paid the cost and expense of such action or proceeding,
any amounts remaining shall be paid to such Party.**.

              (ii) OSI PATENTS FOR INVENTIONS. OSI shall have the right, but not
the obligation, to bring any action or proceeding with respect to infringement
in the Territory of any OSI Patent for OSI Inventions, by counsel of its own
choice, and Roche shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. If OSI chooses not to bring an
action or proceeding with respect to such OSI Patents for OSI Inventions within
sixty (60) days of being notified of such infringement, then Roche shall have
the right (but not the obligation) to bring such action. The Party not in
control may elect to contribute ** of the costs and expense of such action or
proceeding by providing written notice to the controlling Party within
forty-five (45) days of the date such action or proceeding is first brought.
Otherwise, the controlling Party shall bring such action or proceeding at its
own cost and expense. The Party not bringing such action or proceeding agrees to
be joined as a party plaintiff if necessary to prosecute the action or
proceeding and to give reasonable assistance and authority to file and prosecute
the action or proceeding. Any damages or other monetary awards recovered from
settlement or judgment from such an action or proceeding shall be allocated
first to reimburse the costs and expenses of the controlling Party, then to
reimburse the costs and expenses, if any, of the other Party (except for costs
associated with the other Party being represented by counsel of its own choice).
If a single Party has paid the costs and expense of such action or proceeding,
any amounts remaining shall be paid to such Party.**.

              (iii) JOINTLY-OWNED PATENTS FOR INVENTIONS. In the event of an
infringement of a Joint Patent, the Parties shall promptly decide the best way
for the Parties to proceed, including handling costs of enforcement, and
entitlement to recovery from any settlement or judgment from any action or
proceeding to enforce any such jointly-owned patent. In any event, if the
Parties decide to bring an action or proceeding, the Party not bringing such
action or proceeding agrees to be joined as a party plaintiff if necessary to
prosecute the action or proceeding and to give reasonable assistance and
authority to file and prosecute the action or proceeding.

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              (iv) BASE PATENTS. The Parties acknowledge that the Divestiture
Agreement governs responsibility for enforcing the Base Patents. To the extent
and only to the extent permitted by the Divestiture Agreement, the Parties agree
that as between OSI and Roche, the following provision shall apply. OSI shall
have the right, but not the obligation, to bring any action or proceeding with
respect to infringement of any such of the Base Patents in the Territory, by
counsel of its own choice. If OSI chooses not to bring an action or proceeding
in the Territory with respect to such a Base Patent within sixty (60) days of
being notified of such infringement, then, to the extent permitted by the
Divestiture Agreement, Roche shall have the right (but not the obligation) to
bring such action in the Territory. The Party not in control may elect to
contribute ** of the costs and expenses of such action or proceeding by
providing written notice to the controlling Party within forty-five (45) days of
the date such action or proceeding is first brought. Otherwise, the controlling
party shall bring such action or proceeding at its own cost and expense. The
Party not bringing such action or proceeding agrees to be joined as a party
plaintiff if necessary to prosecute the action or proceeding and to give
reasonable assistance and authority to file and prosecute the action or
proceeding. Any damages or other monetary awards recovered from settlement or
judgment from such an action or proceeding shall be allocated first to reimburse
the costs and expenses of the controlling Party, then to reimburse the costs and
expenses, if any, of the other Party (except for costs associated with the other
Party being represented by counsel of its own choice). If a single Party has
paid the costs and expense of such action or proceeding, any amounts remaining
shall be paid to such Party. **.

         (c) SETTLEMENT WITH A THIRD PARTY. The Party that brings suit to
enforce a given Licensed Product Patent shall also have the right to control
settlement of such claim; provided, however, that if one Party controls, no
settlement shall be entered into without the written consent of the other Party
if such settlement would materially and adversely affect the interests of such
other Party. If there is no agreement between the Parties regarding such
settlement, then the dispute will be resolved pursuant to Article 16 below. If
the dispute is not resolved pursuant to Article 16, then the case may not be
settled.

                                  ARTICLE 12.
                         REPRESENTATIONS AND WARRANTIES

         12.1 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby
represents and warrants as follows:

         (a) This Agreement is a legal and valid obligation binding upon such
Party and enforceable in accordance with its terms. The execution, delivery and
performance of the Agreement by such Party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a Party or by which
it is bound, nor violate any law or regulation of any court, governmental body
or administrative or other agency having jurisdiction over it.

         (b) Such Party has not, and during the Term of the Agreement will not,
grant any rights related to Licensed Products to any Third Party which would
conflict with the rights

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<PAGE>   24
granted to the other Party hereunder or under the OSI-Genentech Agreement or
Tripartite Agreement.

         (c) That such Party has the right to grant the licenses granted herein.

         12.2 ROCHE REPRESENTATION. Roche represents that during the course of
this transaction and prior to the Closing Roche has had an opportunity to ask
questions of, and to receive answers from, OSI and its representatives, with
respect to OSI, OSI-774 and the terms and conditions of this transaction.

         12.3 OSI REPRESENTATION. OSI represents that during the course of this
transaction and prior to the Closing, Roche, or representatives of Roche have
had the opportunity to ask questions of and receive answers from representatives
of OSI concerning the terms and conditions of the transaction, and to obtain
information, documents, records and books relative to OSI, its business, OSI-774
and the transaction, and OSI represents and warrants that it did not knowingly
withhold any material information from Roche in response to Roche's inquiries or
otherwise in connection with the subject matter of this Agreement. **

         12.4 THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS
AGREEMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE EXCEPT THAT THIS SHALL NOT AFFECT ANY
REPRESENTATION MADE ABOUT MATERIAL FURNISHED UNDER ANY SUPPLY OR MANUFACTURING
AGREEMENT.

         12.5 DISCLAIMER. IN NO EVENT SHALL EITHER OSI OR ROCHE BE LIABLE FOR
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT BASED ON CONTRACT, TORT OR ANY LEGAL THEORY EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT.

                                  ARTICLE 13.
                             INFORMATION AND REPORTS

         13.1 INFORMATION. Roche and OSI will disclose and make available to
each other in a timely manner all pre-clinical, clinical, regulatory and other
information concerning Licensed Products known by Roche or OSI at any time
during the Term of this Agreement in accordance with the Tripartite Agreement.
Each Party will use Commercially Reasonable and Diligent Efforts to disclose to
the other Party all significant information directly related to Licensed
Products promptly after it is learned or its significance is appreciated. The
ownership and maintenance of a database of adverse drug experience information
for all commercial Licensed Products will be determined in accordance with the
Tripartite Agreement. As soon as reasonably possible after the execution of this
Agreement, the Parties will enter into one or more separate safety and adverse
event reporting agreements which will govern the reporting and other procedures
related to adverse drug experiences under this collaboration between OSI and
Roche, and under the activities in the Tripartite Agreement between the Parties
and Genentech.

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         13.2 PRODUCT COMPLAINTS. Roche will maintain a record of all
non-medical and medical Licensed Product related complaints and will notify OSI
of any complaint in a sufficient time to allow OSI to comply with any regulatory
requirements it may have with respect to such complaint.

         13.3 ADVERSE DRUG EVENTS. The Parties recognize that the Party that is
the holder of an IND and a Drug Approval Application will be required to submit
information and file reports to various governmental agencies on compounds under
clinical investigation, compounds proposed for marketing, or marketed drugs.
Information must be submitted at the time of initial filing for investigational
use in humans and at the time of a request for market approval of a new drug. In
addition, supplemental information must be provided on compounds at periodic
intervals and adverse drug experiences must be reported at more frequent
intervals depending on the severity of the experience. The specific obligations
of each Party with respect to adverse drug experiences will be governed by the
safety and adverse event reporting agreement(s) described in Section 13.1 above.

         13.4 RECORDS OF NET SALES. Roche and its Affiliates shall keep, and
shall require its sublicensees to keep, full, true and accurate books of account
containing all particulars that may be necessary for the purpose of calculating
all royalties payable to OSI. Such books of accounts shall be kept at their
principal place of business. At the reasonable expense of OSI, OSI or its
authorized independent public accountant has the right to engage Roche's
officially appointed worldwide independent public accountant to perform, on
behalf of OSI or its independent public accountant, an audit, conducted in
accordance with international accounting standards (IAS), of such books and
records of Roche, its Affiliates and sublicensees, that are deemed necessary by
Roche's independent public accountant to report on Net Sales of Licensed Product
for the period or periods requested by OSI and the correctness of any report or
payments made under this Agreement. Roche shall have the right to participate in
the determination of the scope of such audit procedures.

         Upon timely request and at least thirty (30) working days' prior
written notice from OSI, such audit shall be conducted as an additional audit
work during Roche's annual audit of the countries specifically requested by OSI,
during regular business hours in such a manner as to not unnecessarily interfere
with Roche's normal business activities, and shall be limited to results in the
two (2) calendar years prior to audit notification. Such audit shall not be
performed more frequently than once per calendar year nor more frequently than
once with respect to records covering any specific period of time. **. All
information, data documents and abstracts herein referred to shall be used only
for the purpose of verifying royalty statements or compliance with this
Agreement, shall be treated as Roche Confidential Information subject to the
obligations of this Agreement and need neither be retained more than one (1)
year after completion of an audit hereof, if an audit has been requested; nor
more than three (3) years from the end of the calendar year to which each shall
pertain; nor more than one (1) year after the date of termination of this
Agreement. Audit results shall be shared by Roche and OSI. If the audit reveals
an underpayment, Roche shall promptly make up such underpayment. If the audit
reveals that the

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                                       23
<PAGE>   26
royalties owed by Roche to OSI for the countries specifically requested and for
any calendar year in total have been understated by more than **.  The failure
of OSI to request verification of any royalty calculation within the period
during which corresponding records must be maintained will be deemed to be
acceptance of the royalty reporting. In the case Roche has overpaid royalties to
OSI, Roche shall be entitled to claim reimbursement of any such amount overpaid
and OSI shall promptly reimburse Roche for any such amount.

         13.5 CONTRIBUTION OF INFORMATION. It is the intention of the Parties
that each will disclose to the other Party such information in its possession
that is useful to the development and commercialization of Licensed Products,
subject to contractual obligations of the Parties entered into prior to the
execution of this Agreement by the Parties.

         13.6 PUBLICITY REVIEW. The Parties agree that the public announcement
of the execution of this Agreement shall be in the form of a press release to be
agreed upon on or before the Effective Date and thereafter each Party shall be
entitled to make or publish any public statement consistent with the contents
thereof. Thereafter, except as set forth in the Tripartite Agreement, OSI and
Roche will jointly discuss and agree, based on the principles of this Section
13.6, on any statement to the public regarding this Agreement or any aspect of
this Agreement and the results of clinical studies conducted hereunder, subject
in each case to disclosure otherwise required by law or regulation as determined
in good faith by each Party. When a Party elects to make any such statement it
will give the other Party at least five (5) day's notice, unless disclosure is
required by law in a shorter period of time, to the other Party to review and
comment on such statement. The Parties acknowledge the importance of supporting
each other's efforts to publicly disclose results and significant developments
regarding Licensed Products. The principles to be observed by OSI and Roche in
such public disclosures will be: accuracy, the requirements for confidentiality
under Article 10, the advantage a competitor of OSI or Roche may gain from any
public statements under this Section 13.6, and the standards and customs in the
biotechnology and pharmaceutical industries for such disclosures by companies
comparable to OSI and Roche. The terms of this Agreement may also be disclosed
to (a) government agencies where required by law, including filings required to
be made by law with the Securities and Exchange Commission, the New York Stock
Exchange, or any national exchange, or (b) Third Parties with the prior written
consent of the other Party, which consent shall not be unreasonably withheld, so
long as such disclosure is made under a binder of confidentiality at least as
restrictive as the confidentiality provisions in Section 10.1 above (in the case
of Third Parties), so long as highly sensitive terms and conditions such as
financial terms are extracted from the Agreement or not disclosed upon the
request of the other Party and the disclosing Party gives reasonable advance
notice of the disclosure under the circumstances requiring the disclosure.

                                  ARTICLE 14.
                              TERM AND TERMINATION

         14.1 TERM. This Agreement shall commence as of the Effective Date. The
Parties have specifically provided elsewhere in this Agreement the term during
which certain rights and obligations hereunder shall apply. Subject to Section
6.4, unless sooner terminated as provided in this Article 14, the remaining
provisions of this Agreement relating to activities in the

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                                       24
<PAGE>   27
Territory shall continue in effect until the date on which OSI is no longer
entitled to receive a royalty on any Licensed Product (the "Term"). Unless
sooner terminated as provided in this Article 14, the license granted to Roche
in Section 9.2 shall survive the Term.

         14.2 TERMINATION.

         (a) TERMINATION FOR BREACH. If either Party materially breaches this
Agreement at any time, which breach is not cured within ninety (90) days after
written notice thereof from the non-breaching Party specifying the nature of
such breach, the non-breaching Party shall have the right to terminate this
Agreement immediately upon written notice to the breaching Party. Upon such
termination, the Parties shall have no further rights or obligations under this
Agreement except as set forth in this Article 14 or as otherwise specifically
provided in this Agreement. The Parties acknowledge and agree that failure to
exercise any right or option with respect to any Licensed Product or to take any
action expressly within the discretion of a Party shall not be deemed to be
material breach hereunder.

         (b) FAILURE OF ROCHE TO MAKE PAYMENT. Notwithstanding Section 14.2(a),
if Roche materially breaches this Agreement by failure to make any of the
payments required under Section 6.3 or 6.5 within thirty (30) days after such
payment becomes payable, and such failure is not remedied within thirty (30)
days after Roche's receipt of written notice from OSI of such breach, then OSI
shall have the right to terminate this Agreement, provided however, that if the
Parties disagree as to the achievement of any milestone event applicable to such
payment, then Roche will not be obligated to make such payment pending
resolution of such disagreement, and the Parties will resolve such disagreement
pursuant to the dispute resolution procedures in Sections 16.1, 16.2 and 16.3.

         (c) BREACHING PARTY OBLIGATIONS. In the event of termination by a Party
due to material breach by the other Party, the breaching Party shall: (i) remain
responsible to supply the amounts of Licensed Product it was obligated to supply
at the time of such termination for a reasonable period of time to allow the
other Party to find an alternate source of supply, or as otherwise required
under a Manufacturing and Supply Agreement between the Parties; (ii) make its
personnel and other resources reasonably available to the other Party as
necessary to effect an orderly transition of responsibilities, with the
reasonable cost of such personnel and resources to be borne by the breaching
Party after the effective date of termination and (iii) if such material breach
occurred prior to the second anniversary of the Closing Date, pay to the
non-breaching Party, in addition to any amounts due and owing by the breaching
Party under this Agreement (other than amounts, if any, that cause the breach)
**. If such material breach occurs on or after the second anniversary of the
Closing Date, the non-breaching Party shall have all remedies provided by law or
equity with respect to such breach, that may be awarded pursuant to Article 16
below, in addition to any amounts due and owing by the breaching Party to the
non-breaching Party under this Agreement.

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                                       25
<PAGE>   28
         14.3 ADDITIONAL EFFECTS OF TERMINATION FOR MATERIAL BREACH.

         (a) In the event that OSI terminates this Agreement pursuant to Section
14.2 above, (i) all rights and licenses granted to Roche hereunder shall revert
to OSI, (ii) title to all jointly owned Inventions shall be transferred to OSI
(except that Roche shall retain ** non-exclusive worldwide license to practice
such Inventions to the extent applicable to products other than Licensed
Products), (iii) Roche shall grant to OSI a sole and exclusive worldwide,
perpetual, ** license under Roche Patents and Roche Know-how to make, have made,
use, sell, offer for sale or import Licensed Products throughout the world, and
(iv) Roche shall provide and assign to OSI, at Roche's expense, for no
additional consideration to be paid by OSI, all clinical data, Drug Approval
Applications, Regulatory Approvals and all other regulatory documentation
specifically covering Licensed Product (but only to the extent they specifically
relate only to Licensed Product and not other products or matters) that Roche
may have developed in its activities under this Agreement.

         (b) In the event that Roche terminates this Agreement pursuant to
Section 14.2 above, at Roche's sole option, all licenses granted to Roche
hereunder shall survive, provided that Roche shall **.

         14.4 PARTIAL TERMINATION.

         (a) PARTIAL TERMINATION BY ROCHE. Beginning two (2) years after the
Effective Date, Roche shall have the right to provide six (6) months written
notice to OSI to terminate this Agreement on a country-by-country basis. Such
country-by-country termination shall be effective at the end of the applicable
notice period.

         (b) PARTIAL TERMINATION BY OSI. OSI shall have the right to terminate
this Agreement on a country-by-country basis if Roche has not launched and
marketed a Licensed Product in any such country within six (6) months after
regulatory approval in such country without an objectively justifiable business
or scientific reason adequately evidenced by competent written records.

         14.5 EFFECT OF PARTIAL TERMINATION.

         (a) Termination pursuant to Section 14.4 shall not relieve either party
of the performance of any obligations incurred or payments (i) due prior to the
effective date of termination, (ii) which are uncancellable, and (iii) in
accordance with the Global Development Plan.

         (b) Notwithstanding the foregoing, if Roche terminates the Agreement
with regard to a Licensed Product in a country in accordance with Section
14.4(a) the following shall apply for the country:

              (i) Roche shall use its reasonable efforts to effect a smooth and
orderly transition of any already on-going clinical studies, Regulatory Approval
or pre-marketing efforts to OSI (including all data and reports in the
possession of Roche);

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                                       26
<PAGE>   29
              (ii) Roche shall make its personnel and other resources reasonably
available to the other Party as necessary to effect an orderly transition of
development responsibilities, with the reasonable cost of such personnel and
resources to be borne by Roche after the effective date of termination;

              (iii) **;

              (iv) all rights and licenses granted herein to Roche shall revert
to OSI, for no additional consideration, and immediately terminate. Thereafter,
OSI shall have the sole and exclusive license to make, have made, use, offer for
sale, sell and import Licensed Product in the Territory under Roche Patents and
Roche Know-how; and

              (v) Roche shall provide and assign to OSI, at Roche's expense, all
clinical data, INDs, NDAs, Regulatory Approvals and all other regulatory
documentation specifically relating to Licensed Product (but only to the extent
they specifically relate only to Licensed Product and not other products or
matters) that Roche may have developed in its activities under this Agreement.

         (c) In the event of termination pursuant to Section 14.4(b), with
regard to such country (i) all licenses granted by OSI to Roche in such country
shall terminate, (ii) all licenses granted by Roche to OSI shall continue and
(iii) at the request of OSI, Roche shall assign to OSI all regulatory filings,
regulatory approvals and clinical data owned and controlled by Roche relating to
Licensed Products, or, if such assignment is not legally permissible, grant OSI
the right to access, use and cross reference such filings, approval and data.

         (d) Roche shall have the unilateral right to terminate this Agreement
at any time upon thirty (30) days' writtten notice to OSI if the Global
Development Committee imposes a clinical hold for at least six (6) months, or
there has been a clinical hold by a regulatory authority in a Major European
Country or Japan for at least six (6) months, provided, however:

              (i) Roche shall use its reasonable efforts to effect a smooth and
orderly transition of any already on-going clinical studies, Regulatory Approval
or pre-marketing efforts to OSI (including all data and reports in the
possession of Roche);

              (ii) Roche shall make its personnel and other resources reasonably
available to the other Party as necessary to effect an orderly transition of
development responsibilities, with the reasonable cost of such personnel and
resources to be borne by Roche after the effective date of termination;

              (iii) **;

              (iv) all rights and licenses granted herein to Roche shall revert
to OSI, for no additional consideration, and immediately terminate. Thereafter,
OSI shall have the sole and exclusive license to make, have made, use, offer for
sale, sell and import Licensed Product in the Territory under Roche Patents and
Roche Know-how; and

              (v) Roche shall provide and assign to OSI, at Roche's expense, all
clinical data, INDs, NDAs, Regulatory Approvals and all other regulatory
documentation specifically

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                                       27
<PAGE>   30
relating to Licensed Product (but only to the extent they specifically relate
only to Licensed Product and not other products or matters) that Roche may have
developed in its activities under this Agreement.

         14.6 TERMINATION WITHOUT CAUSE.

         (a) Subject to Section 6.1, either Party may terminate this Agreement,
upon ten (10) days' prior written notice to the other Party if the FTC does not
approve the transaction under the HSR Act or if all applicable waiting periods,
requests for information (and any extensions thereof) under the HSR Act have not
expired or otherwise been terminated by June 1, 2001, in which case this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of OSI or Roche or their respective affiliates, officers,
directors or shareholders except (i) with respect to Article 10 and (ii) that no
such termination shall relieve any Party from liability for a material breach
hereof.

         (b) OSI may terminate this Agreement, upon ten (10) days' prior written
notice to Roche, if the conditions under Section 6.2(a)(iii)-(vi) are not
satisfied (but only with respect to 6.2(a)(v) if OSI complied) and the
conditions under Section 6.2(a)(i) and 6.2(b)(i) have been satisfied or waived.
Nothing in this Section shall prevent OSI from seeking any remedy that it may
have in addition to those rights it has under this Agreement. Roche may
terminate this Agreement, upon ten (10) days' prior written notice to OSI, if
the conditions under Section 6.2(b)(iii) or 6.2(b)(iv) are not satisfied (but
only if Roche has complied with respect to Section 6.2(b)(iv) and has complied
with Section 6.2(a)(iv)) and the conditions under Section 6.2(a)(i) and
6.2(b)(i) have been satisfied or waived. Nothing in this Section shall prevent
Roche from seeking any remedy that it may have in addition to those rights it
has under this Agreement. If either OSI or Roche terminates this Agreement in
accordance with this Section 14.6(b) but Roche has made payments under Sections
6.2(a)(iii) and (iv), then Roche shall be entitled to a prompt refund to such
payments.

         14.7 BANKRUPTCY. Either Party may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement, in whole or in
part as the terminating Party may determine, by written notice to the other
Party in the event the other Party shall have become bankrupt, or shall have
made an assignment for the benefit of its creditors or there shall have been
appointed a trustee or receiver of the other Party or for all or a substantial
part of its property or any case or proceeding shall have been commenced or
other action taken by or against the other Party in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up, arrangement, composition
or readjustment of its debts or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any jurisdiction now
or hereafter in effect and any such event shall have continued for ninety (90)
days undismissed, unbonded and undischarged. All rights and licenses granted
under to this Agreement by one Party to the other Party are, and shall otherwise
be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses
of rights to "intellectual property" as defined under Section 101 (56) of the
Bankruptcy Code. The Parties agree that the licensing Party under this Agreement
shall retain and may fully exercise all of its rights and elections under the
Bankruptcy Code in the event of a bankruptcy by the other Party. The Parties
further agree that in the event of the commencement of a bankruptcy proceeding
by or against one Party under the Bankruptcy Code, the licensee shall be
entitled to complete access to any such intellectual property pertaining to the

                                       28
<PAGE>   31
rights granted in the licenses hereunder of the Party by or against whom a
bankruptcy proceeding has been commenced and all embodiments of such
intellectual property.

         14.8 SURVIVING RIGHTS. Except as modified in this Article 14, the
obligations and rights of the Parties under Articles 10, 14 and 15 and Sections
4.2, 8.2 (only with respect to Genentech), 11.1(a) and (c), 11.2, 11.6, 13.4,
13.6 (but only regarding disclosures required by law), 16.2, 17.5, 17.6,
17.8(a), 17.9, 17.10 and 17.4 of this Agreement will survive any termination or
expiration of this Agreement. In addition, the obligations and rights of any
other provision of this Agreement, which by the nature of the provision and the
nature of the termination or expiration, are intended to survive, shall survive
and continue to be enforceable.

         14.9 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Except as specifically
provided in this Agreement, termination, relinquishment or expiration of the
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of either Party prior to such termination,
relinquishment or expiration, including damages arising from any breach
hereunder. Except as specifically provided, such termination, relinquishment or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of the Agreement.

                                  ARTICLE 15.
                                 INDEMNIFICATION

         15.1 INDEMNIFICATION BY ROCHE. Roche hereby agrees to save, defend and
hold OSI and its agents and employees harmless from and against any and all
losses, damages, liabilities, settlements, penalties, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
(collectively, "Losses") resulting or alleged to result from any actual or
asserted violation of applicable law or regulation by Roche, its Affiliates or
sublicensees by virtue of which Licensed Products manufactured (if Roche becomes
a manufacturer under an agreement with OSI with respect thereto), advertised,
marketed, handled, stored, distributed or sold by Roche, its Affiliates and
sublicensees shall be alleged or determined to be adulterated, mislabeled or
otherwise not in compliance, relating to the foregoing, except to the extent
such Losses result from the negligence or willful misconduct of OSI or its
employees or agents. This indemnification provision shall include any reasonable
attorney's fees incurred by OSI in connection with enforcing this
indemnification.

         15.2 INDEMNIFICATION BY OSI. OSI hereby agrees to save, defend and hold
Roche and its agents and employees harmless from and against any and all Losses
resulting or alleged to result from any actual or asserted violation of
applicable law or regulation by OSI, its Affiliates or sublicensees by virtue of
which Licensed Products manufactured, handled, stored, distributed or sold by
OSI, its Affiliates and sublicensees shall be alleged or determined to be
adulterated, mislabeled or otherwise not in compliance, relating to the
foregoing except to the extent such Losses result from the negligence or willful
misconduct of Roche or its employees or agents. This indemnification provision
shall include any reasonable attorney's fees incurred by Roche in connection
with enforcing this indemnification.

         15.3 INDEMNIFICATION CONDITIONS. In the event that a Party is seeking
indemnification under Section 15.1 or 15.2 above, it shall inform the
indemnifying Party of a claim as soon as

                                       29
<PAGE>   32
reasonably practicable after it receives notice of the claim, shall permit the
indemnifying Party to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration),
shall cooperate as requested (at the expense of the indemnifying Party) in the
defense of the claim, and shall not settle or compromise the claim without the
express written consent of the indemnifying Party.

                                  ARTICLE 16.
                               DISPUTE RESOLUTION

         16.1 DISPUTES. The Parties recognize that disputes as to certain
matters may from time to time arise during the Term of this Agreement which
relate to either Party's rights and/or obligations hereunder. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. To accomplish this objective, the
Parties agree to follow the procedures set forth in this Article 16 if and when
a dispute arises under this Agreement.

         Unless otherwise specifically recited in this Agreement, disputes among
the Parties shall be presented to the chief executive officer of Roche and of
OSI, or their respective designee, for resolution. In the event that the chief
executive officer of Roche and OSI, or their respective designees, cannot
resolve the dispute within thirty (30) days of being requested by a Party to
resolve a dispute, either Party may, by written notice to the other, invoke the
provisions of Section 16.2 hereinafter.

         16.2 ARBITRATION. The Parties agree that any dispute, controversy or
claim arising out of or relating to this Agreement, or the breach, termination,
performance or invalidity thereof, shall be resolved through binding
arbitration. If the dispute arises between the Parties, and if such dispute
cannot be resolved pursuant to Section 16.1 above, each Party shall have the
right to have any such unresolved dispute, controversy or claim resolved by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, except as modified herein. Each such
arbitration shall be conducted by a panel of three arbitrators; provided that
each such arbitrator shall have had, by the time of the actual arbitration, at
least ten (10) years of experience as an attorney and experience in the
pharmaceuticals industry so as to better understand the legal, business and
scientific issues addressed in the arbitral proceeding. A reasoned arbitration
decision shall be rendered in writing within thirty (30) days of the conclusion
of the arbitration hearing and shall be binding and not be appealable to any
court in any jurisdiction. The prevailing Party may enter such decision in any
court having competent jurisdiction. Each Party must bear its own attorney's
fees and associated costs and expenses. The arbitrators shall have the authority
to grant specific performance and shall allocate costs between the Parties
(excluding attorney's fees). If brought by Roche, such arbitration shall be held
in New York, New York and in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. If brought by OSI, such arbitration shall
be held in Zurich, Switzerland under the rules of the Zurich Chamber of
Commerce.

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<PAGE>   33
                                  ARTICLE 17.
                                  MISCELLANEOUS

         17.1 ASSIGNMENT.

         (a) This Agreement may not be assigned by either Party without the
consent of the other, except that each Party may, without such consent, assign
this Agreement and the rights, obligations and interests of such Party, in whole
or in part, to any of its Affiliates, wholly-owned subsidiaries, to any
purchaser of all or substantially all of its assets in the line of business to
which this Agreement pertains, or of all of its capital stock, or to any
successor corporation resulting from any merger or consolidation of such Party
with or into such corporation.

         (b) This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the Parties. Any attempt to assign any
portion of this Agreement in violation of this Section 17.1 shall be void.
Subject to the foregoing, any references to OSI and Roche hereunder shall be
deemed to include the successors and permitted assigns thereof.

         17.2 LEGAL COMPLIANCE. Each Party shall comply in all material respects
with all laws, rules and regulations applicable to the conduct of its business
pursuant to this Agreement.

         17.3 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other cause beyond the control and without the fault or negligence of the
defaulting Party, provided that the Party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure; provided, however,
that in no event shall a Party be required to settle any labor dispute or
disturbance. Such excuse shall continue as long as the condition preventing the
performance continues. Upon cessation of such condition, the affected Party
shall promptly resume performance hereunder. Each Party agrees to give the other
Party prompt written notice of the occurrence of any such condition, the nature
thereof, and the extent to which the affected Party will be unable to perform
its obligations hereunder. Each Party further agrees to use all reasonable
efforts to correct the condition as quickly as possible and to give the other
Party prompt written notice when it is again fully able to perform its
obligations.

         17.4 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

         17.5 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no
right, express or implied, is granted by the Agreement to use in any manner the
name "OSI," "Roche" or any other trade name or trademark of the other Party or
it's Affiliates in connection with the performance of the Agreement.

         17.6 NOTICES. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).

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<PAGE>   34
         IF TO OSI TO:        OSI PHARMACEUTICALS, INC.
                              106 Charles Lindbergh Boulevard
                              Uniondale, New York 11553-3632
                              Attention: Colin Goddard
                                         Chief Executive Officer
                              Telecopy:  516-745-6429

         WITH A COPY TO:      MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO, P.C.
                              666 Third Avenue
                              New York, NY 10017
                              Attention: Joel I.  Papernik, Esq.
                              Telecopy:  212-983-3115

         IF TO ROCHE TO:      F.HOFFMANN-LA ROCHE LTD
                              Grenzacher Strasse 124
                              CH-4070-Basel
                              Switzerland
                              Attention: Corporate Law
                              Telecopy:  41-61-688-13-96

         17.7 WAIVER. Except as specifically provided for herein, the waiver
from time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of same or of any other of such Party's rights or remedies provided in
this Agreement.

         17.8 SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (a) the remainder of this Agreement,
or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.

         17.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with, the laws of the State of New York.

         17.10 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authorized the ambiguous provision.

         17.11 HEADINGS. All headings are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.

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<PAGE>   35
         17.12 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         17.13 ENTIRE AGREEMENT. Except for the Tripartite Agreement, this
Agreement, including all Exhibits attached hereto which are hereby incorporated
herein by reference, sets forth all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto with respect to the subject matter hereof and supersedes and terminates
all prior agreements and understandings between the Parties, subject to Section
10.4 above with respect to prior Confidentiality Agreements. Except for the
Tripartite Agreement, there are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties with respect to the subject matter hereof other than as set forth
herein and therein. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties hereto unless reduced to
writing and signed by the respective authorized officers of the Parties. If any
provision of this Agreement conflicts with the provisions of the Tripartite
Agreement, the provisions of the Tripartite Agreement shall govern such
conflict.

         17.14 NO THIRD PARTY BENEFICIARY. Except as expressly provided herein,
this Agreement shall not confer any rights or remedies upon any Third Party
other than the Parties and their respective successors and permitted assigns.

                   [This space is intentionally left blank.]

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<PAGE>   36
         IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first above
written.

OSI PHARMACEUTICALS, INC.                   F.HOFFMANN-LA ROCHE LTD

By:    /s/ COLIN GODDARD                      By:    /s/ WERNER HENRICH
       ---------------------------                   --------------------------

Name:  Colin Goddard                          Name:  Werner Henrich
       -----------------------------------           --------------------------

Title: Chairman & Chief Executive Officer     Title: Senior Vice President
       -----------------------------------           --------------------------

                                              By:    /s/ RUDOLF SCHAFFNER
                                                     --------------------------

                                              Name:  Rudolf Schaffner
                                                     --------------------------

                                              Title: Vice President
                                                     --------------------------
<PAGE>   37
                                    EXHIBIT A

  **

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<PAGE>   38
                                    EXHIBIT B
                             GLOBAL DEVELOPMENT PLAN

  **

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                                      B-1
<PAGE>   39
                                    EXHIBIT C
                     OSI/ROCHE DEVELOPMENT COSTS AND BUDGET

         C.1  OSI/ROCHE DEVELOPMENT COSTS.

         OSI/Roche Development Costs shall mean the costs specifically
attributable to the development of a Licensed Product and actually incurred in
the Territory after the Effective Date of the Agreement through the date of
termination as defined under the Tripartite Agreement to the extent they are not
already considered and accounted as Global Development Costs as defined under
Exhibit A of the Tripartite Agreement.

         Such costs shall comprise those costs, both direct and indirect
including Development Allocable Overhead (i.e. fully burdened development
costs), required to obtain, expand and/or maintain the authorization and/or
ability to manufacture, formulate, fill, ship and/or sell a Licensed Product in
commercial quantities in the Territory.

         OSI/Roche Development Costs shall include but are not limited to costs
of development including cost of studies on the toxicological, pharmacokinetic,
metabolic or clinical aspects of a Licensed Product conducted internally or by
individual investigators, or consultants, process development, process
improvement, qualification lots, costs for preparing, submitting, reviewing or
developing data or information necessary for the purpose of submission to a
governmental authority in order to obtain, expand and/or maintain approval of a
Licensed Product in the Territory.

         OSI/Roche Development Costs shall include expenses for data management,
statistical designs and studies, document preparation, and other administration
expenses associated with the clinical testing program or post registration
clinical studies required to obtain, expand and/or maintain approvals in the
Territory.

         OSI/Roche Development Costs shall not include patent costs,
pre-registration marketing costs (e.g. trademark costs, advertising agency
selection costs, pre-marketing studies), post-registration clinical and
marketing studies which are not conducted in order to obtain, expand and/or
maintain approval of a Licensed Product in the Territory.

         OSI/Roche Development Costs shall include a lump sum equivalent to **
of the sum of the development costs of Roche and of OSI as defined above, in
lieu of General and Administrative Costs.

         In determining OSI/Roche Development Costs, each Party will use its
respective project accounting systems with the purpose of tracking costs as much
as possible on a indication-by-indication basis, and will review and approve its
respective project accounting systems and methodologies with the other Parties.
In general, these project accounting systems report actual time spent on
specific projects, applying the actual labor costs, capture actual costs of
specific projects and allocate other expenses to projects.

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                                      C-1
<PAGE>   40
         C.2  DEVELOPMENT ALLOCABLE OVERHEAD.

         Shall mean costs incurred by a Party or for its account which are
attributable to a Party's supervisory services, occupancy costs, payroll,
information systems, human resources or purchasing functions and which are
allocated to the development activities based on a space occupied or headcount
or other activity-based method. Development Allocable Overhead shall not include
any costs attributable to general corporate activities including, by way of
example, executive management, investor relations, business development, legal
affairs and finance.

         C.3  OSI/ROCHE DEVELOPMENT PROGRAM.

         In addition to the Global Development Plan as defined in the Tripartite
Agreement, the Parties shall agree on a OSI/Roche Development Program
encompassing activities for mutually approved indications of a Licensed Product
in the Territory which are not included in the Global Development Plan. The
parties shall conduct the OSI/Roche Development Program in accordance with
annual budgets in U.S. Dollars and shall share OSI/Roche Development Costs
provided that they relate to activities derived from the OSI/Roche Development
Program.

         C.4  BUDGETING OSI/ROCHE DEVELOPMENT COSTS.

         The development plans and budgets for a given Licensed Product shall be
prepared on an indication-by-indication basis, for at least ** calendar quarters
in advance and shall be updated as a rolling development budget whenever needed
quarterly if changes in the Development Program so require it, but at least on
an annual basis before September 15th of each year.

         The rolling development budget shall identify activities in sufficient
detail as agreed upon between the Parties to allow an appropriate monitoring of
expenses versus budget.

         C.5  CHARGING OSI/ROCHE DEVELOPMENT COSTS.

         The OSI/Roche Development Program and rolling development budget as
agreed by the Parties for the Licensed Product shall be the reference for
charging and sharing OSI/Roche Development Costs.

         The responsibility for the consolidated reporting of the OSI/Roche
Development Costs shall be with Roche, in close cooperation with OSI. The
Parties shall determine the structure and the level of details which shall apply
to report their incurred OSI/Roche Development Costs for consolidation by Roche,
taking into consideration the level of details which shall apply to report the
Global Development Costs as per the Tripartite Agreement. This will be the basis
for OSI/Roche Development Program accounting and determining of payments between
the Parties.

         The Clinical Supplies for clinical studies of the OSI/Roche Development
Program shall be charged as material costs, at Fully Burdened Manufacturing Cost
(excluding General and Administrative Costs), whether supplied by a Party or by
a Third Party. Fully Burdened Manufacturing Cost means one hundred percent
(100%) of a Party's manufacturing cost (in accordance with the Party's
accounting policies consistently applied), which shall comprise the cost of
goods produced as determined by the Party manufacturing or contracting with a
Third

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                                      C-2
<PAGE>   41
Party for each stage of the manufacturing process in accordance with IAS
consistently applied by such Party, including product quality assurance/control
costs, applicable Allocable Overhead, and other costs borne by the Party for
transport, customs clearance and storage of product at the request of the other
Party prior to the time of sale (i.e., freight, customs, duty and insurance).

         C.6  REPORTING AND CONSOLIDATING OSI/ROCHE DEVELOPMENT COSTS.

         OSI/Roche Development Costs shall be reported as early as possible, but
no later than ** days after the last day of the calendar quarter in question,
and shall separately identify the quarterly and year-to-date cumulative figures.
Each Party shall report OSI/Roche Development Costs in a manner consistent with
its project accounting system.

         As early as possible, but no later than ** days after the last day of
the calendar quarter OSI will provide Roche with financial statements for its
activities, prepared in accordance with the terms contained in this Exhibit C in
order for Roche to prepare the consolidated reports. No later than ** days after
the last day of the calendar quarter Roche shall provide OSI with a copy of a
reconciliation statement identifying on an indication-by-indication basis the
OSI/Roche Development Costs and the calculation serving as the basis of
determining payments between the Parties. Each quarterly report will be
accompanied by and include reasonable documentation which itemizes and explains
the costs incurred as to allow comparison to the annual budget and provide
details as agreed upon by the Parties, in U.S. Dollars in a manner consistent
with the amounts budgeted for such activities.

         C.7  SHARING OF OSI/ROCHE DEVELOPMENT COSTS - PAYMENTS BETWEEN THE
PARTIES.

         OSI/Roche Development Costs will be shared pursuant to Section 4.3 of
this Agreement.

         A settlement balancing payment will be invoiced quarterly to one of the
Parties, no later than ** days after the last day of the quarter, such that each
Party bears its proportionate share of the OSI/Roche Development Costs. The
Parties shall meet on an annual basis no later than ** days after the last day
of the year in question and a "true-up" of the calendar year actual OSI/Roche
Development Costs and its sharing between the Parties shall be presented for
approval. A corrective settlement payment may be issued as a consequence of the
final decision taken by the Parties. Such yearly corrective settlement payment
will be approved and invoiced as early as possible, but no later than ** days
after the last day of the year in question.

         Any payment which is not paid before ** days from receipt of an invoice
will bear interest, to the extent permitted by applicable law, at the average
one-month European Interbank Offered Rate (=EURIBOR) as reported by Datastream
(or a successor or similar organization) from time to time, calculated on the
number of days such a payment is overdue.

         C.8  AUDITS AND INTERIM REVIEWS.

         The parties shall maintain and cause the third parties acting for their
account to maintain books of account and complete and accurate records
pertaining to the OSI/Roche Development

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                                      C-3
<PAGE>   42
Costs in sufficient detail to permit to confirm the correct calculation of the
OSI/Roche Development Costs.

         At a party's ("Auditing Party") request, the other party ("Audited
Party") will cause its independent certified public accountants to prepare
abstracts of its relevant business records for review by the Auditing Party. **

         Such auditing shall not be requested to be performed more frequently
than once per calendar year nor more frequently than once with respect to
records covering any specific period of time, shall be performed upon no less
than thirty (30) days prior written notice to the Audited Party, during the
Audited Party's normal business hours and shall not commence later than two (2)
years following the end of the period requested to be audited. All information,
data, documents and abstracts herein referred to shall be used for the sole
purpose of verifying compliance with this Agreement, shall be treated as
Confidential Information subject to the obligations of this Agreement and need
neither be retained more than one (1) year after completion of an audit hereof,
if an audit has been requested; nor more than three (3) years from the end of
the calendar year to which each shall pertain; nor more than one (1) year after
the date of termination of this Agreement. Audit results shall be shared by
Roche and OSI.

         The Auditing Party will bear the full cost of the preparation of
abstracts and any such audit unless such abstracts or audit discloses an
underpayment to the Auditing Party of more than ** from the amounts paid for the
entire audited period. The Audited Party shall (1) promptly pay any underpayment
due the Auditing Party and, (2) if the underpayment due to the Auditing Party is
more than ** of the amount paid, bear the full reasonable cost of such audit.
Any overpayment by the Audited Party shall be deducted from the next payment due
the Auditing Party under Section 4 of this Agreement or, if no such further
payments are due promptly reimbursed by the Auditing Party.

         The failure of a Party to request verification of any calculation of
OSI/Roche Development Costs during the period when records have to be retained
shall be considered acceptance of the accuracy of such reporting by such Party.

         C.9  START OF OPERATIONS AND EFFECTIVE ACCOUNTING DATE TERMINATION.

         Operation of the OSI/Roche Development Program will be deemed to have
commenced as of the Effective Date of the Agreement. Costs and expenses incurred
prior to such date are not chargeable to the OSI/Roche Development Costs.

         For reporting and accounting purposes with respect to the OSI/Roche
Development Costs, the effective termination date of the Agreement will be the
nearest month end to which such termination takes place.

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                                      C-4

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