Document:

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                                                                    EXHIBIT 10.1

Confidential treatment has been requested for portions of this Exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated by ***. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

                                LICENSE AGREEMENT

                                 BY AND BETWEEN

                                DR. ROBERT BASES

                                       AND

                         SPECTRUM PHARMACEUTICALS, INC.

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                 Page
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<S>                                              <C>
1.       DEFINITIONS.........................      1

         1.1      Affiliate..................      1
         1.2      Confidential Information...      2
         1.3      Controlled.................      2
         1.4      EMEA.......................      2
         1.5      Event of Default...........      2
         1.6      FDA........................      2
         1.7      First Commercial Sale......      2
         1.8      Foundation.................      3
         1.9      GAAP.......................      3
         1.10     Improvements...............      3
         1.11     IND........................      3
         1.12     Invention..................      3
         1.13     Joint Inventions...........      3
         1.14     Joint Patent...............      3
         1.15     Know-How...................      3
         1.16     Licensed Field.............      3
         1.17     Materials..................      3
         1.18     Milestone Payment..........      4
         1.19     NDA........................      4
         1.20     Net Sales..................      4
         1.21     Patent.....................      4
         1.22     Patent Rights..............      5
         1.23     Product....................      5
         1.24     Product License............      5
         1.25     Regulatory Authority.......      5
         1.26     Royalty Term...............      5
         1.27     Sublicense.................      5
         1.28     Technology.................      5
         1.29     Term.......................      5
         1.30     Territory..................      5
         1.31     Third Party................      5
         1.32     Valid Claim................      5

2.       PRODUCT LICENSE.....................      6

         2.1      Product License............      6
         2.2      Sublicenses................      6
         2.3      Material Transfer..........      6
         2.4      Research License...........      6
         2.5      Regulatory Filings.........      6

3.       FINANCIAL TERMS AND CONDITIONS......      7

         3.1      Initial Fees...............      7
         3.2      Milestone Payment..........      7
         3.3      Product Royalties..........      7
         3.4      Payments...................      8
         3.5      Records....................      8
         3.6      Income Tax Withholding.....      8
         3.7      Audit......................      9
</TABLE>

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<TABLE>
<S>                                                                               <C>
         3.8      Late Payments................................................    9

4.       OWNERSHIP AND PATENT MATTERS..........................................   10

         4.1      Ownership....................................................   10
         4.2      Prosecution and Maintenance of Patent Rights.................   10
         4.3      Infringement Actions.........................................   12

5.       OBLIGATIONS RELATED TO DEVELOPMENT, MARKETING AND COMMERCIALIZATION...   13

         5.1      Spectrum's Diligence Obligations.............................   13
         5.2      Governmental Approvals.......................................   13
         5.3      Manufacture of Products......................................   14
         5.4      Reporting....................................................   14

6.       INDEMNITY.............................................................   14

         6.1      Spectrum Indemnification.....................................   14
         6.2      Dr. Bases Indemnification....................................   14
         6.3      Indemnity Procedure..........................................   15

7.       REPRESENTATIONS AND WARRANTIES........................................   15

         7.1      By Dr. Bases.................................................   16
         7.2      By Spectrum..................................................   17

8.       ADDITIONAL COVENANTS..................................................   17

         8.1      Preservation of Title........................................   18
         8.2      No Conflicts.................................................   18

9.       CONFIDENTIALITY AND PUBLICATION.......................................   18

         9.1      Treatment of Confidential Information........................   18
         9.2      Public Statements............................................   19

10.      TERM, DEFAULT AND TERMINATION.........................................   20

         10.1     Term of Agreement............................................   20
         10.2     Unilateral Termination - Spectrum............................   20
         10.3     Default......................................................   21
         10.4     Insolvency...................................................   21
         10.5     Effects of Expiration or Termination.........................   22
         10.6     Work-in-Progress.............................................   23

11.      DISPUTE RESOLUTION....................................................   23

         11.1     Arbitration..................................................   23
         11.2     Administration...............................................   24
         11.3     Waivers......................................................   24
         11.4     Non-Arbitrable Disputes......................................   25

12.      GENERAL PROVISIONS....................................................   25
</TABLE>

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<TABLE>
<S>                                          <C>
12.1     Further Assurances...............   25
12.2     Independent Contractors..........   25
12.3     Entire Agreement; Modification...   25
12.4     Force Majeure....................   25
12.5     Limitation of Liability..........   25
12.6     Assignment.......................   26
12.7     Governing Law....................   26
12.8     Headings.........................   26
12.9     Severability.....................   26
12.10    No Waiver........................   26
12.11    Notices 26
12.12    Compliance with Laws.............   27
</TABLE>

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                                LICENSE AGREEMENT

      THIS LICENSE AGREEMENT (this "AGREEMENT"), entered into as of May 16, 2005
(the "EFFECTIVE DATE"), by and between SPECTRUM PHARMACEUTICALS, INC., a
Delaware corporation ("SPECTRUM") and DR. ROBERT E. BASES, an individual whose
permanent residence is in New Rochelle, New York. Dr. Bases and Spectrum may
each be referred to herein individually as a "PARTY" and collectively as the
"PARTIES."

                                    RECITALS

      A. Whereas, Dr. Bases is the inventor of a method of treating cancer of
the central nervous system through the administration of lucanthone and
radiation (the "Invention") and has developed certain know-how concerning the
Invention.

      B. Whereas the Invention is the subject of a United States patent entitled
***.

      C. Whereas, Spectrum is engaged in the development and eventual marketing,
sale and licensing of pharmaceutical products and desires to have access to the
Invention and Dr. Bases' know how relating to the Invention.

      D. Whereas, the Parties desire to enter into a license agreement whereby
Spectrum shall obtain the right to develop and commercialize the Invention for
the purposes of preventing, diagnosing and treating cancer.

      NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, Dr. Bases and Spectrum hereby agree as follows:

                                    AGREEMENT

1.    DEFINITIONS Capitalized terms shall have the meaning set forth below.

      1.1 AFFILIATE The term "Affiliate" shall mean any entity which directly or
indirectly controls, is controlled by, or is under common control with Spectrum
or Dr. Bases, as applicable. The term "control" as used in this definition means
having (i) more than fifty percent (50%) ownership of the assets, profit
interest or outstanding voting securities or (ii) the power to direct or cause
the direction of the management and the policies of an entity, whether by
contract or otherwise.

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Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.

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      1.2 CONFIDENTIAL INFORMATION The term "Confidential Information" shall
mean all know-how, trade secrets and other proprietary or confidential
information of a disclosing Party or held by the disclosing Party under an
obligation of confidentiality to a Third Party, which may be disclosed from one
Party to the other Party at any time and from time to time during the term of
this Agreement. "Confidential Information" shall include the terms of this
Agreement as well as any proprietary or confidential information that is jointly
owned by the Parties. Information shall not be considered Confidential
Information to the extent such information:

                  (a) is known by the receiving Party at the time of its
receipt, and not through a prior disclosure by the disclosing Party, as
documented by business records;

                  (b) is properly in the public domain;

                  (c) is subsequently disclosed to the receiving Party by a
Third Party who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party; or

                  (d) is developed by the receiving party independently of
Confidential Information received from the disclosing Party, as documented by
research and development records.

Nothing in this definition shall preclude a Party from use or disclosure of any
proprietary or Confidential Information owned by that Party where the other
Party has no rights of ownership.

      1.3 CONTROLLED The term "Controlled" shall mean possessing the ability to
grant a license or sublicense without violating (i) any applicable law or
governmental regulation or (ii) the terms of an agreement with a Third Party
that has an effective date which predates the Effective Date hereof.

      1.4 EMEA The term "EMEA" shall mean the European Agency for the Evaluation
of Medicinal Products (European Medicines Agency), any successor agency thereto
or any equivalent replacement agency having substantially the same functions.

      1.5 EVENT OF DEFAULT The term "Event of Default" shall have the meaning
set forth in Section 10.3.1 of this Agreement.

      1.6 FDA The term "FDA" shall mean the United States Food and Drug
Administration, or any successor agency thereto.

      1.7 FIRST COMMERCIAL SALE The term "First Commercial Sale" shall mean,
with respect to any Product, the first sale for end use or consumption of such
Product in a country after all required approvals, including marketing and
pricing approvals, have been granted by the governing Regulatory Authority of
such country.

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      1.8 FOUNDATION The term "Foundation" shall mean the Rome Sisters
Foundation of New Rochelle, NY.

      1.9 GAAP The term "GAAP" shall mean generally accepted accounting
principles in the United States or International Accounting Standards outside
the United States, in each case as consistently applied by Spectrum, its
Affiliates or its sublicensees in their respective financial statements, audited
if applicable.

      1.10 IMPROVEMENTS The term "Improvements" shall mean one or more
enhancements, improvements or modifications in the manufacture, formulation,
conjugations, ingredients, preparation, dosage, administration or packaging of a
Product or the Technology.

      1.11 IND The term "IND" shall mean (i) an Investigational New Drug
application as defined in the United States Food, Drug & Cosmetic Act and
applicable regulations promulgated thereunder, as amended from time to time or
(ii) an equivalent application or filing with the applicable Regulatory
Authority in any country other than the United States allowing the commencement
of human clinical trials.

      1.12 INVENTION The term "Invention" is defined in Recital A above.

      1.13 JOINT INVENTIONS The term "Joint Inventions" shall have the meaning
set forth in Section 4.1 of this Agreement.

      1.14 JOINT PATENT The term "Joint Patent" shall mean any Patent filed with
respect to a Joint Invention.

      1.15 KNOW-HOW The term "Know-How" shall mean any methods, processes,
techniques and data that relate to the Patent Rights or the Materials which are
necessary or useful for researching, developing, manufacturing, using or selling
a Product, now or in the future owned or Controlled by Dr. Bases, whether or
not: (i) the same is eligible for protection under the patent laws of the United
States or elsewhere; (ii) enforceable as a trade secret; or (iii) the copying of
which would be enjoined or restrained by a court as constituting unfair
competition.

      1.16 LICENSED FIELD The term "Licensed Field" shall mean all uses,
including without limitation, all therapeutic, prophylactic, palliative and
diagnostic uses.

      1.17 MATERIALS The term "Materials" shall mean the materials provided by
Dr. Bases to Spectrum under this Agreement as set forth in Exhibit A, as the
same may be amended by the Parties from time to time.

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      1.18 MILESTONE PAYMENT The term "Milestone Payment" shall mean the payment
from Spectrum to Dr. Bases under Section 3.2.

      1.19 NDA The term "NDA" shall mean a New Drug Application, as defined in
the United States Food, Drug & Cosmetic Act and applicable regulations
promulgated thereunder, as amended from time to time, to obtain approval from
the FDA for commercial sale of a Product, or an equivalent application or filing
with the applicable Regulatory Authority in any country other than the United
States.

      1.20 NET SALES The term "Net Sales" shall mean the amount received by
Spectrum, its Affiliates or its sublicensees on account of sales of a Product to
Third Parties in the Territory, less the following deductions to the extent
actually allowed or specifically allocated to the Product by the selling party
using GAAP and not separately invoiced: (i) sales and excise taxes and duties
paid or allowed by the selling party and any other governmental charges imposed
upon the production, importation, use or sale of such Product; (ii) customary
trade, quantity and cash discounts allowed on the Product; (iii) allowances or
credits to customers on account of rejection or return of Product or on account
of retroactive price reductions affecting such Product; (iv) freight and
insurance costs; (v) rebates, chargebacks and other amounts paid on sale or
dispensing of the Product; (vi) sales commissions paid to distributors and/or
selling agents; (vii) the booked cost of devices or systems used for delivering
a Product into the patient where the Product when sold is a combination of the
active pharmaceutical ingredient and the device or system; and (viii) amounts
not actually received due to bad debt or returned checks. For the avoidance of
doubt, for each Product the Net Sales shall be calculated only once for the
first sale of such Product by Spectrum, its Affiliate or its sublicensee, as the
case may be, to a Third Party which is neither an Affiliate or sublicensee of
Spectrum. A sale of Products by Spectrum, its Affiliate or its sublicensee to a
wholesaler shall be regarded as the first sale of the Product for the purpose of
calculating Net Sales unless such sale is made by one of them directly to a
hospital, pharmacy, physician, retailer or other entity which provides the
Product to the patient in which case the first sale shall be the sale to such
hospital, pharmacy, physician, retailer or other entity. Net Sales shall not
include the amount received on account of sales of a Product or of sales of a
Product in a particular country for which the Term of this Agreement has
expired.

      1.21 PATENT The term "Patent" shall mean any and all unexpired patent
applications, provisional patent applications and any patent issuing therefrom
worldwide, together with any extensions, registrations, confirmations, reissues,
continuations, divisions, continuations-in-part, reexamination certificates,
confirmations, registrations, revalidations, additions, supplementary protection
certificates, substitutions or renewals thereof and any patents anywhere in the
world, claiming the priority date of any of the foregoing.

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      1.22 PATENT RIGHTS The term "Patent Rights" shall mean: the United States
patent entitled ***; all rights (including without limitation all U.S. and
foreign Patents) arising out of or resulting from such patent; and any other
U.S. and foreign Patents now or in the future owned or Controlled by Dr. Bases
having claims covering or directed to the Invention, the Know-How or the
Materials.

      1.23 PRODUCT The term "Product" shall mean any product, including products
under development and products approved by a Regulatory Authority, that
includes, is based upon or is derived from the Technology. The term "Products"
shall mean more than one Product.

      1.24 PRODUCT LICENSE The term "Product License" shall have the meaning set
forth in Section 2.1.

      1.25 REGULATORY AUTHORITY The term "Regulatory Authority" shall mean the
principal governmental organization or agency that has the right to approve the
sale and, if applicable price, of Products in a given country, including,
without limitation, the FDA, the EMEA and the Ministry of Health, Labour and
Welfare in Japan.

      1.26 ROYALTY TERM The term "Royalty Term" shall have the meaning set forth
in Section 3.3.2.

      1.27 SUBLICENSE The terms "Sublicense" and "Sublicenses" shall have the
meanings set forth in Section 2.2.

      1.28 TECHNOLOGY The term "Technology" shall mean the Patent Rights,
Know-How and Materials.

      1.29 TERM The term "Term" shall have the meaning set forth in Section
10.1.

      1.30 TERRITORY The term "Territory" shall mean all of the countries in the
world (including their territories and possessions).

      1.31 THIRD PARTY The term "Third Party" shall mean any person or entity
other than a Party hereto or an Affiliate.

      1.32 VALID CLAIM The term "Valid Claim" shall mean a claim in any
unexpired, issued patent within the Patent Rights which has not been held
invalid and/or unenforceable in a decision by a court or other body of competent
jurisdiction from which there is no appeal or, if appealable, from which no
appeal has been taken.

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2.    PRODUCT LICENSE.

      2.1 PRODUCT LICENSE Dr. Bases hereby grants to Spectrum an exclusive (even
as to Dr. Bases, except as provided in Section 2.4), right and license under Dr.
Bases' rights to use the Technology to research, develop, make, have made, use,
offer for sale, sell, have sold, distribute, import, and export Products in the
Licensed Field in the Territory (the "PRODUCT LICENSE"). The Product License
shall not be construed to confer any rights upon Spectrum by implication,
estoppel or otherwise as to any technology not included in the Technology.

      2.2 SUBLICENSES Spectrum shall have the right, but not the obligation, to
grant sublicenses (one a "Sublicense"; more than one "Sublicenses") under the
Product License to its Affiliates and Third Parties. Spectrum shall notify Dr.
Bases of each sublicense granted hereunder.

      2.3   MATERIAL TRANSFER.

            2.3.1 MATERIALS Dr. Bases shall transfer those Materials described
in Exhibit A to Spectrum together with the data related thereto on or about the
delivery dates set forth in Exhibit A. Spectrum shall also have the right to
further transfer the Materials transferred hereunder to its Affiliates or
sublicensees, in accordance with Sections 2.1 and 2.2, under a sublicense or
material transfer agreement consistent with the terms of this Agreement.

            2.3.2 TRANSFER AND USE The Parties shall mutually agree on the
method for packaging and delivering Materials to Spectrum. Each Party
understands and agrees that Materials may have unpredictable and unknown
biological and/or chemical properties and that they are to be used with caution.
Spectrum, its Affiliates and sublicensees will use the Materials subject to the
terms of this Agreement, and in material compliance with applicable laws and
regulations, including but not limited to, any laws or regulations relating to
the research, testing, production, storage, transportation, export, packaging,
labeling or other authorized use of such Materials.

      2.4 RESEARCH LICENSE Notwithstanding Section 2.1, Spectrum grants back to
Dr. Bases an irrevocable non-exclusive, royalty-free non-transferable right to
use the Know-How for his own research and other non-commercial purposes.

      2.5 REGULATORY FILINGS Within thirty (30) days after the Effective Date,
Dr. Bases shall assign and transfer to Spectrum any and all regulatory filings
such as INDs and NDAs that relate to the Invention or proposed Products,
including all correspondence with appropriate Regulatory Authorities, made
anywhere in the Territory (the "Regulatory Filings"). Spectrum shall own all of
the Regulatory Filings in perpetuity provided that this Agreement is not
terminated pursuant to Section 10.3 as a result of

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a breach of the Agreement by Spectrum, in which case, upon request by Dr. Bases,
Spectrum shall assign and transfer back to Dr. Bases all regulatory filings
assigned and transferred by Dr. Bases to Spectrum back to Dr. Bases. Spectrum
shall have the right to reference any and all of the data submitted in support
of the Regulatory Filings. This right of reference shall survive expiration or
termination of this Agreement for any reason other than for breach of the
Agreement by Spectrum as set forth above.

3.    FINANCIAL TERMS AND CONDITIONS.

      3.1 INITIAL FEES Spectrum shall pay to Dr. Bases an initial payment of ***
Dollars ($***), payable in two equal installments of *** Dollars ($***), the
first payable no later than ten (10) days after the Effective Date and the
second thirty (30) days thereafter. Spectrum shall further pay a fee of ***
Dollars ($***) a *** for ***, with the first payment to be made ten (10) days
after the Effective Date and not later than the first day of each *** thereafter
for the successive ***.

      3.2 MILESTONE PAYMENT Spectrum shall pay to Dr. Bases a *** payment of ***
Dollars ($***) in cash or shares of Spectrum common stock (at Spectrum's sole
discretion) within *** days of the *** approval of an NDA for a Product by the
FDA. This Milestone Payment shall be made only once regardless of the number of
Products developed. If Spectrum decides to pay this milestone in shares of
Spectrum common stock, the number of shares of Spectrum common stock that
Spectrum shall issue (the "Shares") shall be determined by dividing *** Dollars
($***) by the average closing price of Spectrum's common stock, as traded on the
NASDAQ, on the *** business days day prior to the date of approval by the FDA,
as set forth in the Wall Street Journal on the day of approval by the FDA.

      3.3   PRODUCT ROYALTIES.

            3.3.1 PATENT ROYALTIES During the Royalty Term, Spectrum shall pay
Dr. Bases a royalty of *** Percent (***%) on the aggregate annual Net Sales of
each Product sold by Spectrum, its Affiliates and any sublicensees during each
*** in each country where there is a Valid Claim covering the Product, as
determined on a Product-by-Product and country-by-country basis. Multiple
royalties shall not be earned or paid on a particular Product if such Product or
its manufacture, use, importation or sale is covered by more than one Valid
Claim.

            3.3.2 ROYALTY TERM The "ROYALTY TERM" shall begin on the First
Commercial Sale of a particular Product in a particular country and expire on
the expiration of the last Valid Claim covering such Product in that country, as
determined on a Product-by-Product basis and a country-by-country basis.

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            3.3.3 ROYALTY OFFSETS In the event that royalty payments are owed by
Spectrum to Third Parties with respect to licenses necessary to use, develop,
manufacture, import or sell a Product, the royalties owed to Dr. Bases under
Section 3.3.1 shall be reduced by *** of the amount of the royalty payments
actually paid by Spectrum to such Third Parties provided that such reductions
shall not reduce the royalty paid to Dr. Bases in such country below *** Percent
(***%)

            3.3.4 *** ROYALTY PAYMENTS Royalties owed to Dr. Bases pursuant to
this Article 3 shall be payable by Spectrum within *** after the end of each ***
(i.e., *** after ***) based upon the Net Sales of each Product during such ***.
Any underpayment or overpayment of the *** royalty payments shall be reconciled
and added or deducted to the royalty payment due in the *** in which such
underpayment or overpayment is discovered. In the case of sales outside the
United States, the rate of exchange to be used in computing the amount of
currency equivalent in U. S. Dollars due Dr. Bases shall be made at the rate of
exchange utilized by Spectrum in its worldwide accounting system under GAAP.

            3.3.5 REPORTS Spectrum shall furnish to Dr. Bases at the same time
as each royalty payment is made by Spectrum, a written report of Net Sales of
the Products on a Product by Product and country by country basis and the
royalty due and payable thereon, for the *** period upon which the royalty
payment is based. Net Sales made in currencies other than U.S. Dollars will be
translated into U.S. Dollars as provided in Section 3.3.4 and added to Net Sales
made in U.S. Dollars for purposes of determining aggregate Net Sales and the
royalties due to Dr. Bases.

      3.4 PAYMENTS With the exception of the initial *** payment set forth in
Section 3.1, which shall be paid to Dr. Bases, all cash payments due to Dr.
Bases under this Agreement shall be paid to the Foundation (unless otherwise
directed in writing by Dr. Bases) in U. S. Dollars by check or bank wire
transfer in immediately available funds to such bank account in the United
States designated in writing by Dr. Bases from time to time.

      3.5 RECORDS Spectrum shall keep full, complete and proper records and
accounts of all sales of Products by Spectrum, its Affiliates and sublicensees
in accordance with GAAP, in sufficient detail and in the currencies in which the
sale was made to enable the royalties payable on each Product to be determined.
All such records, statements, reports and accounts referred to in this Section
3.5 shall be retained for a period of three (3) years after the end of the
period to which they apply.

      3.6 INCOME TAX WITHHOLDING If laws, rules or regulations require
withholding of income taxes or other rates imposed upon payments set forth in
this Article 3, Spectrum may make such withholding payments as required and
subtract such withholding payments from the payments set forth in

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this Article 3. Spectrum shall submit appropriate proof of payment of the
withholding rates to Dr. Bases within a reasonable period of time. Spectrum
shall use efforts consistent with its usual business practices to ensure that
any withholding taxes imposed are reduced as far as possible under the
provisions of the current or any future double taxation treaties or agreements
between foreign countries, and the Parties shall cooperate with each other with
respect thereto, with the appropriate Party under the circumstances providing
the documentation required under such treaty or agreement to claim benefits
thereunder.

      3.7   AUDIT If Dr. Bases disagrees with a royalty report provided by
Spectrum, with reasonable justification for such disagreement, Dr. Bases, at his
own expense, shall have the right, upon reasonable prior notice during regular
business hours, to meet with Spectrum's independent auditor to inspect and
discuss the books and accounts of Spectrum or its Affiliates, related to the
payment and calculation of royalties arising under this Agreement. After this
inspection, if Dr. Bases still disagrees with the report provided by Spectrum,
with reasonable justification for such disagreement, Dr. Bases, at his own
expense, shall have the right, upon reasonable prior notice during regular
business hours, to appoint independent auditors reasonably acceptable to
Spectrum and have them during normal business hours, inspect and copy the books
and accounts of Spectrum or its Affiliates, related to the payment and
calculation of royalties arising under this Agreement. Spectrum shall cooperate
and cause Spectrum's Affiliates, to cooperate with such auditors. The auditors
performing the audit shall disclose to Dr. Bases only information relating to
the accuracy of records kept and the payments made, and shall be under a duty to
keep confidential any other information obtained from such records. Spectrum
shall audit the books and accounts of its sublicensees, if any, using its
independent auditor or a comparable reputable auditor. Spectrum shall share the
results of its audit with Dr. Bases.

            3.7.1 If any such audit establishes that Spectrum has underpaid or
overpaid the amount due, Spectrum shall promptly pay any remaining amounts due
as established by such audit or Dr. Bases shall promptly refund any over
payment. If the underpayment is more than *** percent (***%) of the aggregate
Net Sales for all countries during any calendar year, Spectrum shall reimburse
Dr. Bases for his out-of-pocket expense of such audit, together with interest at
the rate specified in Section 3.8 below for late payments on any such overdue
payment from the date due until paid.

      3.8   LATE PAYMENTS Any payments due Dr. Bases under this Agreement that
are not paid on the due date shall accrue interest at the lower of the rate of
*** percent (***%) per annum, or the maximum rate allowed by law, from the due
date until paid in full.

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4.    OWNERSHIP AND PATENT MATTERS.

      4.1 OWNERSHIP As between the parties, all Technology shall be owned by Dr.
Bases. Improvements that are made to Technology by an employee, agent or
consultant of Spectrum, solely or jointly with a Third Party, shall be owned by
Spectrum. Improvements that are made jointly by employees, agents or consultants
of Spectrum and Dr. Bases and his employees, agents or consultants ("JOINT
INVENTIONS") shall be jointly owned by Spectrum and Dr. Bases and treated as
joint inventions under U.S. laws applicable to joint inventions. Dr. Bases
shall, and hereby does, grant Spectrum the exclusive and unrestricted right
(even as to Dr. Bases, subject to Section 2.4) in the Licensed Field to make,
have made, use, sell, have sold, import, export and license Dr. Bases' interest
in all Joint Inventions. Notwithstanding anything to the contrary, Dr. Bases
agrees to assign and agrees to have any employees, agents, and/or consultants
paid by Dr. Bases assign to Spectrum all right, title and interest to
Improvements that may accrue to Dr. Bases and/or any of his employees, agents
and/or consultants under clinical study agreements that Spectrum and Dr. Bases
and/or his employees, agents and/or consultants are a party to related to the
research and/or development of a Product. For the avoidance of doubt, Dr. Bases
does not have the authority to bind, and does not agree to bind, any third party
institution conducting a clinical study or any person subject to obligations
owed by such a person to such an institution and Dr. Bases' agreement to assign
rights in accordance with this Article 4, is subject to any pre-existing
obligations that Dr. Bases may have to a third party institution. Dr. Bases
hereby grants to Spectrum the exclusive and unrestricted right (even as to Dr.
Bases, subject to Section 2.4) in the Licensed Field to make, have made, use,
sell, have sold, import, export and license all Improvements made solely by Dr.
Bases, his employees or consultants in accordance with the provisions of the
present Agreement, including but not limited to the Royalty provisions and
shall, and hereby does, after Spectrum's royalty obligations under Section 3.3
have expired or been terminated by Spectrum due to a breach of this Agreement by
Dr. Bases or due to the insolvency of Dr. Bases pursuant to Article 10, grant
Spectrum a perpetual, royalty-free license to use all Improvements owned by Dr.
Bases and all information, know-how and other data pertaining to all
Improvements and the Joint Inventions. Spectrum shall own any trademarks
associated with the Products.

      4.2   PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.

            4.2.1 PATENT PROSECUTION AND MAINTENANCE Spectrum, at its own
expense, shall direct and control the preparation, filing, prosecution and
maintenance of all United States and foreign Patents within the Patent Rights
and all Joint Patents, including any interferences and foreign oppositions.

            4.2.2 PARTICIPATION AND ASSISTANCE Spectrum shall consult with Dr.
Bases with regard to the preparation, filing, prosecution and/or maintenance of
the Patents within the Patent Rights and any Joint Patents. Notwithstanding the
preceding sentence, however, Spectrum shall in all events have final
decision-making authority as relates to the preparation, filing, prosecution
and/or maintenance of the

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Patents within the Patent Rights any Joint Patents and the scope of claims
contained therein. Dr. Bases shall cooperate fully with Spectrum, at Spectrum's
request, in all matters relating to the preparation, filing, prosecution and/or
maintenance of the Patents within the Patent Rights and any Joint Patents,
including without limitation, signing any necessary or appropriate documents,
providing written and testimonial evidence, and doing such other acts as
Spectrum may reasonably require.

            4.2.3 PATENT ABANDONMENT In the event Spectrum elects not to
prosecute or to discontinue or abandon the prosecution and/or maintenance of any
patent or patent application within the Patent Rights, any such patent or patent
application shall at that time be excluded from the definition of Patent Rights
and from the scope of the licenses granted under this Agreement. Spectrum shall
give Dr. Bases at least *** prior written notice of its election to discontinue
or abandon any such patent or patent application within the Patent Rights during
which time Dr. Bases may elect, in his sole discretion, to prosecute, file,
continue and maintain such patent or patent application at his sole cost and
expense and for his sole benefit by delivery of written notice to Spectrum. If
Dr. Bases does not notify Spectrum in writing during such *** period that it is
exercising such rights, the patent or patent application shall be deemed
abandoned and neither Dr. Bases nor Spectrum shall have any further
responsibility for any such abandoned patent applications or patents. However,
if Dr. Bases does not elect to prosecute, file, continue and maintain such
patent or patent application, Spectrum may later elect to continue to prosecute
and maintain such patent or patent application, in which case, the patent or
patent application shall remain within the Patent Rights and licenses hereunder.

            4.2.4 EXECUTION OF DOCUMENTS Each Party shall promptly execute or
have executed by its employees, agents and consultants all documents necessary
to vest ownership of inventions and related intellectual property rights
relating to Joint Patents in Dr. Bases and Spectrum and to enable Spectrum to
file, prosecute and maintain the Patents within the Patent Rights and Joint
Patents. If Spectrum is unable, after reasonable effort, to secure the signature
of Dr. Bases or any employee, agent or independent contractor of Dr. Bases on
any document needed to apply for, prosecute or defend any patent or other
intellectual property right or protection relating to the Patent Rights or the
Joint Patents, Dr. Bases hereby designates and appoints Spectrum and its duly
authorized officers and agents as its agent and attorney in fact to execute,
verify and file applications, and to do all other lawfully permitted acts
necessary to protect Spectrum's rights in Joint Patents and to enable Spectrum
to file, prosecute and maintain Patent Rights and Joint Patents with the same
legal force and effect as if executed by Dr. Bases.

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      4.3   INFRINGEMENT ACTIONS.

            4.3.1 PROSECUTION OF INFRINGEMENT

                  (a) The Parties shall promptly notify one another in writing
of any and all actual or threatened infringements by Third Parties of any
Patents within the Technology that relate to a Product in the Licensed Field
that is known to them, and in any event within *** of learning of such
infringement.

                  (b) With respect to actual or threatened infringements of
Patents within the Technology with respect to the Products, Spectrum shall have
the first right, but not the obligation, to file suit or take other action to
prevent such infringements of any such Patents. To the extent Spectrum takes
such action, Spectrum shall control any such action and may enter into
settlements, stipulated judgments or other arrangements respecting such
infringement, at its own expense; provided, however, that such proposed
settlements, judgments or arrangements shall be subject to Dr. Bases' consent,
not to be unreasonably withheld. In the event that Spectrum takes such action,
Spectrum shall indemnify, defend and hold Dr. Bases harmless from any costs,
expenses and liabilities respecting the action for such claimed infringement.
Dr. Bases shall permit an action to be brought by Spectrum in Dr. Bases' name if
required by law. Dr. Bases agrees to provide all assistance that Spectrum may
reasonably require in any litigation, including providing written evidence,
deposition and trial testimony, for which Spectrum shall pay to Dr. Bases a
reasonable and customary hourly rate of compensation. Spectrum shall keep Dr.
Bases informed of developments in any such action, including, to the extent
permissible by law, the status of any settlement negotiations and the terms of
any offer related thereto. Dr. Bases shall have the right at his own expense to
be represented by counsel in any such action. Any damages or other recovery from
an infringement action undertaken by Spectrum pursuant to this Section 4.3.1(b)
shall be used ***.

                  (c) Spectrum shall promptly notify Dr. Bases in writing of its
intention with regard to any such infringement. In the event that Spectrum
elects not to take action against an actual or threatened infringement, Dr.
Bases shall have the right to take action against such infringement, in which
case Dr. Bases shall (i) pay any and all costs and expenses incurred in such
action, (ii) indemnify, defend and hold Spectrum harmless from any costs,
expenses or liability respecting all such action, and (iii) retain any and all
recovery from such action. Spectrum agrees to provide all assistance that Dr.
Bases may reasonably require in any litigation, including providing written
evidence, deposition and trial testimony, for which Dr. Bases shall pay to
Spectrum a reasonable hourly rate of compensation.

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            4.3.2 DEFENSE OF INFRINGEMENT CLAIMS

                  (a) If a Third Party makes or threatens against Spectrum, its
Affiliates or sublicensees any claim of infringement of a Patent right based
upon the use of, or arising as a result of the exercise of the rights and
licenses granted hereunder to the Technology (each an "ALLEGED INFRINGEMENT"),
Spectrum shall have the right to respond to and defend any and all such Alleged
Infringements at its own cost and expense, and in its sole discretion. Dr. Bases
agrees to provide any necessary assistance that Spectrum may reasonably require
in any such defense action for which Spectrum shall pay to Dr. Bases a
reasonable hourly rate of compensation. Dr. Bases shall have the right, at his
own expense, to retain counsel of his choice to represent it in any such defense
action.

                  (b) Spectrum shall promptly notify Dr. Bases in writing and
provide a copy of (i) any claim of Alleged Infringement filed with a court or
governmental authority or (ii) any written notice of an Alleged Infringement
from an attorney or law firm. Within a reasonable period of time in advance of
any responsive deadline required by law or otherwise set forth in the claim or
notice of Alleged Infringement, Spectrum shall notify Dr. Bases in writing as to
whether or not Spectrum intends to respond to such Alleged Infringement. In the
event that Spectrum does not intend to respond to any such claim or notice or,
notwithstanding Section 4.3.2(a), and notifies Dr. Bases in accordance with this
Section, Dr. Bases shall have the right, in his sole discretion, to respond to
such Alleged Infringement, in which case Dr. Bases shall pay any and all future
costs and expenses incurred by Spectrum in such action, and shall indemnify,
defend and hold Spectrum harmless from any future costs, expenses or liability
respecting all such actions undertaken by Dr. Bases.

5.    OBLIGATIONS RELATED TO DEVELOPMENT, MARKETING AND COMMERCIALIZATION.

      5.1 SPECTRUM'S DILIGENCE OBLIGATIONS Spectrum shall use commercially
reasonable efforts to (i) complete, file and actively pursue regulatory approval
for one or more Products in the Territory and (ii) promote and market the
Product or Products in the Territory under trademarks to be created by Spectrum
in its sole discretion. Such development, marketing and commercialization shall
be pursued at Spectrum' sole cost and expense. Spectrum shall have sole
responsibility for making all decisions regarding the development, marketing and
commercialization of the Products.

      5.2 GOVERNMENTAL APPROVALS Spectrum shall be solely responsible for
obtaining all necessary approvals from Regulatory Authorities for the use,
development, production, distribution, sale and import or export of any
Products, at Spectrum's expense, including, without limitation, preclinical and
clinical trials and regulatory filings. Spectrum shall have sole responsibility
for any warning labels, packaging and instructions as to the use of Products and
for the quality control for any Product. Spectrum, its Affiliates or
sublicensees shall own all regulatory filings and documents filed with the
applicable Regulatory Authorities with respect to the Products and all
regulatory approvals.

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      5.3 MANUFACTURE OF PRODUCTS Spectrum shall be responsible for conducting
and funding all process science, process development, and scale-up necessary to
manufacture the Products for pre-clinical studies, clinical trials and
commercial sale.

      5.4 REPORTING Spectrum shall keep Dr. Bases generally informed as to
Spectrum's progress in marketing and commercializing the Products. Spectrum
shall keep Dr. Bases specifically and timely informed with regard to the
achievement of the milestone event listed in Section 3.2 above.

6.    INDEMNITY.

      6.1 SPECTRUM INDEMNIFICATION Spectrum (the "INDEMNIFYING PARTY" under this
Section 6.1) hereby agrees to indemnify, defend and hold Dr. Bases, his
Affiliates, and his directors, employees and agents (the "INDEMNIFIED
PARTY(IES)" under this Section 6.1) harmless from and against any and all suits,
claims, actions, demands, liabilities, expenses and/or loss, including without
limitation reasonable legal expenses and attorneys' fees (collectively,
"LOSSES"), to which one or more Indemnified Parties may become subject as a
result of any (a) claim, demand, action or other proceeding for personal injury,
wrongful death or product defect by any Third Party relating to the research,
development, manufacture, use or sale of Products by Indemnifying Party and/or
its Affiliates and/or their respective employees or agents, except to the extent
that such Losses result from the gross negligence, wrongful intentional acts or
willful omissions of Indemnified Party(ies), (b) claim, demand, action or other
proceeding by any Third Party to the extent such Losses result from Spectrum's
material breach of any, obligation, representation, warranty or covenant
contained in this Agreement or (c) any failure by Spectrum or its Affiliates or
its sublicensees to comply with applicable law. In no event shall Spectrum be
liable for any lost opportunities, profits or special, incidental, consequential
or indirect damages of the Indemnified Party(ies) under this Section 6.1.

      6.2 DR. BASES INDEMNIFICATION Dr. Bases (the "INDEMNIFYING PARTY" under
this Section 6.2) hereby agrees to indemnify, defend and hold Spectrum and its
Affiliates and their directors, officers, employees, and agents (the
"INDEMNIFIED PARTY(IES)" under this Section 6.2) harmless from and against any
Losses to which one or more Indemnified Parties may become subject as a result
of any (a) claim, demand, action or other proceeding by any Third Party to the
extent such Losses result from Dr. Bases' breach of any material obligation,
representation, warranty or covenant contained in this Agreement or (b) failure
by Dr. Bases to comply with applicable law. In no event shall Dr. Bases be
liable for any lost opportunities, profits or special, incidental, consequential
or indirect damages of the Indemnified Party(ies) under this Section 6.2.,
except, however, as the result of any breach by Dr. Bases of any of the
covenants in Article 8 below.

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      6.3 INDEMNITY PROCEDURE

                  (a) The Indemnified Party(ies) agrees to give the Indemnifying
Party(ies) written notice, as soon as is practicable, but in any event within
thirty (30) days if possible, of any claim, suit, loss or the discovery of facts
upon which such Indemnified Party(ies) intends to base a request for
indemnification under Section 6.1 or Section 6.2 (collectively, a "CLAIM").

                  (b) The Indemnified Party(ies) shall furnish promptly to the
Indemnifying Party(ies) copies of all papers and official documents received in
respect of any Claim. The Indemnified Party(ies) shall cooperate with the
Indemnifying Party(ies), at the Indemnifying Party(ies)'s expense, in providing
witnesses and records necessary in the defense against any Claim.

                  (c) With respect to any Claim relating solely to the payment
of money damages that will not (i) result in the Indemnified Party(ies)'s
becoming subject to injunctive or other relief, (ii) require an admission of
guilt or other responsibility or liability, or (iii) otherwise adversely affect
the business interests or rights of the Indemnified Party(ies) in any manner,
and as to which the Indemnifying Party(ies) shall have acknowledged in writing
the obligation to indemnify the Indemnified Party(ies) hereunder, the
Indemnifying Party(ies) shall have the sole right to defend, settle, or
otherwise dispose of such claim, on such terms as the Indemnifying Party(ies),
in its sole discretion (subject to the limitations of this Section), shall deem
appropriate.

                  (d) With respect to all other Claims the Indemnifying
Party(ies) shall obtain the written consent of the Indemnified Party(ies), which
shall not be unreasonably withheld, prior to ceasing to defend, settling, or
otherwise disposing thereof.

                  (e) The Indemnifying Party(ies) shall not be liable for any
settlement or other disposition of a Claim by the Indemnified Party(ies) that is
reached without the written consent of the Indemnifying Party(ies).

                  (f) Except as provided above, the costs and expenses,
including fees and disbursements of counsel, incurred by any Indemnified
Party(ies) in connection with any claim shall be paid by the Indemnifying
Party(ies), without prejudice to the Indemnifying Party(ies)'s right to contest
the Indemnified Party(ies)'s right to indemnification and subject to refund in
the event the Indemnifying Party(ies) is ultimately held not to be obligated to
indemnify the Indemnified Party(ies).

                  (g) The Indemnified Party(ies) shall always have the right to
retain counsel and participate in the defense, negotiation or settlement of any
Claim at its/their own cost and expense.

7.    REPRESENTATIONS AND WARRANTIES.

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      7.1 BY DR. BASES

                  (a) Dr. Bases hereby represents and warrants that as of the
Effective Date: (A) he has all necessary right and authority to execute, deliver
and perform all of his obligations under this Agreement; (B) he has the right to
grant the licenses and other rights granted herein; (C) he has not previously
granted any right, license or interest in or to the Technology, or any portion
thereof, inconsistent with the rights granted to Spectrum herein; and (D) to the
best of his knowledge, there are no material adverse proceedings, claims or
actions pending or threatened relating to the Technology which would materially
interfere with Dr. Bases' performance of his obligations or power to make the
grants and covenants hereunder, or Spectrum's unfettered use of the Technology.

                  (b) The Technology is free and clear of any and all
encumbrances, covenants, conditions and restrictions or, other adverse claims or
interests of any kind or nature, and Dr. Bases has not received any oral or
written notice or claim challenging his complete and exclusive rights to the
Technology or suggesting that any other person has any claim of legal or
beneficial ownership with respect thereto, and there is no agreement, decree,
arbitral award or other provision or contingency which obligates Dr. Bases to
grant licenses in the Technology.

                  (c) To Dr. Bases' knowledge, he owns or possesses sufficient
rights to use all of the Technology necessary to develop, make, have made, use,
sell, offer for sale, have sold, import and export and commercialize Products in
the Licensed Field in the Territory.

                  (d) No litigation is now pending and no notice or other claim
has been received by Dr. Bases, (A) alleging that Dr. Bases has engaged in any
activity or conduct that infringes upon, violates or constitutes the
unauthorized use of any Patents of any Third Party, or (B) challenging the
ownership, use, validity or enforceability of any of the Patents within the
Patents Rights.

                  (e) Dr. Bases confirms that he has been given sufficient
access to information regarding Spectrum in connection with his decision to
receive the Shares, including the opportunity to ask questions of, and receive
answers from, persons acting on behalf of the Spectrum concerning its respective
financial affairs, prospects and condition.

                  (f) Dr. Bases represents and warrants that, by reason of his
business or financial expertise, he has the capacity to protect his own
interests in connection with his acquisition of the Shares and that he is an
"accredited investor" as defined in Rule 501 of Regulation D of the Securities
Act of 1933, as amended (the "Securities Act").

                  (g) Dr. Bases represents, warrants and covenants that he shall
acquire the Shares for his own account and not for the account or on behalf of
others, and he is doing so with the intent of retaining the Shares as an
investment and without the current intent to redistribute the Shares.

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                  (h) Dr. Bases acknowledges that: (i) no securities commission
or similar authority has reviewed or passed on the merits of the Shares issuable
under this Agreement; (ii) there is no government or other insurance covering
such Shares; and (iii) there are risks associated with the acquisition of the
Shares, including without limitation those described in Spectrum's filings with
the Securities and Exchange Commission.

                  (i) Dr. Bases acknowledges that (i) he must and shall bear the
economic risk of holding the Shares for an indefinite period of time because at
the time the Shares are issued they will not have been registered under the
Securities Act or any other securities law and, therefore, cannot be sold unless
they are subsequently registered under applicable national, federal, provincial
and state securities laws or an exemption from such registration is available;
(ii) the Shares may not be resold or transferred on the official stock transfer
records of Spectrum without furnishing to Spectrum an opinion of counsel
reasonably acceptable to Spectrum that such sale or transfer of the shares will
not violate the registration provisions of applicable national, federal,
provincial and state securities laws; and (iii) certificates representing the
shares shall have endorsed on them a restrictive legend to this effect.

                  (j) Dr. Bases confirms that he is not purchasing the Shares as
a result of or subsequent to any advertisement, article, notice or other
communication regarding the Shares published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

                  (k) Dr. Bases acknowledges that Spectrum is relying on the
representations, warranties, covenants and acknowledgments in this Section 7.1
to ensure that the Shares that may be issued under the terms of this Agreement
can be issued in reliance on exemptions from registration requirements under
United States federal and state securities laws.

      7.2 BY SPECTRUM Spectrum hereby represents and warrants that as of the
Effective Date: (A) it is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware; (B) it has the full
right, authority and power to enter into this Agreement and to perform its
obligations hereunder; (C) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Spectrum; and (D) to the best of its knowledge there are no material
adverse proceedings, claims or actions pending or threatened against it which
would materially interfere with the performance of its obligations hereunder.
Spectrum represents, warrants and covenants that the Shares that may be issued
to Dr. Bases under Section 3.2 of this Agreement will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.

8.    ADDITIONAL COVENANTS.

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      8.1 PRESERVATION OF TITLE Dr. Bases shall use his best efforts to preserve
and maintain his ownership and title to all Technology licensed hereunder.

      8.2 NO CONFLICTS Neither Party shall grant any right, license or interest
in or to the Technology, or any portion thereof, inconsistent with the rights
granted to Spectrum herein. Without the other Party's prior written consent,
neither Party shall enter into any agreement that creates additional obligations
upon the other Party or limits the exercise of the other Party's rights
hereunder or diminishes the other Party's rights hereunder.

9.    CONFIDENTIALITY AND PUBLICATION.

      9.1 TREATMENT OF CONFIDENTIAL INFORMATION The Parties agree that during
the term of this Agreement, and for a period of seven (7) years after this
Agreement terminates or expires, a Party receiving Confidential Information of
the other Party will (i) maintain in confidence such Confidential Information to
the same extent such Party maintains the confidentiality of its own Confidential
Information, (ii) not disclose such Confidential Information to any Third Party
without the prior written consent of the disclosing Party and (iii) not use such
Confidential Information for any purpose other than the exercise of a Party's
rights or performance of a Party's obligations under this Agreement; provided
however, that the provisions of this Section 9.1 shall not prevent a Party from
disclosing Confidential Information if such disclosure:

                  (a) is made to its employees, directors, accountants,
attorneys, contractors or consultants who reasonably require such disclosure on
a need to know basis and who are bound to it by obligations of confidentiality
and non-use no less stringent than the obligations between Spectrum and Dr.
Bases hereunder;

                  (b) is made to collaborators for the purpose of performing the
obligations or exercising the rights of a Party hereunder and who are bound to
that Party by obligations of confidentiality and non-use no less stringent than
the obligations between Spectrum and Dr. Bases hereunder;

                  (c) is in response to a valid order of an United States court
or otherwise required by law or regulation, provided however that receiving
Party shall first have given notice to the disclosing Party and shall have made
a reasonable effort to obtain a protective order by: (i) seeking protection of
Confidential Information not relevant to the court's inquiry from a general
disclosure (e.g., without limitation, requesting limited and in-camera review by
such court and/or seeking that such information be treated under seal); (ii)
seeking to redact any Confidential Information; and (iii) in any event requiring
that, to the extent ordered to be disclosed, that such disclosure of
Confidential Information be used only for the purposes for which the order was
issued; or

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                  (d) is necessary to: (i) file or prosecute Patents in
accordance with this Agreement; (ii) submit regulatory filings with respect to
Products in accordance with this Agreement; (iii) prosecute or defend
litigation; (iv) make required governmental securities filings and other such
similar and required disclosures by law, subject to appropriate redactions and
requests for confidential treatment as permitted by law; (v) make disclosures
required by the principal stock exchange on which the Party's stock is traded,
subject to appropriate redactions and requests for confidential treatment as
permitted by law and the rules of such exchange; (vi) conduct pre-clinical or
clinical trials of Products in accordance with this Agreement, provided any
Affiliates or Third Parties conducting pre-clinical trials agree to be bound by
terms of confidentiality and non-use at least equivalent in scope to those set
forth in this Section 9.1 and any Affiliates or Third Parties conducting
clinical trials agree to be bound by terms of confidentiality and non-use that
are customarily obtained in connection with such clinical trials; or (viii)
enable Affiliates or bona fide potential or actual sublicensees to evaluate
and/or exercise their rights under a sublicense that would be or has been issued
in accordance with this Agreement, provided such Affiliates and Third Parties
agree to be bound by similar terms of confidentiality and non-use at least
equivalent in scope to those set forth in this Section 9.1.

      9.2   PUBLIC STATEMENTS.

            9.2.1 PUBLICATIONS Dr. Bases or Spectrum, as the case may be, may
publish or present information derived from the performance of this Agreement,
provided that: the publishing Party first provides the non-publishing Party with
a copy of the proposed publication or presentation for comment and input at
least forty-five (45) days prior to any submission for publication or
presentation and if any such information was derived from the non-publishing
Party's efforts under this Agreement, the non-publishing Party shall have the
right to require the publishing Party to redact such information from the
proposed publication. In addition, at the non-publishing Party's request, the
publishing party will further delay the presentation or publication for an
additional forty-five (45) days so as to allow the non-publishing party time to
file for patent protection or other intellectual property protection. If a
publication by Spectrum results from work relating to the Technology, Spectrum
agrees to acknowledge Dr. Bases and give credit to Dr. Bases' scientists, as
scientifically appropriate, based on any contribution they may have made to the
work. Likewise, if a publication by Dr. Bases results from work performed by
Spectrum, Dr. Bases agrees to acknowledge Spectrum and give credit to Spectrum'
scientists, as scientifically appropriate, based on any contribution they may
have made to the work.

            9.2.2 OTHER PUBLIC STATEMENTS Except as provided in Section 9.2.1,
or as otherwise required by law or the rules of the principal stock exchange on
which the Party's stock is traded, no Party shall originate any public
statement, news release or other written public announcement, whether in the
public press, stockholders' reports, or otherwise, relating to this Agreement or
to any sublicense hereunder, or to the performance hereunder or any such
agreements, or use a Party's name for any

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purpose, including, without limitation, in connection with the advertising or
sale of Products, without the prior written approval of the other Party, such
consent not to be unreasonably withheld. The Parties each agree to respond to
each such request within five (5) business days of receipt of a request (unless
a shorter period of time is necessary to comply with law). Notwithstanding
anything to the contrary in this Agreement, each party shall be permitted to
publicly disclose (i) the existence of this Agreement, (ii) that Dr. Bases and
Spectrum are the parties to this Agreement, and (iii) the Technology covered by
this Agreement. In the case of unintentional public disclosure concerning this
Agreement, any Product or any other subject matter hereof, the disclosing Party
shall promptly inform the other Party of such disclosure and the other Party
shall be entitled to make a public announcement regarding the subject matter of
the disclosure. The other Party shall notify the disclosing Party of their
intention to make such an announcement. Following a Party's consent to or
approval of the public announcement of any information pursuant to this Section
9.2.2, both Parties shall be entitled to make subsequent public announcements of
such information without renewed compliance with this Section 9.2.2, unless the
scope and/or duration of such consent or approval is expressly limited. Upon
conclusion of this Agreement, the Parties will publish a press release on their
future cooperation.

10.   TERM, DEFAULT AND TERMINATION.

      10.1 TERM OF AGREEMENT The term of this Agreement shall commence on the
Effective Date and, unless terminated early in accordance with the provisions of
this Agreement, shall continue on a Product-by-Product and country-by-country
basis until the expiration of the obligation to pay royalties under Section 3.3
above applicable to such Product in such country (the "TERM"). This Agreement
shall expire in its entirety after the date that Spectrum no longer owes any
royalties to Dr. Bases under Section 3.3.

      10.2 UNILATERAL TERMINATION - SPECTRUM Spectrum shall have the unilateral
right to terminate this Agreement, in its entirety or on a Product-by-Product or
country-by-country basis, at any time for any reason upon prior written notice
to Dr. Bases given at least *** prior to the desired date of termination.

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      10.3  DEFAULT.

            10.3.1 The following event shall constitute an "EVENT OF DEFAULT"
hereunder: a material breach of a material provision of this Agreement by a
Party, and the failure of the Party in breach to cure such material breach
within *** after receipt of notice from the other Party specifying in reasonable
detail the nature of such breach. For purposes of this Agreement, it is not a
"material breach" of this Agreement by Spectrum if the development of a Product
is delayed due to the following: (i) reasonable scientific, medical or technical
reasons; (ii) circumstances that are beyond the control of Spectrum; or (iii)
the fault of Dr. Bases.

            10.3.2 Upon the occurrence of any Event of Default by a Party, the
non-defaulting Party may deliver to the defaulting Party written notice of
intent to terminate specifying in reasonable detail the nature of such breach,
such termination to be effective *** after the date set forth in such notice.
Such termination rights shall be in addition to and not in substitution for any
other remedies that may be available to the non-defaulting Party. Termination
pursuant to this Section 10.3.2 shall not be treated as an election of remedies
and shall not relieve the defaulting Party from liability and damages to the
other Party for breach of this Agreement. Waiver by either Party of a single
breach or a succession of breaches shall not deprive such Party of any right to
terminate this Agreement arising by reason of any subsequent breach.

            10.4 INSOLVENCY In addition to the termination rights provided for
in this Section, each Party shall have the right to terminate this Agreement,
immediately by giving written notice of termination to the other Party, if the
other Party files a voluntary petition, or if an involuntary petition is granted
in respect of the other Party and appeal proceedings are not commenced within a
period of fifteen (15) days from the date of such petition under the bankruptcy
provisions of applicable law, or the other Party is declared insolvent,
undergoes voluntary or involuntary dissolution, or makes an assignment for the
benefit of its creditors, or fails or is unable to pay its debts as they come
due, or suffers the appointment of a receiver or trustee over all, or
substantially all, of its assets or properties. All rights and licenses granted
under or pursuant to this Agreement by Dr. Bases are, for the purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties
agree that Spectrum shall retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code.

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      10.5  EFFECTS OF EXPIRATION OR TERMINATION

                  (a) RIGHTS UPON EXPIRATION. Following the expiration of the
term of this Agreement under Section 10.1, excluding any early termination prior
to expiration, Spectrum shall have and retain a perpetual and fully paid up
license under the applicable Product Licenses. Notwithstanding the foregoing,
Spectrum shall retain all rights and interest in all materials, inventions,
discoveries and know-how (whether or not patentable or patented) solely
generated by Spectrum in the course of performing research and development
activities under the licenses granted in this Agreement. Other than rights
intended to survive expiration, or as otherwise provided under Section 10.5(e),
neither Party shall have any further rights or obligations upon the expiration
of this Agreement.

                  (b) RIGHTS UPON TERMINATION BY DR. BASES UNDER SECTIONS 10.3
OR 10.4 OR BY SPECTRUM UNDER SECTION 10.2. Upon any termination of this
Agreement by Dr. Bases under Section 10.3 or 10.4 or by Spectrum under Section
10.2, (i) all rights and licenses granted by Dr. Bases to Spectrum shall
terminate and revert to Dr. Bases and (ii) Spectrum shall return to Dr. Bases
or, at Dr. Bases' option, destroy the Materials. The foregoing provisions shall
also apply to the partial termination of this Agreement by Spectrum on a
Product-by-Product and/or country-by-country basis in accordance with Section
10.2, provided, however, that in such event: (1) only those rights that solely
pertain to the Product and/or country being terminated would revert back to Dr.
Bases; (2) only those Materials that solely pertain to the Product and/or
country being terminated would be returned or destroyed by Spectrum. In addition
Spectrum shall at no cost to Dr. Bases transfer to Dr. Bases the benefit of all
research and development work it has performed or has had performed on Products.
At the same time, Spectrum shall provide to Dr. Bases at no cost to Dr. Bases
all CMC data, preclinical testing and stability data and results and clinical
trial data and results relating to the development of Products and a technology
transfer package for all processes, formulations, and protocols for the
manufacture of APIs for Products and for finished Products. If Spectrum has
licensed any technology from Third Parties relating to the Technology or any
Product, Spectrum shall use commercially reasonable efforts to transfer such
rights to Dr. Bases at no cost to Dr. Bases. Notwithstanding the foregoing,
Spectrum shall retain its right, title and interest under Section 4.1 in any
Improvements made solely by Spectrum and in any Joint Inventions.

                  (c) Rights Upon termination by Spectrum under Sections 10.3 or
10.4. Upon any termination of this Agreement by Spectrum under Sections 10.3 or
10.4, the license rights granted by Dr. Bases to Spectrum contained in this
Agreement shall continue in full force and effect, however, Spectrum's
obligations under this Agreement shall terminate. Notwithstanding the foregoing,
Dr. Bases shall retain his rights under Section 2.4 and his right, title and
interest under Section 4.1 in any Joint Inventions. For the avoidance of doubt,
in the event of such a termination by Spectrum under Section 10.3 or 10.4, the
retention by Dr. Bases of his rights under Section 2.4 shall only include the
right to use the Know-How for his own research and other non-commercial purposes
and Dr. Bases may not

                                       22
<PAGE>

use the Know-How or the results of his research for any commercial purposes and
may not allow others to use it or any results from his research for any
commercial purposes.

                  (d) PAYMENTS. Not later than *** after the expiration or
termination date of this Agreement, each Party shall pay to the other Party any
amounts that are then due and payable, including but not limited to any final
period royalty report and payment. Notwithstanding anything in this Agreement to
the contrary, Spectrum shall not be required to pay any remaining monthly
installments yet to be paid pursuant to Section 3.1 above, if this Agreement is
terminated prior to the payments of all installments pursuant to Section 3.1.

                  (e) ACCRUED RIGHTS; SURVIVING OBLIGATIONS. Termination or
expiration of this 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 or expiration, and shall not relieve either Party from its
obligations which are expressly indicated to survive expiration or termination
of this Agreement, including, without limitation, those under Articles 6, 9, 11
and 12 and Sections 3.5 through 3.8, 4.1 through 4.3, 10.5 and 10.6 shall
survive any expiration or termination of this Agreement.

      10.6 WORK-IN-PROGRESS Notwithstanding anything in this Agreement to the
contrary, upon any such early termination of the license granted hereunder in
accordance with this Agreement, Spectrum shall be entitled to finish any
work-in-progress and to sell any completed inventory of a Product which remain
on hand as of the date of the termination, so long as Spectrum pays to Dr. Bases
the royalties applicable to said subsequent sales in accordance with the terms
and conditions as set forth in this Agreement, provided that no such sales shall
be permitted after the expiration of *** after the date of termination.

11.   DISPUTE RESOLUTION.

      11.1 ARBITRATION Any claim, dispute, or controversy of any nature arising
out of or relating to this Agreement, including, without limitation, any action
or claim based on tort, contract or statute, or concerning the interpretation,
effect, termination, validity, performance and/or breach of this Agreement
(each, a "DISPUTE") between the Parties shall be finally settled by binding
arbitration conducted in the English language in accordance with the Rules of
Commercial Arbitration of the American Arbitration Association ("AAA"). The
arbitration shall be held in New York, New York, and shall be conducted by three
(3) arbitrators who are knowledgeable in the subject matter at issue in the
dispute. One (1)

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arbitrator will be selected by Dr. Bases, one (1) arbitrator will be selected by
Spectrum, and the third arbitrator will be selected by mutual agreement of the
two (2) arbitrators selected by the Parties, provided that if a Party fails to
select an arbitrator within thirty (30) days of the request for arbitration, the
arbitrator that was to be selected by such Party shall be appointed in
accordance with the rules of the AAA. During the period prior to the hearing,
each Party shall have the right to conduct up to two (2) depositions and to
submit up to twenty (20) document requests to the other Party. The arbitrators
may proceed to an award, notwithstanding the failure of either Party to
participate in the proceedings. The arbitrators shall, within forty-five (45)
calendar days after the conclusion of the arbitration hearing, issue a written
award and statement of decision describing the essential findings and
conclusions on which the award is based, including the calculation of any
damages awarded. The arbitrators shall be authorized to award compensatory
damages, but shall NOT be authorized to (i) award non-economic or punitive
damages (except to the extent expressly permitted by this Agreement), or (ii)
reform, modify or materially change this Agreement or any other agreements
contemplated hereunder; provided, however, that the damage limitations described
in part (i) of this sentence will not apply if such damages are statutorily
imposed. The arbitrators also shall be authorized to grant any temporary,
preliminary or permanent equitable remedy or relief that the arbitrators deem
just and equitable and within the scope of this Agreement, including, without
limitation, an injunction or order for specific performance. The award of the
arbitrators shall be the sole and exclusive remedy of the Parties. Judgment on
the award rendered by the arbitrators may be enforced in any court having
competent jurisdiction thereof, subject only to revocation on grounds of fraud
or clear bias on the part of the arbitrators. Notwithstanding anything contained
in this Section 11.1 to the contrary, each Party shall have the right to
institute judicial proceedings against the other Party or anyone acting by,
through or under such other Party, in order to enforce the instituting Party's
rights hereunder through specific performance, injunction or similar equitable
relief.

      11.2 ADMINISTRATION Each Party shall bear its own attorneys' fees, costs,
and disbursements arising out of the arbitration, and shall pay an equal share
of the fees and costs of the arbitrators; provided, however, that the
arbitrators shall be authorized to determine whether a Party is the prevailing
party, and if so, to award to that prevailing party reimbursement for its
reasonable attorneys' fees, costs and disbursements (including, for example,
expert witness fees and expenses, photocopy charges and travel expenses), and/or
the fees and costs of the arbitrators. Absent the filing of an application to
correct or vacate the arbitration award (if permitted by AAA rules), each Party
shall fully perform and satisfy the arbitration award within fifteen (15) days
of the service of the award.

      11.3 WAIVERS By agreeing to the binding arbitration provision in Section
11.1, the Parties understand that they are waiving certain rights and
protections which may otherwise be available if a Dispute between the Parties
were determined by litigation in court, including, without limitation, the right
to seek or obtain certain types of damages precluded by this provision, the
right to a jury trial, certain rights of appeal, and a right to invoke formal
rules of procedure and evidence.

                                       24
<PAGE>

      11.4 NON-ARBITRABLE DISPUTES Section 11.1 shall not apply to any dispute,
controversy or claim that concerns (A) the validity, enforceability or
infringement of a Patent, trademark or copyright; or (B) any antitrust,
anti-monopoly or competition law or regulation, whether or not statutory. All
such disputes, controversies or claims, and all judicial actions brought in
order to enforce the instituting Party's rights hereunder through specific
performance, injunction or similar equitable relief, shall be brought only in
the state or federal courts sitting in New York, New York. The Parties hereby
submit to the exclusive jurisdiction of such courts.

12.   GENERAL PROVISIONS.

      12.1 FURTHER ASSURANCES At any time or from time to time on and after the
Effective Date, each Party, at the request of the other Party, shall (i) deliver
to the other Party such records, data or other documents consistent with the
provisions of this Agreement, (ii) execute, and deliver or cause to be
delivered, all such assignments, consents, documents or further instruments of
transfer or license, and (iii) take or cause to be taken all such other actions,
as the other Party may reasonably deem necessary or desirable in order for such
other Party to obtain the full benefits of this Agreement and the transactions
contemplated hereby.

      12.2 INDEPENDENT CONTRACTORS The relationship between Dr. Bases and
Spectrum is that of independent contractors. Dr. Bases and Spectrum are not
joint venturers, partners, principal and agent, master and servant, employer or
employee, and have no other relationship other than independent contracting
Parties. Dr. Bases and Spectrum shall have no power to bind or obligate each
other in any manner, other than as is expressly set forth in this Agreement.

      12.3 ENTIRE AGREEMENT; MODIFICATION This Agreement sets forth the entire
agreement and understanding between the Parties as to the subject matter hereof.
There shall be no amendments or modifications to this Agreement, except by a
written document which is signed by both Parties.

      12.4 FORCE MAJEURE Neither Party shall be liable for any delay or failure
of performance to the extent such delay or failure is caused by circumstances
beyond its reasonable control and that by the exercise of due diligence it is
unable to prevent, provided that the Party claiming excuse uses its commercially
reasonable efforts to overcome the same.

      12.5 LIMITATION OF LIABILITY EXCEPT FOR LIABILITY FOR BREACH OF
CONFIDENTIALITY OR FOR INFRINGEMENT OR MISAPPROPRIATION, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR
EXEMPLARY DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS (EXCEPT, HOWEVER,
ANY LOST PROFITS OF SPECTRUM AS THE RESULT OF ANY BREACH BY DR. BASES OF ANY OF
THE COVENANTS IN

                                       25
<PAGE>

ARTICLE 8), ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS
OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

      12.6 ASSIGNMENT Except for sublicensing rights as set forth in Section 2.2
and the right of Dr. Bases to direct that payment be made to the Foundation on
his behalf, neither this Agreement nor any rights granted hereunder may be
assigned or transferred by either Party without the prior written consent of the
non-assigning Party. Notwithstanding the foregoing, Spectrum may assign this
Agreement to a successor in interest pursuant to a merger, acquisition or sale
of all or substantially all of its assets . Subject to the limitations on
assignment herein, this Agreement shall be binding upon and inure to the benefit
of any successors in interest and permitted assigns of Dr. Bases and Spectrum.
Any such successor or permitted assignee of Spectrum's interest shall expressly
assume in writing the performance of all terms and conditions of this Agreement
to be performed by Spectrum.

      12.7 GOVERNING LAW This Agreement shall be construed and enforced in
accordance with the laws of the State of California, without regard to the
conflicts of laws principles thereof.

      12.8 HEADINGS The headings for each article and section in this Agreement
have been inserted for convenience of reference only and are not intended to
limit or expand on the meaning of the language contained in the particular
article or section.

      12.9 SEVERABILITY Should any one or more of the provisions of this
Agreement be held invalid or unenforceable by a court of competent jurisdiction,
it shall be considered severed from this Agreement and shall not serve to
invalidate the remaining provisions thereof. The Parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by them when entering this
Agreement may be realized.

      12.10 NO WAIVER. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.

      12.11 NOTICES. Any notices required by this Agreement shall be in writing,
shall specifically refer to this Agreement and shall be sent by registered or
certified airmail, postage prepaid, or by e-mail or telefax, confirmed by
registered mail, or by telex or cable, charges prepaid, or by overnight courier,
charges prepaid, and shall be delivered to the respective addresses set forth
below unless subsequently changed by written notice to the other Party:

      For Dr. Bases:                        Dr. Robert Bases
                                            1 Mohegan Place
                                            New Rochelle, New York 10804

                                       26
<PAGE>

                                           Facsimile:
                                           E-Mail:

      For Spectrum:                        Spectrum Pharmaceuticals, Inc.
                                           157 Technology Drive
                                           Irvine, CA 92618
                                           Facsimile: (949) 788-6706
                                           E-Mail: rshrotriya@spectrumpharm.com
                                           Attention:  Rajesh C. Shrotriya, M.D.

Notice shall be deemed delivered upon the earlier of (i) when actually received,
(ii) the date notice is sent via e-mail, telefax, telex or cable, and confirmed
by written receipt or (iii) the day immediately following delivery to overnight
courier (except Sunday and holidays).

      12.12 COMPLIANCE WITH LAWS Nothing contained in this Agreement shall
require or permit Dr. Bases or Spectrum to do any act inconsistent with the
requirements of any United States law, regulation or executive order as the same
may be in effect from time to time.

      12.3 COUNTERPARTS.

      This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

                                       27
<PAGE>

      IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives as of the date set forth above.

DR. BASES                                   SPECTRUM PHARMACEUTICALS, INC.

By: /s/ Robert E. Bases                     By: /s/ Rajesh C. Shrotriya
    ------------------------------------        --------------------------------
    Robert E. Bases, M.D.                   Name: Rajesh C. Shrotriya, M.D.

                                            Title: Chairman, CEO and President

                                       28
<PAGE>

                                    EXHIBIT A

                                    MATERIALS

None.<PAGE>
                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT ("Agreement"), made the 20th day of May, 2005, between
SOVEREIGN BANCORP, INC., a Pennsylvania corporation ("SBI"), and MARK R.
McCOLLOM, an individual (the "Executive"),

                                   WITNESSETH:

      WHEREAS, Sovereign Bank (the "Bank") is a wholly owned subsidiary of SBI;
and

      WHEREAS, the Executive has heretofore served in various executive
capacities for SBI and the Bank; and

      WHEREAS, SBI desires to promote the Executive to a new position with
substantially increased responsibilities; and

      WHEREAS, the Executive has expressed his desire to assume such
responsibilities; and

      WHEREAS, SBI and the Executive desire to enter in a formal agreement
regarding, among other things, the Executive's employment by SBI.

                                   AGREEMENT:

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

      1. Employment. SBI hereby employs the Executive, and the Executive hereby
accepts employment with SBI, on the terms and conditions set forth in this
Agreement.

      2. Duties of Employee. The Executive shall perform and discharge well and
faithfully such duties as an executive officer of SBI as may be assigned to him
from time to time by the Chief Executive Officer of SBI or SBI's board of
directors ("Board of Directors"). The Executive initially shall be employed as
the Chief Financial Officer of SBI, shall be a member of the Office of the
Chairman, and shall hold such additional titles as may be given to him from time
to time by the Board of Directors and the board of directors of the Bank (and
any of their affiliated companies). The Executive shall devote his full time,
attention and energies to the business of SBI (and its affiliated companies) and
shall not, during the Employment Period (as defined in Section 3), be employed
or involved in any other business activity, whether or not such activity is
pursued for gain, profit or other pecuniary advantage; provided, however, that
this Section 2 shall not be construed as preventing the Executive from (a)
investing his personal assets in no more than 1% of the voting stock of a public
company or in other nonpublic corporations or businesses that do not directly or
indirectly compete with SBI or any of its affiliated companies, (b) acting as a
member of the board of directors of any other corporation or as a member of the
board of trustees of any other organization not in direct or indirect
competition with SBI or any of its affiliated companies, so long as such service
does not adversely affect his ability to properly discharge his duties
hereunder, or (c) being involved in

                                       1
<PAGE>

any other activity with the prior approval of the Chief Executive Officer of
SBI. The Executive's office will be located in Wyomissing, Pennsylvania or in
such other location that is not further than [65] miles therefrom, unless
otherwise explicitly agreed to by the Executive.

      3. Term of Employment. The Executive's employment under this Agreement
shall be for a period (the "Employment Period") commencing on the date of this
Agreement and ending on the date that is three years subsequent thereto,
provided that on the first and each subsequent annual anniversary date of this
Agreement, and unless a party has given the other party written notice at least
60 days prior to such anniversary date that such party does not agree to renew
this Agreement, the term of this Agreement and the Employment Period shall be
deemed renewed for a term ending three years subsequent to such anniversary
date, unless sooner terminated in accordance with Section 5 hereof or one of the
following provisions:

            (a) Termination for Cause. The Executive's employment under this
      Agreement may be terminated at any time during the Employment Period for
      Cause by action of the Board of Directors, upon giving notice of such
      termination to the Executive at least 15 days prior to the date upon which
      such termination shall take effect. As used in this Agreement, "Cause"
      means any of the following events:

                  (i) the Executive is convicted of or enters a plea of guilty
            or nolo contendere to a felony, a crime of falsehood, or a crime
            involving fraud or moral turpitude, or the actual incarceration of
            the Executive for a period of 45 consecutive days;

                  (ii) the Executive willfully fails to follow the lawful
            instructions of the Chief Executive Officer or Board of Directors
            after his receipt of written notice of such instructions, other than
            a failure resulting from the Executive's incapacity because of
            physical or mental illness;

                  (iii) the Executive repeatedly fails in any material respect
            to perform the reasonable duties required of the Executive under
            Section 2 after his receipt of written notice of such failure from
            the Chief Executive Officer or Board of Directors;

                  (iv) the Executive willfully violates SBI's or the Bank's Code
            of Conduct, as the same may be amended from time to time, or any
            material bank regulatory statute or regulation, or any cease and
            desist order applicable to SBI or the Bank;

                  (v) the Office of Thrift Supervision, Federal Deposit
            Insurance Corporation or any government regulatory agency having
            jurisdiction over SBI or the Bank recommends or orders that the
            Executive's employment be terminated or that he be relieved of his
            duties hereunder;

                                       2
<PAGE>

                  (vi) the Executive engages in any activity that results in a
            breach of fiduciary duty involving receipt of personal profit by him
            at the expense of SBI, the Bank or any of their affiliated
            companies;

                  (vii) the Executive commits a significant act of personal
            dishonesty or willful misconduct, or performs his duties under this
            Agreement in an incompetent manner; or

                  (viii) the Executive breaches any material provision of this
            Agreement and fails to cure such breach within 15 days after receipt
            of written notice of such breach from the Board of Directors.

      If the Executive's employment is terminated under the provisions of this
      Section 3(a), then all of his rights under Section 4 shall cease as of the
      effective date of such termination; provided, however, that he shall
      nonetheless be paid his accrued but unpaid salary (determined under
      Section 4(a)) to the date of termination, incurred but unreimbursed
      appropriate business expenses as of the date of termination, and such
      other amounts and benefits (if any) as he may otherwise be due hereunder
      and under the pension and welfare benefit plans in which he is then a
      participant.

            (b) Involuntary Termination Without Cause. The Executive's
      employment under this Agreement may be terminated at any time during the
      Employment Period without Cause, by action of the Board of Directors, upon
      giving written notice of such termination to the Executive at least 30
      days prior to the date upon which such termination shall take effect. If
      the Executive's employment is terminated under the provisions of this
      Section 3(b), then the Executive shall be entitled to receive the
      compensation and benefits set forth in Section 6 or Section 7, whichever
      shall be applicable. To the extent the Executive becomes entitled to and
      receives the payment and benefits set forth in Section 6 or 7, such
      payments and benefits shall constitute liquidated damages for any possible
      breach of this Agreement by SBI, the Bank or any of their affiliated
      companies, and shall represent the maximum extent of liability therefore
      that the Executive can claim against any of such entities.

            (c) Retirement or Death. If the Executive retires or dies, the
      Executive's employment under this Agreement shall be deemed terminated as
      of the date of the Executive's retirement or death, and all of his rights
      under Section 4 shall cease as of the date of such retirement or death;
      provided, however, that the Executive (or his estate, as applicable) shall
      nonetheless be entitled to payment of accrued but unpaid salary
      (determined under Section 4(a)) to the date of termination, incurred but
      unreimbursed appropriate business expenses as of the date of termination,
      and such other amounts and benefits (if any) as he may otherwise be due
      hereunder and under the pension and welfare benefit plans in which he is
      then a participant.

            (d) Disability. If the Executive is incapacitated by accident,
      sickness, or otherwise so as to render him mentally or physically
      incapable of performing the services required under Section 2 of this
      Agreement for a continuous period of six months (after

                                       3
<PAGE>

      SBI's undertaking and making of reasonable accommodation therefor), then,
      upon the expiration of such period or at any time thereafter (if such
      condition persists), by action of the Board of Directors, the Executive's
      employment under this Agreement may be terminated immediately upon giving
      the Executive written notice to that effect. If the Executive's employment
      is terminated under the provisions of this Section 3(d), then all of his
      rights under Section 4 shall cease as of the last business day of the week
      in which such termination occurs; provided, however, that he shall
      nonetheless be entitled to payment of accrued but unpaid salary
      (determined under Section 4(a)) to the date of termination, incurred but
      unreimbursed appropriate business expenses as of the date of termination,
      and such other amounts and benefits (if any) as he may otherwise be due
      hereunder and under the pension and welfare benefit plans in which he is
      then a participant.

            (e) Voluntary Termination by the Executive Without Good Reason. The
      Executive may voluntarily terminate his employment under this Agreement at
      any time during the Employment Period (and without regard to whether such
      termination may be deemed retirement for any purpose), by giving written
      notice of such termination to the Board of Directors at least 30 days
      prior to the date upon which termination is to take effect. If the
      Executive terminates his employment under the provisions of this section,
      then all of his rights under Section 4 shall cease as of the date of
      termination; provided, however, that the Executive shall nonetheless be
      entitled to payment of accrued but unpaid salary (determined under Section
      4(a)) to the date of termination, incurred but unreimbursed appropriate
      business expenses as of the date of termination, and such other amounts
      and benefits (if any) as he may otherwise be due hereunder and under the
      pension and welfare benefit plans in which he is then a participant.

            (f) Expiration of Agreement. In the event this Agreement and
      Executive's employment hereunder terminate by reason of the expiration of
      the Employment Period, because of the failure to renew such Period as
      provided above in this section, then all of the Executive's rights under
      Section 4 shall cease as of the date of expiration; provided, however,
      that the Executive shall nonetheless be entitled to payment of accrued but
      unpaid salary (determined under Section 4(a)) to the date of termination,
      incurred but unreimbursed appropriate business expenses as of the date of
      termination, and such other amounts and benefits (if any) as he may
      otherwise be due hereunder and under the pension and welfare benefit plans
      in which he is then a participant.

      4. Employment Period Compensation.

            (a) Salary. For services performed by the Executive under this
      Agreement, SBI shall initially pay (or cause to be paid to) the Executive
      a salary, during the Employment Period, at the rate of $350,000 per year,
      payable at the same times as salaries are payable to other executive
      officers of SBI. SBI may, from time to time, increase the Executive's
      salary (or cause it to be increased), and any and all such increases shall
      be deemed to constitute amendments to this Section 4(a) to reflect the
      increased amounts, effective as of the dates established for such
      increases by the Board of Directors in the resolutions authorizing such
      increases. Notwithstanding the preceding

                                       4
<PAGE>

      provisions of this section, no later than one year following the effective
      date of this Agreement, the amount of the Executive's base salary shall be
      revised so that it is equal to the base salaries generally then prevailing
      for members of the Office of the Chairman (other than the Chief Executive
      Officer of SBI).

            (b) Bonuses. The Executive shall participate in such bonus programs
      as may be maintained from time to time by SBI for its executive officers
      of similar rank. Notwithstanding the preceding sentence, the Executive
      shall be treated as a full year participant in the Senior Officers Bonus
      Award Program for 2005, effective as of the date determined by action of
      the Compensation Committee of the Board of Directors. The payment of any
      such bonuses shall not reduce or otherwise affect any other obligation of
      SBI to the Executive provided for in this Agreement.

            (c) Other Benefits. SBI will provide the Executive (or cause him to
      be provided), during the Employment Period, with insurance, vacation,
      retirement, and other fringe benefits, including the ability to
      participate in SBI's executive benefit programs, which benefits are, in
      the aggregate, not less favorable than those received by other comparable
      executive employees of SBI.

            (d) Automobile Allowance. The Executive shall be entitled to the
      same automobile allowance as he was entitled to immediately prior to the
      date of this Agreement. Nothing in the preceding sentence, however, shall
      preclude SBI from unilaterally modifying the amount of Executive's
      automobile allowance or the manner in which it may be provided. The
      Executive agrees to periodically provide SBI with such information as it
      may require with respect to his use of his automobile.

            (e) Club Membership. The Executive shall, from time to time, be paid
      or reimbursed for country club dues and business-related expenses at one
      such club. The identity of such club will be mutually agreed upon by SBI
      and the Executive.

            (f) Business Expenses. SBI will reimburse the Executive (or cause
      him to be reimbursed) for reasonable, normal and customary business
      expenses incurred in connection with his duties hereunder, in accordance
      with its employee or executive business expense reimbursement policies
      from time to time in effect.

      5. Resignation of the Executive for Good Reason.

            (a) Termination for Good Reason; Definition of Term. The Executive
      may resign for Good Reason at any time during the three-year period
      following a Change in Control (as defined in Section 5(b)), as hereinafter
      set forth. As used in this Agreement, "Good Reason" means any of the
      following:

                  (i) any reduction in title, change in reporting structure or
            significant reduction in the Executive's responsibilities or
            authority, including such responsibilities and authority as the same
            may be increased at any time during the

                                       5
<PAGE>

            term of this Agreement, or the assignment to the Executive of duties
            inconsistent with the Executive's status as an executive officer of
            SBI;

                  (ii) any reassignment of the Executive which reasonably
            requires the Executive to move his principal residence;

                  (iii) any removal of the Executive from office or any adverse
            change in the terms and conditions of the Executive's employment,
            except for any termination of the Executive's employment under the
            provisions of Section 3(a) or (d);

                  (iv) any reduction in the Executive's annual base salary as in
            effect on the date hereof or as the same may be increased from time
            to time;

                  (v) any failure of SBI to provide the Executive with benefits
            at least as favorable as those enjoyed by the Executive under any of
            the retirement, life insurance, medical, health and accident,
            disability and other employee benefit plans of SBI or the Bank in
            which the Executive participated at the time of the Change in
            Control, or the taking of any action that would materially reduce
            any of such benefits in effect at the time of the Change in Control,
            unless such reduction is part of a reduction applicable to all or
            substantially all employees;

                  (vi) any failure to obtain a satisfactory agreement from any
            successor to assume and agree to perform this Agreement, as
            contemplated in Section 16;

                  (vii) any material breach of this Agreement of any nature
            whatsoever on the part of SBI or any of its affiliated companies; or

                  (viii) termination of the Executive's membership in the Office
            of the Chairman (or any successor group).

      At the option of the Executive, exercisable by the Executive within 90
      days after the occurrence of the event constituting Good Reason, the
      Executive may resign from employment under this Agreement by a notice in
      writing (the "Notice of Termination") delivered to SBI (or its successor)
      and the provisions of Section 6 shall thereupon apply.

            (b) Change in Control Defined. As used in this Agreement, "Change in
      Control" means a change of control of a nature that would be required to
      be reported in response to the instructions for Schedule 14A of Regulation
      14A promulgated under the Securities Exchange Act of 1934, as amended (the
      "Exchange Act"), as enacted and in force on the date hereof, whether or
      not SBI is then subject to such reporting requirement; provided, however,
      that, without limitation, a Change in Control shall, in any event, be
      deemed to have occurred if:

                  (i) any "Person" (as such term is used in Sections 13(d) and
            14(d) of the Exchange Act except for any of SBI's employee benefit
            plans, or any entity

                                       6
<PAGE>

            holding SBI's voting securities for, or pursuant to, the terms of
            any such plan (or any trust forming a part thereof) (the "Benefit
            Plan(s)"), is or becomes the beneficial owner, directly or
            indirectly, of SBI's securities representing 19.9% or more of the
            combined voting power of SBI's then outstanding securities other
            than pursuant to a transaction described in (iv) below;

                  (ii) there occurs a contested proxy solicitation of SBI's
            shareholders that results in the contesting party obtaining the
            ability to vote securities representing 19.9% or more of the
            combined voting power of SBI's then outstanding securities;

                  (iii) a binding written agreement is executed (and, if legally
            required, approved by SBI's shareholders) providing for a sale,
            exchange, transfer or other disposition of substantially all of the
            assets of SBI or of the Bank to another entity, except to an entity
            controlled at the time directly or indirectly by SBI;

                  (iv) the shareholders of SBI approve a merger, consolidation,
            or other reorganization of SBI, unless:

                        (A) under the terms of the agreement approved by SBI's
                  shareholders providing for such merger, consolidation or
                  reorganization, the shareholders of SBI immediately before
                  such merger, consolidation or reorganization, will own,
                  directly or indirectly immediately following such merger,
                  consolidation or reorganization at least 51% of the combined
                  voting power of the outstanding voting securities of the
                  corporation resulting from such merger, consolidation or
                  reorganization (the "Surviving Corporation") in substantially
                  the same proportion as their ownership of the voting
                  securities immediately before such merger, consolidation or
                  reorganization (such proportion determined without regard to
                  any cash vs. stock election, on the part of such shareholders,
                  in the transaction);

                        (B) under the terms of the agreement approved by the
                  SBI's shareholders providing for such merger, consolidation or
                  reorganization, the individuals who were members of the Board
                  of Directors immediately prior to the execution of such
                  agreement will constitute at least 51% of the members of the
                  board of directors of the Surviving Corporation after such
                  merger, consolidation or reorganization; and

                        (C) based on the terms of the agreement approved by
                  SBI's shareholders providing for such merger, consolidation or
                  reorganization, no Person (other than (1) SBI or any
                  subsidiary of SBI, (2) any Benefit Plan (3) the Surviving
                  Corporation or any subsidiary of the Surviving Corporation, or
                  (4) any Person who, immediately prior to such merger,
                  consolidation or reorganization had beneficial ownership of
                  19.9% or more of the then outstanding voting securities of
                  SBI) will have beneficial

                                       7
<PAGE>

                  ownership of 19.9% or more of the combined voting power of the
                  Surviving Corporation's then outstanding voting securities;

                  (v) a plan of liquidation or dissolution of SBI, other than
            pursuant to bankruptcy or insolvency laws, is adopted;

                  (vi) during any period of two consecutive years, individuals,
            who at the beginning of such period, constituted the Board of
            Directors, cease for any reason to constitute at least a majority of
            such Board, unless the election and nomination of each new director
            was approved by a vote of at least two-thirds (2/3) of the directors
            then still in office who were directors at the beginning of the
            period; or

                  (vii) the occurrence of a "triggering event", within the
            meaning of such term in the Rights Agreement dated as of September
            19, 1989 between SBI and Chemical Bank, as the same may be amended
            through any relevant date,

                  (viii) the occurrence of any other event which is irrevocably
            designated as a "change in control" for purposes of this Agreement
            by resolution adopted by a majority of the then non-employee
            directors of SBI.

      Notwithstanding Clause (i), a Change in Control will not be deemed to have
      occurred if a Person becomes the beneficial owner, directly or indirectly,
      of stock and securities representing 19.9% or more of the combined voting
      power of SBI's then outstanding stock and securities or the aggregate
      number of shares of SBI's then outstanding common stock solely as a result
      of an acquisition by SBI of its stock or securities which, by reducing the
      number of securities or stock outstanding, increases the proportionate
      number of securities or stock beneficially owned by such Person; provided,
      however, that if a Person becomes the beneficial owner of 19.9% or more of
      the combined voting power of stock and securities or the aggregate number
      of shares of common stock by reason of such acquisition and thereafter
      becomes the beneficial owner, directly or indirectly of any additional
      voting stock securities or common stock (other than by reason of a stock
      split, stock dividend or similar transaction), then a Change in Control
      will thereupon be deemed to have occurred.

      6. Rights in Event of Termination of Employment After Change in Control.
In the event that Executive resigns from employment for Good Reason following a
Change in Control, by delivery of a Notice of Termination to SBI, or Executive's
employment is terminated by SBI without Cause upon or after a Change in Control,
Executive shall be absolutely entitled to receive the amounts and benefits set
forth in this section.

            (a) Current Compensation at Termination. For a period of three years
      from the date of termination of employment, Executive shall be paid his
      Current Compensation at Termination.

                  (i) For purposes of this section, the term "Current
            Compensation at Termination" means the sum of (A) the greatest of
            the Executive's base salary as

                                       8
<PAGE>

            of the date of termination of employment (or prior to any reduction
            thereof resulting in Good Reason for resignation) and for any of the
            three immediately preceding calendar years, and (B) a dollar amount
            equal to the highest of the awards Executive received as bonuses
            (including deferred bonuses) in any of the three calendar years
            preceding the year in which the termination of employment occurs.

                  (ii) Amounts required to be paid to Executive under this
            Section 6(a) shall be paid in equal monthly installments, beginning
            30 days following the date of termination of employment or the
            receipt by SBI of the approval of payment of such amounts by the
            Office of Thrift Supervision or such other regulatory agency to the
            extent such approval is required at that time.

            (b) Benefits. For a period of three years from the date of
      termination of employment, Executive shall receive a continuation of all
      life, disability, medical insurance and other welfare benefits in effect
      with respect to Executive during the two calendar years prior to his
      termination of employment, or, if SBI cannot provide such benefits (or
      cause them to be provided) because Executive is no longer an employee, a
      dollar amount equal to the after-tax cost to Executive of obtaining such
      benefits (or substantially similar benefits), less any amounts he was
      actually paying himself for such benefits immediately prior to
      termination.

            (c) Matters Relating to Certain Federal Excise Tax. In the event
      that the amounts and benefits payable under this Agreement, when added to
      other amounts and benefits which may become payable to the Executive by
      SBI and any affiliated company, are such that he becomes subject to the
      excise tax provisions of Section 4999 of the Internal Revenue Code of
      1986, as amended (the "Code"), SBI shall pay him such additional amount or
      amounts as will result in his retention (after the payment of all federal,
      state and local excise, employment and income taxes on such payments and
      the value of such benefits) of a net amount equal to the net amount he
      would have retained had the initially calculated payments and benefits
      been subject only to income and employment taxation. For purposes of the
      preceding sentence, the Executive shall be deemed to be subject to the
      highest marginal federal, relevant state and relevant local tax rates. All
      calculations required to be made under this subsection shall be made by
      independent public accountants retained by SBI, subject to the right of
      Executive's representative to review the same. All such amounts required
      to be paid shall be paid at the time any withholding may be required under
      applicable law, and any additional amounts to which the Executive may be
      entitled shall be paid or reimbursed no later than 15 days following
      confirmation of such amount by SBI's accountants. In the event any amounts
      paid hereunder are subsequently determined to be in error because
      estimates were required or otherwise, the parties agree to reimburse each
      other to correct such error, as appropriate, and to pay interest thereon
      at the applicable federal rate (as determined under Code Section 1274 for
      the period of time such erroneous amount remained outstanding and
      unreimbursed). The parties recognize that the actual implementation of the
      provisions of this subsection are complex and agree to deal with each
      other in good faith to resolve any questions or disagreements arising
      hereunder.

                                       9
<PAGE>

            (d) No Mitigation or Offset. Executive shall not be required to
      mitigate the amount of any payment or benefit provided for in this section
      by seeking employment or otherwise, nor shall any amount or benefit
      provided for in this section be subject to offset for compensation
      received from other employers unrelated to SBI.

      7. Rights in Event of Termination of Employment Without Cause in Absence
of Change in Control. In the event that Executive's employment is terminated by
SBI without Cause and no Change in Control shall have occurred at the date of
such termination, Executive shall be entitled to receive the amounts and
benefits set forth in this section.

            (a) Current Compensation at Termination. For a period of the greater
      of one year from the date of termination of employment or the remaining
      term of this Agreement, Executive shall be paid his Current Compensation
      at Termination.

                  (i) For purposes of this section, the term "Current
            Compensation at Termination" means the sum of (A) Executive's base
            salary as of the date of termination of employment (or prior to any
            reduction thereof preceding termination of employment), and (B) a
            dollar amount equal to the average of the awards Executive received
            as bonuses (including deferred bonuses) for each of the three
            calendar years preceding the year in which the termination of
            employment occurs.

                  (ii) Amounts required to be paid to Executive under Section
            7(a) shall be paid in equal monthly installments, beginning 30 days
            following the date of termination of employment or the receipt by
            SBI of the approval of payment of such amounts by the Office of
            Thrift Supervision or such other regulatory agency to the extent
            such approval is required at that time.

            (b) Benefits. For a period of the greater of one year from the date
      of termination of employment or the remaining term of this Agreement,
      Executive shall receive a continuation of all life, disability, medical
      insurance and other welfare benefits in effect with respect to Executive
      during the two calendar years prior to his termination of employment, or,
      if SBI cannot provide such benefits because Executive is no longer an
      employee, a dollar amount equal to the after-tax cost to Executive of
      obtaining such benefits (or substantially similar benefits).

            (c) No Mitigation or Offset. Executive shall not be required to
      mitigate the amount of any payment or benefit provided for in this section
      by seeking employment or otherwise, nor shall any amount or benefit
      provided for in this section be subject to offset for compensation
      received from other employers unrelated to SBI.

      8. Covenant Not to Compete; Non-Solicitation of Customers and Employees;
Confidential Information.

                                       10
<PAGE>

            (a) Covenant Not to Compete; Non-Solicitation. The Executive hereby
      acknowledges and recognizes the highly competitive nature of the business
      of SBI and of the Bank (and their affiliated companies) and, accordingly,
      agrees that, during and for the applicable period set forth in Section
      8(c) hereof, the Executive shall not:

                  (i) be engaged, directly or indirectly, either for his own
            account or as agent, consultant, employee, partner, officer,
            director, proprietor, investor (except as an investor owning less
            than 1% of the stock of a publicly owned company) or otherwise of
            any person, firm, corporation or enterprise engaged in any business
            in which SBI or one of its subsidiaries, including the Bank, is
            engaged at the date of termination of employment (the "Business") in
            any geographic area in which, at any time during the Employment
            Period, SBI or any of its subsidiaries, including the Bank, conducts
            the Business (the "Non-Competition Area");

                  (ii) provide financial or other assistance to any person,
            firm, corporation, or enterprise engaged in the Business in the
            Non-Competition Area;

                  (iii) engage in any of the foregoing types of business with,
            or solicit the sale of or sell any financial service or product
            relating to the Business to, any customer or client of SBI or any of
            its subsidiaries, including the Bank; or

                  (iv) solicit or hire any employees of SBI or any of its
            subsidiaries, including the Bank, who are engaged in the Business or
            induce any of such employees to terminate their employment
            relationship with SBI or any of its subsidiaries, including the
            Bank.

            (b) Judicial Cut-Back Authorized. It is expressly understood and
      agreed that, although the Executive and the Bank consider the restrictions
      contained in Section 8(a) hereof reasonable for the purpose of preserving
      for SBI and its subsidiaries their good will and other proprietary rights,
      if a final judicial determination is made by a court having jurisdiction
      that the time or territory or any other restriction contained in Section
      8(a) hereof is an unreasonable or otherwise unenforceable restriction
      against the Executive, the provisions of Section 8(a) hereof shall not be
      rendered void but shall be deemed amended to apply as to such maximum time
      and territory and to such other extent as such court may judicially
      determine or indicate to be reasonable.

            (c) Restrictive Period. The provisions of this Section 8 shall be
      applicable commencing on the date of this Agreement and ending on the date
      that is 12 months following the Executive's termination of employment
      unless the Executive's employment is terminated without Cause as provided
      in Section 3(b) or the Executive resigns for Good Reason as provided in
      Section 5, in which case the provisions of this Section 8 shall be
      applicable on the date of this Agreement and ending on the date of
      termination of the Executive's employment. In the event the Executive's
      employment terminates as a result of his notice to SBI of his
      non-agreement to renewal of this Agreement, the provisions of this Section
      8 shall be fully applicable to him. In the event termination of the
      Executive's employment is as a result of SBI's notice to him of its
      non-agreement to

                                       11
<PAGE>

      renewal of this Agreement, the provisions of this Section 8 shall not
      apply to the Executive beyond the termination date; provided, however,
      that for a period of 12 months following the termination date, the
      Executive shall be subject to the prohibitions set forth in Subsections
      (a)(iii) and (iv) of this Section 8.

            (d) Confidential Information.

                  (i) The Executive agrees that all customer lists, files and
            records now or hereafter used or possessed by SBI or any of its
            subsidiaries, including the Bank, are the property of SBI and are
            its trade secrets. Accordingly, the Executive acknowledges that
            SBI's trade secrets as they may exist from time to time and other
            confidential information concerning the SBI's business, products,
            technical information, sales activities, procedures, promotion,
            pricing techniques, business plans, customer and dealer lists and
            credit and financial data concerning customers are valuable, special
            and unique assets of SBI, access to and knowledge of which are
            essential to the performance of the Executive's duties under this
            Agreement. In light of the highly competitive nature of the industry
            in which the business of the SBI and its subsidiaries, including the
            Bank, is conducted, the Executive further agrees that all knowledge
            and information described in the preceding sentence not in the
            public domain and heretofore or in the future obtained by the
            Executive as a result of employment by SBI or any of its affiliated
            companies shall be considered confidential information. In
            recognition of this fact, the Executive agrees that the Executive
            will not, during or after the Employment Period, disclose any of
            such confidential information to any person or other entity for any
            reason or purpose whatsoever, except as necessary in the performance
            of the Executive's duties as an employee of or consultant to SBI or
            any of its subsidiaries, including the Bank, nor shall the Executive
            make use of any such confidential information for the Executive's
            own purposes or for the benefit of any person or other entity
            (except SBI and its subsidiaries, including the Bank) under any
            circumstances during or after the Employment Period.

                  (ii) Notwithstanding the provisions of Subsection (d)(i), SBI
            acknowledges and agrees that SBI's trade secrets and confidential
            information shall not be deemed to include (1) information which was
            in the Executive's possession prior to the Executive's employment by
            SBI and is not known by the Executive to be subject to another
            confidentiality agreement with or other obligation of secrecy to SBI
            or any of its subsidiaries, including the Bank, (2) information
            which becomes generally available to and known by the public other
            than as a result of disclosure by the Executive or (3) information
            which becomes generally available to the Executive on a
            non-confidential basis from a source other than SBI or any of its
            subsidiaries, including the Bank, provided such source is not known
            by the Executive to be bound by a confidentiality agreement with or
            other obligation of secrecy to SBI or any of its subsidiaries,
            including the Bank. In addition, nothing contained herein shall be
            deemed to preclude the Executive from responding to requests for
            information or inquiries from the Office of Thrift Supervision or
            the Federal Deposit Insurance Corporation, or from disclosing

                                       12
<PAGE>

            such information if required to do so by law; provided, however,
            that in any such case, he shall (unless prohibited by law) advise
            SBI in writing, in advance of any such disclosure, of the
            circumstances surrounding the proposed disclosure.

      9. Arbitration. SBI and the Executive recognize that in the event a
dispute should arise between them concerning the interpretation or
implementation of this Agreement, lengthy and expensive litigation will not
afford a practical resolution of the issues within a reasonable period of time.
Consequently, each party agrees that all disputes, disagreements and questions
of interpretation concerning this Agreement are to be submitted for resolution
to the American Arbitration Association (the "Association") in Philadelphia,
Pennsylvania. SBI, or the Executive, may initiate an arbitration proceeding at
any time by giving notice to the other in accordance with the rules of the
Association. The arbitrator shall be selected and proceedings shall be conducted
in accordance with the Association's National Rules for the Resolution of
Employment Disputes. The arbitrator shall not be bound by the rules of evidence
and procedure of the courts of the Commonwealth of Pennsylvania but shall be
bound by the substantive law applicable to this Agreement. The decision of the
arbitrator, absent fraud, duress, incompetence or gross and obvious error of
fact, shall be final and binding upon the parties and shall be enforceable in
courts of proper jurisdiction. Following written notice of a request for
arbitration, SBI, and the Executive, shall be entitled to an injunction
restraining all further proceedings in any pending or subsequently filed
litigation concerning this Agreement, except as otherwise provided herein
regarding equitable remedies.

      10. Legal Expenses. SBI shall pay to the Executive all reasonable legal
fees and expenses when incurred by the Executive in successfully obtaining,
enforcing or securing any material right or benefit provided by this Agreement.

      11. Exclusive Remedy; Release. The Executive agrees that the amounts and
benefits provided for in this Agreement, if paid when due or promptly after
resolution of any good faith disputes regarding the same, shall constitute the
Executive's sole and exclusive remedy, contractual or otherwise, in the event of
his termination of employment. The Executive agrees that he shall not be
entitled to any severance payment or benefit under any severance program
maintained by SBI or any of its affiliated companies. To the extent the
preceding sentence is not enforceable under any such program, the payments
and/or benefits he would otherwise receive hereunder shall be reduced (but not
below zero) by the severance payments and benefits he actually receives under
such program. At the request of SBI, and as a condition of SBI's obligation to
make any payments or provide any benefits following the Executive's termination
of employment, the Executive agrees to execute a form of mutual release then
generally in use by SBI for such circumstances of employment termination.

      12. Notices. Any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested, to
the last known residence of the Executive, in the case of notices to the
Executive, and to the principal office of SBI, in the case of notices to SBI.
Notices of any change in address may be given in the same manner.

                                       13
<PAGE>

      13. Waiver. No provision of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by the Executive and an executive officer of SBI specifically
designated by the Board of Directors. No waiver by any party hereto at any time
of any breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

      14. Assignment. This Agreement shall not be assignable by either party
hereto, except by SBI to any successor in interest to the business of SBI.

      15. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement and supersedes any
prior oral or written agreement of the parties relating to the matters governed
by this Agreement, including, but not limited to, the Change in Control
Agreement, dated as of January 1, 2001, between the Executive and SBI.

      16. Successor; Inurement Following Death.

            (a) Assumption by Successor. SBI will require any successor (whether
      direct or indirect, by purchase, merger, consolidation, or otherwise) to
      all or substantially all of the business and/or assets of SBI to expressly
      assume and agree to perform this Agreement in the same manner and to the
      same extent that SBI would be required to perform it if no such succession
      had taken place. Failure by SBI to obtain such assumption and agreement
      prior to the effectiveness of any such succession shall constitute a
      breach of this Agreement and the provisions of Section 6 shall apply. As
      used in this Agreement, "SBI" shall mean SBI as hereinbefore defined and
      any successor to the respective business and/or assets of SBI as
      aforesaid, which assumes and agrees to perform this Agreement by operation
      of law or otherwise.

            (b) Inurement Following Death. This Agreement shall inure to the
      benefit of and be enforceable by the Executive's personal or legal
      representatives, executors, administrators, heirs, distributees, devisees,
      and legatees. If the Executive should die while any amount is payable to
      the Executive under this Agreement if the Executive had continued to live,
      all such amounts, unless otherwise provided herein, shall be paid in
      accordance with the terms of this Agreement to the Executive's devisee,
      legatee, or other designee, or, if there is no such designee, to the
      Executive's estate.

      17. Termination. Any termination of the Executive's employment under this
Agreement or of this Agreement shall not affect the stated intent of the terms
of this Agreement including, without limitation, the provisions of Sections 6,
7, 8 and 10 hereof, which shall survive any such termination and remain in full
force and effect in accordance with their respective terms.

                                       14
<PAGE>

      18. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

      19. Applicable Law. Except to the extent preempted by federal law, this
Agreement shall be governed by and construed in accordance with the domestic
laws (but not the law of conflict of laws) of the Commonwealth of Pennsylvania.

      20. Headings. The headings of the several sections and subsections of this
Agreement are for convenience of reference only and shall not control or affect
the meaning or construction or limit the scope or intent of any of the
provisions of this Agreement.

      21. Effective Date. This Agreement shall become effective upon the day and
year first above written.

      22. Allocation of Costs Generally. SBI and the Bank agree that, as between
themselves (and, if relevant, their affiliated companies), they shall bear their
respective costs incurred under this Agreement in such manner as is determined
on a mutually satisfactory basis. Notwithstanding the preceding sentence,
regardless of any internal cost allocation arrangements between SBI and the Bank
(and any other companies), SBI shall remain primarily obligated to Executive for
the payments and benefits to which he may become entitled hereunder.

      23. Guaranty; SBI and Bank Representation. To the extent permitted by law,
the Bank hereby irrevocably and unconditionally guarantees to the Executive the
full and timely performance by SBI of each and every obligation of SBI set forth
in this Agreement. SBI and the Bank represent to the Executive that this
Agreement has been fully authorized by all necessary corporate action and is
fully enforceable in accordance with its terms.

      24. Cooperation Covenant. Both during and after the Employment Period, the
Executive shall cooperate fully with SBI and with any legal counsel, expert or
consultant it may retain to assist it in connection with any judicial
proceedings, arbitration, administrative proceeding, governmental investigation
or inquiry or internal audit in which SBI or any affiliate thereof, including
the Bank, may be or become involved, including full disclosure of all relevant
information and truthfully testifying on SBI's behalf (or, at the request of
SBI, on behalf of such affiliate of SBI, including the Bank) in connection with
any such proceeding or investigation.

      25. Tax Withholding. All payments made and benefits provided hereunder
shall be subject to required tax withholding, the cost of which, except as
otherwise specifically provided herein, shall be borne by the Executive. In the
case of a noncash benefit, SBI may require the Executive, as a condition of the
receipt of such benefit, to deposit sufficient funds with SBI to discharge any
required withholding obligation.

      26. Representation of Executive. As an inducement to entering into this
Agreement, the Executive represents to SBI and the Bank that his execution of
and performance under this Agreement will not constitute a violation by him of
any written or other contract, understanding, arrangement, duties or other
obligation pertaining to his performance of personal services,

                                       15
<PAGE>

solicitation of employees or customers, or other conduct on his part
contemplated by this Agreement.

      27. Number. Words used herein in the singular form shall be deemed to
include the plural, as appropriate in the context in which such word is used,
and vice versa.

      28. American Jobs Creation Act of 2004. Notwithstanding anything herein to
the contrary, the provisions of this Agreement are subject to the conditions and
provisions of Section 885 of the Jobs Creation Act of 2004 and Code Section 409A
implemented thereby. To the extent any provision hereof would violate the
provisions of such laws, thereby potentially resulting in adverse tax
consequences to the Executive, the parties agree to negotiate, in good faith and
to the extent possible, to ameliorate or eliminate such potential adverse tax
consequences to the Executive. In connection therewith, in the event the
provision of payments or benefits is accelerated, the parties acknowledge and
agree that SBI may take into account reasonable present value concepts in making
any payments or providing accelerated benefits hereunder.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first

                   [This space is intentionally left blank.]

                                       16
<PAGE>

         above written.

                                          SOVEREIGN BANCORP, INC.

                                          By /s/ Jay S. Sidhu
                                            ------------------------------------
                                                   Jay S. Sidhu
                                                   Chairman, President and Chief
                                                   Executive Officer

(SEAL)                                    Attest: /s/ David A. Silverman
                                                 -------------------------------
                                                   David A. Silverman
                                                   Secretary
                                                   ("SBI")

                                                  /s/ Mark R. McCollom
                                            ------------------------------(SEAL)
                                                   Mark R. McCollom
                                                   ("Executive")

Agreed to as of the date of this
Agreement.

SOVEREIGN BANK, A FEDERAL SAVINGS BANK

/s/ Jay S. Sidhu
-----------------------------
Jay S. Sidhu
Chairman, President and
Chief Executive Officer

                                       17

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