Exhibit 10.1

PONIARD PHARMACEUTICALS, INC.
INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”), dated as of June 26, 2006, is
entered into by and between Poniard Pharmaceuticals, Inc., a Washington
corporation (the “Company”), and Ronald A. Martell (“lndemnitee”).

RECITALS

A.    The Company and lndemnitee recognize the litigation risks inherent in
service as a director and/or officer of a publicly traded company, including the
substantial costs involved in defending such matters.

B.     The Company’s articles of incorporation (the “Articles”) and bylaws (the
“Bylaws”) contain certain provisions, approved by the Company’s shareholders,
for indemnification of the Company’s directors and/or officers to the full
extent permitted by the Washington Business Corporation Act (the “Statute”).

C.     The Articles, the Bylaws and the Statute specifically provide that they
are not exclusive, and contemplate that contracts may be entered into between
the Company and its directors and/or officers with respect to indemnification.

D.     The lndemnitee has indicated a desire to supplement the indemnification
provisions in the Articles and Bylaws to provide additional protections against
the risks associated with his service to the Company and further clarify his
rights with respect to indemnification in certain circumstances.

E.     To induce Indemnitee to accept the position or continue service as a
director and/or officer of the Company, the Company and the Indemnitee now agree
that they should enter into this Indemnification Agreement.

AGREEMENT

1.   Indemnification of Indemnitee

1.1   Scope

Subject to Section 4.1 and all other terms and conditions of this Agreement, the
Company agrees to indemnify and hold harmless Indemnitee, to the full extent
permitted by law, whether or not specifically authorized by this Agreement, the
Articles, the Bylaws, the Statute or otherwise, for any Indemnifiable Losses (as
defined below) which the Indemnitee is or becomes legally obligated to pay in
connection with any Proceeding. In the event of any change, after the date of
this Agreement, in any applicable law, statute or rule regarding the right of a
Washington corporation to indemnify a director and/or officer, such changes, to
the extent that they would expand Indemnitee’s indemnification rights, shall be
within the purview of Indemnitee’s rights and the Company’s obligations under
this Agreement, and, to the extent that they would narrow Indemnitee’s
indemnification rights, shall not affect or limit the scope of this Agreement;
provided, however, that

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any change that is required by applicable laws, statutes or rules to be applied
to this Agreement shall be so applied regardless of whether the effect of such
change is to narrow Indemnitee’s rights.

1.2   Nonexclusivity

The indemnification provided by this Agreement is not exclusive of any rights to
which Indemnitee may be entitled under the Articles, the Bylaws, any other
agreement, any vote of shareholders or disinterested directors, the Statute, or
otherwise, whether as to action in Indemnitee’s official capacity or otherwise.

1.3   Definition of Indemnifiable Losses

For purposes of this Agreement, the term “Indemnifiable Losses” shall include
(without limitation) any and all damages (compensatory, exemplary, punitive or
otherwise), judgments, fines, penalties, settlements, costs, attorneys’ fees and
disbursements, costs of attachment or similar bonds, investigations, expenses of
establishing a right to indemnification under this Agreement, and any other
losses, claims, liabilities or other expenses incurred in connection with a
Proceeding, subject to the limitations set forth in Section 4.1 below.

1.4   Definition of Proceeding

For purposes of this Agreement, the term “Proceeding” shall include (without
limitation) any threatened, pending or completed claim, action, suit or
proceeding, whether brought by or in the right of the Company or otherwise, and
whether of a civil, criminal, administrative or investigative nature, in which
the Indemnitee may be or may have been involved as a party or otherwise
(including without limitation as a witness), (a) by reason of the fact that
Indemnitee is or was, or has agreed to become, a director and/or officer of the
Company, (b) by reason of any actual or alleged error or misstatement or
misleading statement made or suffered by the Indemnitee, (c) by reason of any
action taken by Indemnitee or of any inaction on Indemnitee’s part while acting
as such director and/or officer, or (d) by reason of the fact that Indemnitee
was serving at the request of the Company as a director, trustee, officer,
employee or agent of the Company or another corporation, partnership, joint
venture, trust or other enterprise (including without limitation employee
benefit plans and administrative committees thereof) (which request will be
conclusively presumed in the case of any of the foregoing that are “affiliates”
of the Company as defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended); provided, however, that, except with respect to an action to
enforce the provisions of this Agreement, the term “Proceeding” shall not
include any action, suit, claim or proceeding instituted by or at the direction
of Indemnitee unless such action, suit, claim or proceeding is or was authorized
or ratified by the Company’s Board of Directors.

1.5   Determination of Entitlement

In the event that a determination of Indemnitee’s entitlement to indemnification
is required pursuant to Section 23B.08.550 of the Statute or its successor or
pursuant to other applicable law, the party specified therein as the determining
party shall make such determination; provided, however, (a) that Indemnitee
shall initially be presumed in all cases to be entitled to indemnification,
(b) that Indemnitee may establish a conclusive presumption of any fact necessary
to such a determination by delivering to the Company a declaration made under
penalty of perjury that such fact is true and (c) that, unless the Company shall
deliver to Indemnitee written notice of a determination that Indemnitee is not
entitled to indemnification within twenty (20) days of the Company’s receipt of

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Indemnitee’s initial written request for indemnification, such determination
shall conclusively be deemed to have been made in favor of the Company’s
provision of indemnification and Company agrees not to assert otherwise.

1.6   Survival

The indemnification provided under this Agreement shall apply to any and all
Proceedings, notwithstanding that Indemnitee has ceased to serve in a capacity
referred to in Section 1.4(a)-(d).

2.   Expense Advances

2.1   Generally

The right to indemnification for Indemnifiable Losses conferred by Section 1
shall include the right to have the Company pay Indemnitee’s expenses in any
Proceeding as such expenses are incurred and in advance of such Proceeding’s
final disposition (such right is referred to hereinafter as an “Expense
Advance”), subject to Sections 2.2, 4 and 5 and all other terms and conditions
of this Agreement.

2.2   Conditions to Expense Advance

The Company’s obligation to provide an Expense Advance is subject to
(a) Indemnitee or his representative having first executed and delivered to the
Company an undertaking, which need not be secured and shall be accepted without
reference to Indemnitee’s financial ability to make repayment, by or on behalf
of Indemnitee to repay all Expense Advances if and to the extent that it shall
ultimately be determined by a final, unappealable decision rendered by a court
having jurisdiction over the parties and the subject matter of the dispute that
Indemnitee is not entitled to be indemnified under this Agreement or otherwise;
and (b) Indemnitee furnishing, upon request by the Company and if required under
applicable law, a written affirmation of Indemnitee’s good faith belief that
Indemnitee has met any applicable standards of conduct.

2.3   Subrogation

In the event of payment under this Agreement, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee,
who shall execute all papers required and shall do everything that may be
necessary to secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to enforce such
rights.

3.   Procedures for Enforcement

3.1   Enforcement

In the event that a claim for indemnification hereunder is made and is not paid
in full within sixty days after written notice of such claim has been received
by the Company, except in the case of a claim for advance expenses, in which
case the applicable period shall be twenty days, Indemnitee may, but need not,
at any time bring suit against the Company to recover the unpaid amount of the
claim (an “Enforcement Action”), subject to all other terms, conditions and
limitations of this Agreement.

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3.2   Presumptions in Enforcement Action

In any Enforcement Action the following presumptions (and limitation on
presumptions) shall apply:

(a)    The Company shall conclusively be presumed to have entered into this
Agreement and assumed the obligations imposed on it to induce Indemnitee to
accept the position of, or to continue as a director and/or officer of the
Company; and

(b)    Neither (i) the failure of the Company (including its Board of Directors,
independent or special legal counsel or the Company’s shareholders) to have made
a determination prior to the commencement of the Enforcement Action that
indemnification of Indemnitee is proper in the circumstances nor (ii) an actual
determination by the Company, its Board of Directors, independent or special
legal counsel or the shareholders that Indemnitee is not entitled to
indemnification shall be a defense to the Enforcement Action or create a
presumption that Indemnitee is not entitled to indemnification.

3.3   Attorneys’ Fees and Expenses for Enforcement Action

The Company shall indemnify and hold harmless Indemnitee against all of
Indemnitee’s reasonable fees and expenses in bringing and pursuing any
Enforcement Action (including reasonable attorneys’ fees at any stage, including
on appeal); provided, however, that the Company shall not be required to provide
such indemnity (a) if a court of competent jurisdiction determines that all the
material assertions made by Indemnitee in such Enforcement Action were not made
in good faith or were frivolous or (b) to the extent limited under Section 4.1
below.

4.   Limitations

4.1   Limitation on Indemnity

Notwithstanding any other provision of this Agreement, the Company shall not be
obligated to provide indemnification pursuant to this Agreement:

(a)    on account of any suit in which a final, unappealable decision is
rendered by a court having jurisdiction over the parties and the subject matter
of the dispute for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company in violation of the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto;

(b)    for Indemnifiable Losses that have been paid directly to Indemnitee by an
insurance carrier under a policy of insurance maintained by the Company;

(c)    on account of Indemnitee’s conduct which is finally adjudged with no
further right of appeal to have been intentional misconduct, a knowing violation
of law, a violation of RCW 23B.08.310 or any successor provision of the Statute,
or a transaction from which Indemnitee derived personal benefit in money,
property or services to which Indemnitee was not legally entitled;

(d)    to the extent that the Indemnitee is indemnified and actually paid
otherwise than pursuant to this Agreement;

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(e)    if a final, unappealable decision is rendered by a court having
jurisdiction over the parties and the subject matter of the dispute finding that
paying such indemnification is prohibited by applicable law;

(f)     to the extent that attorneys’ fees, costs and disbursements, or similar
expenses, that otherwise would constitute Indemnifiable Losses hereunder are
determined to be unreasonable by a final, unappealable decision rendered by a
court having jurisdiction over the parties and the subject matter of the
dispute, provided that the burden of proof that any Indemnifiable Losses are
unreasonable shall be on the Company; or

(g)    to the extent such Indemnifiable Losses have been incurred by Indemnitee
in violation of the terms of Section 5 below.

4.2   Partial Indemnification

If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of any Indemnifiable Losses
in connection with a Proceeding, but not, however, for the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion of such
Indemnifiable Losses to which Indemnitee is entitled.

4.3   Mutual Acknowledgment

The Company and Indemnitee acknowledge that, in certain instances, federal law
or public policy may override applicable state law and prohibit the Company from
indemnifying Indemnitee under this Agreement or otherwise. For example, the
Company and Indemnitee acknowledge that the Securities and Exchange Commission
has taken the position that indemnification is not permissible for liabilities
arising under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. Furthermore, Indemnitee
understands and acknowledges that the Company has undertaken or may be required
in the future to undertake with the Securities and Exchange Commission to submit
the question of indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee.

5.   Notification and Defense of Claim

5.1   Notification

Promptly after receipt by Indemnitee of notice of the commencement of any
Proceeding, Indemnitee will, if a claim is to be made against the Company under
this Agreement, notify an officer of the Company in writing of the nature and
status of the Proceeding; provided, however, that the omission so to notify an
officer of the Company will not relieve the Company from any obligation which it
may have to Indemnitee under this Agreement or otherwise unless and only to the
extent that such omission can be shown to have prejudiced the Company.

If, at the time of the receipt of a notice of a claim pursuant to this
Section 5.1, the Company has director and officer liability insurance in effect,
the Company shall give prompt notice of the commencement of such Proceeding to
the insurers in accordance with the procedures set forth in the respective
policies (unless the Indemnitee’s involvement in such Proceeding is solely as a
witness or there is otherwise no basis for asserting coverage). The Company
shall take all necessary action to

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cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a result of such Proceeding in accordance with the terms of such policies.

5.2   Defense of Claim

With respect to any such Proceeding as to which Indemnitee notifies the Company
of the commencement thereof or otherwise seeks indemnification hereunder:

(a)    The Company may participate at its own expense in such Proceeding;

(b)    The Company, jointly with any other indemnifying party similarly
notified, may assume the defense of the Proceeding with counsel reasonably
satisfactory to Indemnitee. After notice from the Company to Indemnitee of its
election to assume the defense, the Company shall not be liable to Indemnitee
under this Agreement or otherwise for any legal or other expenses of counsel
(other than reasonable costs of investigation) subsequently incurred by
Indemnitee in connection with the defense of such Proceeding, unless (i) the
employment of counsel by Indemnitee has been authorized in advance by the
Company in writing, (ii) Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and Indemnitee in the conduct
of the defense of such action and notified the Company in writing to that effect
in advance of the expense, (iii) the Company shall not in fact have employed
counsel to assume the defense of such action, or (iv) the Company is not
financially or legally able to perform its indemnification obligations, in each
of which cases the fees and expenses of counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any action,
suit or proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have made the conclusion provided for in (ii) or (iv) above;

(c)    The Company shall not settle any action or claim in any manner which
would impose any penalty or limitation on Indemnitee that would not be an
Indemnifiable Loss hereunder for which indemnification would be provided by the
Company without Indemnitee’s written consent.

6.   Miscellaneous

6.1   Entire Agreement

This Agreement is the entire agreement of the parties regarding its subject
matter and supersedes all prior written or oral communications or agreements.

6.2   Severability

Nothing in this Agreement is intended to require or shall be construed as
requiring the Company to do or fail to do any act in violation of applicable
law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable. If this
Agreement or any portion shall be invalidated on any ground by any court of
competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee
to the full extent permitted by any portion of this Agreement not invalidated,
and the balance of this Agreement shall be enforceable in accordance with its
terms.

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6.3   Notices

Notices given pursuant to this Agreement shall be deemed duly given on the date
of personal delivery, on the date sent by fax or three days after mailing if
mailed by certified or registered mail, return receipt requested, postage
prepaid, to the party at its address below or such other address of which the
addressee may subsequently notify the other parties in writing.

6.4   Governing Law

This Agreement and the rights and obligations of the parties shall be governed
by and construed in accordance with the laws of the state of Washington, without
giving effect to principles of conflicts of law.

6.5   Counterparts

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

6.6   Amendments; Waivers

Neither this Agreement nor any provision may be amended except by written
agreement signed by the parties. No waiver of any breach or default shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default.

6.7   Successors and Assigns

This Agreement shall be binding upon the Company and its successors (including,
without limitation, any direct or indirect successors by purchase, merger,
consolidation or otherwise to all or substantially all of the business and
assets of the Company) and assigns, and inure to the benefit of Indemnitee and
Indemnitee’s heirs, legal representatives and assigns.

(Signature page follows)

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the date first above written.

 

COMPANY:

 

 

 

 

 

PONIARD PHARMACEUTICALS, INC.

 

 

 

 

 

 

 

By:

 

/s/GERALD MCMAHON

 

 

 

 

Gerald McMahon
President and Chief Executive Officer

 

 

 

 

 

 

 

Address:

 

300 Elliott Avenue West, Suite 500
Seattle, Washington 98991

 

 

 

 

 

INDEMNITEE:

 

 

 

 

 

/s/RONALD A. MARTELL

 

 

Ronald A. Martell

 

 

 

 

 

 

 

Address:

 

25 Queensbury Way
Basking Ridge, NJ 07920

 

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