Exhibit 10.26


 


Confidential Treatment has been requested for
portions of this exhibit. The copy filed herewith omits the information subject
to the confidentiality request. Omissions are designed as[*] . A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.


 


MANUFACTURING
AND SUPPLY AGREEMENT


 


This Manufacturing and Supply Agreement (“Agreement”)
is entered into as of the date signed by the last party to sign this Agreement,
and with an effective date of May 4, 2005 (the “Effective Date”) by and
between Hyaluron Inc., with its principal place of business at 99 S. Bedford
Street, Suite 2, Burlington, MA 
01803, (“Hyaluron”) and NeoRx, a Washington corporation, having its
principal place of business at 300 Elliott Avenue West, Suite 500,
Seattle, Wa 98119-4114. Hyaluron and NeoRx may be referred to herein as a “Party”
or, collectively, as the “Parties”.


 


WHEREAS, NeoRx is engaged in the business of developing therapeutic
product(s); and


 


WHEREAS, Hyaluron is in the business of developing, manufacturing, testing and
packaging sterile pharmaceutical products; and


 


WHEREAS, NeoRx desires to utilize Hyaluron to develop, manufacture, test,
and/or package supplies of the product(s) as designated by NeoRx:


 


NOW, THEREFORE, the Parties agree as follows:


 


Definitions. As used herein the following terms will
have the following meanings:


 


“API” means the raw material components of the
Product, as specified and provided to Hyaluron by NeoRx.


 


“Batch” means the entire amount of Product yielded
from a manufacturing event using a specific quantity of APIs, Excipients, and
components processed in accordance with the Master Batch Record and the
Manufacturing Standards.


 


“Batch Record” means the document created as and
after each Batch is Processed and Packaged. Each Batch Record will reflect and
incorporate all aspects of the Master Batch Record, the applicable Certificate
of Analysis, and any Manufacturing Variance Reports issued with respect to such
Batch.


 


“Batch Release” means the final sign-off by a party’s
quality department marking the culmination of the quality process through which
a batch of Product is shown to conform to all aspects of the Manufacturing
Standards.


 


“Bulk” means the bulk API for formulation.


 


“Compounded Bulk” means the API and Excipients which
have been compounded but not filled or packaged or finished into a final dosage
presentation.


 


“Certificate of Analysis” means a certificate that
accompanies each shipment of APIs or Product certifying that the APIs or
Product meets the specifications as defined in the Manufacturing Standards.


 


“Date of Manufacture” means the date of sterile
filtration and/or filling of the Compounded Bulk.


 


“Excipient” means any substance other than the API
used in formulating the Compounded Bulk.


 


“API Reference Standard” means a quantity of APIs
with a known assay, supplied by NeoRx, with which Hyaluron may perform
comparative analysis to API samples having an unknown assay.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


1





















 


“API Specifications” means the specifications with
respect to the APIs as set forth in the Master Batch Record.


 


 “Manufacturing
Standards” means the specifications for Processing, Packaging, and storing the
Product set forth in the Specifications, the Master Batch Record, CGMPs (as
defined below), MSDSs, the QA Schedule and all applicable U.S. laws and
regulations, to the extent such terms and conditions are not inconsistent with
this Agreement.


 


“Manufacturing Variance Report” means a written
report indicating any significant variance in the Processing or Packaging of a
Batch from the procedures set forth in the Master Batch Record.


 


“Master Batch Record” means the document, as may be
amended from time to time, specifying: (i) the API Specifications, (ii) the
procedures for testing and releasing the APIs, (iii) the Excipients, (iv) the
Primary Components, (v) Secondary Packaging, (vi) the Specifications,
(vii) the formula (listing the APIs and the Excipients for the Product),
and (viii) the procedures for manufacturing the Product (listing the APIs,
the Excipients, the Primary Components, and the Secondary Packaging).


 


“To Package” and “Packaging” means the act of
inspecting, labeling, and packing the Product into units.


 


“Primary Components” means the vial/syringe,
stopper, and seal as identified in the Master Batch Record.


 


“Process” or “Processing” means the manufacturing
procedures, or any part thereof, involved in manufacturing the Product in
accordance with the Manufacturing Standards.


 


“Product” means finished product in final dosage
presentation.


 


“Specifications” means the specifications for the
APIs, the Excipients, the Primary Components, the Secondary Packaging, and the
in-process and release specifications for the Product, as set forth initially
in the applicable Statement or Work and, subsequently in the Master Batch
Record. Revisions to Specifications may be made by the Parties from time to
time and such changes will be reflected in the Master Batch Record.


 


“Qualified Supplier” means a supplier of materials
or components that has been audited and/or assessed by Hyaluron and has passed
Hyaluron’s quality assurance standards.


 


“Secondary Packaging” means any component other than
Primary Components used to convert primary units into units.


 


“Shipping Components” means the packaging, boxes,
and shipping containers into which the Product is placed for shipment to NeoRx.


 


“Variance” or “Deviation” means a departure from an
established quality standard (e.g., CGMP standard operating procedure, Master
Batch Record or Specifications,, analytical control procedure, water monitoring
procedure, environmental monitoring specification, equipment maintenance
schedule, or any unusual occurrence), which may be either anticipated or
unanticipated departures from established quality standards and may have the
potential to affect the safety, identity, strength, quality or purity of the
Product or Compounded Bulk.


 


1.                                       Quotation. Hyaluron will provide to
NeoRx the manufacturing and related services (the “Services”) as described in
the applicable Quotation (the “Quotation”),
a form of which is attached hereto as Exhibit A and incorporated herein by
reference. The Parties will mutually agree to the contents of each Quotation
and any amendments thereto. Each Quotation will, in addition to other matters,
address the quality assurance and control procedures. The Quotation may specify
that NeoRx will provide certain materials to Hyaluron or require that Hyaluron
acquire certain materials from a particular source. If NeoRx provides materials
to Hyaluron, title in and risk of loss of such materials will remain with
NeoRx,


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


2





















 


unless such loss occurs due to negligence by Hyaluron. In the event
NeoRx requests additional services relating to this Agreement, the Parties may
mutually agree upon such services and the costs related thereto in a separate
written agreement, which must be signed by authorized representatives of both
Parties before any such costs are incurred.


 


2.                                       Compensation for Services. Compensation for the Services will be as
specified in the Quotation. Hyaluron will bill NeoRx for the Services as
specified in the applicable Purchase Order. Such invoices will be payable upon
receipt by NeoRx. All pricing, payments, credits, allowances or other monetary
adjustments under this Agreement will be in U.S. Dollars.


 


3.                                       Advance Notice For Services. NeoRx agreesto give Hyaluron 60 days
advance written notice prior to the required date of manufacture for each
Product Order under the terms of this Agreement.


 


4.                                      Services.


 


(a)                                  All Services will be conducted in accordance
with the applicable Quotation and Hyaluron’s internal Standard Operating
Procedures (“SOPs”), copies of which will be available for inspection by NeoRx
or its designated representatives at Hyaluron upon reasonable notice.
Notwithstanding the foregoing, unless otherwise specified in the applicable
Purchase Order, the manufacturing of the Product will be conducted in accordance
with Current Good Manufacturing Practices (“CGMPs”) as described in the
relevant United States Food and Drug Administration (“FDA”) regulations and
guidelines for the manufacture, control and storage of human pharmaceutical
products, including, without limitation, the FDA’s guidance for industry titled
“Sterile Drug Products Produced by Aseptic Processing – Current Good
Manufacturing Practice”, dated September  2004.


 


(b) Hyaluron will
follow CGMP standards to manufacture for NeoRx clinical Batches of a finished
dosage form of the Product per the Manufacturing Standards, and as may be
further developed by Hyaluron, using the APIs, components and Excipients
specified. In accordance with CGMP and during the term of this Agreement,
Hyaluron will utilize validated cleaning and changeover procedures prior to
manufacturing any Product for NeoRx. Both Parties will promptly notify each
other of any new instructions or specifications required by CGMP. Hyaluron will
timely provide NeoRx with (a) a written description of any actions taken
to comply with new or revised CGMPs that affect the Product and/or (b) copies
of Hyaluron’s manufacturing records, including its Batch Records regarding the
Product, for the purposes of assuring product quality and compliance with agreed-upon
manufacturing procedures.


 


(c) Hyaluron will
adhere to the Specifications and requirements, as detailed in the Master Batch
Record, the Manufacturing Standards and mutually agreed upon protocols, where
such specifications are in compliance and agreement with FDA and other
applicable regulatory agency guidelines. Hyaluron will obtain NeoRx’s prior
approval before it implements any change in the materials, equipment, process
or procedures used to manufacture the Product that would constitute a significant
Deviation under CGMP. Hyaluron will disclose all proposed changes in such
manufacturing materials, equipment, process or procedure to NeoRx.


 


(d) In the event that
the Bulk fails to meet in-process or release specifications, NeoRx may
authorize a Deviation from the Batch Record in an attempt to salvage the Batch.
NeoRx assumes responsibility for all costs associated with batch failure(s)
until such time as Hyaluron has validated the filling line for the Product,
unless such batch failure(s) result(s) from negligence by Hyaluron. Hyaluron
will assume responsibility for Excipient costs for batch failures occurring
subsequent to product fill line validation, unless such batch failures result
from negligence by NeoRx. At no time will Hyaluron be responsible for API costs
resulting from batch failure.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


3





















 


(e) Hyaluron will
obtain materials and components for production from Qualified Suppliers.


 


(f) Hyaluron and NeoRx
will mutually develop a Master Batch Record for the Product following the
technical specifications, methods and know-how provided by NeoRx.


 


(g) NeoRx will transfer
to Hyaluron appropriate methods and in process assays for manufacturing the
Product. Such methods and in process assays will be confirmed, or if requested,
validated by Hyaluron for their application to the finished Product.


 


(h) Hyaluron will provide NeoRx with copies of
executed Batch Records, process deviations and analytical data showing that the
Specifications have been met, following completion of the manufacture of the
Product. NeoRx will have the right to review and approve Master Batch Records,
to approve planned process deviations and to receive prompt notice of unplanned
process deviations. Hyaluron will retain original documents relating to the
manufacture of NeoRx Products and store these documents in accordance with CGMP
and Hyaluron’s internal quality assurance SOPs. Subject to the foregoing
Hyaluron will notify NeoRx before disposing of any of this Product
documentation. In such case, NeoRx may request, within seven days, to have the
documents shipped to NeoRx in accordance with NeoRx’s instructions and at NeoRx’s
expense.


 


(i) In the event that NeoRx proposes any
significant change to the Specifications or manufacturing Process, NeoRx will
deliver written notice to Hyaluron describing such Change. Hyaluron will
respond to any such notice within 15 days after Hyaluron’s receipt thereof;
provided, however, that the Specifications or Process will not be supplemented,
modified or amended in any respect without the prior written agreement of the
Parties. If any change in the Primary Components, Secondary Packaging, Shipping
Components, Processes or Product testing Specifications materially increases
Hyaluron’s cost to manufacture, test, or package the Product, Hyaluron reserves
the right to make reasonable pricing adjustments if needed to accommodate such
changes. Prior to initiating any work, Hyaluron will provide a scope of work
and cost proposal. New pricing will be effective upon implementation of the new
specifications or process.


 


(j) Hyaluron will provide NeoRx with all documents
NeoRx reasonably requests regarding its manufacturing processes and procedures
for the Product. Hyaluron further agrees to use reasonable commercial efforts
to assist NeoRx in obtaining FDA approval of a New Drug Application (NDA) with
respect to the Product. Where practicable, Hyaluron will assist NeoRx in
obtaining approvals from other government or regulatory agencies which may be
required for the conduct of clinical trials of the Product in other countries.
Hyaluron specifically agrees to cooperate with the FDA or other regulatory
agencies, including but not limited to any inspection prior to approval of any
product.


 


 (k) Labeling
and packaging will be approved by NeoRx, and all labels and package inserts
will be developed in accordance with Hyaluron’s guidelines with regard to
physical dimensions and handling procedures.


 


(l) Hyaluron will have the right to sample and
retest Product or to have an outside laboratory sample and retest Product if
NeoRx claims that such Product does not conform to the Manufacturing Standards.
Disputes between the Parties as to whether any Product rejected by NeoRx
conforms to the Manufacturing Standards will be resolved by a mutually
acceptable third party testing laboratory.


 


(m) In the event that a batch of Compounded Bulk is
found not to conform to the bulk release specification set forth in the
Manufacturing Standards prior to initiation of the fill, Hyaluron will
undertake one or more remedial steps in an attempt to bring the Compounded Bulk
into specification.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


4





















 


Should these remedial steps fail to bring the Compounded Bulk into
specification NeoRx may direct Hyaluron to terminate the manufacturing process
at this stage.


 


(n) Hyaluron will ship Product to the destination
specified by NeoRx in accordance with the applicable NeoRx instructions and
will store the Product in compliance with CGMP at Hyaluron’s facilities until
delivery. All shipping costs will be the responsibility of NeoRx. Title to and
risk of loss of the Product shall pass to NeoRx as the Product is delivered
F.O.B. via a common carrier. Completion of the task will be deemed to occur at
the time Hyaluron informs NeoRx that the Batch Record is signed off and the
Certificate of Analysis has been issued. NeoRx will be deemed to have accepted
delivery of Batch of Product if no Notice of Rejection/Nonconformance is
received by Hyaluron within 30 days after completion of the task. If NeoRx
requests Hyaluron to store Product longer than 2 weeks past the release date,
there will be a storage charge applied which will be proportional to the
quantity stored.


 


(o) Hyaluron will retain and store samples of
Product in accordance with CGMPs and Hyaluron’s internal quality assurance
SOPs. Subject to the foregoing, Hyaluron will notify NeoRx before disposing of
any retention samples of manufacturing lots of intermediates or the Product. In
such case, NeoRx may request, within seven days, to have the samples shipped to
NeoRx in accordance with NeoRx’s instructions and at NeoRx’s expense.


 


(p) Hyaluron will dispose of all waste in accordance
with applicable local and federal regulations at NeoRx’s expense.


 


4.                                       Representations, Warranties
and Covenants.


 


(a)                                  Hyaluron represents and warrants to NeoRx
that:


 


(i)                                       All Product furnished pursuant to this
Agreement will conform to the relevant Specifications except in case of
variance or deviation of which NeoRx has been notified by Hyaluron;


 


(ii)                                    All Product furnished pursuant to this
Agreement will be manufactured and stored in accordance with, and all packaging
and labeling operations will be conducted in compliance with, CGMPs and other
applicable FDA and other governmental laws and regulations and all other
requirements set forth in the applicable Purchase Order;


 


(iii)                               All manufacturing under this Agreement will be performed with the
degree of skill and diligence normally employed by a contract manufacturer
performing the same or similar services; and


 


(iv)                              Hyaluron’s application of any intellectual property, other
than that provided to Hyaluron by NeoRx, in the performance of the Services
will not infringe any third party intellectual property rights.


 


(v)                                 Hyaluron represents as of the date of this Agreement
and continuously during the term of this Agreement that, to the best of its
knowledge, it and its employees, affiliates, contractors, and agents have never
been (i) debarred or (ii) convicted of a crime for which a person can
be debarred, under Section 335(a) or 335(b) of the Federal Food,
Drug, and Cosmetic Act (the “Act”). Hyaluron represents that it has never been
and, to the best of its knowledge, none of its employees, affiliates,
contractors, or agents has ever been (i) threatened to be debarred under
the Act or (ii) indicted for a crime or otherwise engaged in conduct for
which a person can be debarred under the Act. Hyaluron agrees that it will
promptly notify NeoRx in the event it receives notification of any such
debarment, conviction, threat or indictment.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


5





















 


(b)                                 NeoRx represents and warrants to Hyaluron
that Hyaluron’s application of any intellectual property provided
to Hyaluron by NeoRx in the performance of the Services will not infringe any
third party intellectual property rights.


 


(c)                                  Each of NeoRx and Hyaluron represent and
warrant to the other that:


 


(i)                                     it is duly organized and validly existing
under the laws of the jurisdiction of its incorporation and has full corporate
power and authority to enter into this Agreement and to carry out the
provisions hereof;


 


(ii)                                  this Agreement is a legal and valid
obligation of it, binding upon it and enforceable against it in accordance with
the terms of this Agreement;


 


(iii)                               the execution, delivery and performance of this Agreement by it does
not conflict with any agreement, instrument or understanding, oral or written,
to which it is a party or by which such may be bound, and does not violate any
law or regulation of any court, governmental body or administrative or other agency
having authority over it; and


 


(iv)                              it has not done any act or knowingly omitted to do any act, and, to the
best of its knowledge, after due inquiry, no event has occurred, in each case
during the period between the Effective Date and the date this Agreement is
entered into, that would (1) constitute a breach by it of any provision of
this Agreement, (2) cause the other party to incur any material liability
other than as to obligations to perform work and make payments in accordance
with this Agreement or (3) render any of its representations and/or
warranties untrue.


 


5.                                       Records. Hyaluron will maintain adequate and
accurate records covering the manufacture, quality control testing and release
of the Product and all other Services provided hereunder in accordance with
CGMPs and Hyaluron’s QA SOPs.


 


6.                                      Inspections. NeoRx will have the right to schedule site
inspections/compliance audits as needed, provided reasonable advance notice is
given to schedule such audits and such audits are carried out during normal
business hours. All inspections/audits will be performed in such a manner as
not to unduly delay the performance of the Services. NeoRx will be permitted to
attend any FDA or other regulatory inspections relating to the Services
specific to NeoRx’s product(s). Routine audits in excess of one audit day per
calendar year will be billed to NeoRx at Hyaluron’s prevailing daily audit
charge rate. Audits related to FDA compliance of NeoRx’s product(s) or failures
in product quality may be conducted by NeoRx without charge by Hyaluron.


 


7.                                       Confidentiality.


 


7.1                                 NeoRx Confidential
Information


 


(a) Hyaluron agrees during the term of this
Agreement and for five (5) years thereafter that it will take all steps
reasonably necessary to: (i) hold NeoRx Confidential Information in trust
and confidence. “NeoRx Confidential Information” means (A) this Agreement
and any schedules and attachments hereto, (B) the Product, and (C) any
other information disclosed by NeoRx to Hyaluron. Notwithstanding the other
provisions of this Agreement, nothing received by Hyaluron will be considered
to be NeoRx Confidential Information if Hyaluron can establish by competent
proof that (A) such information has been published or is otherwise readily
available to the public other than by a breach of this Agreement; (B) such
information has been rightfully received by Hyaluron from a third party without
confidential


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


6





















 


limitations; (C) such information has been independently developed
for Hyaluron by personnel or agents; or (D)  such information was known to
Hyaluron prior to its first receipt from NeoRx. Hyaluron may only disclose
NeoRx Confidential Information to those employees of Hyaluron who are required
to have the information in order to perform its obligations under this
Agreement and third parties who are bound by confidentiality restrictions no
less stringent than those contained in this Agreement. Notwithstanding the
foregoing limitations on disclosure, Hyaluron may disclose such information as
is required by any law, rule, regulation, order, decision, decree, subpoena or
other legal process to be disclosed. If such disclosure is requested by legal
process, Hyaluron will notify NeoRx of this request promptly prior to any
disclosure to permit NeoRx to oppose such disclosure by appropriate legal
action.


 


(b)  Hyaluron
agrees that it will take all reasonable measures to protect the secrecy of and
avoid disclosure and unauthorized use of NeoRx Confidential Information.
Without limiting the foregoing, Hyaluron will take at least those measures that
it takes to protect its own confidential information; however, in no event,
will less than a reasonable standard of care be used. Hyaluron will make copies
of NeoRx Confidential Information solely as necessary to perform its
obligations under this Agreement. Hyaluron will immediately notify NeoRx in the
event of any unauthorized use or disclosure of NeoRx Confidential Information
of which Hyaluron is or becomes aware.


 


7.2                                                         Hyaluron Confidential
Information


 


(a) NeoRx agrees during the term of this
Agreement and for five (5) years thereafter that it will take all steps
reasonably necessary to (i) hold Hyaluron Confidential Information in
trust and confidence, (ii) not use Hyaluron Confidential Information in
any manner or for any purpose not expressly set forth in this Agreement, and (iii) not
disclose any such Hyaluron Confidential Information to any third party without
first obtaining Hyaluron’s express written consent on a case-by-case basis.
Notwithstanding the other provisions of this Agreement, nothing received by
NeoRx will be considered to be Hyaluron Confidential Information if NeoRx can
establish by competent proof that (A)  such information has been published
or is otherwise readily available to the public other than by a breach of this
Agreement; (B) such information has been rightfully received by NeoRx from
a third party without confidential limitations; (C) such information has
been independently developed for NeoRx by personnel or agents without use of or
reference to the Hyaluron Confidential Information; or (D) such
information was known to NeoRx prior to its first receipt from Hyaluron. NeoRx
may only disclose Hyaluron Confidential Information to those employees or
independent contractors of NeoRx who have a need to know the information in
order to perform their duties at NeoRx and who are bound by confidentiality
restrictions no less stringent than those contained in this Agreement.
Notwithstanding the foregoing limitations on disclosure, NeoRx may disclose
such information as is required by any law, rule, regulation, order, decision, decree,
subpoena or other legal process to be disclosed. If such disclosure is
requested by legal process, NeoRx will notify Hyaluron of this request promptly
prior to any disclosure to permit Hyaluron to oppose such disclosure by
appropriate legal action.


 


(b) NeoRx agrees that it will take reasonable
measures to protect the secrecy of and avoid disclosure and unauthorized use of
the Hyaluron Confidential Information. Without limiting the foregoing, NeoRx
will take at least those measures that it takes to protect its own confidential
information; however, in no event, will less than a reasonable standard of care
be used. NeoRx will immediately notify Hyaluron in the event of any
unauthorized use or disclosure of the Hyaluron Confidential Information of which
NeoRx is or becomes aware.


 


8.                                       Intellectual Property.


 


Hyaluron
agrees that NeoRx has and will retain sole and exclusive rights of ownership in
and to any


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


7





















 


NeoRx Confidential Information. NeoRx agrees that Hyaluron has and will
retain sole and exclusive rights of ownership in and to any Hyaluron Confidential
Information. The parties do not plan to jointly develop any devices or
processes. The parties agree, however, if a device or process is jointly
developed, they will jointly own such device or process.


 


9.                                      Term and Termination.


 


(a)                                  This Agreement will continue until April 15,
2010. Notwithstanding the foregoing, this Agreement may be extended by written
agreement of both of the parties. Termination of this Agreement will not affect
any right or obligations of the parties that arose prior to such termination.


 


(b)                                 This Agreement may be terminated by NeoRx if
Hyaluron materially breaches this Agreement and Hyaluron fails to cure such
breach within 30 days from the receipt of prior written notice from NeoRx. This
Agreement may be terminated by Hyaluron if NeoRx materially breaches this
Agreement and NeoRx fails to cure such breach within 30 days from the receipt
of prior written notice from Hyaluron. In the event of termination by Hyaluron
or by NeoRx, Hyaluron will be entitled to payment for any portion of the
Services completed and for any noncancellable expenses incurred prior to the
date of notification of termination pursuant to this Agreement. Payment is upon
the date of receipt by NeoRx of the final invoice and receipt by NeoRx of all
items specified in this Section 10(b).


 


(c)                                  This Agreement may be terminated by either
party if the other party enters into liquidation whether compulsory or
voluntarily otherwise than for the purpose of amalgamation or reconstruction,
or a petition in bankruptcy is filed by or against either party in any
competent court and the same is not dismissed within 120 days or if the other
party is adjudicated bankrupt or insolvent or if the other ceases to do
business, or otherwise terminates its business operations.


 


(d)                                 This Agreement may be terminated by NeoRx if
NeoRx decides to no longer continue manufacturing or distributing the Product.


 


(e)                                  In the event of termination for any reason,
Hyaluron will return to NeoRx all materials NeoRx provided to Hyaluron
hereunder, and, upon NeoRx’s request, work completed or in progress by Hyaluron
pursuant to this Agreement, including any reports and other documentation.


 


10.                                 Indemnification.


 


(a)                                  NeoRx agrees to defend, indemnify and hold
harmless Hyaluron, its affiliates, officers, directors, employees and agents
(collectively, the “Hyaluron Parties”) from and against any and all costs
(including reasonable legal fees), damages, expenses, losses, suits, claims and
demands, in any manner caused by, resulting from or arising out of third party
claims or suits related to: (i) activities to be carried out by NeoRx
pursuant to this Agreement; (ii) the
distribution of the Product or its use in clinical trials; and (iii) a
claim by a third party that Hyaluron’s use in the Services of intellectual property
provided to Hyaluron by NeoRx infringes such third party’s intellectual
property rights; provided, however, that the foregoing indemnification will not
apply to the extent such costs, damages, expenses, losses, suits, claims or
demands result from:


 


i.                  the negligence or willful misconduct of any
Hyaluron Party;


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


8





















 


ii.               any breach of this Agreement by Hyaluron, or
any act by Hyaluron outside the scope of this Agreement; or


 


iii.            Hyaluron’s failure to comply with applicable
FDA or other governmental laws and regulations.


 


(b)                                 Hyaluron agrees to defend, indemnify and hold
harmless NeoRx, its affiliates, officers, directors, employees and agents
(collectively, the “NeoRx Parties”) from and against any and all costs,
(including reasonable legal fees), damages, expenses, losses, suits, claims and
demands, in any manner caused by, resulting from or arising out of third party
claims or suits related to: (i) the negligence or willful misconduct of
any Hyaluron Party; (ii) any breach of this Agreement by Hyaluron, or any
act by a Hyaluron Party outside the scope of this Agreement; (iii)Hyaluron’s
failure to comply with applicable FDA or other governmental laws and
regulations; or (iv) a claim by a third party that Hyaluron’s use in the
Services of intellectual property, other than that provided to Hyaluron by
NeoRx, infringes such third party’s intellectual property rights; provided,
however, that the foregoing indemnification will not apply to the extent such
costs, damages, expenses, losses, suits, claims or demands result from:


 


i.                  the negligence or willful misconduct of any
NeoRx Party;


 


ii.               any breach of this Agreement by NeoRx; or


 


iii.            NeoRx’s failure to comply with applicable FDA
or other governmental laws and regulations.


 


(c)                                  In the event that either party seeks
indemnification under the terms of this Section 10 (“the Indemnified Party”),
it will inform the other party (the “Indemnifying Party”) of the claim as soon
as reasonably practicable after it receives notice thereof (but in any event
within 15 days of receipt of notice of such claim). The Indemnifying Party will
have the right, but not the obligation to, at the Indemnifying Party’s cost, to
assume direction and control of the defense of the claim, and will cooperate as
requested (at the expense of the Indemnifying Party), in the defense of the
claim. The Indemnifying Party will not settle or otherwise compromise any claim
or suit in any manner which requires the Indemnified Party to provide any
consideration, admit fault or take any other action that would be binding on
such Indemnified Party without the prior written consent of the Indemnified
Party.


 


11.                                 Limitation of Liability.


 


(a) In no event will either party be liable to
the other party for lost profits, loss of use, loss of business, business
interruption, loss of data, cost of cover or any indirect, special,
consequential or incidental damages of any nature whatsoever, however caused
and under any theory of liability whether based in contract, warranty, tort
(including without limitation, negligence), strict liability, statutory or
otherwise, arising out of or in connection with this Agreement even if the
other party has been advised of the possibility of such damages.


 


(b) Notwithstanding anything to the contrary
herein, any limitations on liability will not be applicable to liabilities to
the extent arising from the violations of law, recklessness or willful
misconduct of a party.


 


(c)  This Section 11 shall not preclude a
party from seeking indemnification for damages as defined in Section 10.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


9





















 


12.                                                                                 Miscellaneous.


 


(a)                                  Changes to this Agreement must be in writing
and require the signature of authorized officers of NeoRx and Hyaluron,
provided, however that changes involving additional services will be handled in
accordance with Section 1.


 


(b)                                 Hyaluron agrees to perform all the work under
this Agreement as an independent contractor. Hyaluron is not an employee,
partner, representative or joint venture of or with NeoRx, and nothing in this
Agreement will be construed to create such a relationship. Neither party will
have the power or right to bind or obligate the other.


 


(c)                                 Notices under this Agreement will be in
writing and delivered personally or by United States mail, certified mail or
courier to the following individuals:


 


To
NeoRx:


Karen
Auditore-Hargreaves


President &
COO


300
Elliott Avenue West, Suite 500


Seattle,
WA 98119-4114


 


To
Hyaluron:


Dr. Shawn
D. Kinney


President


Hyaluron Inc.


99 South Bedford St.


Burlington, MA 01803


 


(d)                                 This Agreement will be governed and construed
in accordance with the laws of the state of Massachusetts, excluding any choice
of law rules that may direct the application of the laws of another
jurisdiction.


 


(e)                                  If any provision of this Agreement is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, such provision will be deemed amended to conform to the
applicable laws of such jurisdiction so as to be valid and enforceable. If the
offending provision cannot be so amended without materially altering the
intention of the Parties: (i) it will be stricken; (ii) the validity,
legality and enforceability of such provision will not in any way be affected
or impaired in any other jurisdiction; and (iii) the remainder of this
Agreement will remain in full force and effect.


 


(f)                                    This Agreement contains the entire
understanding of the Parties with respect to the subject matter hereof and
supercede all previous agreements (oral and written). Any form containing other
terms and conditions of sale will not have the effect of modifying the terms
and conditions of this Agreement unless this Agreement is specifically amended
as provided herein. This Agreement will be binding upon and inure to the
benefit of the Parties and their successors and permitted assigns.


 


(g)                                 Hyaluron, on behalf of itself and its
employees, agents, subcontractors and affiliates, agrees not to use the name of
NeoRx or any of its employees, agents or affiliates, or reference any of their
products, in any publicity, advertising or other publication without NeoRx’s
prior written approval. Results and services provided by Hyaluron do not
constitute an endorsement of the Product or NeoRx’s scientific conclusions.
NeoRx agrees not to use Hyaluron’s name in a manner that could reasonably be


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


10





















 


construed as such an endorsement or in any other publicity or
advertising without Hyaluron’s prior written approval.


 


(h)                                 Neither party’s failure to exercise, or delay
in exercising any privileges, powers, rights or remedies under this Agreement
will operate as a waiver thereof, nor will any single or partial exercise of
any right or remedy under this Agreement preclude further exercise of any other
right or remedy hereunder. The rights and remedies of the Parties provided in
this Agreement will not be exclusive and are in addition to any other rights
and remedies at law or in equity.


 


(i)                                     Neither party will be
liable to the other party in any manner whatsoever for any failure or delay in
performing its obligations under this Agreement if and to the extent, and for
the duration, that such is due to Force Majeure. Without prejudice to Section 10,
any said failure or delay will not give either party the right to terminate
this Agreement except, and to the extent that such Force Majeure continues for
a period exceeding three (3) months. Hyaluron will be entitled to payment for any portion of the Services
completed and for any noncancellable expenses incurred prior to the date of
notification of termination pursuant to this Agreement and Hyaluron will return
to NeoRx all materials NeoRx provided to Hyaluron hereunder, and, upon NeoRx’s
request, work completed or in progress by Hyaluron pursuant to this Agreement,
including any reports and other documentation. For the purposes of this Section 13(j),
“Force Majeure” means any cause beyond the reasonable control of the
party in question which for the avoidance of doubt and without prejudice to the
generality of the foregoing will include governmental actions, war, riots,
terrorism, civil commotion, fire, flood, epidemic, labor disputes (excluding labor disputes involving
the work force or any part thereof of the party in question.


 


(j)                                     During the term of this Agreement, Hyaluron
and NeoRx will each maintain separate insurance coverage as follows: (1) Product
Liability in amounts of at least US$2,000,000.00; (2) General Liability in
amounts of at least US$2,000,000.00; (3) Workers compensation or foreign
employer liability in amounts in accordance with local and national statute;
and (4) Property in an amount of at least US$500,000.00 in accordance with
local and national statute. All insurance amounts may be obtained by full,
individual primary policy amount; a primary amount of less than minimum
requirement enhanced by a blanket excess umbrella policy; or a combination of
either. As an alternative to such insurance minimums, a party may provide
evidence of adequate financing, for purposes of self-insurance, as certified by
an independent actuary. The Parties will provide a certificate of insurance
upon request by the other. The Parties will provide each other with at least 30
days prior written notice of any material change, cancellation or expiration of
the above-required insurance.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


11





















 


IN
WITNESS WHEREOF, this Agreement has been signed by an authorized corporate officer
of each party as of the date first above written.


 


 


	
  Hyaluron Inc.

  
	
   

  	
   

  
	
  By:

  	
  s/Shawn D. Kinney

  	
   

  
	
   

  	
  Shawn D. Kinney, Ph.D.

  
	
   

  	
  President

  
	
  Date:

  	
  4-26-05

  
	
   

  	
   

  
	
   

  	
   

  
	
  NeoRx:

  
	
   

  	
   

  
	
  By:

  	
  s/Karen Auditore-Hargreaves

  	
   

  
	
   

  	
  Karen Auditore-Hargreaves

  
	
   

  	
  President & COO

  
	
  Date:

  	
  5-4-05

  
	
   

  	
   

  
	
   

  	
  s/Susan D. Berland, CFO

  	
   

  
					



 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


12





















 


NEORX CORPORATION AND SUBSIDIARY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


 


Exhibit A


 


	
  QUOTATION

  	
   

  	
   

  
	
  To:

  	
  Mr. Erik D. Laursen

  	
   

  	
  Bid/Project#: 163

  	
  Date: 7/28/2005

  
	
   

  	
  Sr. Dir. Manufacturing

  	
   

  	
  Rev#: 02

  
	
   

  	
  NeoRx Corp.

  	
   

  	
  Project
  Title: Manufacture of NX 473 for Phase II

  
	
   

  	
  300 Elliott Ave. W., Suite 500

  	
   

  	
  Studies

  
	
   

  	
  Seattle, WA 98119

  	
   

  	
   

  
	
   

  	
  Tel: 206-286-2504

  	
   

  	
   

  
	
   

  	
  Fax: 206-286-2537

  	
   

  	
   

  



 


Detailed
project proposal attached.


 


Payment
Schedule:          Please
refer to attached project proposal


 


Payment
Terms:           All payments due upon receipt of invoice


 


CONFIDENTIAL:          This
document is protected in full by our confidentiality agreement and should not
be shared with any individual or company not named in the agreement without the
prior written approval of Hyaluron Inc.


 


Prepared
by:


 


	
  s/Andrea Wagner

  	
   

  
	
  Andrea Wagner, Ph.D.

  
	
  Vice President, Business Development

  



 


Client: Please
complete the following and return one original to the attention of Andrea
Wagner, Hyaluron Inc., 99 S. Bedford Street, Burlington, MA  01803.


 


	
  I agree to the terms and conditions of this quotation and its
  attached project proposal:

  	
  PO#:

  
	
   

  	
  Billing Address (if different from above):

  
	
  Authorized Signature: s/Karen Auditore-Hargreaves

  	
   

  
	
  Title: Pres/COO

  	
   

  
	
  Date: 5/4/05

  	
   

  



 


Please
direct any questions concerning this proposal to Andrea Wagner, Customer
Representative. This quotation is valid for 30 days.


 


1





















 


PROJECT PROPOSAL: 163


Revision
Number: 02


 Issued: April 26, 2005


PROJECT TITLE: Manufacture of NX 473 for Phase II Studies


Hyaluron
Customer Service Contact: Dr. Andrea Wagner


 


OBJECTIVE:                                                                                                                      Hyaluron Inc. will:


 


•                  Provide aseptic filling, labeling and
packaging for Phase II Studies.


 


This
quote is offered with the assumptions that:


 


1.                                       There will be initial start up costs related
to the purchase of   equipment.


2.                                       All analytical methods are not known at
Hyaluron and some will be transferred to Hyaluron with current SOPs developed
and validated or verified at Hyaluron.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


2





















 


TASK 1:                        BATCH RECORD/DOCUMENTATION
PACKAGE


 


Hyaluron
will prepare a documentation package for manufacturing of client’s product.
This will include preparation of documentation for material specifications,
incoming inspection, in process testing, final product release tests and
results and manufacturing directions. One copy of this documentation will be
provided to client.


 


COST


$[*]










*Includes one client review/comment of documentation, additional
revisions will require additional fees.


 


TASK 2:                        ANALYTICAL TESTING TRANSFER,
DEVELOPMENT AND VALIDATION


 


Hyaluron
will work with NeoRx Corp. to obtain release testing via outside testing groups
designated by NeoRx Corp. NeoRx Corp. will transfer the UV assay to Hyaluron
for validation to perform the cleaning validation of the filling area.
Additionally, this test will be used to release the formulation for filling and
understand the concentration of the API in the product formulation. The assay
will be incorporated into Hyaluron’s quality system with a copy sent to NeoRx
Corp. for review.


 


COST


$[*]*










*Does
not include cost of materials or outsourced testing which will be billed to
client at Hyaluron’s cost plus [*]%.


 


TASK 3:                        FORMULATION TRANSFER


 


Hyaluron
(HY) will work with NeoRx Corp., to verify the proposed product and process
requirements, and confirm all design goals such as:


 


A.                                   Batch Sizes (Input from NeoRx Corp. (NRC))


B.                                     Aseptic requirements (Nitrogen overlay/needle
sparging/vacuum) (HY & NRC)


C.                                     Formulation and storage conditions for API –
need to formulate heated between [*]
(HY)


D.                                    Homogeneity specifications – some sensitivity
to stainless steel – use polypropylene system (NRC)


E.                                      Fill size specifications and filling
requirements (Very large fill volume need to do media fills for hand or semi
automated filling of [*]
bottle)(NRC)


F.                                      Final Product container, labeling and
packaging (NRC)


 


Hyaluron
will transfer the formulation and run one engineering (10% of full scale) run.
Through this engineering run draft manufacturing directions will be finalized.
The material will used to finalize assay development, transfer and validation
if required.


 


COST


$[*]*










*Does
not include any client specific equipment costs or product components, which
will be billed at Hyaluron’s cost plus [*]%.


 


[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


3





















 


TASK 4:                        CLEANING VERIFICATION


 


Hyaluron
will perform the follow tasks to verify cleaning effectiveness:


 


A.           Develop a cleaning specification for NeoRx Corp.’s product.


B.             Determine the most effective product sampling
program to use for the detection of residual product or cleaning agents (e.g.,
direct surface sampling and rinse samples).


C.             Establish limits for analytical detection of
product and cleaning agents (if applicable), as well as recommended
methodologies (TOC, product specific assays, HPLC, etc.)


D.            Perform verification studies to demonstrate
that remaining product residues are within established acceptance criteria when
cleaned by standard operating procedures.


 


COST


$[*]*


 


TASK 5:                        EQUIPMENT REQUIRED


 


The
following equipment will be required to conduct the validations and
manufacturing of commercial product:


 


2-
Fill Needles estimated $[*]/each


1
- Mixing bags/levitron bags estimated at $[*]


Stainless
Steel Trays for vials estimated at $[*]


Change
parts for capper estimated at $[*]


 


TOTAL ESTIMATED COST


$[*]*


 










*Cost
is Hyaluron’s cost plus [*]%.


 


TASK 6:                        ASEPTIC FILLING VALIDATION


 


Hyaluron
will perform aseptic media validation simulating the aseptic handling of NeoRx
Corp.’s product during filling operations. Sterilization validation of all
product contact parts, such as pumps, needles, tubing and any vessels, must be
performed prior to the initiation of the media fills. Hyaluron will fill up to [*] of the selected vials with the highest
volume desired (up to [*]) of
media, stopper and incubate. This will be performed in triplicate with a 2-week
incubation occurring after each fill. The filling validation will be performed
in compliance with ISO 13408-1 and the FDA 2004 Guideline on Sterile Drugs
Products Produced by Aseptic Processing.


 


Cost


$[*]/run*


 










*Does
not include the cost of bottles, stoppers or caps – requirement of [*] units to complete the validation.


 


[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


4





















 


TASK 7:                        STERILIZATION VALIDATION OF
VIALS AND STOPPERS


 


The
objective of this task is to validate the steam autoclave cycle used to
sterilize the equipment (stoppers, transfer tubing and filling equipment) for
the aseptic filling. The depyrogenation cycle will also be validated for the
sterilization of the [*] ml vials.
Each validation will be performed with an overkill approach using appropriate
temperature monitoring and biological indicators. The validation results will
be included in a summary report upon completion of the validation, which will
be forwarded to NeoRx Corp.


 


COST


$[*]*


 










*Does
not include the cost of the vials or stoppers used in each validation. All
outside testing will be charged to NeoRx Corp. at Hyaluron’s cost plus [*]%.


 


TASK 8:                        EH&S EVALUATION


 


Hyaluron
will evaluate the product toxicity for handling purposes. Disposal, handling
during lab analysis, formulation and filling will be evaluated and a protocol
written to train operators on overall handling of the material. Operator
training on toxic substance handling as it relates to the product will be
conducted to ensure safety in the handling of the product. Additionally, spill
containment and clean-up training in the case that a spill or breach in
containment occurs with the product will be conducted with all personnel
exposed to the product. Standard operating procedures for disposal and handling
will be written.


 


Cost


$[*]


 


TASK 9:                        FILL DEVELOPMENT


 


Hyaluron
will evaluate the filling process and develop a method to fill the NX 473
solution on the SV-122 filler that will be validated and employ hand
stoppering. The material will be transferred to the West Capper for capping
after filling. The equipment will be retro-fitted to accommodate the large vial
size and ensure high volume filling and capping.


 


Cost


$[*]


 


TASK 10:                 PHASE II STUDY LOT
PRODUCTION


 


Hyaluron
will provide NeoRx Corp. with production of a [*]
ml of the NX 473 solution with [*]
gram volume into [*] ml vial in
accordance with approved manufacturing directions. Hyaluron will sterile filter
bulk solution formulated from drug substance API and excipients by Hyaluron and
aseptically fill by semi-automatic method, and send out post fill testing to
the laboratory of NeoRx’s choice, inspect, label, and package vials and ship to
NeoRx Corp or a designated storage facility.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


5





















 


 


	
  Stability Production

  	
   

  	
  Cost*

  
	
  [*] ml Bottles

  	
   

  	
   

  
	
  2000 units

  	
   

  	
  $ [*]

  
	
  Cost of Additional Units

  	
   

  	
   

  
	
  Up to 4000

  	
   

  	
  $ [*]/each

  



 










 *Cost of bottle, stopper, cap, and outsourced
washing at estimated $[*]/vial is
not included in the above cost, if actual costs exceed this estimate then
client will be billed the additional. The product will be labeled, packed and
sent to NeoRx Corp at NeoRx expense. Minimum order quantity is 2000 units.


 


NeoRx
and Hyaluron will use best efforts, within commercial reasonableness to release
the product before the end of Q3 2005.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


6





















 


GENERAL PROVISIONS FOR THE PROJECT


Hyaluron Inc. will not:


•                  Modify the objectives without client
approval.


•                  Delete or modify any agreed specification
without client approval.


•                  Ship any supplies without expressed written
client approval.


 


The Client will:


•                  Provide raw materials in sufficient quantity
on the agreed upon date


•                  Provide to Hyaluron Inc. any information
pertinent to the project that may be known to the client.


•                  Provide safety and toxicology data and
information (both known and suspected, including a MSDS) for any compound prior
to project initiation as well as updates as information becomes available.


•                  The client agrees that, if any document submission to the FDA, domestic
or international regulatory agencies, contains a description of work performed
by Hyaluron Inc., the content of which has not been previously submitted to the
agency, that description of work will be provided to Hyaluron Inc. after the
submission.


 


Audits:


Hyaluron
Inc. allows the client an annual one-day audit with a one-time allowance of up
to three audit days given on the first year, and one visit to the facility
during development and during the fill. The visitation limitation does not
include technology transfer issues that may arise and cause additional visits.
Additional audits or visits will be charged to the client at a rate of $[*] per day. Audits and visits will be scheduled
in advance at a reasonable time.


 


Liability:


Hyaluron
shall not be liable for damages for, nor shall this agreement be terminable by
reason of, any delay or default in Hyaluron’s performance hereunder if such a
delay or default is caused by conditions beyond Hyaluron’s control including,
but not limited to, acts of God, regulation or law or other action of
government or any agency thereof, war, insurrection, civil commotion
destruction of production facilities or materials by earthquakes, fire, flood or
storm, labor disturbances, epidemic, or failure of suppliers, public utilities
or common carriers. Hyaluron agrees to promptly notify the client of any
interruptions of supply as described above and to employ all reasonable efforts
toward prompt resumption of its performance when possible if such performance
is delayed or interrupted by reason of such event.


 


Supplies:


Unless
otherwise specified in the proposal, the client will be invoiced for the cost
plus [*]% of all excipients,
supplies and capital items necessary to complete the project (such as vials,
stoppers, seals, labels, etc.).


 


Shipping:


All
shipping, packaging materials and handling charges will be billed to the
client.


 


Waste Disposal:


Hyaluron
will be responsible for all waste disposal related to product production. NeoRx
will be charged Hyaluron’s cost plus [*]%.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


7





















 


Variables and Additions:


The
parties recognize that this is a development project leading to a commercial
production and supply, and that, as such, unusual, unique and unexpected
problems, requirements, or developments may arise which require additional
unanticipated work such as additional analytical work due to customer request,
out of specification results and/or analysis of samples placed on hold.


 


In
the event any of these variables or others exist or occur, Hyaluron Inc will promptly
identify them, and notify the client such that mutually agreeable terms can be
reached. The additional work will proceed when agreement has been reached.
Hyaluron will supply regulatory and other support for as requested at a
billable rate of $[*]/hour.


 


Cancellations and Rescheduling:


All
cancellation and rescheduling requests must be submitted in writing.


 


Cancellation
or rescheduling of clinical runs will incur the following fees:


 


	
  Number of days before scheduled

  run

  	
   

  	
  Rescheduling Fee (if rescheduled

  within 30 days of initial)

  	
   

  	
  Cancellation Fee

  
	
  16 – 30 days

  	
   

  	
  [*]% of Manufacturing Task Price

  	
   

  	
  [*]% of Manufacturing Task Price

  
	
  8 – 15 days

  	
   

  	
  [*]% of Manufacturing Task Price

  	
   

  	
  [*]% of Manufacturing Task Price

  
	
  0 – 7 days

  	
   

  	
  [*]% of Manufacturing Task Price

  	
   

  	
  [*]% of Manufacturing Task Price

  



 


When
canceling an entire project, the client forfeits the initial deposit paid at
the beginning of the project and is responsible for project costs incurred up
to the date of receipt of the cancellation notice as well as any associated
costs to close down the project.


 


Terms of Payment:


[*]% of each task’s cost is due upon acceptance of the task; the remainder
is due upon completion of the task. All equipment costs are due prior to
Hyaluron’s placement of a P.O. for purchase. All invoices are due and
payable upon receipt and past due after thirty (30) days from the date of
invoice. All amounts past due shall incur interest at the rate of 1.5% per
month or the highest rate permitted by law (whichever is less). All payments
shall be made to Hyaluron Inc. at the address specified on the front of the
invoice.


 


The
client assumes all responsibility for all reasonable legal fees and other
reasonable collection costs made necessary by wrongful default in payment.


 










[*] designates portions of this document that have been omitted
pursuant to a request for confidential treatment filed separately with the
Commission.


 


8