**Exhibit 10.36**

 

[OnTexas State Bank letterhead]

 

October 14,2005

 

NeoRx Manufacturing Group, Inc.

NeoRx Corporation

300 Elliott Avenue West, Suite 500

Seattle, Washington 98119-4114

Attn:  Gerald McMahon, Chairman and CEO

 

**Re:****                            ****Agreements Concerning SecuredIndebtedness**

 

Dear Mr. McMahon:

 

Reference is hereby made to (1) thatcertain promissory note dated as of April 17, 2001 made by NeoRxCorporation, a Washington corporation (“NeoRx”) and NEORX Manufacturing Group, Inc.(formerly NRX Acquisition Corporation), a Washington corporation (“NRX”),payable to Texas State Bank (“Bank”) in the principal amount of $6,000,000 (“Note”),(2) that certain security agreement dated as of April 17, 2001between NRX, as debtor, and Bank, as secured party (“Security Agreement”), and (3) thatcertain deed of trust, with security agreement, assignment of rents and leasesand financing statement dated as of April 17, 2001 made by NRX, asgrantor, for the benefit of Bank, as beneficiary (“Deed of Trust”).  Capitalized terms not defined herein shallhave the meanings assigned to them in the Deed of Trust.  The Note, the Security Agreement and the Deedof Trust are collectively referred to herein as the “Loan Documents.”

 

NRX and NeoRx (collectively,“Borrowers”) have notified Bank that they intend to sell the MortgagedProperty, and to apply the proceeds from such sale to the last maturinginstallments of principal owing on the Note. Bank has requested the following additional assurances (“AdditionalAssurances”) from Borrowers in connection with the sale of the MortgagedProperty:

 

(i)                                     Borrowersdeposit $1,000,000 in an interest bearing account with Bank (such deposit andall interest and earnings thereon, the “Cash Collateral”) on before October 19,2005, as additional collateral securing the payment of the Note;

 

(ii)                                  if Borrowersare unable to obtain at least $15,000,000 in new financing on or before January 31,2006, then Bank may apply the Cash Collateral to payment of the last maturinginstallments owing on the Note; and

 

(iii)                               if Borrowersobtain $15,000,000 or more in new financing on or before January 31, 2006,Borrowers agree to make a principal payment on the Note by January 31,2006 (“Loan Equalization Payment”) that reduces the unpaid principal owing onthe Note to an amount equal to the lowest of: $2,640,000; or 80% of the fair market value of the Mortgaged Property asreflected in the most recent appraisal of the 

 

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Mortgaged Property preparedby a qualified appraiser; or 80% the sales price in the most recent listingagreement on the Mortgaged Property; with the payment applied to the lastmaturing installments of principal owing on the Note.

 

In exchange for theAdditional Assurances, Bank agrees (the “Bank Agreements”):

 

(1)                                  Borrower’scessation of operations at the Mortgaged Premises will not be declared an Eventof Default under the Loan Documents so long as Borrowers continue to maintaininsurance on the Mortgaged Premises, pay the taxes on the Mortgaged Premises priorto delinquency, comply with Borrowers’ maintenance, repair and restorationobligations on the Mortgaged Premises, and maintain adequate security at theMortgaged Premises;

 

(2)                                  prior to January 31,2006, not to declare an Event of Default under Section 9.16 of the Deed ofTrust;

 

(3)                                  after January 31,2006, not to declare an Event of Default under Section 9.16 of the Deed ofTrust provided the Borrowers obtain $15,000,000 or more in new financing on orbefore January 31, 2006, the Loan Equalization Payment is made, and theprincipal balance owing on the Note thereafter is never greater than the lesserof:  80% of the fair market value of theMortgaged Property as reflected in the then most recent appraisal of the MortgagedProperty prepared by a qualified appraiser; or 80% of the sales price in thethen most recent listing agreement on the Mortgaged Property; and

 

(4)                                  to release theCash Collateral to the Borrowers upon receipt of the Loan Equalization Payment.

 

Borrowers, by theiracceptance of this letter agreement, agree:

 

(I)                                    to theAdditional Assurances requested by the Bank, and hereby grant the Bank asecurity interest in the Cash Collateral and related deposit account to securethe payment of the Note; however, if the borrowers fail to make the required$1,000,000 deposit on or before October 19, 2005, the Bank is releasedfrom all the Bank Agreements, and the Bank Agreements shall be null and void;

 

(II)                                to deliver tothe Bank, on or before October 19, 2005, certifications of resolutionsadopted by each of the Borrower’s board of directors authoring the Borrowersexecution and delivery of this letter agreement, and the performance byBorrowers of all the actions required of them under this letter agreement; and

 

(III)                            to execute anddeliver all documents and information reasonably necessary to establish thedeposit account for the Cash Collateral, such as signature cards,identification information, tax identification numbers, names of authorizedsignatories, and a security agreement further documenting the Borrower’s grantto the Bank of a security interest in the Cash collateral and the depositaccount.

 

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This letter agreement shallbecome effective on the Bank’s receipt of this letter signed by the Borrowerson or before October 17, 2005.

 
| Sincerely,                   |
|------------------------------|
|                         |
| TEXAS STATE BANK             |
|                         |
|                         |
|  /s/ Douglas G.  Bready |   |
| Douglas G. Bready            |
| President – McAllen     |

 

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The undersigned have readand understand the foregoing and agree to the terms and conditions set forth inthis letter, and understand that this letter agreement is a legally enforceableagreement.

 
|   | NeoRx  Manufacturing Group, Inc.  a Washington corporation |
|--------|-----------------------------------------------------------------|
|   |                                                            |
|   |                                                            |
|   | By                                                              | /s/  Gerald McMahon |   |
|   |                                                            | Name: |  Gerald  McMahon |   |
|   |                                                            | Title: |  President &  CEO |   |
|   |                                                            | Dated: |  10/17/05 |   |
|   |                                                            |
|   |                                                            |
|   | NeoRx  Corporation,                                             |
|   | a  Washington corporation                                       |
|   |                                                            |
|   |                                                            |
|   | By                                                              | /s/  Gerald McMahon |   |
|   |                                                            | Name: |  Gerald  McMahon |   |
|   |                                                            | Title: |  President &  CEO |   |
|   |                                                            | Dated: | 10/17/05 |   |
|        |                                                                 |  |  |  |  |  |  |

 

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