Exhibit
      10.7

    TRANSACTION
      AGREEMENT

     

    THIS
      TRANSACTION AGREEMENT
      dated as
      of the 6th day of May, 2006, 

     

    BETWEEN:

     

    INEX
      PHARMACEUTICALS CORPORATION,
      a
      company amalgamated under the laws of British Columbia company and having an
      office at #200 - 8900 Glenlyon Parkway, Burnaby, British Columbia, Canada V5J
      5J8

     

    (“INEX”)

     

    AND:

     

    HANA
      BIOSCIENCES, INC.,
      a
      company incorporated under the laws of Delaware and having an office at
400
      Oyster Point Boulevard, Suite 215,
      South
      San
      Francisco, CA 94080, U.S.A.

     

    (“Hana”)

     

    WHEREAS:

     

    (A) Under
      a
      Letter of Intent dated March 15, 2006, INEX, its direct and indirect
      subsidiaries IE Oncology Company Limited and Inex Pharmaceuticals, Inc.
      (“IPI”),
      and
      Hana agreed in principle to a transaction (the “Transaction”)
      involving the licensing, sublicensing, and assignment, as the case may be,
      by
      INEX, IE oncology and IPI of all rights they hold to technologies for the
      sphingosomal formulation of certain chemotherapeutic agents; 

     

    (B) Subsequent
      to the Letter of Intent, all such rights held by IE Oncology and IPI were
      transferred to Inex; and

     

    (C) This
      Agreement confirms the manner in which the Transaction will be completed as
      well
      as other rights and obligations of the parties;

     

    NOW
      THEREFORE,
      in
      consideration of the premises and the mutual covenants and agreements herein
      the
      parties covenant and agree as follows: 

     

    ARTICLE
      1

    DEFINITIONS,
      INTERPRETATION AND EXHIBITS

     

    1.1 Definitions:
      In
      addition to the terms defined elsewhere in this Agreement, unless there is
      something in the subject matter or context inconsistent therewith, the following
      terms will have the meanings ascribed to them:

     

    (a) “Agreement”
means
      this Agreement including the exhibits attached hereto as the same may be
      supplemented or amended from time to time;


    
      
         

      

      
         

        
          

        

      

      
         

      

    


     

    (b) “Asset
      Purchase Agreement”
means
      an asset purchase agreement under which certain assets of INEX related to the
      manufacture and development of the Products are sold to Hana by
      INEX;

     

    (c) “Bankruptcy
      Proceeding”
means
      the proceedings between INEX and Stark Trading and Shepherd Investments
      International, Ltd.;

     

    (d) “BCA”
means
      the Business
      Corporations Act,
      S.B.C.
      2002, c.57, as amended;

     

    (e) “Business
      Day”
in
      any
      particular place means a day which is neither a Saturday or Sunday, nor a
      statutory holiday at that place;

     

    (f) “Clinical
      Trial Agreements”
means
      those agreements identified as “Clinical Trial Agreements” in Exhibit A
      hereto;

     

    (g) “Closing”
will
      have the meaning set forth in §5.1;

     

    (h) “Closing
      Date”
will
      have the meaning set forth in §2.3(b);

     

    (i) “Closing
      Documents”
will
      the meaning set forth in §5.1(a);

     

    (j) “Competitive
      Product”
means
      any liposomal medicinal product which incorporates the Products encapsulated
      in
      a liposome not proprietary to INEX for use in the Hana Field;

     

    (k) “Confidentiality
      Agreements”
means
      those agreements identified as “Confidentiality Agreements” in Exhibit A
      hereto;

     

    (l) “Definitive
      Agreements”
has
      the
      meaning set out in §2.1(a);

     

    (m) “Deposits”
will
      have the meaning set forth in §2.2(b);

     

    (n) “DHSM
      Patents”
means
      the patents issuing from those dihydrosphingomyelin patent applications set
      forth in Exhibit E hereto;

     

    (o) “Elan
      Assignment and Novation Agreement”
means
      an assignment and novation agreement under which Elan Pharmaceuticals Inc.
      and
      certain of its affiliates agree to the assignment by INEX to Hana of the Amended
      and Restated License Agreement dated April 3, 2003 among INEX, IE and Elan
      Pharmaceuticals Inc.;

     

    (p) “Escrow
      Agent”
means
      LMLS Services Inc.;

     

    (q) “INEX
      Cash”
means
      the US $200,000 deposited by INEX with the Escrow Agent;

     

    (r) “Interim
      Development Plan”
means
      an interim plan for obtaining and maintaining Regulatory Approvals for each
      Product in the Territory, together with a corresponding budget accounting for
      the anticipated development costs to be expended or incurred by Hana in
      conducting such activities; until such time as the terms of the final
      Development Plan is complete;


    
      
         

      

      
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    (s) “Institution”
means
      the university, research hospital or clinic which is a party to a Clinical
      Trial
      Agreement;

     

    (t) “Investigator”
means
      the Person charged with responsibility for overseeing or acting as primary
      contact under a Clinical Trial Agreement;

     

    (u) “License
      Agreement”
means
      that license agreement dated May 6, 2006 under which INEX licenses to Hana
      certain patents and technology related to the Products, and sublicenses to
      Hana
      the BCCA Patents and the MD Anderson License and patents referenced
      therein;

     

    (v) “Operations
      Agreements”
means
      those research and development, material transfer, collaborative research and
      supply and manufacturing agreements identified as “Operations Agreements” in
      Exhibit A hereto;

     

    (w) “Payment”
will
      have the meaning set forth in §2.2;

     

    (x) “Person”
      includes an individual, sole proprietorship, partnership, unincorporated
      association, unincorporated syndicate, unincorporated organization, trust,
      body
      corporate, trustee, executor, administrator or other legal representative and
      the Crown or any other applicable government authority, agency or
      instrumentality thereof;

     

    (y) “Registration
      Rights Agreement”
means
      a
      registration rights agreement under which certain shares in the capital stock
      of
      Hana, which form part of the consideration due under the License Agreement,
      will
      be registered; 

     

    (z) “Restricted
      Business”
means
      the business of Developing, Manufacturing or Commercializing any Product, as
      well as any future generation products for any formulations containing
      vincristine, vinorelbine or topotecan. A Person will be deemed engaged in the
      Restricted Business if such Person sells, transfers or assigns (including by
      license) any rights to such technology, patents, or improvements thereto
      (including any products incorporating or resulting from any of the foregoing),
      to a third party; provided however, that INEX will not be deemed to be engaged
      in the Restricted Business as result of practicing the rights reserved to INEX
      in the Definitive Agreements or as a result of the transaction with Hana
      contemplated by this Agreement.

     

    (aa) “Service
      Agreement”
means
      a
      service agreement dated May 6, 2006 for the provision of certain services by
      INEX, its affiliates and/or subcontractors to Hana related to the manufacture
      and development of the Products; 

     

    (bb) “Termination
      Agreement”
means
      that certain termination agreement among Elan Corporation, PLC, Elan Pharma
      International Limited, Elan International Services, Ltd., Monksland Holdings,
      B.V., INEX, INEX International Holdings Ltd., IE Oncology and Elan
      Pharmaceuticals Inc. made as of April 3, 2003;


    
      
         

      

      
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    (cc) “Transaction”
has
      the
      meaning set out in Recital (A); 

     

    (dd) “UBC”
means
      the University of British Columbia; and

     

    (ee) “UBC
      Sublicense Agreement”
means
      a
      sublicense agreement between INEX and Hana for certain patents and technology
      relating to ionophore loading and sphingosome preparation, including methods
      and
      apparatus.

     

    1.2 Meaning:
      Words
      and phrases that are not otherwise defined herein and are defined in the License
      Agreement or the BCA will have the same meaning herein as in the License
      Agreement of the BCA, as the case may be, unless the context otherwise requires;
      words and phrases that are not otherwise defined herein and are defined in
      any
      of the Other Definitive Agreements will have the same meaning herein as in
      such
      other applicable Definitive Agreement in which such word or phrase is
      defined.

     

    1.3 Supremacy:
      Unless
      otherwise specified in this Agreement, in the event of a conflict between the
      terms of this Agreement and the License Agreement, the terms of the License
      Agreement will govern. In the event of a conflict between the terms of this
      Agreement and any of the other Definitive Agreements (except the License
      Agreement), the terms of this Agreement will govern. 

     

    1.4 Currency:
      All
      amounts of money referred to in this Agreement are expressed in lawful money
      of
      the United States of America unless otherwise specified. 

     

    1.5 Interpretation
      Not Affected by Headings:
      The
      division of this Agreement into articles, sections, subsections, paragraphs
      and
      subparagraphs and the insertion of headings are for convenience of reference
      only and will not affect the construction or interpretation of the provisions
      of
      this Agreement. The terms “this Agreement”, “hereof’, “herein”, “hereunder” and
      similar expressions refer to this Agreement and the exhibits hereto as a whole
      and not to any particular article, section, subsection, paragraph or
      subparagraph hereof and include any agreement or instrument supplementary or
      ancillary hereto.

     

    1.6 Number
      and Gender:
      In this
      Agreement, unless the context otherwise requires, words importing the singular
      include the plural and vice versa and words importing either gender include
      both
      genders and the neuter.

     

    1.7 Date
      for any Action:
      If any
      date on which any action that is required to occur hereunder is not a Business
      Day in the place where the action is required to occur, the action will be
      required to occur on the next succeeding day which is a Business Day at that
      place.

     

    1.8 Exhibits:
      All
      exhibits hereto are hereby incorporated into and form part of this
      Agreement.

     

    ARTICLE
      2

    TRANSACTIONS

     

    2.1 Transactions:
      Subject
      to the terms and conditions contained in this Agreement, the parties will effect
      the Transaction by: 

     


    
      
         

      

      
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    (a) executing
      and delivering the Definitive Agreements:

     

    (i) the
      License Agreement,

     

    (ii) the
      Asset
      Purchase Agreement,

     

    (iii) the
      Service Agreement,

     

    (iv) the
      Registration Rights Agreement,

     

    (v) the
      UBC
      Sublicense Agreement, and

     

    (vi) the
      Elan
      Assignment and Novation Agreement, 

     

    (b) agreeing
      to the Interim Development Plan, and

     

    (c) paying
      the consideration due INEX under §2.2.

     

    2.2 Consideration
      Payable to INEX:
      In
      consideration for completing the Transaction, Hana will pay to INEX $11,500,000
      (the “Payment”)
      made
      up as follows:

     

    (a) the
      issue
      of 1,006,711 shares of Hana’s common stock;

     

    (b) the
      initial deposit of $500,000 and 111,857 shares of Hana’s common stock made by
      Hana and held by the Escrow Agent (the “Deposits”);
      and

     

    (c) $1,000,000
      payable by way of wire transfer or other readily available funds on
      Closing;

     

    the
      Payment to be allocated in the manner set out in the attached Exhibit B
      hereto.

     

    2.3 When
      Agreements Effective:
      Each of
      the Definitive Agreements will be deemed to be effective on a temporary basis
      as
      of the date of execution thereof by all parties to each such Definitive
      Agreement. However, INEX and Hana agree that each Definitive Agreement will
      be
      delivered by one party to the other subject to the following
      conditions:

     

    (a) the
      Transaction will not close and the Definitive Agreements will not be considered
      fully effective unless and until all Definitive Agreements have been executed
      by
      all parties thereto;

     

    (b) the
      closing of the Transaction must take place on or before May 31, 2006 (the
“Closing
      Date”);
      and 

     

    2.4 If
      all of
      the Definitive Agreements are not executed and delivered by all parties thereto
      and the Transaction does not close by the Closing Date, the Definitive
      Agreements will be deemed to have been terminated with retroactive effect,
      and
      all of the rights and obligations of each of the parties thereunder will revert
      to those rights and obligations which each party had prior to the date of
      signing each such Definitive Agreement.


    
      
         

      

      
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    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1 Representations
      and Warranties of Each Party:
      Each
      party hereby represents and warrants to the other party that:

     

    (a) it
      is a
      corporation duly incorporated and validly subsisting under the laws of its
      jurisdiction of incorporation, and has full capacity and authority to enter
      into
      this Agreement and the Definitive Agreements and to perform its covenants and
      obligations under those agreements,

     

    (b) it
      has
      taken all corporate actions necessary to authorize the execution and delivery
      of
      this Agreement and the Definitive Agreements,

     

    (c) neither
      the execution and delivery of this Agreement nor, when executed a Definitive
      Agreement, or the performance of any covenant or obligation under this Agreement
      or a Definitive Agreement, will constitute a material default under, or be
      a
      material contravention or breach of, any: 

     

    (i) provision
      of its constating documents or any other governing corporate documents,


     

    (ii) judgment,
      decree, order, law, statute, rule or regulation applicable to it, or


     

    (iii) agreement
      or instrument to which it is a party or by which it is bound, and

     

    (d) no
      dissolution, winding up, bankruptcy, liquidation or similar proceedings have
      been commenced in respect of it other than the Bankruptcy
      Proceeding.

     

    3.2 Representations
      and Warranties of Hana:
      Hana
      represents and warrants to the other parties that:

     

    (a) the
      authorized capital stock of Hana consists of 100,000,000 shares of common stock,
      of which 22,689,920 shares are issued and outstanding as of May 4, 2006 (without
      giving effect to the shares of Hana common stock included in the Payment),
      and
      10,000,000 shares of preferred stock, par value $0.001 per share, none of which
      is issued and outstanding. All of such issued and outstanding shares of Common
      Stock have been validly issued and are outstanding as fully paid and
      non-assessable; and

     

    (b) Hana
      has
      filed all reports, schedules, forms, statements and other documents required
      to
      be filed by it under the U.S. Exchange Act, including pursuant to Section 13(a)
      of the U.S. Exchange Act, for the two years preceding the date hereof (the
      foregoing materials, including the exhibits thereto and the documents
      incorporated by reference therein, being collectively referred to as the
“SEC
      Reports”).
      As at
      the time of filing, the SEC Reports complied in all material respects with
      the
      requirements of their respective forms and, except to the extent updated or
      superseded by any subsequently filed report, were complete and correct in all
      material respects as of the dates at which the information was furnished, and
      contained (as of such dates) no untrue statements of a material fact nor omitted
      to state any material fact necessary in order to make the statements contained
      therein, in light of the circumstances under which they were made, not
      misleading;


    
      
         

      

      
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    (c) Hana
      meets the registrant eligibility requirements for the use of SEC Form S-3 for
      the registration of secondary offerings of securities under the U.S. Securities
      Act as of the date of this Agreement and will meet such eligibility requirements
      as of the Closing Date.

     

    3.3 Representations
      and Warranties of INEX:
      INEX
      represents and warrants to Hana that:

     

    (a) INEX
      is
      an “accredited
      investor”,
      as
      such term is defined in Rule 501 of Regulation D promulgated under the U.S.
      Securities Act of 1933, as amended (the “Securities
      Act”),
      in
      that as of the date of this Agreement INEX has total assets of at least
      $5,000,000 and it was not formed for the specific purpose of acquiring the
      shares of Hana common stock included in the Payment.

     

    (b) INEX
      is
      acquiring the shares of Hana common stock included in the Payment for its own
      account, for investment intent and not with a view toward distribution. INEX
      understands that, should it later desire to resell such shares, it will do
      so
      only pursuant to an effective registration statement under the Securities Act
      or
      pursuant to a valid exemption from the registration requirements of such
      Securities Act, which exemption will be confirmed by the opinion of counsel
      reasonably satisfactory to Hana.

     

    (c) INEX
      acknowledges that it has reviewed, or has had the opportunity to review, copies
      of Hana’s (1) Annual Report on Form 10-K for the year ended December 31, 2005,
      (2) Definitive Proxy Statement on Schedule 14A relating to its Annual Meeting
      of
      Stockholders to be held May 9, 2006, and (3) Current Reports on Form 8-K filed
      since January 1, 2006, all as filed with the SEC.

     

    (d) INEX
      has
      had an opportunity to ask questions of and receive answers from officers or
      other representatives of Hana concerning the terms and conditions of the
      issuance of the shares of Hana common stock included in the Payment or Hana’s
      business or financial condition, and INEX has received all additional
      information concerning Hana to the extent such information was requested by
      INEX
      or its agents.

     

    (e) INEX
      acknowledges that the certificate(s) representing the shares of Hana common
      stock included in the Payment will contain a legend, substantially in the form
      as follows:

    
       

      “The
        shares represented by this certificate have not been registered under the
        Securities Act of 1933 (the “Act”)
        and
        are “restricted securities” as that term is defined in Rule 144 under the Act.
        The shares may not be offered for sale, sold or otherwise transferred except
        pursuant to an effective registration statement under the Act or pursuant
        to an
        exemption from registration under the Act, the availability of which is to
        be
        established to the satisfaction of the Company.”

    

    
 

    
      
         

      

      
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    ARTICLE
      4

    PRE-CLOSING
      COVENANTS

     

    4.1 Commitment
      to Effect:
      Subject
      to termination of this Agreement, the parties will each use all reasonable
      efforts and do all things reasonably required to complete the execution of
      all
      of the Definitive Agreements by the parties thereto and to otherwise cause
      the
      Transaction to occur.

     

    4.2 Covenants:
      Each
      party will do and perform all such acts and things, and execute and deliver
      all
      such agreements, assurances, notices and other documents and instruments, as
      may
      reasonably be required to facilitate the carrying out of the intent and purpose
      of this Agreement.

     

    4.3 Interim
      Development Plan:
      INEX
      and Hana will use reasonable commercial efforts to complete the Interim
      Development Plan on or before the Closing.

     

    4.4 Work
      under Service Agreement:
      Hana
      acknowledges and agrees that the Service Agreement will be effective April
      3,
      2006 and that prior to the Closing, work has been undertaken (and after the
      Closing work will continue to be undertaken) by INEX, its affiliates or
      subcontractors, pursuant to the terms of the Service Agreement. Hana further
      acknowledges and agrees that Hana will compensate INEX for all services
      performed by INEX from the Effective Date of the Service Agreement, regardless
      of when the Closing occurs.

     

    ARTICLE
      5

    CLOSING

     

    5.1 Closing:
      The
      closing of the Transaction (the “Closing”)
      will
      take place on the Closing Date in the following manner:

     

    (a) each
      of
      the fully executed Definitive Agreements, once executed, together with any
      other
      documents contemplated thereby or which the parties thereto may reasonably
      request be delivered at Closing (together with the Definitive Agreements, the
      “Closing
      Documents”),
      will
      be jointly held in escrow by Lang Michener LLP (“Lang”)
      and
      Maslon Edelman Borman & Brand LLP (“Maslon”)
      until
      such time as all Definitive Agreements have been fully executed by all parties
      thereto and INEX and Hana:

     

    (i) have
      each
      delivered to the other a written confirmation that all Closing Documents have
      been completed and the Closing may proceed;

     

    (ii) have
      delivered a joint direction to each of Lang and Maslon to release the Closing
      Documents from escrow; and

     

    (iii) have
      delivered a joint direction to the Escrow Agent, as escrow agent of the Deposits
      and the INEX Cash, to release to INEX the Deposits, together with the INEX
      Cash,
      to Lang on behalf of INEX.

     

    (b) upon
      receipt of the joint direction from INEX and Hana, each of Lang and Maslon
      will:


    
      
         

      

      
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    (i) deliver
      their opinions as contemplated by §5.2(e);

     

    (ii) confirm
      that the Escrow Agent will release the Deposits and the INEX Cash to Lang;
      

     

    (iii) release
      the Closing Documents; and

     

    (iv) confirm
      that the Closing of the Transaction is complete, upon receipt of the Deposits
      and the INEX Cash by Lang.

     

    5.2 Closing
      Conditions:
      The
      respective obligations of the parties to complete the Transactions will be
      subject to the satisfaction or waiver of the following conditions:

     

    (a) INEX
      and
      Hana each will have obtained, or, to the reasonable satisfaction of the other,
      obviated the need to obtain, all consents, approvals or waivers from
      governmental bodies or agencies, regulatory authorities and third parties,
      including without limitation, INEX’s licensors, reasonably necessary for the
      execution and delivery of the Definitive Agreements;

     

    (b) the
      respective boards of directors of INEX and Hana will have approved the
      Transaction;

     

    (c) there
      will have been no material legal or governmental proceedings seeking to
      restrain, enjoin or otherwise prohibit, nor will any court or governmental
      authority of competent jurisdiction have issued any order restraining, enjoining
      or otherwise prohibiting the consummation of the Transaction;

     

    (d) each
      of
      INEX and Hana will have made such investigation of materials related to the
      financial, business and legal condition and prospects of the other as may be
      reasonably necessary to become and remain familiar with the business operations
      and financial condition of each such party; and

     

    (e) each
      of
      Lang and Maslon will have delivered their opinions dealing with the matters
      set
      forth in Exhibit C hereto; 

     

    (f) each
      of
      the parties will have with reasonable diligence, done all such things and
      provided all such reasonable assurances as may be required to consummate the
      transactions contemplated by this Agreement, and each party will provide such
      further documents or instruments required by the other parties as may be
      reasonably necessary or desirable to give effect to the purpose of this
      Agreement and carry out its provisions whether before or after the
      Closing;
      and

     

    (g) this
      Agreement will not have been terminated pursuant to §9.1.

     

    Except
      for the conditions set out in §§5.2(b), (c) and (f), which may not be waived,
      any of the other conditions in §5.2 may be waived by the party otherwise
      entitled to performance of such conditions at its discretion, and in
      writing.


    
      
         

      

      
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    5.3 Survival
      of Representations, Warranties and Covenants:
      All of
      the provisions of this Agreement which by their nature survive the Closing
      or
      termination of this Agreement (including without limitation, the provisions
      of
      Article 7 and Article 6) will survive indefinitely.

     

    ARTICLE
      6

    POST-CLOSING
      COVENANTS

     

    6.1 Reasonable
      Commercial Efforts:
      After
      the Closing, each of the parties will fully cooperate with the others and exert
      reasonable commercial efforts in order to complete the assignment of the
      agreements set forth in Exhibit A hereto to Hana. Until such time as the
      agreements are assigned to Hana, INEX agrees that it will hold such agreements
      in trust for the benefit of Hana, and perform all obligations pursuant to such
      agreements, provided that Hana promptly reimburses INEX for all costs associated
      with doing so.

     

    6.2 Access
      to Lab Books:
      INEX
      agrees to grant access, during INEX’s normal business hours, to Hana or Hana’s
      employees, contractors or agents, as the case may be, in order to review from
      time to time the laboratory note books (the “Lab
      Books”)
      related to the manufacture and development of the Products and currently
      maintained by INEX, provided that Hana gives INEX at least five (5) Business
      Days prior written notice of its wish to review the Lab Books. Hana acknowledges
      and agrees that the Lab Books contain information that is unrelated to the
      Products (the “INEX
      Information”)
      and is
      confidential and proprietary to INEX. As such, Hana acknowledges and agrees
      that
      it is prohibited from disclosing the INEX Information, and that it is governed
      by the provisions of Article 10 of the License Agreement, which apply to the
      INEX Information mutatis
      mutandis.

     

    6.3 Right
      of First Refusal on Future Products:
      If
      after the Closing, INEX acquires, develops or obtains a license (provided that
      such license allows for a sublicense of rights as contemplated hereby, INEX
      having used commercially reasonable efforts to negotiate such allowance) for
      any
      products encapsulating one or more of the Products in a liposome other than
      a
      liposome that includes sphingomyelin and cholesterol, and where the
      sphingomyelin comprises less than 20% dihydrosphingomyelin, then INEX will,
      at
      the request of Hana, license such products to Hana on terms which are
      substantially similar to the terms set out for each such Product in the License
      Agreement.

     

    6.4 Payment
      of Royalties:
      Hana
      acknowledges and agrees that upon Hana taking a direct license from UBC and
      upon
      the assignment or sub-license of the patents or agreements (as the case may
      be)
      set forth in Exhibit D hereto, Hana will be solely responsible for any payment
      obligations to any third parties thereunder while continuing to be responsible
      for all payment obligations to INEX as set forth in the License Agreement and
      the UBC Sublicense Agreement. 

     

    6.5 Completion
      of Development Plan:
      INEX
      and Hana will agree upon the terms of and execute the Development Plan within
      30
      days of Closing.

     

    6.6 Assumption
      of Indebtedness to Elan:
      Hana
      acknowledges and agrees with INEX that the Definitive Agreements amount to
      a
      Commercialization Agreement (as defined in the Termination Agreement), and
      therefore upon receipt of a Regulatory Approval (as defined in the Termination
      Agreement) of Sphingosomal Vincristine, Hana will pay to Elan International
      Services, Ltd. on behalf of INEX and its subsidiary INEX International Holdings
      Ltd. the sum of $2,500,000 in accordance with §6.4.1(3) of the Termination
      Agreement. Hana further acknowledges and agrees that Hana will be responsible
      for, indemnify, hold harmless and defend the INEX Indemnitees from and against
      any and all Damages suffered or incurred by any INEX Indemnitee arising out
      of,
      related to, resulting from or in connection with Hana’s failure to make payment
      to Elan International Services, Ltd. as contemplated by this §6.6.


    
      
         

      

      
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    6.7 BCCA
      Patents:
      After
      the Closing, with respect to the BCCA Patents:

     

    (a) INEX
      will
      make commercially reasonable efforts to obtain the consent of Aradigm
      Corporation (“Aradigm”)
      to the
      assignment of the BCCA Patents to Hana on or before the 6 month anniversary
      of
      the Closing;

     

    (b) Subject
      to Aradigm’s consent to the assignment of the BCCA Patents, INEX and Hana will
      each make commercially reasonable efforts to execute an assignment and license
      agreement which will cover:

     

    (i) the
      assignment by INEX to Hana of the BCCA Patents; and 

     

    (ii) the
      license back by Hana to INEX, of the BCCA Patents for use by INEX in all fields
      other than the Hana Field, provided that such license back is an irrevocable,
      exclusive, world-wide, royalty-bearing (to MD Anderson but not to Hana) license,
      with a right of INEX right to sublicense, the BCCA Patents (and any related
      technology) outside the Hana Field; and

     

    (c) Hana
      will
      not be relieved of any milestone, royalty or sublicensing payments which Hana
      would otherwise have made to INEX in respect of the BCCA Patents had the
      assignment of BCCA Patents to Hana not taken place.

     

    6.8 Sarris
      and Thomas Patents:
      After
      the Closing, with respect to the MD Anderson License and the patents referred
      to
      therein:

     

    (a) INEX
      will
      make commercially reasonable efforts to obtain the consent of MD Anderson to
      the
      assignment of the MD Anderson License to Hana on or before the 6 month
      anniversary of the Closing;

     

    (b) Subject
      to MD Anderson’s consent to the assignment of the MD Anderson License and the
      Sarris and Thomas patents referred to therein, INEX and Hana will each make
      commercially reasonable efforts to execute a license agreement which will cover
      the license by Hana to INEX of the Sarris and Thomas patents, provided that
      such
      license is an irrevocable, exclusive, world-wide, royalty-bearing (to the
      British Columbia Cancer Agency, but not to Hana) license, with the right of
      INEX
      to sublicense the Sarris and Thomas patents (and any related technology) and
      any
      improvements thereto outside the Hana Field; and 

     

    (c) Hana
      will
      not be relieved of any milestone, royalty or sublicensing payments which Hana
      would otherwise have made to INEX in respect of Hana’s use of the Sarris and
      Thomas patents had the assignment not taken place.


    
      
         

      

      
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    6.9 UBC
      Technology:
      After
      the Closing, with respect to UBC:

     

    (a) INEX
      will
      make commercially reasonable efforts to assist Hana in obtaining a direct
      license from UBC of the same patents and technology as those licensed pursuant
      to the UBC Sublicense Agreement (the “UBC
      Technology”)
      for
      use by Hana within the Hana Field.

     

    (b) As
      long
      as INEX or Tekmira Pharmaceuticals Corporation (“Tekmira”)
      continues to hold a license to the UBC Technology, Hana’s financial obligations
      to INEX (or Tekmira, as the case may be) in respect of the UBC Technology will
      survive, notwithstanding the fact that Hana may have a direct license from
      UBC
      for the UBC Technology, and royalties will continue to be payable to INEX (or
      Tekmira, as the case may be) as well as to UBC.

     

    6.10 DHSM
      Patents:
      After
      Closing, with respect to the DHSM Patents:

     

    (a) Hana
      will
      reimburse INEX for 10% of all costs and expenses incurred by INEX or its
      Affiliate after Closing in connection with prosecution and maintenance of the
      applications for the DHSM Patents;

     

    (b) Hana
      will
      have the right (the “Option”) (upon 45 days’ prior written notice to INEX) to
      obtain a license to the Intellectual Property Rights in and to the DHSM Patents
      by Hana solely in connection with Hana’s (or Hana’s Affiliates’ or
      Sublicensees’) manufacture, use, sale, offering for sale or importing of the
      Products or any of them throughout the Territory;

     

    (c) Upon
      exercise of the Option, Hana will reimburse INEX (or INEX’s Affiliate, as the
      case may be) for 40% of all costs and expenses incurred by INEX in connection
      with the prosecution of the applications for the DHSM Patents (and after
      issuance of each of the DHSM Patents, for the maintenance for each such DHSM
      Patent) to the date of the exercise of the Option; and

     

    (d) After
      exercise of the Option, Hana and INEX will each use commercially reasonable
      efforts to negotiate a license agreement covering Hana’s license of the
      Intellectual Property Rights in and to the DHSM Patents by Hana solely in
      connection with Hana’s (or Hana’s Affiliates’ or Sublicensees’) manufacture,
      use, sale, offering for sale or importing of a liposome that includes
      sphingomyelin (where the sphingomyelin comprises more than 20%
      dihydrosphingomyelin) and cholesterol, together with an encapsulated form of
      vincristine, vinorelbine or topotecan, on terms substantially similar to those
      set forth in the License Agreement, save and except that it shall be a term
      of
      such license agreement that Hana will reimburse INEX (or INEX’s Affiliate, as
      the case may be) for 50% of all future costs and expenses incurred by INEX
      in
      connection with the prosecution of the applications for the DHSM Patents (and
      after issuance of each of the DHSM Patents, for the maintenance of each such
      DHSM Patent).

     

    6.11 Continuing
      Obligations:
      Notwithstanding any other provision of any of the Definitive Agreements
      (including without limitation, the Elan Assignment and Novation Agreement),
      INEX
      agrees that should any obligations of INEX or IE Ocology arise to UBC or NeXstar
      Pharmaceuticals, Inc. under Amended and Restated License Agreement among Elan
      Pharmaceuticals, Inc, INEX and IE Oncology dated April 3, 2003, wherein INEX
      and
      IE Oncology agreed to assume responsibility for royalty, milestone and other
      payments, if any, arising under (a)  that certain agreement between The
      Liposome Company and NeXstar Pharmaceuticals, Inc. dated March 24, 1993; and
      (b)
      that certain UBC Research Project Agreement (as amended) dated May 8, 1984
      between UBC and The Liposome Company, and assigned to Elan Pharmaceuticals
      Inc.
      on December 28, 2001, INEX will be responsible for any such obligations.
      Further, INEX acknowledges that any such obligations will continue
      notwithstanding the assignment of such Amended and Restated License Agreement
      by
      INEX to Hana, and INEX will be responsible for, indemnify, hold harmless and
      defend the Hana Indemnitees from and against any and all Damages suffered or
      incurred by any Hana Indemnitee arising out of, related to, resulting from
      or in
      connection with INEX’s failure to carry out any such
      obligations.


    
      
         

      

      
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    6.12 Confidentiality
      Agreements:
      INEX
      will hold the Confidentiality Agreements in trust for the benefit of Hana,
      and
      Hana will have the right (at its sole cost and expense) to commence any action
      at law or in equity against any Third Party which is alleged to have breached
      the provisions of any Confidentiality Agreement. INEX will cooperate with Hana
      in any action taken by Hana against any Third Party arising from or related
      to
      the provisions of a Confidentiality Agreement, provided that Hana reimburses
      INEX for any of its expenses associated therewith.

     

    6.13 Clinical
      Trial Agreements:
      INEX
      and Hana hereby acknowledge and agree that:

     

    (a) INEX
      will
      make commercially reasonable efforts to assign and Hana will make commercially
      reasonable efforts to take the assignment of each of the Clinical Trial
      Agreements, provided that each such assignment will take place after completion
      of the clinical trial(s) contemplated by each such Clinical Trial
      Agreement;

     

    (b) As
      of the
      Closing, Hana will assume all financial obligations of INEX and its affiliates,
      if any, under each such Clinical Trial Agreement (including without limitation,
      all costs and expenses incurred by INEX and its affiliates related to operating
      the trails, travel expenses, salary and benefits costs of employees working
      on
      such trials, data management, statistical analysis and reporting);

     

    (c) For
      any
      patient enrolled in a Product-related trial operated pursuant to a Clinical
      Trial Agreement prior to Closing, INEX will be liable for any Damages suffered
      by any such patient which arise from a claim that is made by such patient prior
      to the 30th
      day
      after such patient receives his or her last dose of a Product pursuant to the
      Clinical Trial Agreement;

     

    (d) For
      any
      patient enrolled in a Product-related trial operated pursuant to a Clinical
      Trial Agreement after Closing, Hana will be liable for any Damages suffered
      by
      any such patient, and will be responsible for, indemnify, hold harmless and
      defend the INEX Indemnities from and against any and all Damages suffered or
      incurred by any INEX Indemnitee arising out of, related to, resulting from
      or in
      connection with the Clinical Trial Agreement pursuant to which such patient
      was
      treated, including without limitation, INEX’s or Hana’s conduct of a clinical
      trial pursuant to such Clinical Trial Agreement;


    
      
         

      

      
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    (e) As
      of the
      Closing, Hana will assume all liabilities to Institutions or Investigators
      pursuant to each Clinical Trial Agreement provided that such liabilities relate
      to or are associated with any claim made by any patient enrolled in a
      Product-related trial operated pursuant to such Clinical Trial Agreement against
      an Institution or Investigator, and will be responsible for, indemnify, hold
      harmless and defend the INEX Indemnities from and against any and all Damages
      suffered or incurred by any INEX Indemnitee arising out of, related to,
      resulting from or in connection with the Clinical Trial Agreement pursuant
      to
      which such patient was treated, including without limitation, INEX’s or Hana’s
      conduct of a clinical trial pursuant to such Clinical Trial Agreement;
      and

     

    (f) INEX
      and
      Hana will jointly prepare, approve, execute and send a notice to each
      Institution and Investigator for the purpose of informing each such Institution
      and Investigator of Hana’s and INEX’s allocation of liability and
      indemnifications set out in this §6.13.

     

    6.14 Operating
      Agreements:
      INEX
      and Hana acknowledge and agree that each will use commercially reasonable
      efforts to ensure that the Operating Agreements are assigned by INEX to Hana
      as
      soon as is practicable after Closing.

     

    6.15 Complete
      List:
      INEX
      and Hana acknowledge and agree that the agreements set forth in Exhibit A hereto
      are not exhaustive, and that INEX will provide a comprehensive list of
      agreements to be included as Exhibit A hereto within 45 days of Closing, and
      upon delivery, such list will become Exhibit A to this Agreement.

     

    ARTICLE
      7

    NON-COMPETITION

     

    7.1 Launch
      of Competitive Product:
      Hana
      hereby agrees that in the event Hana or its Affiliate(s), either alone or in
      partnership, in collaboration or in conjunction with any Person other than
      INEX
      or INEX’s Affiliate(s), whether as principal, agent, employee, director,
      officer, shareholder, licensor or in any capacity or manner whatsoever, whether
      directly or indirectly, Develops, Manufactures or Commercializes any Competitive
      Product during the Term in
      a
      particular country(ies) in the Territory,
      all
      licenses and sublicenses granted by INEX to Hana in respect of such Product
      in
      such country(ies) in the Territory will
      terminate and Hana’s rights thereunder will
      revert
      to INEX.

     

    7.2 Cure
      by Hana:
      Notwithstanding the provisions of §7.1, if Hana or its Affiliate(s) acquires an
      entity or all or substantially all of the assets of an entity during the Term
      and such entity distributes or the assets of such entity includes a Competitive
      Product, Hana or its Affiliate will have 6 months in which to divest itself
      of
      such Competitive Product or to otherwise cease distribution of such Competitive
      Product, and upon such divestiture or cessation, Hana will not be in violation
      of §7.1.

     

    7.3 Non-Competition:
      INEX
      hereby agrees that in the event INEX or its Affiliate(s) either
      alone or in partnership, in collaboration or in conjunction with any Person
      other than Hana or Hana’s Affiliate(s), whether as principal, agent, employee,
      director, officer, shareholder, licensor or in any capacity or manner
      whatsoever, whether directly or indirectly, engages in the Restricted Business,
      INEX shall grant to Hana, a permanent, fully paid up, exclusive, royalty-free
      license in respect of such Product in such country(ies) in the Territory where
      INEX or
      its
      Affiliate(s) has engaged in the Restricted Business.
      The
      term “engage” as used herein, includes, but will not be limited to, giving
      advice or technical or financial assistance, by loan, guarantees, stock
      transactions or in any other manner to any Person, firm, association, trust,
      venture or corporation doing or proposing to undertake such Restricted Business
      in the Territory. 

     


    
      
         

      

      
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    7.4 Cure
      by INEX:
      Notwithstanding the provisions of §7.3, if INEX or its Affiliate(s) engages in a
      Restricted Business, INEX or its Affiliate(s), as the case may be, will have
      6
      months from the date of receipt of written notice from Hana requiring INEX
      or
      its Affiliate(s) as the case may be, to cease all activity(ies) involving such
      Restricted Business as set forth in such written notice (and provided that
      INEX
      or its Affiliate(s), as the case may be, will do all such reasonable things
      and
      provide all such reasonable assurances as may be required to ensure that the
      Intellectual Property Rights and Confidential Information of Hana is returned
      to
      Hana), in which case INEX (or its Affiliate(s), as the case may be) will not
      be
      in violation of §7.3.

     

    7.5 Modification:
      In the
      event that any portion of this §7.5 is considered by a court of competent
      jurisdiction to be excessive in its duration, scope or in the area to which
      it
      applies, it will be considered modified and valid for such scope, duration
      and
      for such area as said court may determine reasonable under the circumstances.
      In
      recognition of the irreparable harm that a violation of this §7.5 would cause
      Hana, Hana will have the right to enforce this Agreement by specific remedies,
      which will include, among other things, temporary restraining orders and
      temporary and permanent injunctions. In the event of any such violation, INEX
      agrees to be liable for, jointly and severally, and pay the reasonable legal
      fees incurred by Hana in pursuing any of its rights with respect to such
      violation or violations in addition to the actual damages sustained by Hana
      as a
      result thereof.
      The
      duration of the Non-Compete Period will be extended beyond the time period
      set
      forth above for a period equal to the duration of any breach or default of
      either such covenant by INEX.

     

    ARTICLE
      8

    ASSIGNMENT

     

    8.1 Assignment:
      No
      party may assign its rights or obligations under this Agreement or the
      Definitive Agreements without the prior written consent of the other party,
      save
      and except that notwithstanding any other provisions of this Agreement or of
      any
      of the Definitive Agreements, INEX and Hana may assign this Agreement (or any
      of
      the Definitive Agreements except the Registration Rights Agreement) in whole
      or
      in part to a wholly-owned subsidiary, provided, however that in the event INEX
      assigns this Agreement in whole or in part to its subsidiary Tekmira
      Pharmaceuticals Corporation (“Tekmira”)
      and
      subsequent to such assignment, a controlling interest in the capital stock
      of
      Tekmira is sold by INEX, all of Tekmira’s rights and obligations under such
      assignment will automatically revert to INEX.


    
      
         

      

      
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    ARTICLE
      9

    TERMINATION

     

    9.1 Termination:
      If the
      Transaction does not Close on May 31, 2006, either of Hana or INEX may terminate
      this Agreement upon delivery of written notice to the other.

     

    9.2 Effect
      of Termination:
      Upon
      termination of this Agreement in accordance with §9.1, each of the parties will
      with reasonable diligence and at no cost to INEX except for those which INEX
      may
      directly incur in connection herewith, do all such things and provide all such
      reasonable assurances as may be required to ensure that the Intellectual
      Property Rights (as such term is defined in both the License Agreement and
      the
      UBC Sublicense Agreement) in the Products vest again with INEX as though none
      of
      the Definitive Agreements were ever executed or any performance by any party
      was
      taken thereunder, whether in whole or in part; provided however, that INEX
      will
      be entitled to receive and retain all payments and reimbursements made by Hana
      to INEX in respect of any and all services rendered in accordance with the
      Service Agreement. 

     

    ARTICLE
      10

    GENERAL

     

    10.1 Notices:
      All
      notices which may or are required to be given pursuant to any provision of
      this
      Agreement will be given or made in writing and will be delivered or telecopied,
      addressed as follows:

     

    (a) in
      the
      case of INEX:

     

    INEX
      Pharmaceuticals Corporation

    200
      -
      8900 Glenlyon Parkway

    Burnaby,
      BC V5J 5J8

     

    Attention:             
      Ian
      Mortimer, Vice President, Finance 

    and
      Chief
      Financial Officer

    Facsimile:              
      (604)
      419-3202

     

    with
      a
      copy to:

     

    Lang
      Michener LLP

    1500
      -
      1055 West Georgia Street 

    Vancouver,
      B.C. V6E 4N7

     

    Attention:              Leo
      Raffin

    Facsimile:              
      (604)
      685-7084


    
      
         

      

      
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    (b) in
      the
      case of Hana:

     

    Hana
      Biosciences, Inc.

    400
      Oyster Point Boulevard

    Suite
      215

    South
      San
      Francisco, CA

    94080,
      U.S.A.


     

    Attention:             
      Mark
      J.
      Ahn

    President
      and Chief Executive Officer 

    Facsimile:           
         (650)
      588-2787

     

    with
      a
      copy to:

     

    Maslon
      Edelman Borman & Brand, LLP

    3300
      Wells Fargo Center

    90
      South
      7th
      Street


    Minneapolis,
      Minnesota

    USA

     

    Attention:             
      Christopher
      J. Melsha 

    Facsimile:              
      (612)
      642-8343 

     

    10.2 Binding
      Effect:
      This
      Agreement will be binding upon and will enure to the benefit of the parties
      and
      their respective successors and permitted assigns.

     

    10.3 Amendment:
      This
      Agreement may only to be amended by the written agreement of the parties
      hereto.

     

    10.4 Waiver:
      No
      waiver or release of any provision of this Agreement, will be effective unless
      in writing and executed by the party granting such waiver or
      release.

     

    10.5 Governing
      Law:
      This
      Agreement will be governed by and be construed in accordance with the laws
      of
      the State of Washington and the laws of the United States of America applicable
      therein.

     

    10.6 Jurisdiction:
      The
      parties agree that the courts of the State of Washington will have exclusive
      jurisdiction to determine all disputes and claims arising between the
      parties.

     

    10.7 Expenses:
      All
      expenses incurred by a party in connection with this Agreement, the Arrangement
      and the transactions contemplated hereby and thereby will be borne by the party
      that incurred the expense.

     

    Signature
      Page Follows


    
      
         

      

      
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    10.8 Entire
      Agreement:
      This
      Agreement constitute the entire agreement between the parties with respect
      to
      the subject matter of this Agreement and supersedes all prior and
      contemporaneous agreements, understanding, negotiations and discussions, whether
      oral or written, of the parties.

     

    10.9 Time
      of Essence:
      Time is
      of the essence of this Agreement.

     

    10.10 Counterparts:
      This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original but all of which together will constitute one and
      the
      same instrument.

     

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

     

    INEX
      PHARMACEUTICALS CORPORATION

     

    Per: /s/
      Timothy
      Ruane                                


            Authorized
      Signatory

     

    HANA
      BIOSCIENCES, INC.

     

    Per: /s/
      Mark J.
      Ahn                                      


            Authorized
      Signatory

     

    Signature
      Page to Transaction Agreement

     

     

    
      
         

      

        
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