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EXHIBIT 10.1

                             CONFIDENTIAL TREATMENT

                         LICENSE AND MARKETING AGREEMENT

                                 BY AND BETWEEN

                               CYTOGEN CORPORATION

                                       AND

                            ADVANCED MAGNETICS, INC.

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                                TABLE OF CONTENTS

1. Definitions.................................................................1
2. The Projects................................................................6
3. Cooperation.................................................................7
 3.1 Cytogen Assistance with AM Projects.......................................7
 3.2 Cooperation Regarding FDA Matters.........................................7
 3.3 Post-Marketing Regulatory Communications..................................8
 3.4 Adverse Event and Other Reporting.........................................8
 3.5 Advertising and Promotional Materials.....................................9
4. Grants of Rights and Licenses..............................................10
 4.l Rights and Licenses......................................................10
 4.2 Rights to Feridex I.V....................................................11
 4.3 License of Trademarks....................................................11
 4.4 Sublicensees.............................................................12
5. License Fees...............................................................13
 5.1 Payments.................................................................13
6. Disclosure of Project and Other Information................................13
7. Confidentiality............................................................14
 7.1 Confidentiality..........................................................14
 7.2 Exceptions...............................................................14
 7.3 Project Information Disclosed to AM......................................15
9. Infringement Actions.......................................................15
 8.1 Infringement of Agent Technology or Manufacturing Technology.............15
 8.2 Infringement of Patents of Third Parties.................................17
 8.3 Limitation of Remedies...................................................20
9. Ownership..................................................................20
10. Supply; Royalties.........................................................21
 10.2 Payment.................................................................21
 10.2 Minimum Sales...........................................................21
12. Obligation of Cytogen to Market Agent.....................................22
12. Reports and Accounting for Agent..........................................23
 12.1 Payments and Monthly Reports for Agent Net Sales........................23
 12.2 Annual Reports..........................................................23
 12.3 Records.................................................................23
 12.4 Currency................................................................24
13. Compliance with Regulations...............................................24
14. Representations and Warranties............................................24
 14.1 By AM...................................................................24
 14.2 By Cytogen..............................................................25
 14.3 Limitations.............................................................27
15. Term and Termination......................................................27
 15.1 Term....................................................................27
 15.2 Termination Events......................................................27
 15.3 Partial Termination for Certain Agents..................................28
 15.4 Effect of Expiration or Termination.....................................28
16. General Provisions........................................................29
 16.1 Force Majeure...........................................................29

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 16.2 Waiver..................................................................29
 16.3 Publicity...............................................................29
 16.4 Notices.................................................................30
 16.5 Entire Agreement........................................................31
 16.6 Headings................................................................31
 16.7 Assignment..............................................................31
 16.8 Independent Contractors.................................................31
 16.9 Governing Law...........................................................31
 16.10 Severability...........................................................32

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                         LICENSE AND MARKETING AGREEMENT

         AGREEMENT  made as of this  25th day of  August  2000  (the  "Effective
Date), by and between Advanced Magnetics, Inc., a Delaware corporation having an
address of 61 Mooney Street, Cambridge,  Massachusetts 02138 ("AM"), and Cytogen
Corporation, a Delaware corporation, having an address of 600 College Road East,
Princeton, New Jersey 08540 ("Cytogen").
                                    RECITALS:
         WHEREAS, AM is developing certain contrast agents for use in magnetic
resonance imaging ("MRI"); and
         WHEREAS,  subject to the terms and conditions hereinafter set forth, AM
is willing to grant Cytogen the right to market and sell Feridex I.V.,  Combidex
and Code 7228 in the Territory;
         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:
         1.  Definitions.
         1.1 "Affiliate" shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, is Controlled by, or is under
common Control with, the Person specified.
         1.2 "Agent" shall mean Feridex I.V., Combidex and Code 7228,
individually or in the aggregate, as the context provides.
         1.3 "Agent Net Sales"  shall mean,  with respect to any Agent, during
the term of this  Agreement  and  calculated  for each  period  indicated
herein, the gross amount invoiced for such Agent by Cytogen, its Affiliates, and
its Approved  Sublicensees  to Third Parties,  less deductions for: (i) quantity
and/or cash discounts,  allowances, rebates, and chargebacks actually allowed or
given; (ii) freight, postage and shipping, and insurance expenses (if separately
identified  in such  invoice);  (iii)  credits or refunds  actually  allowed for
rejected,  outdated or returned Agent; and (iv) sales and other taxes and duties
directly  related to the sale, to the extent that such items are included in the
gross invoice price (but not including taxes assessed against the income derived
from such sale); provided, however, that Agent Net Sales shall not include sales
to  Affiliates  of a  reasonable  amount of samples and  supplies  for  clinical
studies permitted pursuant to this Agreement.  In the event of any sale of Agent
to any Affiliate or Approved Sublicense for resale to its customers,  "Agent Net
Sales" shall be based on the greater of the amount actually  received by Cytogen
from its Affiliate or Approved  Sublicensees or the amount actually  received by
such Affiliate or Approved Sublicensee from its customers for the sale of Agent.

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                  1.4 "Agent Technology" shall mean all proprietary  information
with  respect  to  any  Agent  and  improvements  (as  defined  below)  thereto,
including,  without  limitation,  all  information  provided  by AM  pursuant to
Article 6 of this  Agreement,  Project  Information,  trade  secrets,  technical
information,  data, techniques,  discoveries,  inventions,  processes, know-how,
patents  (including  any  extension,  reissue  or  renewal  thereof)  and patent
applications  (including  such  patents  and  patent  applications  set forth in
Exhibit A to this  Agreement and  incorporated  herein),  that AM now has or may
hereafter  conceive,  develop,  own or Control during the term of this Agreement
(but excluding any  information  owned or Controlled by any Person who becomes a
successor or assignee of AM hereunder  immediately prior to becoming a successor
or assign),  which is necessary or useful in connection with: the performance of
the Cytogen  Project,  the  marketing  and sale by Cytogen of Agent  pursuant to
Section 4.1 or 4.2 or the performance by Cytogen of its  obligations  hereunder.
No Manufacturing  Technology shall be deemed to be included in Agent Technology.
For  purposes  of  this  Section  1.4,  a  substance  shall  only be  deemed  an
"improvement"  to the extent that it is an MRI  contrast  agent  composed of the
same  active  ingredient  contained  in  the  Agent  to  which  it  would  be an
improvement and falls within the claims of any Patent covering such Agent.
                  1.5 "AM Projects" shall mean the Combidex Project and the
Code 7228 Project.
                  1.6 "Approved  Sublicensee"  shall  mean any  Person  to whom
Cytogen has sublicensed all or a part of its rights arising under this Agreement
with AM's written consent, subject to Section 4.4.
                  1.7 "Feridex  Agreement"  shall  mean  the  agreement  by and
between AM and a Third  Party under  which AM has  granted  exclusive  marketing
rights in the Territory to such Third Party.
                  1.8 "Code 7228" shall mean the contrast agent  currently known
as Code  7228  which is  composed  of the  substance  AMI-7228  and which (i) is
covered in whole or in part by an issued,  unexpired claim of one or more of the
Patents or is manufactured  using a process which is covered in whole or in part
by an issued,  unexpired  claim of one or more of the Patents or (ii) is covered
by the Agent Technology.
                  1.9 "Code 7228 Approval  Date" shall mean the later of (a) the
date of AM's receipt of an FDA approval letter permitting  commercial  marketing
of Code 7228 in the United States (said date being referred to as the "Code 7228
Approval Letter Date") and (b) the date on which AM is first able to produce and
provide a supply of Code 7228 to Cytogen for commercial  marketing in the United
States in interstate commerce pursuant to and in compliance with an approved NDA
and any other  conditions  that must be  satisfied  prior to initial  commercial
sales then imposed by law, such supply to be sufficient to

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supply at least six months of reasonable Cytogen  requirements as set forth in a
notice sent to AM by Cytogen no later than fifteen (15) business days after AM's
receipt of the approval  letter from the FDA and notice  thereof to Cytogen.  If
Cytogen  fails to timely  provide such notice of supply  requirements,  the Code
7228 Approval Date shall be the Code 7228 Approval Letter Date.
                  1.10 "Code 7228 NDA" shall mean the New Drug Application
submitted by AM to the FDA with respect to Code 7228.
                  1.11 "Code 7228 Project" shall mean any work undertaken in
obtaining  FDA  approval  for  commercial  marketing  of Code 7228 in the United
States  including  all work upon which such approval is  contingent,  including,
without  limitation,  the  conduct of human  clinical  trials and United  States
regulatory  applications  (including the preparation and filing of the Code 7228
NDA). The Code 7228 Project shall also include all studies which are required to
be conducted as a condition of the FDA approval of the Code 7228 NDA.

                  1.12 "Code 7228 Project Team" shall mean a standing  committee
composed  of  designated  representatives  of  AM  and  Cytogen,  with  majority
representation  from AM, established for the purpose of overseeing the Code 7228
Project  and   relating  to  the  Field  of  Use.  AM  shall  have  the  primary
responsibility  for and the  final  decision  with  respect  to any  actions  or
recommendations  made  by  the  Code  7228  Project  Team.  Notwithstanding  the
foregoing,  the Parties shall jointly agree to labeling content and requirements
for Code 7228 in the Field of Use.

                  1.13  "Collective  Opinion of Patent  Counsel"  shall mean the
final joint opinion of patent counsel selected by AM and patent counsel selected
by Cytogen after review of all data and information  reasonably available at the
time such opinion is rendered. If patent counsel for AM and Cytogen cannot agree
on a final joint  opinion,  such counsel shall agree on the selection of a third
patent counsel who shall offer an independent opinion on the subject matter. The
final opinion of such third patent  counsel shall be the  Collective  opinion of
Patent Counsel.
                  1.14 "Combidex"  shall mean the contrast agent currently known
as Combidex  which is composed of the substance  with the United States  Adopted
Name  Ferumoxtran-10  and which (i) is covered in whole or in part by an issued,
unexpired claim of one or more of the Patents or is manufactured using a process
which is  covered in whole or in part by an  issued,  unexpired  claim of one or
more of the Patents or (ii) is covered by the Agent Technology.

                  1.15 "Combidex  Approval Date" shall mean the later of (a) the
date of AM's receipt of an FDA approval letter permitting  commercial  marketing
of Combidex in the United  States (said date being  referred to as the "Combidex
Approval Letter Date") and (b) the date on which AM is first able to

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produce and provide a supply of Combidex to Cytogen for commercial  marketing in
the United States in interstate  commerce  pursuant to and in compliance with an
approved NDA and any other  conditions  that must be satisfied  prior to initial
commercial  sales then imposed by law, such supply to be sufficient to supply at
least six months of  reasonable  Cytogen  requirements  as set forth in a notice
sent to AM by Cytogen no less than six months after the  execution  date of this
Agreement but no later than fifteen (15) business days after AM's receipt of the
approval letter from the FDA and notice thereof to Cytogen.  If Cytogen fails to
timely provide such notice of supply  requirements,  the Combidex  Approval Date
shall be the Combidex Approval Letter Date.
                  1.16 "Combidex  NDA"  shall  mean  the New  Drug  Application
submitted  by AM to the FDA with  respect to Combidex and accepted for filing by
the FDA on December 21, 1999.
                  1.17 "Combidex  Project"  shall mean any work  undertaken  in
obtaining  FDA  approval  for  commercial  marketing  of  Combidex in the United
States,  including all work upon which such approval is  contingent,  including,
without  limitation,  the conduct of human clinical trials. The Combidex Project
shall  include all studies  which are required to be conducted as a condition of
the FDA approval of the NDA.
                  1.18 "Combidex  Project Team" shall mean a standing  committee
composed  of  designated  representatives  of  AM  and  Cytogen,  with  majority
representation  from AM,  established for the purpose of overseeing the Combidex
Project.  AM shall have the primary  responsibility  for and the final  decision
with  respect to any actions or  recommendations  made by the  Combidex  Project
Team. Notwithstanding the foregoing, the Parties shall jointly agree to labeling
content and requirements for Combidex.
                  1.19 "Competing  Products"  shall mean,  with  respect to any
Agent,  a  product  approved  by the FDA for  marketing  in the  Territory  with
substantially similar indications.
                  1.20 "Controls"  or "Control"  shall mean, in the case of any
Person,  the  possession  of the power to direct or cause the  direction  of the
management  and policies of such  Person,  whether  through the  ownership of at
least fifty percent  (50%) of the voting  securities  thereof or otherwise,  and
when used in the context of "Control" of technology or  information,  shall mean
possession  by a Person of the right to grant  licenses or  sublicenses  of such
technology,  or disclose such  information,  without  violating the terms of any
agreement or other  arrangement  with, or the rights of, any other Person or any
legally binding laws or regulations.
                  1.21 "Cytogen  Agreements"  shall  mean this  Agreement,  the
Supply Agreement and the Escrow Agreement.

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                  1.22 "Cytogen  Project"  shall mean the conduct of such Phase
III(b) Studies and Phase IV Studies and any other studies  undertaken to enhance
the marketing of any Agent that Cytogen elects to conduct.
                  1.23 "Escrow  Agreement"  shall  mean  the  Escrow  Agreement
entered into as of the date hereof by and between  Cytogen,  AM and Chase Mellon
Shareholder Services, Inc.
                  1.24 "Feridex  I.V." shall mean the contrast  agent  currently
known and marketed as Feridex I.V.,  which is composed of the substance with the
United States  Adopted Name  Ferumoxide  and which (i) is covered in whole or in
part  by an  issued,  unexpired  claim  of one or  more  of  the  Patents  or is
manufactured  using a process which is covered in whole or in part by an issued,
unexpired  claim of one or more of the  Patents  or (ii) is covered by the Agent
Technology.
                  1.25 "Feridex  I.V.  NDA" shall mean the New Drug  Application
submitted  by AM to the FDA with respect to Feridex I.V. and accepted for filing
by the FDA on or about April 8, 1994 and approved by the FDA on August 30, 1996.
                  1.26 "Feridex Start Date" shall mean the date on which AM
notifies Cytogen of the termination of the Feridex Agreement.
                  1.27 "Field of Use" shall  mean  diagnostic  imaging  for the
detection or staging of cancer, and similar diagnostic applications in the field
of oncology.
                  1.28 "Manufacturing Technology" shall have the meaning defined
in Section 1.26 of the Supply  Agreement.
                  l.29 "Party"  shall mean Cytogen and/or AM. 1.30 "Patents"
shall mean the patents listed on Exhibit A and any reissues, extensions or
renewals thereof.
                  1.31 "Phase III Studies" shall mean clinical or other studies
of any Agent which are necessary for approval of the applicable NDA.
                  1.32 "Person"   shall  mean  an   individual,   partnership,
corporation,  joint venture,  unincorporated  association, or other entity, or a
government or department or agency thereof.
                  1.33 "Phase  III(b)  Studies"  shall mean  clinical  or other
studies of any Agent which are not necessary for approval of the applicable NDA,
but which are begun prior to FDA approval of the applicable NDA.
                  1.34 "Phase IV Studies"  shall mean  clinical or other studies
of any Agent which are undertaken  following approval of the applicable NDA, and
which are not required to be conducted as a condition of the FDA approval of the
applicable NDA.

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                  1.35 "Project" or "Projects" shall mean the AM Projects and/or
the Cytogen Project.
                  1.36 "Project   Information"   shall  mean  all   information
developed  as  a  result  of  the  Projects,   including,   without  limitation,
techniques,  discoveries, processes, know-how, toxicological and pharmacological
data, clinical trial results,  regulatory  applications and documents evidencing
approval thereof,  and test results,  and all information and data provided to a
Party pursuant to Article 6 hereof.
                  1.37 "Qualified  Person"  shall mean any employee or agent of
Cytogen engaged in the Cytogen  Project  pursuant to Article 2, the marketing of
the  Agent  pursuant  to  Section  11 or  the  performance  of  Cytogen's  other
obligations hereunder,  or any employee or agent of AM engaged in the AM Project
or the performance of AM's  obligations  hereunder,  designated by Cytogen or AM
respectively,  to  receive  Agent  Technology,   Project  Information  or  other
information  provided  pursuant  to  Article  6 of this  Agreement  or any other
information proprietary to AM or Cytogen,  respectively,  who has a need to know
the information included therein and disclosed to them.
                  1.38 "Supply Agreement" shall mean the Supply Agreement
entered into as of the Effective Date by and between Cytogen and AM.
                  1.39 "Territory" shall mean the United States (including its
territories  and  possessions  and Puerto  Rico).
                  1.40 "Third Party" shall mean any party other than a Party, to
this Agreement.
                  1.41 "Trademarks" shall  mean  the  following trademarks
registered in the United States of America: Feridex I.V. and Combidex.  Any
other mark  registered by AM in the United States relating to Feridex  I.V.,
Combidex  and Code  7228  (only in the  Field of Use)  after the Effective Date
shall be deemed a Trademark hereunder.
         2. The Projects.  AM shall be responsible for the conduct of, and shall
bear all  out-of-pocket  expenses in connection with, the AM Projects.  AM shall
consult  with  the  Combidex  Project  Team and the Code  7228  Project  Team in
developing  plans for clinical  trials.  Cytogen  shall be  responsible  for the
conduct of, and shall bear all  out-of-pocket  expenses in connection  with, the
Cytogen Project.  AM may conduct Phase III(b) Studies or Phase IV Studies at its
own expense,  and Cytogen shall have no rights to the benefits thereof.  AM will
be  responsible  for all fees paid for FDA approval,  including fees paid to the
FDA in connection with Combidex,  prior to the Combidex Approval Letter Date. AM
will be responsible for all fees for FDA approval, including fees payable to the
FDA in  connection  with  Code 7228 on filing of the Code 7228 NDA and up to the
Code 7228 Approval  Letter Date. AM will be responsible  for all fees payable to
the FDA in connection  with the  certification  of its facilities for commercial
production of Agent.  Cytogen will be responsible  for any other fees payable to
the FDA in

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connection  with (i) Code 7228 (in the Field of Use) and Combidex as such Agents
incur FDA charges after their respective  Approval Letter Dates and (ii) Feridex
I.V. if a license is granted under Section 4.2 hereof.  Cytogen shall  reimburse
AM for the Annual Product  Registration  Fee payable with respect to any NDA for
an Agent while Cytogen has exclusive  rights under this Agreement to such Agent.
AM shall be responsible for the annual Establishment Registration Fee.
         If Cytogen  desires to conduct any clinical study solely to enhance the
marketing of any Agent and such study  necessitates no material labeling change,
then Cytogen shall be  responsible  for  conducting  any such study and shall be
responsible for all costs incurred in connection therewith. AM and Cytogen shall
agree to a protocol for such study,  provided,  however, that Cytogen shall have
final approval of any such protocol.
         If AM or Cytogen  desires to conduct any clinical  study to enhance the
marketing  of any  Agent,  which  study  supports  any  material  changes to the
labeling of such Agent,  Cytogen and AM shall be  responsible  for sixty percent
(60%) and forty percent (40%), respectively, of the costs incurred in connection
therewith.  AM and Cytogen  shall agree to a protocol for such study,  provided,
however, that Cytogen shall have final approval of any such protocol.
         3. Cooperation.
                  3.1 Cytogen  Assistance with AM Projects.  Cytogen and AM
shall mutually agree upon the reasonable  assistance  that Cytogen shall provide
AM with  the AM  Projects,  which  will  include  assistance  in  reviewing  and
commenting on  information  provided by AM,  evaluating  clinical data and, when
deemed appropriate,  providing  alternative language or other advice believed to
be  constructive  to FDA  approval of the NDAs and  communication  with the FDA.
Cytogen  shall  provide such  services to AM at cost.  AM shall not contract for
services in connection  with the AM Projects  without first  offering to Cytogen
the opportunity to submit a proposal to provide such services,  such proposal to
be submitted by Cytogen within thirty days of AM's request. Cytogen shall not be
obligated  to submit a proposal and AM shall not be obligated to accept any such
proposal.  AM may  contract  for  services  from  Cytogen  or others in its sole
discretion.  If Cytogen  provides such services,  AM shall not be responsible to
Cytogen for amounts greater than the quoted amount for such services.
                  3.2 Cooperation Regarding FDA Matters. Prior to the respective
Combidex and Code 7228 Approval  Dates,  AM shall  provide the Combidex  Project
Team and the Code  7228  Project  Team with (i) an  opportunity  to  consult  in
advance with AM regarding clinical trials,  research and regulatory applications
to be conducted by, or for, AM or to be submitted  and filed  pursuant to the AM
Projects  after the date  hereof;  (ii) a reasonable  opportunity  to review and
comment on material

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communications  with or  submissions  to the FDA after the date hereof  prior to
their submission and filing;  and (iii) an opportunity to be present at meetings
between  the FDA and AM  concerning  Combidex  or Code  7228,  and shall  advise
Cytogen from time to time, but no less than on a monthly basis, of the status of
the Combidex and Code 7228 NDAs.  AM shall be under no  obligation to accept any
comments  or other  advice  provided  by  Cytogen,  and  Cytogen  shall  have no
liability to AM for the  consequences  to AM of accepting or rejecting  any such
comments or advice,  absent bad faith or willful misconduct by Cytogen.  Subject
to Section 3.3, AM shall promptly  advise Cytogen of any material  communication
which it may receive from the FDA regarding any Agent and Cytogen shall promptly
advise AM of any  communication  which it may receive from the FDA regarding any
Agent.  Except as expressly  provided in Section 3.5, or prior to the respective
Combidex and Code 7228 Approval Dates, Cytogen shall not make any communications
to the FDA  concerning  Combidex  or Code 7228 other than  through,  or with the
prior  consent  of, AM,  and AM shall  advise  Cytogen  before it shall make any
material communication with the FDA.
                  3.3 Post-Marketing  Regulatory  Communications.  It is  the
intent of the parties that AM shall, as the sponsor of the Feridex I.V. NDA, the
Combidex  NDA and the Code 7228 NDA, be  primarily  responsible  for  conducting
communications with the FDA regarding the Agents. Unless otherwise agreed by the
Parties,  except as expressly  provided in Section 3.5,  following  the Approval
Date with respect to any Agent,  neither AM nor Cytogen  shall make any material
communications to the FDA concerning such Agent without the prior consent of the
other unless such  communication  is required by law or regulation or is of such
an urgent and material  nature that such Party is not reasonably able to consult
with the other Party in advance of the time  communication  is to be made to the
FDA; in which case such Party shall inform the other Party of such communication
as soon as  practicable  thereafter.  AM shall use its  commercially  reasonable
efforts to obtain such status of the current circumstances  concerning any Agent
or NDA for Cytogen as will enable Cytogen to communicate with the FDA concerning
the Agent in the emergency circumstance described in this section.
                  3.4. Adverse  Event and Other  Reporting.  (a) If  Cytogen
learns of any information that might give rise to a recall or market  withdrawal
of any Agent or which might result in a field alert report  pursuant to the NDA,
or which  involves a complaint  about the  quality or purity of any Agent,  then
Cytogen shall promptly  provide notice thereof to AM. With respect to any Agent,
and as between  Cytogen and AM,  initiation of any recall or market  withdrawal,
any  investigation  of any product  complaint,  or the filing of any field alert
report  with  the  FDA,  shall  be the  responsibility  of AM,  and AM  shall be
responsible  for  and  handling  of all  interaction  with  the  FDA  and  other
governmental authorities.

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To the extent possible under the circumstances,  AM will inform Cytogen prior to
communicating  with the FDA  concerning any recall,  market  withdrawal or field
alert report involving any Agent distributed by Cytogen.
                  (b) If  in any case where  Cytogen's name is on the label
of an Agent and Cytogen is of the opinion that a report to a  regulatory  agency
must be made, or a recall or market  withdrawal  initiated,  and such action has
not been taken  diligently by AM, then Cytogen shall have the right to take such
action,  if required by law,  except that  Cytogen will not initiate a recall or
market withdrawal without first discussing the matter with the FDA.
                  (c) Any U.S. adverse event report or medical  complaint
received by Cytogen or AM relating to an Agent shall be promptly investigated by
Cytogen.  AM will notify  Cytogen within one working day of becoming aware of an
adverse event or medical complaint, providing appropriate contact information to
allow for  Cytogen  follow-up.  Adverse  events from  outside  the U.S.  will be
followed  up by AM.  Copies of  serious  (FDA  defined)  non-U.S.  cases will be
transmitted  to Cytogen within five (5) working days of AM becoming aware of the
case. Any such report that involves an event that is both serious and unexpected
(as those terms are defined by then applicable FDA regulations) will be promptly
reported to the FDA by Cytogen within fifteen (15) working days of receipt (term
definition  and reporting  requirements  to be modified to meet then  applicable
regulations).  Cytogen  will  provide AM with copies of  completed  serious (FDA
defined) U.S.  cases within five (5) working days of Cytogen  becoming  aware of
the case. Cytogen will prepare adverse event periodic reports in accordance with
FDA  regulations.  Periodic  reports will be forwarded to AM within  twenty-five
(25)  days of  close  of the  reporting  interval,  AM will be  responsible  for
submission of periodic and other  non-fifteen  (15) day reports to the FDA. Each
Party will provide the other with monthly  updates of adverse  event and product
complaint activity.
                  3.5 Advertising and Promotional Materials.
                           (a)  Prior  to  the  approval  of the  Combidex  NDA,
Cytogen will have the exclusive right to submit to the FDA
for approval,  and  negotiate  with the FDA with respect to the approval of, the
advertising  and  promotional  materials  to be  used  by  Cytogen  relating  to
Combidex.  If such direct contact with the FDA is not permitted by the FDA, then
AM, at no cost to Cytogen,  will act as Cytogen's agent in obtaining approval of
such  advertising and promotional  materials.  If AM acts as Cytogen's agent, AM
may make changes requested by the FDA, only after consultation with and approval
of Cytogen.

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                           (b) After the approval of the Combidex NDA,  Cytogen,
to the extent permitted by law and regulation, will
have the exclusive  right to submit to the FDA and  negotiate  with the FDA with
respect to Cytogen's advertising and promotional materials for Combidex.
                           (c) After the approval of the Code 7228 NDA, Cytogen,
to the extent permitted by law and regulation, will have the exclusive  right to
submit to the FDA and  negotiate  with the FDA with respect to Cytogen's
advertising and promotional materials for Code 7228 in the Field of Use.
                           (d) After the  Feridex  Start Date,  Cytogen,  to the
extent permitted by law and regulation, will have the exclusive right to submit
to the FDA and negotiate with the FDA with respect to Cytogen's advertising and
promotional materials for Feridex I.V.
                           (e) The rights granted Cytogen under this Section 3.5
with respect to any Agent shall terminate in
the event of the  termination  of the  exclusivity  of the  license  grant  with
respect to such Agent pursuant to Sections 8.2, 11, 10.2 or 15.3.
                           (f) Notwithstanding  anything to the contrary in this
Section 3.5, AM shall, solely relating to the use of the Trademarks,  have final
approval regarding  advertising and promotional materials to be submitted to the
FDA and any advertising and promotional materials approved by the FDA to confirm
that such  materials  comply  with AM's  policy  for the use of its  trademarks;
provided, however, that if AM does not object to any advertising and promotional
materials  proposed by Cytogen within five (5) days of communication  thereof to
AM by  Cytogen  in  writing,  AM  shall  be  deemed  to have  consented  to such
materials.
         4. Grants of Rights and Licenses.
                  4.l Rights and Licenses.  Subject to the terms and conditions
contained in this Agreement,  AM hereby grants to Cytogen and its Affiliates (a)
the  non-exclusive  right to use the Agent Technology for purposes of performing
the Cytogen Project; (b) the exclusive right and license to distribute,  market,
offer to sell and sell Combidex in the  Territory;  and (c) the exclusive  right
and  license  to  distribute,  market,  offer to sell and sell  Code 7228 in the
Territory  for the Field of Use. AM may request a proposal  from Cytogen for the
marketing of Code 7228 in the Territory for one or more indications  outside the
Field of Use. If Cytogen  notifies AM in writing  within five (5) business  days
after  receipt of such notice of its  interest in obtaining  such rights,  there
shall be a period of *****  (*****) days after such notice from Cytogen to AM in
which the Parties may negotiate and execute a final agreement  relating  thereto
or Cytogen may deliver a proposal,  binding on itself,  covering all the matters
set forth in AM's notice to Cytogen.  If the Parties do not execute an agreement
or if AM declines to accept any binding  proposal offered by Cytogen within such
***** (*****) day period, AM may in its sole

---------------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       10
<PAGE>
discretion  enter into a definitive  agreement  with a Third Party  covering the
subject matter of the notice from AM to Cytogen requesting a proposal; provided,
however, that AM shall not enter into a definitive agreement with a Third Party,
other than an Affiliate of AM, granting the rights to market and distribute Code
7228 in the Territory  for an indication  outside the Field of Use on terms less
advantageous  to AM than those  contained in any  proposal  made by, and binding
upon,  Cytogen to obtain such rights.  The foregoing  shall not restrict AM from
granting  rights to market  Code 7228 to an  Affiliate  of AM or  outside of the
Territory; nor shall there be any restriction on AM developing or marketing Code
7228 for any indication outside the Field of Use for its own account. If Cytogen
does not  make a  binding  proposal,  AM shall  have no  restrictions  as to the
matters set forth in its notice requesting a proposal.
                  4.2 Rights to Feridex I.V. Subject to the terms and conditions
contained in this  Agreement,  AM shall grant to Cytogen the exclusive right and
license  to  distribute,  market,  offer to sell and sell  Feridex  I.V.  in the
Territory if the Feridex Agreement terminates for any reason; provided, however,
such grant shall not be exclusive to the extent that AM has granted  rights to a
Third Party which will  survive the  termination  of the Feridex  Agreement  and
solely for the purpose of meeting AM's obligations under the survival provisions
of such Feridex Agreement. Such license shall be granted automatically as of the
Feridex Start Date.
                  4.3 License of Trademarks.
                           (a)  Subject to the terms and conditions of this
Agreement  and for as long  as the  license  granted  under  Section  4.1 or 4.2
remains  exclusive with respect to Combidex or Feridex I.V., AM hereby grants to
Cytogen an exclusive  right and license to use the  Trademarks  in the Territory
solely in connection with Cytogen's use, marketing, distribution, offer for sale
and sale of the Agent in the Territory to which the Trademark relates; provided,
however,  the right to use the Feridex I.V.  Trademark  shall not commence until
the Feridex Start Date; provided, further, however, that Cytogen may not use the
trademark  "Feridex"  in the  United  States for any  activities;  in the United
States, the word Feridex is to be used as "Feridex I.V."
                           (b)  Cytogen   shall  not  use  any  other  marks  in
connection with the marketing or sale of Agent or market or
sell Agent under any other trademark, whether registered or unregistered without
AM's prior  written  consent,  which  consent may be granted or withheld in AM's
sole discretion.
                           (c) Cytogen  undertakes  that the nature and quality
of Agent made by it, if any, or for it by any Person (other than AM) and
identified by the  Trademarks  shall at all times conform to the standards set
by and maintained by AM.

                                       11
<PAGE>

                           (d) Cytogen  acknowledges that AM is the owner of the
Trademarks.  Cytogen  shall not at any time do, cause to be done,  or permit any
act or thing inconsistent with, contesting or in any way impairing or tending to
impair,  such  ownership.  Cytogen  acknowledges  that nothing in this Agreement
shall give Cytogen any right, title or interest in the Trademarks other than the
right to use the Trademarks in accordance  with this  Agreement.  Cytogen agrees
that it will not  challenge  the title or ownership of AM to the  Trademarks  or
attack or contest the validity of the  Trademarks  and that any such  challenge,
attack or contest will be deemed a material breach of this Agreement.
                           (e) AM shall  register and maintain the Trademarks as
necessary to protect the Trademarks in the Territory during the term of this
Agreement.  If either Party learns of any  unauthorized use of the Trademarks by
others in the Territory,  such Party agrees to promptly notify the other Party
of such unauthorized use.
                           (f) Cytogen  shall not alter,  cover,  obfuscate  or
remove any  Trademark  placed by AM on any vials of Agent.  Cytogen shall at all
times display the Trademarks  with the trademark  symbol "R" and any proprietary
legend that AM shall determine to be reasonably  necessary to protect its rights
therein.  Cytogen shall not,  during the term of this  Agreement or  thereafter,
use,  adopt or seek to register the  Trademarks  or any  trademark or trade name
similar to or confusing with the Trademarks,  or any translation thereof, in any
jurisdiction.  Cytogen  further  agrees that, if it shall have obtained or shall
obtain in the future, in any jurisdiction,  any right,  title or interest in any
mark,  symbol or phrase which shall be identical to,  similar to or likely to be
confused with any Trademark, or any translation thereof, then Cytogen shall have
acted or shall act as an agent and for the benefit of AM for the limited purpose
of obtaining such  registrations and assigning such registration (and all right,
title and interest in such mark, symbol or phrase) to AM. Cytogen further agrees
to execute any and all instruments deemed by AM to be necessary to transfer such
registrations  or such  right,  title  or  interest  to AM.  Cytogen  shall  not
challenge,  or assist  others in  challenging,  the validity or ownership of any
Trademarks.
                  4.4  Sublicensees.  So long as the rights and licenses  remain
exclusive,  Cytogen  may  sublicense  any of the rights or  licenses  granted to
Cytogen in this  Article 4 to any  Person,  but not  without  the prior  written
consent of AM, such  consent not to be  unreasonable  withheld,  it being agreed
that  consent  shall  not be  deemed  to be  unreasonably  withheld  if, in AM's
judgment,  that consent  would not be in the  commercial  best  interests of AM;
provided, however, that Cytogen shall have the right, without the consent of AM,
to transfer  Agent to any Affiliate  for marketing and resale in the  Territory.
Cytogen shall be  responsible  for the payment of all payments and royalties due
and the making of reports under

                                       12
<PAGE>
this  Agreement by reason of sales of any Agent by its  Affiliates  and Approved
Sublicensees and their compliance with all applicable terms of this Agreement.

         5.  License Fees.
                  5.1  Payments.  In  consideration  of the rights and  licenses
granted  pursuant to Article 4, Cytogen shall issue,  on the Effective Date, two
million (2,000,000) shares of its common stock, par value $.01 per share, to AM.
A certificate or  certificates  representing  one million five hundred  thousand
(1,500,000) shares shall be delivered to AM on the date hereof. Two certificates
representing two hundred fifty thousand (250,000) shares each shall be delivered
to an escrow agent and placed in an escrow account to be distributed pursuant to
the terms set forth in the Escrow Agreement.
         Of the 1,500,000  shares not subject to escrow,  AM shall not transfer,
sell or otherwise  dispose of 1,200,000  shares;  provided,  however,  that this
restriction on transfer shall terminate with respect to 300,000 shares one month
after the  Effective  Date and an  additional  300,000  shares  on each  monthly
anniversary of the Effective Date thereafter.
         Such shares shall have been issued pursuant to a registration statement
filed with and declared effective by the U.S. Securities and Exchange Commission
and shall be freely  tradable  without  restriction  under the Securities Act of
1933, as amended.  Certificates  representing such shares shall be issued in the
name  of AM and  delivered  to AM upon  the  Effective  Date  and  shall  not be
inscribed  with any  restrictive  legends  relating  to  registration  under the
Securities Act.
         6.  Disclosure  of  Project  and Other  Information.  Each  Party  (the
"Delivering  Party") shall,  at the  reasonable  request of the other Party (the
"Receiving  Party"),  disclose and deliver to such Qualified Persons as shall be
designated  by the  Receiving  Party  to the  Delivering  Party,  as it  becomes
available,  all Agent Technology and such additional  information and data which
it may  develop  or  acquire  relating  to any Agent  and the  Agent  Technology
necessary  to enable the other Party to exercise  its then  existing  rights and
perform its then  existing  obligations  hereunder,  including  all  information
concerning  product  formulation and  information  provided to AM by Third Party
licensees of any Agent with respect to that Agent (including  regulatory filings
made by such licensees with  applicable  regulatory  authorities)  to the extent
such  disclosure is permitted under the terms of AM's agreements with such Third
Parties.  AM agrees  that to the  extent  that  disclosure  to  Cytogen  of such
information  provided to AM by Third Party  licensees  is not so  permitted,  AM
shall use commercially  reasonable  efforts to obtain such licensee's consent to
such  disclosure,  or to  otherwise  enable  Cytogen  to  obtain  access to such
information  (consistent with AM's agreements with such Third Party). Each Party
shall also  provide  the other with all  information  currently  known (or which
subsequently becomes known) to it regarding handling

                                       13
<PAGE>
precautions,  toxicity,  and hazards associated with the Agent. Said information
shall be provided in written  form.  If requested by Cytogen,  AM shall  provide
Cytogen with the appropriate Material Safety Data Sheet for the Agent.
         7.  Confidentiality.
                  7.1  Confidentiality.  Except as  expressly  permitted in this
Section 7.1, Cytogen shall maintain the confidentiality of all written or orally
disclosed Agent Technology,  Project Information,  information provided pursuant
to  Article  6  and  other  information  proprietary  to  AM  (collectively  "AM
Confidential  Material"),  and not disclose any such AM Confidential Material to
any Person  (including  its own  employees  and  agents),  other than  Qualified
Persons  who  have  signed   Cytogen's   standard   agreement   protecting   the
confidentiality  of Third Party information prior to such disclosure,  and shall
hold  the same in  confidence  and  shall  use the  same  only for the  purposes
specified  herein.  Notwithstanding  anything in this Agreement to the contrary,
Cytogen may disclose  such AM  Confidential  Information:  (i) to  Affiliates or
Approved  Sublicensees on a confidential basis to the extent necessary to enable
them to perform the Cytogen Project (to the extent permitted pursuant to Article
2) and (ii) to Affiliates or Approved  Sublicensees  on a confidential  basis to
the extent  necessary  to enable them to market (to the extent  permitted  under
Section 4.4 and 4.5) Agent in the  Territory;  provided,  however,  that Cytogen
shall  be  responsible  for  any  failure  by any  such  Affiliate  or  Approved
Sublicensee to (a) maintain the  confidentiality of such information  (except as
provided in Section 7.2), (b) use it only for such purposes  and/or (c) disclose
it only to employees who need to know such information for such purposes and who
have previously signed Cytogen's standard  agreement,  referred to above, or are
otherwise bound by obligations  substantially  similar to those in such standard
agreement, prior to such disclosure.
                  7.2.  Exceptions.
                           (a)  The obligations of confidentiality and
restrictions on use imposed upon Cytogen by Section 7.1 shall not apply to any
AM Confidential Information that was:
                                     (i) in the public domain before the
Effective Date or subsequently came into the public domain other than through
any act or omission of Cytogen; or
                                    (ii) lawfully received by Cytogen without an
obligation of confidentiality from a source other than AM; or
                                    (iii)disclosed  with  the  prior  written
approval of AM.
                           (b) Notwithstanding   anything   to  the   contrary
contained  in  this   Agreement,   Cytogen  and  its   Affiliates  and  Approved
Sublicensees may disclose or deliver any such AM Confidential Information (i) to
any government agency or official to the extent that such disclosure or delivery
is

                                       14
<PAGE>
necessary for  compliance  with any law or regulation or (ii) to any Third Party
if required to be disclosed by  governmental  or judicial  order,  in which case
Cytogen  shall  promptly  notify  AM and  take  reasonable  steps to  assist  in
contesting such order or in protecting AM's rights prior to disclosure.
                  7.3 Project Information Disclosed to AM. AM shall be obligated
to maintain  the  confidentiality  of any  Project  Information,  marketing  and
business plans and strategies developed by Cytogen and disclosed or delivered to
AM by Cytogen to the same  extent that  Cytogen is  obligated  to  maintain  the
confidentiality of Project  Information  pursuant to Section 7.1, except that AM
may share information on adverse events and Project Information with the FDA and
may share such information,  on a confidential basis, with Third Party licensees
of Agent if (a) such  Third  Party  licensee,  or AM,  has  provided  comparable
information  developed by or on behalf of, or owned or Controlled by, such Third
Party licensee,  to Cytogen,  or (b) such Third Party licensee has agreed to the
disclosure of such comparable information to Cytogen when it is developed.  Such
obligation  on the part of AM  shall  be  subject  to the  same  exceptions  and
conditions that are applicable to Cytogen's  maintenance of the  confidentiality
of Project Information pursuant to Section 7.2.
                  7.4 This Article 7 shall survive termination of this Agreement
for any reason for a period of five (5) years.
         8.  Infringement Actions.
                  8.1 Infringement  of  Agent   Technology  or   Manufacturing
Technology.  Cytogen and AM shall promptly notify each other of any infringement
or  misappropriation  of any patent or proprietary  right that forms part of the
Agent Technology or  Manufacturing  Technology and shall provide each other with
any  available  evidence  of such  infringement  or  misappropriation.  AM shall
promptly  investigate  all such alleged  infringement  or  misappropriation  and
advise  Cytogen  about any action it  intends  to take  within two (2) months of
notice from Cytogen or discovery by AM.  Cytogen  shall not institute any action
during this period or during the  pendency  of any action  instituted  by AM. AM
shall have the right, but not the obligation,  at its sole cost and expense,  to
take all reasonable  steps necessary to enjoin and prevent such  infringement or
misappropriation and/or to seek damages as a consequence thereof,  including the
institution and maintenance of legal or equitable proceedings.  If AM determines
that it is necessary for Cytogen to join in any such suit, action or proceeding,
Cytogen shall,  at AM's expense,  execute all papers and perform such other acts
as may be reasonably  required and may, at its option, be represented by counsel
of its  choice;  provided  that AM shall  control the  decisions  related to the
litigation.  If AM shall  cause  Cytogen  to join in any such suit,  action,  or
proceeding,  then  AM  shall  reimburse  Cytogen  for  all  reasonable  expenses
(including  reasonable  attorneys'  fees)  incurred in connection  with any such
suit, action or proceeding,  as such expenses are incurred. If AM lacks standing
to bring any such suit, action or proceeding, then Cytogen shall, at the request
of AM, do so upon AM's  undertaking  to  indemnify  and hold it harmless (to the
extent permissible by law) from all consequent liability and to reimburse it for
all reasonable expenses (including reasonable attorneys' fees) incurred in

                                       15
<PAGE>
connection  therewith,  as such  expenses are  incurred;  provided that AM shall
control the decisions related to the litigation. Any amount received by AM in or
as a  result  of any  proceeding  referred  to in the  fourth  sentence  of this
paragraph shall be paid, first, to reimburse AM for any  out-of-pocket  expenses
incurred  in  connection  with such  proceeding,  and next to  reimburse  AM and
Cytogen for any damages  actually  suffered by either  party as a result of such
infringement  or  misappropriation   (other  than  consequential  or  incidental
damages,  such as loss of profits),  and any additional  amounts remaining after
such application shall be shared equally by AM and Cytogen.  Notwithstanding the
foregoing,  AM shall not be  required  to directly  or  indirectly  contest,  or
intentionally  assist in any contest of, any patent or other  proprietary  right
licensed  to AM if AM would  thereby  breach  the terms of its  license  to such
patent or other proprietary interest.
                  After  evaluating such claims,  if AM does not, at its option,
within such period of two (2) months,  either  bring suit or cause such  alleged
infringement or  misappropriation  to cease,  then Cytogen shall have the right,
but not the obligation,  to prosecute all substantial  claims of infringement or
misappropriation  of any of  said  patents  or  proprietary  rights,  at its own
expense and for its own benefit, in the name of AM, if necessary,  and AM agrees
to  execute  any  necessary  papers for such suits (at  Cytogen's  expense).  If
Cytogen  determines that it is necessary for AM to join in any such suit, action
or proceeding,  AM shall, at Cytogen's  expense,  execute all papers and perform
such  other  acts as may be  reasonably  required  and may,  at its  option,  be
represented  by counsel of its choice;  provided  that Cytogen shall control the
decisions  related to the  litigation.  If Cytogen shall cause AM to join in any
such suit,  action,  or  proceeding,  then  Cytogen  shall  reimburse AM for all
reasonable   expenses  (including   reasonable   attorneys'  fees)  incurred  in
connection  with any such  suit,  action or  proceeding,  as such  expenses  are
incurred.  Any  amount  received  by  Cytogen  in or as a  result  of  any  such
proceeding  shall be paid,  first,  to reimburse  Cytogen for any  out-of-pocket
expenses  incurred in  connection  with such  proceeding,  and next to reimburse
Cytogen  and AM for any damages  actually  suffered by each Party as a result of
such infringement or  misappropriation  (other than  consequential or incidental
damages,  such as loss of profits),  and any additional  amounts remaining after
such application shall be shared equally by Cytogen and AM.

                                       16
<PAGE>

                  8.2      Infringement of Patents of Third Parties.
                           (a)  If, in the Collective Opinion of Patent Counsel,
a patent or patents  covering the  manufacture,  use or sale of any Agent should
issue or have issued in the United States in the Field of Use, if applicable, to
a Third Party,  AM shall attempt to negotiate a license from such Third Party to
permit the  manufacture,  use and sale by AM and its licensees of such Agent. If
AM shall  obtain a license  to any such  patent or  patents  covering  any Agent
directly from such Third Party,  Cytogen  shall receive a sublicense  under such
license,  and Cytogen  shall,  on a quarterly  basis,  reimburse AM in an amount
equal  to  *****  percent  (*****%)  of AM's  cost of  obtaining  such  license,
including any license fees and royalty payments (excluding such portion, if any,
of such  cost  that is  attributable  to sales by AM  and/or  its  licensees  of
products  other than any Agent or outside  the Field of Use, if  applicable,  to
sales of any  Agent by AM and/or  its  licensees  outside  the  Territory  or to
considerations  other  than the sale of Agent in the  Territory).  To the extent
that the total payment to AM in any fiscal quarter under the preceding  sentence
would exceed ***** percent  (*****%) of the total Royalty  payments from Cytogen
that are due to AMfor such quarter  pursuant to Section 10.1, such excess amount
shall not be payable in that quarter,  and shall instead be carried  forward and
paid quarterly as soon thereafter as is possible without causing the payments by
Cytogen under this paragraph in any quarter to exceed ***** percent  (*****%) of
the total  Royalty  payments  from  Cytogen  that are due to AM for such quarter
pursuant to Section  10.1. If AM is not  successful in obtaining  such a license
within three months of the Collective Opinion of Patent Counsel,  and if Cytogen
thereafter obtains such a license, the Parties agree that ***** percent (*****%)
of any  consideration  paid by Cytogen  therefor,  including  royalties  paid by
Cytogen  pursuant to such license and license fees paid to obtain such  license,
shall be creditable  against the Royalty  payments due from it to AM pursuant to
Section 10.1 with respect to the Agent or Agents to which the Collective Opinion
of  patent  Counsel  relates;   provided,   however,   that  Cytogen  shall  use
commercially reasonable efforts to enter into any such licensing arrangements on
the most favorable terms then available.  In no event, however,  shall the total
credit  available to Cytogen in any fiscal quarter under this  paragraph  exceed
*****  percent  (*****%) of the total  Royalty  payments from Cytogen that would
have been due to AM for such  quarter  (prior to giving  effect to such  credit)
pursuant to Section 10.1 of this Agreement.  To the extent any credit  available
to Cytogen under this Agreement cannot be totally  exhausted in any period,  the
balance of such credit shall be carried forward and used in future periods until
it is so  exhausted.  If (i) AM and/or  Cytogen are unable to obtain the license
referred  to above  within  ninety  (90) days  after the date of the  Collective
Opinion of Patent Counsel, or (ii) the consideration to be paid to a Third Party
for such  license  would (x) exceed  *****  percent  (*****%) of Agent Net Sales
relating  to such Agent that  allegedly  infringes  the  patents or  proprietary
rights for the six-month period ending prior to the date of

---------------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       17
<PAGE>
the  Collective  Opinion of Patent  Counsel or (y) make such Agent  commercially
unviable  for either  Party,  then either  Party shall have the right for thirty
(30) days after the  expiration  of such ninety (90) day period to terminate the
licenses  granted  hereunder  with respect to such Agent and the  obligation  to
market and supply such Agent. In the event that the foregoing  applies to two or
more  Agents,  either  party shall have the right for thirty (30) days after the
expiration of such ninety (90) day period to terminate this Agreement by written
notice to the other Party  hereto.  During the period  from the  issuance of the
Collective  Opinion  of Patent  Counsel  until such time as a license is secured
pursuant to this Section 8.2(a) or a termination as described above is effected,
Cytogen  shall not be obligated to meet its minimum  revenue  obligations  under
Section 10.2, AM shall not be required to supply the  applicable  Agent pursuant
to the  Supply  Agreement  and AM  shall  have no  indemnity  obligations  under
Section8.2(b)  or (c) hereof for sales by  Cytogen  of such  Agent  during  such
period.  Any failure to deliver  Agent as a consequence  of this Section  8.2(a)
shall not be deemed a breach of the Supply Agreement, shall not give rise to any
right of Cytogen to manufacture any Agent and any cure periods shall be extended
during this period.
                           (b)  Should  a  Third   Party   institute   a  patent
infringement  suit against Cytogen or an Affiliate  thereof in the United States
during the term of this Agreement  charging that their sale or  manufacture,  if
permitted  under  the  Supply  Agreement,  of any  Agent  in the  United  States
infringes one or more United  States  patents owned by or licensed to such Third
Party,  Cytogen  shall so notify AM. AM shall have the option at its  expense to
control the defense of such suit, in which case Cytogen shall execute all papers
and perform other acts as AM may reasonable  request. AM shall reimburse Cytogen
for any out-of-pocket  expenses in connection with the suit. If AM elects not to
control the defense,  then, except as set forth in paragraph (c) below,  Cytogen
shall have the right to reduce the  Royalty  amount  payable to AM  pursuant  to
Section 10.1 of this  Agreement  with respect to such Agent up to *****  percent
(*****%) of the amount of reasonable  out-of-pocket costs,  including legal fees
incurred by Cytogen,  in defending or settling such suit. In no event,  however,
shall the total  credit  available to Cytogen in any fiscal  quarter  under this
paragraph  exceed *****  percent  (*****%) of the total  Royalty  payments  from
Cytogen that would have been due to AM for such quarter  (prior to giving effect
to such credit)  pursuant to Section 10.1 of this  Agreement.  To the extent any
credit available to Cytogen under this Agreement cannot be totally  exhausted in
any  period,  the balance of such  credit  shall be carried  forward and used in
future periods until it is so exhausted.  Such reimbursement or credit shall not
include the cost of Cytogen's  in-house  attorneys' or other Cytogen  employees'
time. If such Third Party suit is not successfully defended by Cytogen or AM, AM
shall indemnify Cytogen for ***** percent (*****%) of all

-----------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       18
<PAGE>
damages  which may be finally  awarded  against  Cytogen  based upon such patent
infringement. If a license is negotiated, the payments for such license shall be
controlled by the provisions of paragraph (a) above.
                           (c)  Should  a  Third   Party   institute   a  patent
infringement suit against AM, or against AM and Cytogen
jointly,  in the United States based on: (i) any  modification or enhancement of
Agent or of the Agent Technology or Manufacturing Technology, or (ii) the method
of the manufacture, finish or use of the Agent; which in either case (i) or (ii)
is not the result of AM's acts but that of Cytogen or its Affiliates or Approved
Sublicensees,  Cytogen  shall  reimburse  AM for *****  percent  (*****%) of the
amount of reasonable  out-of-pocket costs,  including legal fees incurred by AM,
in  defending  such  suit and AM shall be  entitled  to  control  such  defense;
provided,  however,  that  Cytogen  shall  be able to  participate  fully in the
preparation  of such  defense  and that AM shall  make no  settlement  agreement
affecting  material rights held by Cytogen without the consent of Cytogen.  Such
credit  shall  not  include  the cost of AM's  in-house  attorneys'  or other AM
employees'  time.  If such Third  Party  suit is not  successfully  defended  by
Cytogen or AM,  Cytogen  shall  indemnify AM for *****  percent  (*****%) of all
damages which may be finally awarded against it based upon patent  infringement.
If a license is negotiated, the payments for such license shall be controlled by
the provisions of paragraph (a) above.
                           (d)  Nothing in this  Article  shall  prevent  either
Party, at its own expense, from obtaining any license or
other rights from Third Parties it deems appropriate in order to permit the full
and unhindered exercise of its rights under this Agreement.
                           (e) If (i) as a  result  of any  claim  made  against
either Party during the term of this Agreement or the
Supply Agreement  alleging that the manufacture and sale to Cytogen of any Agent
by AM or the manufacture,  use or sale of any Agent by Cytogen (in the case of a
claim  against  Cytogen)  infringes or  misappropriates  any patent or any other
proprietary  right of a Third Party, a judgment is entered against such Party by
a court of competent jurisdiction from which no appeal can be or is taken within
the time permitted for appeal,  such that AM cannot manufacture an Agent or sell
the Agent to Cytogen in the United  States (in the case of a claim  against AM),
or that  Cytogen  cannot  sell an Agent in the  United  States (in the case of a
claim  against  Cytogen),  without  infringing  the patent or other  proprietary
rights of such Third  Party and (ii) (A) AM and/or  Cytogen are unable to obtain
the license  referred to in  subsection  (a) above within ninety (90) days after
such entry of judgment,  or (B) such  consideration  to be paid to a Third Party
for such  license  would (x) exceed  *****  percent  (*****%) of Agent Net Sales
relating to such Agent that infringes the patents or proprietary  rights for the
six-month period ending prior to the time such infringement or  misappropriation
complaint is filed in a court of

---------------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       19
<PAGE>
competent  jurisdiction or (y) make such Agent  commercially  unviable to either
Party,  then  either  Party  shall have the right for thirty (30) days after the
expiration  of such ninety (90) day period to  terminate  the  licenses  granted
hereunder with respect to such Agent and the obligation to market such Agent. In
the event that the foregoing  applies to two or more Agents,  either party shall
have the right for thirty (30) days after the expiration of such ninety (90) day
period to terminate this Agreement by written notice to the other Party hereto.
                  8.3 Limitation of Remedies.  The provisions of Section 8.2 set
forth the Parties'  only  remedies  against each other in respect of the subject
matter thereof, absent bad faith or willful misconduct. In no event shall either
Party  be  liable  to  the  other  under  this  Article  8  for   incidental  or
consequential damages (including, but not limited to, loss of profits or loss of
use damages).
         9.  Ownership.  (a) AM shall be the sole and exclusive owner of (i) the
Agent Technology, subject to Cytogen's rights pursuant to Article 4 hereof, (ii)
the Manufacturing Technology,  subject to Cytogen's rights pursuant to Article 4
hereof, and (iii) the Project Information obtained and/or developed  exclusively
by AM, subject to Cytogen's  rights pursuant to Article 4 hereof.  Cytogen shall
be the sole and exclusive owner of Project Information  developed exclusively by
Cytogen,  and such  information  may not be used by AM or  licensed by AM to any
person  without  Cytogen's  consent  except as otherwise  provided in Article 7.
Project Information, other than patents and patent applications, obtained and/or
developed  jointly by AM and Cytogen shall be deemed owned jointly and severally
by them,  without an  obligation of  accounting.  Any  inventions  conceived and
reduced to practice for which a patent is filed  having  named  investors on the
patent including both one or more AM employees and one or more Cytogen employees
("Joint  Invention(s)"),  shall belong jointly to AM and Cytogen.  AM shall have
the first right, at its own expense,  to prepare,  file,  prosecute and maintain
patent  application(s) and patent(s) for Joint Invention(s) in the United States
and foreign countries.  AM shall provide Cytogen with a copy of such application
at least  fifteen (15) days prior to filing and a filed copy within  thirty (30)
days of filing.  In the event AM elects not to prepare,  file,  prosecute and/or
maintain any such patent application(s) and/or patent(s) in any jurisdiction, AM
shall notify  Cytogen at least  thirty (30) days prior to taking,  or not taking
any action which would result in abandonment, withdrawal or lapse of such patent
application(s)  or  patent(s).  In any  event,  Cytogen  shall have the right to
prepare, file, prosecute and maintain, at its own expense, patent application(s)
and  patent(s)  on any Joint  Invention(s)  for  which AM elects  not to seek or
maintain  patent  protection in the United  States.  Title to all patents issued
thereon, regardless of which party filed the corresponding application(s), shall
be jointly held by AM and Cytogen.  AM's rights to a Joint Invention are subject
to Cytogen's rights as a joint owner and the rights

                                       20
<PAGE>
and licenses granted to Cytogen in this Agreement. Neither party shall grant any
rights to a Joint Invention to a Third Party which would limit the other party's
rights as a joint owner of the Joint Inventions.
                           (b)  AM shall pay any fees necessary to maintain the
Patents in effect. If AM determines,  in its sole judgment,  not to maintain any
of the  Patents,  it shall  timely  notify  Cytogen so that  Cytogen may pay the
necessary  maintenance  fees  on  AM's  behalf.  If  Cytogen  elects  to pay the
maintenance fees, AM shall execute any documents necessary to assign such Patent
to Cytogen for such period as Cytogen  continues to pay such  maintenance  fees.
Cytogen's  right set forth in this Section 9(b) shall be the sole and  exclusive
remedy for AM's failure to maintain any Patent.
         10.  Supply; Royalties.
                  10.1  Payment.   In   consideration   of  the  rights  granted
hereunder,  Cytogen shall pay to AM a royalty (the "Royalty") in an amount equal
to ***** percent  (*****%) of Agent Net Sales, on the payment terms set forth in
subsection  12.1;  provided  that such Royalty shall be reduced to ***** percent
(*****%) for any Agent if Cytogen's license under this Agreement is converted to
a  non-exclusive  license  with  respect  to such  Agent and shall be reduced to
*****% for any Agent upon the  expiration of the last to expire Patent  covering
such Agent.  Such  Royalty  shall be payable as long as AM  continues to provide
Agent to Cytogen  pursuant to the Supply  Agreement.  Furthermore,  such Royalty
shall also be payable,  if  applicable,  as long as Cytogen  manufactures  Agent
pursuant to the Supply Agreement.
                  10.2 Minimum Revenues.  (a) With respect to Combidex, for each
full  twelve-month  period  beginning  on the  first day of the  fiscal  quarter
commencing  after the Combidex  Approval Date, the total amount of revenue to AM
resulting from royalties on Agent Net Sales of Combidex under this Agreement and
payments for Combidex under the Supply Agreement shall not be less than:
                  First Year                         $*****
                  Second Year                        $*****
                  Third Year                         $*****
                  Fourth Year                        $*****
                  Fifth Year                         $*****
                  Thereafter                         *****
         If such revenues are less than such amount in any period, AM shall have
the right to elect that the licenses  and rights  granted  under this  Agreement
with respect to Combidex be converted to non-exclusive licenses and rights.

---------------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       21
<PAGE>
                           (b)  With  respect  to  Code  7228,   for  each  full
twelve-month  period  beginning  on the first day of the  third  fiscal  quarter
commencing  after the Code 7228 Approval Date, the total amount of revenue to AM
resulting from  royalties on Agent Net Sales of Code 7228 and Combidex  combined
under this  Agreement and payments for Combidex and Code 7228 combined under the
Supply Agreement by Cytogen shall not be less than:
                  First Year                         $*****
                  Second Year                        $*****
                  Third Year                         $*****
                  Fourth Year                        $*****
                  Fifth Year                         $*****
                  Thereafter                         *****
         If such revenues for Code 7228 and Combidex combined are less than such
amount in any  period,  AM shall have the right to elect that the  licenses  and
rights  granted under this  Agreement  with respect to Code 7228 be converted to
non-exclusive licenses and rights.
                           (c) If Combidex  may not be marketed  and sold due to
FDA action or any  reason  unrelated  to an action or  inaction  of Cytogen  and
outside its  control,  the Parties  shall  negotiate in good faith to revise the
minimum revenue targets set forth in Section 10.2(b).
                           (d) The  requirement  to achieve the minimum  revenue
targets set forth above shall be suspended during any
period when (i) a Third Party is marketing a Competing  Product in the Territory
that competes with Combidex or (for purposes of Section 10.2(b) only) Code 7228,
such Competing Product has attained a market share of twenty-five  percent (25%)
or greater in any calendar quarter  (measured as sales of such Competing Product
divided by sales of all products  which are Competing  Products and the relevant
Agent),  Cytogen has notified AM pursuant to Section  8.1(a) that such Competing
Product infringes some portion of the Agent  Technology,  and AM has elected not
to institute  any action to prohibit the  marketing of such  Competing  Product,
(ii) AM fails to supply a sufficient amount of Agent to meet the minimum revenue
targets or (iii) as provided in Section 8.2(a).
                           (e) If AM  converts  any  license to a  non-exclusive
license  pursuant to this Section 10.2, the minimum revenue  requirement for any
such  Agent  shall  terminate  and  Cytogen  shall  not be  required  to use its
commercially reasonable efforts to market or sell such Agent.
         11. Obligation of Cytogen to Market Agent.
                  From and after the respective Combidex or Code 7228 Approval
Date, Cytogen shall use

---------------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       22
<PAGE>

***** efforts to market and sell Combidex  and/or Code 7228, as the case may be,
in the Territory.  From and after the date which is two months after the Feridex
Start  Date,  Cytogen  shall use *****  efforts to market  Feridex  I.V.  in the
Territory. As part of said obligation, Cytogen agrees that, it will commence the
marketing of each Agent as soon as  practicable,  but in any event not more than
sixty (60) business  days  following any Approval Date or the Feridex Start Date
(each, a "Market Launch  Date").  If Cytogen fails to commence  marketing of any
Agent within such period,  in addition to any other remedy it may have,  AM will
have the option to terminate  the licenses and rights  granted  under  Article 4
with respect to that Agent. If AM chooses to terminate such rights and licenses,
AM shall so notify Cytogen.  Cytogen's obligations to market and AM's obligation
to supply such Agent shall cease and each party shall follow the  procedures  of
Section 15.4(b) with regard to the return or destruction of any Agent Technology
or other  information.  Subsequent to the Effective  Date,  the parties agree to
cooperate and  coordinate  their  activities in connection  with any such Market
Launch Date.
         12. Reports and Accounting for Agent.
                  12.1     Payments and Monthly Reports for Agent Net Sales.
                  Within  thirty  (30) days  after  the  close of each  calendar
quarter after Cytogen commences sales of any Agent,  Cytogen shall deliver to AM
a report  containing an accounting to AM with respect to all Agent Net Sales for
such  quarter.  Such report shall  indicate the amount and  calculations  of any
payments of  Royalties  due to AM pursuant  hereto,  and the amount of Agent Net
Sales  separately for each Agent, and shall be accompanied by payment thereof in
full of such Royalties.  If no payment is due for any calendar quarter,  Cytogen
shall so report. Interest on all payments due to AM and not paid by Cytogen when
due shall  accrue at a rate of 12% per annum from the due date,  or such maximum
rate  allowed by law if less.  No sales of Agent to any Person  shall be counted
more than once in the  calculation  of Agent Net Sales,  and no  payments  under
Article  10 shall be payable  more than once with  respect to any sale of Agent,
i.e., payments due AM with respect to any sale of Agent shall not be cumulative.
                  12.2 Annual  Reports.  Cytogen  shall cause to be delivered to
AM,  within  ninety (90) days after the end of each  fiscal  year of Cytogen,  a
report certified by an authorized financial officer of Cytogen setting forth the
basis upon which payments were calculated  hereunder during the preceding fiscal
year and the amount of payments  payable  hereunder  during and with  respect to
such fiscal year.
                  12.3  Records.  Cytogen  shall keep and maintain in accordance
with U.S. generally accepted accounting principles, consistently applied, proper
and complete records and books of account

-----------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.

                                       23
<PAGE>
with  respect to the  payments  made or due pursuant to Article 10 but no longer
than three (3) years after the year in which such Agent Net Sales  occurred.  AM
shall have the right,  upon reasonable prior written notice to Cytogen but in no
event less than ten (10) days notice,  during normal business hours,  and at its
own expense to examine or to have examined by a certified public accountant,  or
other person  reasonably  acceptable to Cytogen,  pertinent books and records of
Cytogen,  solely for the purpose of determining the correctness of payments made
hereunder.
                  12.4 Currency.  All payments and royalties  payable under this
Agreement  shall be paid in U.S.  dollars in immediately  available  funds to an
account designated by AM.
         13.  Compliance with Regulations.
                  Each Party will comply with, and cause any of their Affiliates
performing any of their respective  rights or obligations  hereunder (and in the
case of Cytogen,  will use its  reasonable  best  efforts to cause its  Approved
Sublicensees) to comply with, all laws and regulations applicable to such rights
and obligations.
         14.  Representations  and  Warranties;  Limitation of Liability.  The
following  provisions relate to representations  and warranties by the Parties
made in connection with this Agreement and the Supply Agreement:
                  14.1 By AM.  AM represents and warrants to Cytogen as follows:
                           (a)  AM  is a  corporation  duly  organized,  validly
existing, and in good standing under the laws of the state of Delaware.
                           (b) AM has all  necessary  corporate  power  to enter
into and perform its  obligations  under each of the Cytogen  Agreements and has
taken all necessary corporate action under the laws of the state of Delaware and
its  certificate  of  incorporation  and by-laws to authorize  the execution and
consummation of the Cytogen Agreements.
                           (c) AM's  performance  under and in  accordance  with
each of the Cytogen  Agreements  will not result in a breach of or  constitute a
default  under any contract  between AM and a Third Party,  and will not violate
any United States statute, rule or governmental regulation applicable to AM.
                           (d) AM is the sole and  absolute  owner of all of the
Patents and the Trademarks,  and has the right to grant the exclusive rights and
licenses granted under Article IV, subject to the Feridex Agreements.
                           (e) To the best of AM's  knowledge,  all the  Patents
and Trademarks are in full force and effect and have been maintained to date.

                                       24
<PAGE>

                           (f) Other than  litigation  disclosed  in its filings

with the  Securities  and Exchange  Commission,  AM is not aware of any asserted
claim or demand,  or  unasserted  claim or demand which is likely to be asserted
against the Patents or Trademarks;

                           (g) AM has not entered  into
any agreement  with any Third Party which is in conflict with the rights granted
to Cytogen or the obligations assumed by AM pursuant to the Cytogen Agreements.
                           (h) Other than  litigation  disclosed  in its filings
with the  Securities  and Exchange  Commission,  AM is not aware of any asserted
claim or demand,  or Third Party unasserted claim or demand,  which is likely to
be  asserted,  which AM  considers  valid,  which would  materially  affect AM's
ability to perform its obligations under the Cytogen Agreements.
                  14.2  By Cytogen.  Cytogen represents and warrants to AM, as
follows:
                                    (a) Cytogen is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware.
                                    (b)  Cytogen  has  all  necessary  corporate
power to enter into and perform its obligations under the Cytogen Agreements and
has taken all  necessary  corporate  action  under the laws of Delaware  and its
charter and by-laws to authorize the execution and  consummation  of each of the
Cytogen Agreements.
                                    (c)  Cytogen's   performance  under  and  in

accordance with each of the Cytogen Agreements will not result in a breach of or
constitute a default under any contract  between Cytogen and a Third Party,  and
will not violate any United  States  statute,  rule or  governmental  regulation
applicable to Cytogen.
                                    (d)  Cytogen   has  not  entered   into  any
agreement  with any Third Party which is in conflict with the rights  granted to
AM or the obligations assumed by Cytogen pursuant to the Cytogen Agreements.
                                    (e)  Cytogen  is not  aware of any  asserted
claim or demand or Third Party  unasserted claim or demand which is likely to be
asserted,  which Cytogen  considers  valid,  and which would  materially  affect
Cytogen's  ability to perform its obligations under this Agreement or the Supply
Agreement.
                                    (f) The authorized  capital stock of Cytogen
consists  of  250,000,000  shares of  common  stock,  par  value  $.01 per share
("Cytogen  Common Stock"),  and 5,400,000  shares of preferred  stock, par value
$.01 per share ("Cytogen  Preferred  Stock"),  of which Cytogen Preferred Stock,
200,000  shares have been  designated  Series C Junior  Participating  Preferred
Stock, $.01 par value. At

                                       25

<PAGE>
the close of  business  on August 23,  2000,  (i)  73,166,056  shares of Cytogen
Common  Stock were issued and  outstanding,  all of which were  validly  issued,
fully paid and nonassessable,  and free of preemptive rights,  (ii) no shares of
Cytogen  Common  Stock were held in the  treasury  of Cytogen,  (iii)  5,682,837
shares of Cytogen  Common Stock were  reserved for future  issuance  pursuant to
stock option  arrangements of Cytogen  (collectively,  the "Cytogen Stock Option
Plans"). No shares of Cytogen Preferred Stock are issued and outstanding.  As of
the date of this  Agreement,  except as set forth  above,  no shares of  capital
stock or other voting  securities of Cytogen were issued,  reserved for issuance
or  outstanding.  As of the date of this  Agreement,  except  for stock  options
covering not in excess of 3,974,336  shares of Cytogen Common Stock issued under
the Cytogen  Stock Option Plans  (collectively,  the "Cytogen  Stock  Options"),
rights to purchase covering approximately 371,950 shares of Cytogen Common Stock
under the Cytogen  Employee Stock Purchase  Plan,  warrants to purchase  328,012
shares of Cytogen Common Stock,  approximately  923,534 shares of Cytogen Common
Stock  underlying a certain  convertible  promissory  note and 950,000 shares of
Cytogen  Common  Stock  issuable,  in  certain  circumstances,  pursuant  to  an
acquisition  agreement,  there  are  no  options,  warrants,  calls,  rights  or
agreements  to which Cytogen or any of its  subsidiaries  is a party or by which
any of them is bound  obligating  Cytogen or any of its  subsidiaries  to issue,
deliver or sell, or cause to be issued,  delivered or sold, additional shares of
capital stock of Cytogen or  obligating  Cytogen or any of its  subsidiaries  to
grant, extend or enter into any such option,  warrant, call, right or agreement.
Cytogen  does  not  have  any  outstanding  bonds,  debentures,  notes  or other
obligations the holders of which have the right to vote (or convertible  into or
exercisable  for securities  having the right to vote) with the  stockholders of
Cytogen on any matter.
                                    (g) The shares of Cytogen Common Stock to be
issued  in  accordance  with  this  Agreement  will  be,  upon  issuance,   duly
authorized,  validly  issued,  fully paid and  nonassessable,  with no  personal
liability attaching to the ownership thereof. Such issuance of shares of Cytogen
Common Stock will be free of any  restrictions  on transfer  imposed by Cytogen,
other than those contemplated by this Agreement.  There are no preemptive rights
or other anti-dilution rights which would become effective upon or prohibit such
issuance of shares of Cytogen Common Stock.
                                    (h)   No   stop   order    suspending    the
effectiveness of the registration  statement covering the issuance of the shares
of Cytogen  Common Stock to AM under the terms of this Agreement has been issued
under  the  Securities  Act  and no  proceedings  for  that  purpose  have  been
instituted or are pending or, to the knowledge of Cytogen,  are  contemplated by
the Securities and Exchange Commission.

                                       26
<PAGE>
                  14.3  Limitations.  Notwithstanding  the foregoing,  Cytogen's
sole remedies if it is alleged or determined  that Cytogen's  exercise of any of
its rights  hereunder would infringe upon, or conflict with, any patent or other
proprietary  right of any Third Party shall be as set forth in Section  8.2, and
AM's sole remedies if it is alleged or  determined  that AM's exercise of any of
its rights  hereunder  would  infringe  upon,  or conflict  with,  any patent or
proprietary  right of any  Third  Party  shall be as set forth in  Section  8.2.
Except in connection with a breach of the confidentiality obligations of Article
VII hereof or in connection  with an  infringement  or  misappropriation  by one
Party of the intellectual  property of the other,  neither Party shall be liable
to the other for any indirect, incidental,  special, or consequential damages in
connection with this Agreement, however caused, whether based on contract, tort,
warranty,  or other legal  theory,  and even if such Party has been  informed in
advance  of the  possibility  of such  damages or such  damages  could have been
reasonably foreseen by such Party.
         15.  Term and Termination.
                  15.1 Term. This Agreement shall continue in force until August
__, 2010,  with rolling  automatic  successive  renewal periods of an additional
five (5) years,  unless notice of non-renewal or termination is given by Cytogen
or AM ninety  (90) days prior to the  commencement  of any renewal  period,  and
unless and until terminated pursuant to the provisions of Section 15.2.
                  15.2  Termination Events.  This Agreement may be terminated:
                           (a)  at any time, by Cytogen or AM, in accordance
with and to the extent permitted by the provisions of Section 8.2 hereof;
                           (b) at any time,  by Cytogen or AM if the other Party
shall materially  breach any of the terms,  conditions and agreements  contained
herein  to  be  kept,  observed,   and  performed  by  it,  in  which  case  the
non-breaching  Party may  terminate  this  Agreement  at its option and  without
prejudice to any of its other legal and equitable  rights or remedies  except as
specifically provided in this Agreement, by giving the Party which committed the
breach  sixty (60) days  written  notice,  particularly  specifying  the breach,
unless  the  notified  Party  within  such  sixty (60) days shall have cured the
breach;
                           (c) at any time, if any  assignment  shall be made by
either  Party  for the  benefit  of  creditors,  or if a  receiver,  trustee  in
bankruptcy  or similar  officer  shall be appointed to take charge of all of the
property of either Party,  or if either Party files a voluntary  petition  under
applicable  bankruptcy laws or such a petition is filed against either Party and
is not  dismissed  within  sixty  (60)  days,  the other  Party may  immediately
terminate this Agreement by giving written notice of termination; or
                           (d) by AM or Cytogen,  upon thirty (30) days  written
notice, if the Supply Agreement has terminated; provided, however, that the
notice of termination of this Agreement pursuant

                                       27
<PAGE>
to this  subsection must be served on the other party within ninety (90) days of
the termination of the Supply Agreement, as applicable.
                  15.3 Partial  Termination for Certain Agents.  The obligations
of Cytogen to market  any Agent and the grant of the rights and  licenses  by AM
with respect to such Agent may be terminated  (a) at any time, by AM or Cytogen,
upon thirty (30) days  written  notice,  in the event of  significant  bona fide
concerns  about the  safety or  efficacy  of such Agent on the part of the chief
medical  officer of the party  asserting  such concern,  such concerns to be set
forth in writing and delivered to the other Party with the  termination  notice.
Concerns about safety shall be considered an appropriate  basis for  termination
of the  obligations or license with respect to such Agent under this  subsection
if the safety profile of the Agent is such that it fails a risk/benefit analysis
conducted by physicians  experienced in the use of MRI contrast media.  Concerns
about efficacy shall be considered an appropriate  basis for  termination of the
obligations  or license  with  respect to such Agent  under this  subsection  if
physicians  experienced in the use of MRI contrast media conclude that the Agent
is of little diagnostic value; or
                           (b)  at any time by AM or Cytogen in accordance with
the terms and provisions of Section 8.2.
                  15.4  Effect of Expiration or Termination.
                           (a)  Except as otherwise provided in Article 7,
Article 13, or  subsections  (c) and (d) of this  Section  15.4,  expiration  or
termination of this Agreement  shall result in the termination of all provisions
hereof;  provided, that Cytogen shall continue to be liable for all license fees
and Royalty (with respect to all Agent that has then been sold by Cytogen or its
Affiliates or Approved  Sublicensees)  payments that shall then have accrued and
each Party  shall be  responsible  for any  amounts  due under  Section  8.2 and
remaining unpaid.
                           (b) Upon expiration or termination of this Agreement,
Cytogen  shall  return to AM (i) the Agent  Technology,  (ii) the  Manufacturing
Technology,  if any,  in its  possession,  and  (iii)  Project  Information  not
developed  by  Cytogen,   or  otherwise   dispose  of  such  Agent   Technology,
Manufacturing Technology or Project Information as instructed by AM.
                           (c) Upon termination of this Agreement by AM, Cytogen
shall have the right to complete  the sale of its  inventory of the Agent in the
Territory;  provided,  that Cytogen's  obligations hereunder to comply with this
Agreement and the Supply  Agreement in connection  with such  completion of sale
shall remain in effect;  and further provided,  that if requested by AM, Cytogen
shall negotiate with AM for the sale of Cytogen's  entire inventory of the Agent
to AM on terms to be negotiated by the Parties at such time.

                                       28
<PAGE>
                           (d) Upon expiration or termination of this Agreement,
neither  Party shall have  liability  to the other Party for damages of any kind
solely as a result of the fact of such  expiration  or  termination,  whether on
account of the loss by Cytogen of present or prospective  sales,  investments or
goodwill arising solely from statutes that relate to termination of distributors
or licensees, and each Party hereby waives any rights which may be granted to it
by such statutes.
         16.  General Provisions.
                  16.1  Force  Majeure.   If  either  Party  is  prevented  from
performing,  or is  unable  to  perform,  any  of  its  obligations  under  this
Agreement, due to any act of God, fire, casualty,  flood, war, strike, lock out,
failure of public  utilities,  injunction  or any act,  exercise,  assertion  or
requirement of  governmental  authority,  compliance  with any law or government
regulation  or  order,   epidemic,   destruction   of   production   facilities,
insurrection,  inability to procure materials, labor, equipment,  transportation
or energy  sufficient to meet its production or performance  needs, or any other
cause beyond the reasonable control of the Party invoking this provision, and if
such Party  shall have used its  commercially  reasonable  efforts to avoid such
occurrence  and minimize its duration and has given prompt written notice to the
other Party, then the affected Party's performance shall be excused and the time
for performance  shall be extended for the period of delay or ability to perform
due to such occurrence.
                16.2 Waiver. The waiver by either Party of a breach or a default
of any provision of this  Agreement by the other Party shall not be construed as
a waiver of any succeeding breach of the same or any other provisions, nor shall
any delay or omission on the part of either Party to exercise or avail itself of
any right,  power or privilege that it has, or may have hereunder,  operate as a
waiver of any right,  power or  privilege  by such  Party.  No waiver,  consent,
modification or change of terms of this Agreement shall bind either Party unless
in a writing signed by both parties, and then such waiver, consent, modification
or change shall be effective only in the specific  instance and for the specific
purpose given.
                  16.3 Publicity.  Except as required by or advisable under law,
governmental   regulation,   judicial  order,   generally  accepted   accounting
principles  or any  obligations  pursuant  to any  listing  agreement  with,  or
regulation of, any national  securities  exchange or quotation  system,  neither
Party shall  directly or indirectly  make any public  announcement  or publicity
concerning this Agreement or the subject matter hereof without the prior written
consent of the other Party and  agreement  upon the  nature,  text and timing of
such  announcement,  which  approval  and  agreement  shall not be  unreasonably
withheld. Such approval and agreement shall be deemed to be given if no response
is given to the other

                                       29
<PAGE>

Party  within two working  days of receipt of the  proposed  text from the Party
intending to make such  announcement.  In the event of a public  announcement or
publicity  not  required by law, the Party  making such  announcement  shall use
commercially reasonable efforts to provide the other with a copy of the proposed
text prior to such  announcement,  for the purpose of notice and  opportunity to
comment.  Upon  execution  hereof,  each Party  expects to issue a press release
concerning the subject matter hereof.
                  16.4 Notices.  All notices and other  communications  under
this Agreement shall be in writing and shall be delivered  by hand or  overnight
courier service, mailed or sent by telecopier, as follows:
                  If to AM:
                           Advanced Magnetics, Inc.
                           61 Mooney Street
                           Cambridge, Massachusetts 02138
                           Attention:  Chief Executive Officer
                           Telecopier:  (617) 547-2445

                  with a copy to:
                           Testa, Hurwitz & Thibeault
                           125 High Street
                           Boston, Massachusetts 02110
                           Attention:  Leslie E. Davis, Esq.
                           Telecopier:  (617) 248-7100

                  If to Cytogen:
                           Cytogen Corporation
                           600 College Road East
                           Princeton, New Jersey  08540
                           Attention:  Dr. Joseph Reiser
                           Telecopier:  (   ) ___-____

                  with a copy to:
                           Cytogen Corporation
                           600 College Road East
                           Princeton, New Jersey  08540
                           Attention:  General Counsel
                           Telecopier:  (   ) ___-____

or to such other address as any Party may have furnished to the other in writing
in accordance  herewith,  except that notices of change of address shall only be
effective upon receipt.  All notices and other communications given to any Party
hereto in accordance  with the provisions of this  Agreement  shall be deemed to
have been given on the date of receipt if delivered by hand or overnight courier
service or sent

                                       30
<PAGE>
by telex, graphic scanning or other telegraphic  communications equipment of the
sender,  or on the date five  business  days  after  dispatch  by  certified  or
registered  mail if mailed,  in each case  delivered,  sent or mailed  (properly
addressed) to such Party as provided in this Section 16.4.
                  16.5 Entire Agreement.  This Agreement  constitutes the entire
agreement  between the parties  with  respect to the subject  matter  hereof The
subject  matter of this  Agreement  is limited to the rights  expressly  granted
herein.  The terms of this Agreement  shall have no force or effect with respect
to any claim based on the use of any  intellectual  property rights of AM or its
licensors outside the scope of the licenses expressly granted herein. No waiver,
consent,  modification  or change of terms of this  Agreement  shall bind either
Party unless in a writing signed by both parties, and then such waiver, consent,
modification or change shall be effective only in the specific  instance and for
the  specific   purpose  given.   There  are  no   understandings,   agreements,
representations  or  warranties,  expressed  or implied,  not  specified  herein
regarding this Agreement or the subject matter thereof.
                  16.6  Headings.   Captions  and  headings  contained  in  this
Agreement have been included for ease of reference and convenience and shall not
be considered in interpreting or construing this Agreement.
                  16.7 Assignment. Neither this Agreement nor any rights granted
hereby may be assigned by Cytogen  voluntarily  or by operation of law,  without
AM's prior written consent which consent may be granted or withheld in AM's sole
discretion.  Assignment shall be deemed to include the transfer of substantially
all of the assets of, or a majority interest in the voting stock of, Cytogen, or
the merger of Cytogen with one or more other  Persons  (except a merger in which
the  stockholders  of Cytogen  prior to the merger  constitute  the holders of a
majority of the capital  stock of the  surviving  entity  following the merger).
This Agreement shall be freely assignable by AM. This Agreement shall be binding
upon,  and shall inure to the benefit of, the  successors  and assigns of AM and
the permitted successors and assigns of Cytogen.
                  16.8 Independent Contractors.  No agency, partnership or joint
venture is hereby  established.  Neither Party shall be responsible for the acts
or  omissions of the other Party.  Neither  Cytogen nor AM shall enter into,  or
incur, or hold itself out to Third Parties as having  authority to enter into or
incur on behalf of the other  Party any  contractual  obligations,  expenses  or
liabilities whatsoever.
                  16.9 Governing  Law. This  Agreement  shall be governed by and
construed in  accordance  with the laws of the  Commonwealth  of  Massachusetts,
without regard to conflicts-of-law  principles  thereof.  Each party irrevocably
submits to the exclusive  jurisdiction of any state or federal district court of
competent  jurisdiction in the Commonwealth of Massachusetts  for the purpose of
any

                                       31
<PAGE>

suit,  action  or  other  proceeding  arising  out  of  this  Agreement  or  any
transaction  contemplated  by this  Agreement  (and agrees not to  commence  any
action,  suit or proceeding  relating to this agreement or any such transaction,
except in those courts).  Each party further agrees that service of any process,
summons,  notice or document in accordance  with Section 16.4 shall be effective
service  of process  for any  action,  suit or  proceeding  with  respect to any
matters  to  which  it  has  submitted  to  jurisdiction  as  set  forth  in the
immediately  preceding  sentence.  Each party  irrevocably  and  unconditionally
waives any  objection to the laying of venue of any action,  suit or  proceeding
arising out of this agreement or the transactions contemplated by this agreement
in any state or federal court of competent  jurisdiction in the  Commonwealth of
Massachusetts, and further irrevocably and unconditionally waives and agrees not
to plead or claim in any such  action,  suit or  proceeding  sought  in any such
court that such action,  suit or proceeding has been brought in an  inconvenient
forum.
                  16.10  Severability.  The  provisions  of this  Agreement  are
severable,  and in the event  that any  provisions  of this  Agreement  shall be
determined to be invalid or unenforceable under any controlling body of the law,
such invalidity or unenforceability  shall not in any way affect the validity or
enforceability of the remaining provisions hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       32
<PAGE>

         IN WITNESS  WHEREOF,  this Agreement has been duly executed as a sealed
instrument as of the date specified above.

ADVANCED MAGNETICS, INC.                    CYTOGEN CORPORATION

By:  _/s/ Jerome Goldstein ____             By:  _/s/ H. Joseph Reiser _______

Title:  __Chairman/CEO ________             Title:  __President and CEO_______

<PAGE>

                                    EXHIBIT A
                                 Issued Patents

Country                         Patent No.                         Issuance Date

U.S.                             4,770,183                            9/13/88
U.S.                             4,827,945                            5/9/89
U.S.                             4,951,675                            8/28/90
U.S.                             5,055,288                            10/8/91
U.S.                             5,102,652                            4/7/92
U.S.                             5,219,554                            6/15/93
U.S.                             5,248,492                            9/28/93
U.S.                             5,160,726                            11/3/92
U.S.                             5,262,176                            11/16/93
U.S.                             5,314,679                            5/24/94

                             Patent Applications

Country               Application Serial No.                           File Date

U.S.                       *****                                          3/8/00

---------------------------------
***** Confidential  portion omitted and filed separately with the Securities and
Exchange Commission.EXHIBIT 10.2
                             CONFIDENTIAL TREATMENT

                     DEVELOPMENT AND MANUFACTURING AGREEMENT

This  development and  manufacturing  agreement is made and entered into on this
12th day of July 2000.

 BY                                AND BETWEEN:  CYTOGEN CORPORATION,  a company
                                   incorporated under New Jersey law, having its
                                   registered  address at 600 College Road East,
                                   Princeton,  New  Jersey  08540-5308,   United
                                   States of America (hereinafter referred to as
                                   "CYTOGEN"), of the one part;
 AND:                              DSM BIOLOGICS COMPANY B.V., a company
                                   incorporated under Dutch law,  having its
                                   registered  address at 72/2 Zuiderweg,
                                   9744 Groningen, The Netherlands (hereinafter
                                   referred to as "DSM Biologics"), of the other
                                   part;

CYTOGEN and DSM  Biologics  hereinafter  sometimes  individually  referred to as
"Party" and collectively as "Parties".

SECTION 1 - PREAMBLE
--------------------

WHEREAS,  CYTOGEN  avails of a hybridoma  cell line for expressing a protein for
inclusion in a product known by CYTOGEN as  Prostascint(R)  and wishes to have a
manufacturing  process developed for this cell line and have manufactured  three
(3) cGMP batches of this protein  which will  thereafter  be  conjugated  by DSM
Biologics;

WHEREAS, DSM Biologics has expertise and know-how in the area of development and
production of biopharmaceutical products;

WHEREAS,  the Parties have signed a letter of commitment  dated January 26, 2000
for the  commencement  by DSM Biologics of some  development  activities for the
CYTOGEN hybridoma cell line;

NOW,  THEREFORE,  IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS HEREIN
CONTAINED, IT IS HEREBY AGREED BY THE PARTIES HERETO AS FOLLOWS:

SECTION 2 - DEFINlTIONS
-----------------------

In this Agreement the following  terms,  whether used in the singular or plural,
shall, as used herein, have the following respective meanings:

<PAGE>
 2.1     "Acceptance" has the meaning ascribed thereto in Section 5.3;

 2.2     "Affiliates"  means  any  individual,  company,  partnership  or other
         entity  which  directly  or  indirectly,  at present or in the future,
         controls, is controlled by or is under common control with a Party;

 2.3     "Agreement" means this development and manufacturing agreement;

 2.4     "Batch  Records" means for each batch of Product  manufactured in Step
         5, the production protocols showing how the batch was manufactured;

 2.5     "Bill of Testing"  means a document  carrying  Product  and/or Project
         identification,  and stating  for the  Process the list of  analytical
         tests,  their standard methods and procedures,  and the criteria to be
         met during the cGMP manufacturing Product, and all amendments thereto,
         to be agreed upon between the Parties;

 2.6     "CCN" means a so-called  contemplated change  notification  describing
         any material  deviation from the Project,  which notice is provided in
         writing by DSM Biologics to CYTOGEN and must be approved by CYTOGEN in
         writing prior to taking effect;

 2.7     "cGMP"  means  current  good   manufacturing   practices  and  general
         biological  products  standards as promulgated under the United States
         Federal  Food,  Drug  and  Cosmetic  Act  at  21  CFR,  Canadian  Good
         Manufacturing  Practices  and the  EEC  Guide  to  Good  Manufacturing
         Practices  for  Medical  Products  (Vol.  IV rules  governing  medical
         products in the European Community 1989);

 2.8     "Claims"  means  any and all  claims,  demands,  losses,  obligations,
         liabilities, damages, deficiencies,  actions, settlements,  judgments,
         cost  and  expenses  which a Party  may  incur  or  suffer  (including
         reasonable  costs  and  legal  fees  incident  thereto  or in  seeking
         indemnification therefor);

 2.9     "Costs" means the costs for the Project, which costs shall exclude the
         Price but shall include the costs of raw materials,  filters,  resins,
         Product release testing, external testing, any royalties to be paid to
         third parties, subcontractor costs, out of pocket expenses, travel and
         lodging costs, capital investments, shipping Product, insuring shipped
         Products,  and all brokers fees, customs duties, import duties, excise
         taxes and other  taxes  payable in  connection  with the  delivery  of
         Product;

 2.10    "CYTOGEN" means Cytogen Corporation;

                                       2
<PAGE>
 2.11    "CYTOGEN Proprietary Information" has the meaning ascribed thereto in
         Section 14.1;

 2.12    "CYTOGEN Technology" means any and all current and future Intellectual
         Property Rights proprietary to CYTOGEN in so far as provided, granted,
         divulged or disclosed, either directly or indirectly by CYTOGEN to DSM
         Biologics, pertaining to the Project.

 2.13    "Defaulting Party" has the meaning ascribed thereto in Section 15.3;

 2.14    "Documents" means the Specifications,  Bill of Testing, Batch Records,
         certificate  of  analysis  containing  the outcome of the tests on the
         Product and Release statement;

 2.15    "DSM Biologics" means DSM Biologics Company B.V.;

 2.16    "DSM   Biologics   Technology"   means   any  and  all   current   and
         future-Intellectual Property Rights proprietary to DSM Biologics in so
         far as provided,  granted,  divulged or disclosed,  either directly or
         indirectly,  by DSM  Biologics to CYTOGEN in the process of performing
         the  Project,   pertaining  to  fermentation,   primary  recovery  and
         purification of biopharmaceutical products;

 2.17    "Force Majeure" has the meaning ascribed thereto in Section 20.1;

 2.18    "Intellectual  Property  Rights"  means,  whether or not  protected or
         protectible   under  any   particular   law,   all   patents,   patent
         applications,  patentable  subject matter,  copyrights,  copyrightable
         subject matter,  ideas,  inventions,  discoveries,  devices,  designs,
         apparatuses,  practices,  processes,  methods,  products,  cell lines,
         progeny,  engineered  cell  lines,  clones,  samples,  trade  secrets,
         technology, know-how, software, hardware, improvements, trademarks and
         service marks (and the goodwill pertaining thereto);

 2.19    Letter of Commitment" means the letter agreement entered into between
         the  Parties  dated  January  26,  2000  for the  commencement  by DSM
         Biologics of some development activities for the Product cell line;

 2.20    "Manufacturing  Instructions"  means the protocols  for  manufacturing
         Product  in Step 5 and  all  amendments  thereto,  to be  agreed  upon
         between the Parties.  It is understood  between the Parties that these
         protocols may be amended at all times,  including during manufacturing
         of Product;

 2.21    "Parties" means DSM Biologics and CYTOGEN collectively;

 2.22    "Party" means either DSM Biologics or CYTOGEN;

                                       3
<PAGE>

2.23     "Price"  means the price for the  Project  as  specified  in Section 6,
         which price shall exclude Costs;

2.24     "Process"  means the  stirred  tank  perfusion  bioreactor  process  to
         manufacture  Product,  as  well as  purification  and  conjugation,  if
         reduced to practice as a result of Step 1 and Step 4 of the Project;

2.25     "Product" means purified bulk conjugated antibody known by CYTOGEN as
         CYT 356;

2.26     "Project" means development-, upscaling-, cell banking-, manufacturing-
         and validation  activities,  and providing  regulatory  support, by DSM
         Biologics,  comprising  of Step 1,  Step 2,  Step 3, Step 4, Step 5 and
         Step 6 as further  described in the Schedule annexed hereto and being a
         part hereof, and all amendments thereto, to be agreed upon between the
         Parties;

2.27     "Project  Manager" means the  individual  assigned by DSM Biologics who
         will  be  responsible  for  the  scientific  management  and  technical
         components of the Project;

2.28     "Release"  means that,  after Product has been  manufactured in Step 5,
         the Product meets the Specifications and was manufactured  according to
         cGMP and the Manufacturing Instructions;

2.29     "Specifications"  means  the  specifications,   technical  data  and/or
         formulae  of the  Product  manufactured  in Step 5, and all  amendments
         thereto, to be agreed upon between the Parties;

2.30     "Steering Committee" means a committee with an equal number of
         representatives from each Party;

2.31     "Step 1" means  developing  a  Process  under  non-cGMP  conditions  by
         adapting  the  CYTOGEN   Product  cell  line  to  a  serum  free  media
         formulation  and by  performing  upstream  and  downstream  development
         activities,  including a seven (7) liter  fermentation  run and a fifty
         (50) liter so called  pilot  fermentation  with a lab scale down stream
         processing step and conjugation;

2.32     "Step 2" means transfer, development and optimization of CYTOGEN
         quality control assays;

2.33     "Step 3" means preparing under cGMP conditions a master cell bank and a
         manufacturer working cell bank

                                       4
<PAGE>

2.34     "Step 4" means using the Process as  developed  in Step I to perform at
         fifty (50) liter scale,  under non-cGMP  conditions,  one (1) so cal1ed
         shakedown run including one (1) conjugation;

2.35     "Step 5" means cGMP  manufacturing  three (3) batches of Product  using
         the Process for a Biologics  License  Application  (BLA) supplement and
         market distribution;

2.37     "Step 6" means:

         i)       writing a Process and assay master validation plan and
                  subsequently executing this plan during the performance of
                  Step 5;
         ii)      means  providing  support  for  CYTOGEN's   preparation  of  a
                  chemistry  manufacturing  and control  (CMC) data  package for
                  filing the Process for a United  States BLA  supplement  and a
                  European Marketing Authorization Application (MAA) supplement.

SECTION 3 - OBJECTIVES AND OBLIGATIONS OF THE PARTIES
-----------------------------------------------------

3.1      It is the  intention  of the Parties to hereby  establish a lasting and
         mutually  profitable  relationship  and for that  purpose to inform and
         assist one another in a spirit of co-operation  during the execution of
         the Project.

3.2      Subject to the terms and conditions of this  Agreement,  CYTOGEN hereby
         engages  DSM  Biologics  to carry out the  Project  and DSM  Biologics,
         subject  to  the  terms  and  conditions  of  this  Agreement,   hereby
         undertakes to use its best reasonable  efforts to carry out the Project
         in accordance with the Schedule annexed hereto and being a part hereof.

3.3      The Parties  hereby  acknowledge  and agree  that  there is  absolutely
         no guarantee:
         i.)      that the Product and the Process will be commercially
                  exploitable, profitable or approved by any regulatory
                  authority;
         ii.)     that the milestones identified in the Schedule to this
                  Agreement for Step 1, Step 2 and Step 4 will be achieved;
         iii.)    that any Product resulting from Step 1 or Step 4 will fulfill
                  certain specifications, certain yields or will be delivered in
                  time for any further use intended therefor by CYTOGEN; or
         iv.)     that the Product to be manufactured in Step 5 will be
                  delivered in time for a BLA and MAA supplement submission and
                  approval or for market distribution.

3.4      CYTOGEN shall timely provide all CYTOGEN Technology necessary for the
         performance of the Project as well as, if so
         requested by DSM Biologics,

                                       5
<PAGE>

         provide  reasonable  technical  assistance needed by DSM Biologics for
         the performance of the Project.

         Any material  change to the scope of the Project shall not take effect
         unless approved in writing by CYTOGEN through a CCN.

         The  Parties  acknowledge  that this  Agreement  is only for  certain
         development  activities  and the  delivery  of three (3)  batches  of
         Product and not for commercially  manufacturing  Product.  Therefore,
         during the performance of Step 5 of the Project, the Parties shall in
         good faith  negotiate a long term supply  agreement in respect of the
         Product under the proviso that the  aforementioned  three (3) batches
         comply with the  Specifications  and that all  relevant  governmental
         authority  is  granted  to  commercially  use the  Product  on  human
         subjects.  If the  Parties  do not enter into such an  agreement,  at
         CYTOGEN's   request,   the   Parties   will  enter  into  good  faith
         negotiations  for CYTOGEN to - license the DSM  Biologics  Technology
         pursuant to a license  agreement on terms and conditions to be agreed
         upon.  Such  terms  and  conditions  shall be as  competitive  as DSM
         Biologics offers to any third party.

         The Parties will elect, at their convenience,  a Steering  Committee,
         that will  oversee  the  general  execution  of the  Project  and the
         Agreement  and will  discuss,  both  during  the  performance  of the
         Project and after  completion  of the Project,  the further  plans of
         CYTOGEN  for the Product and the  Process,  including  the status and
         outcome  of  clinical  trials,  registration  activities  and  future
         requirements  by CYTOGEN of Product,  whether  for  further  clinical
         trials or for marketing.

SECTION 4 - STEP 1, STEP 2, STEP 3 AND STEP 4 OF THE PROJECT
------------------------------------------------------------

4.1      The  different  parts of the  Project  are  estimated  to require  the
         periods of time  identified  in the  Schedule to this  Agreement.  DSM
         Biologics  shall timely notify CYTOGEN if it expects  performance of a
         part  of the  Project  not to be  possible  within  the  timeframe  as
         described in the Schedule,  and shall take all  reasonable  efforts to
         perform that part of the Project as soon as possible thereafter.

4.2      The  Parties  shall,  during and after  completion  of Step 1,  discuss
         whether the milestones identified in the Schedule to this Agreement for
         Step 1 have been achieved and shall, based upon such discussion, decide
         on whether to perform  additional  work with regard to Step 1,  proceed
         with Step 2 according to the Schedule or terminate the Project.  If the
         Parties  decide to perform  additional  work with regard to Step 1, the
         duration,  scope,  price and costs thereof  shall be separately  agreed
         upon between the Parties.

                                       6
<PAGE>

4.3      During  the  performance  and after  completion  of Step 2, if and when
         performed,  the Parties shall, based upon the milestones  identified in
         the Schedule to this Agreement for Step 2, decide on whether to perform
         additional work with regard to Step 2, proceed with Step 4 according to
         the Schedule or terminate the Project. If the Parties decide to perform
         additional work with regard to Step 2, the duration,  scope,  price and
         costs thereof shall be separately agreed upon between the Parties.

4.4      If the  Parties  agree Step 3 is  necessary,  and as  described  in the
         Schedule  to  this   Agreement,   DSM  Biologics  shall  commence  with
         performing Step 3 of the Project as outlined in the Schedule.

4.5      During  the  performance  and after  completion  of Step 4, if and when
         performed,  the Parties shall, based upon technical reasons such as the
         robustness of the Process, decide on whether to perform additional work
         with regard to Step 4, proceed with Step 5 according to the Schedule or
         terminate the Project. If the Parties decide to perform additional work
         with regard to Step 4, the  duration,  scope,  price and costs  thereof
         shall be separately agreed upon between the Parties.

SECTION 5 - STEP 5 AND STEP 6 OF THE PROJECT
--------------------------------------------

5.1      DSM Biologics  shall commence with  performing Step 5 of the Project if
         and when the Parties  decide  thereto  according  to Section  4.5.  DSM
         Biologics shall timely notify CYTOGEN if it expects delivery of Product
         not to be possible  within the  timeframe  described in the Schedule to
         this  Agreement,  and shall take all efforts to deliver Product as soon
         as possible thereafter.

5.2      The Product shall be manufactured in accordance with the  Manufacturing
         Instructions and under cGMP  conditions.  Each batch of Product will be
         sampled and tested by the quality  control  department of DSM Biologics
         against the  Specifications.  The quality  assurance  department of DSM
         Biologics  will  review  the  Batch  Records  and  will  assess  if the
         manufacturing  has taken  place in  compliance  with the  Manufacturing
         Instructions and cGMP regulations.

5.3      If  based  upon  such  tests,  a  batch  of  Product  conforms  to the
         Specifications  and  was  manufactured   according  to  cGMP  and  the
         Manufacturing Instructions,  a Release statement will be completed and
         approved by the quality  assurance  department of DSM Biologics.  This
         certificate  together  with all other  Documents  will be delivered to
         CYTOGEN or a third party  appointed  by Cytogen.  The batch of Product
         will be  delivered  to CYTOGEN or a third party  appointed by Cytogen.
         DSM  Biologics  shall retain  sample of the batch to be delivered  and
         shall have the batch shipped and insured according to

                                       7
<PAGE>
         CYTOGEN's  instructions.  Responsibility for the batch shall pass after
         delivery by DSM  Biologics  of the batch to the carrier (CIP as defined
         in the INCO Terms 1990).

5.4      CYTOGEN  will  test the batch for  compliance  with the  Specifications
         through analyzing the Documents delivered by DSM Biologics,  within two
         (2) weeks of  delivery  of the  Documents  and will Accept the batch in
         case of such  compliance  ("Acceptance").  CYTOGEN has no obligation to
         accept the batch if such batch does not comply with the Specifications.
         CYTOGEN  will  notify DSM  Biologics  in writing of its  Acceptance  or
         rejection  of the  batch  within  two  (2)  weeks  of  delivery  of the
         Documents.  In the  absence  of any such  written  confirmation  to DSM
         Biologics,  the batch shall be deemed to comply with the Specifications
         and  Accepted  by  CYTOGEN.  During  the  aforementioned  two (2) weeks
         CYTOGEN  shall  store  or  have  stored  the  batch-  under  controlled
         conditions.

5.5      If there is any dispute  concerning  whether Product  complies with the
         Specifications  or not or whether  such  failure is due (in whole or in
         part) to acts or  omissions  of  CYTOGEN  or a CYTOGEN  designee  after
         delivery  of  Product,  a sample of the  rejected  Product and a sample
         retained by DSM Biologics as set forth above shall be exchanged between
         CYTOGEN and DSM Biologics for a counter  check.  If such  counter-check
         does not resolve the dispute,  a sample of the  rejected  Product and a
         sample  retained by DSM Biologics shall be submitted to an independent,
         qualified  third-party  laboratory  that  is  mutually  acceptable  and
         selected by the Parties  promptly in good faith.  Such laboratory shall
         determine  whether the rejected Product met the  Specifications  at the
         time of delivery to the  carrier and such  laboratory's  determinations
         shall be final and  determinative  for purposes of this  Agreement save
         for manifest error on the face of decision.  The Party against whom the
         laboratory  rules  shall bear all costs of the  third-party  laboratory
         activities.

5.6      If a batch of Product does not conform to the Specifications,  and this
         nonconformity  is not due to DSM Biologics'  failure to comply with the
         Manufacturing  Instructions or with cGMP, CYTOGEN shall have to pay the
         Price  and  Costs  for this  batch.  DSM  Biologic  shall at  CYTOGEN's
         request, cost and expense,  either obtain new raw materials and produce
         a new batch of Product  as soon as  reasonably  possible  or rework the
         batch.

5.7      Regardless of whether a batch of Product conforms to the Specifications
         or not, if this batch was not manufactured according to cGMP and/or the
         Manufacturing  Instructions,  thereby making the Product unsuitable for
         its intended purpose, CYTOGEN shall not have to pay the Price and Costs
         for this batch.  DSM  Biologics  shall at CYTOGEN's  request,  cost and
         expense, obtain new raw materials and produce a new batch of Product as
         soon as reasonably  possible.  However,  in the event it is possible to
         rework the Product in such a

                                       8
<PAGE>
         way that the batch can be deemed to have been manufactured according to
         cGMP and the Manufacturing Instructions, then CYTOGEN shall have to pay
         the  Price and  Costs  for  batch of  Product  but not the costs of the
         reworking, which shall be for DSM Biologics' account.

5.8      The Parties shall in good faith separately agree upon the scope of work
         for Step 6, the commencement date and expected duration, and the price
         and costs thereof.

SECTION 6 - PRICE AND COSTS
---------------------------

6.1      It is  understood  between the  Parties  that the Price for the Project
         shall be based upon the  assumptions  contained in the Schedule  hereto
         and  the  limited  information  available  to DSM  Biologics  up to the
         effective date of this Agreement. If, during the preparation for or the
         performance of the Project,  itbecomes clear that these assumptions are
         not  correct,  and have  consequences  for the Project  which cannot be
         dealt with through a CCN, or the detailed information further exchanged
         between the Parties  indicates more labor and/or occupancy is needed to
         perform the Project,  the Parties shall  renegotiate  the Price in good
         faith.  ID addition,  the Price for Step 4 and Step 5 is based upon the
         expected process steps to be defined in the Process.  Should the Step 1
         and/or Step 4 activities lead to a Process which differs  significantly
         in the expected  number of process  steps and/or the time for executing
         the  Process,  the  Price  for  Step 4 and  Step 5  shall  be  adjusted
         accordingly.

6.2      The Price, excluding VAT, for the work to be performed in Step 1 of the
         Project  shall be ***** United States  dollars (US $ *****).  Under the
         Letter of Commitment, Cytogen has paid an amount of ***** United States
         dollars (US $ *****) as an upfront  payment for the  performance by DSM
         Biologics  of Step 1. The  remainder  of the  Price,  including  VAT if
         applicable,  for Step 1, being ***** United States dollars (US $ *****)
         shall be invoiced as follows:
         i.)      *****  United  States  dollars (US $*****)
                  upon completion of the seven (7) liter fermentation run in
                  Step 1;
         ii)      ***** United States dollars (US $ *****)
                  upon  completion  in Step 1 of the fifty  (50) liter so called
                  pilot  fermentation  with a lab scale down  stream  processing
                  step and conjugation.

6.3      The Price,  excluding  VAT,  for the work  performed  in Step 2 of the
         Project shall be based on ***** United States dollars (US $ *****) per
         hour worked.

-----------------------------
*****  Confidential portion omitted and filed separately with the Securities and
Exchange Commission

                                       9
<PAGE>
                  This Price,  including  VAT if  applicable,  shall be invoiced
                  every  month  based  on  the  actual  man-hours  spent  by DSM
                  Biologics in the previous month on performing Step 2.

6.4      The  Price,  excluding  VAT,  for the work  performed  in Step 3 of the
         Project shall be ***** United States  dollars (US $*****).  This Price,
         including VAT if  applicable,  shall be invoiced to and paid by CYTOGEN
         as  follows:  i)  *****  percent  (*****  %) one  (1)  month  prior  to
         commencement  of Step 3; ii) *****  percent  (***** %) at completion of
         Step 3.

6.5      The Price, excluding VAT, for the work performed in Step 4 of the
         project shall be ***** United States dollars (US $ *****).  This Price,
         including VAT if applicable, shall be invoiced to and paid by CYTOGEN
         as follows:
         i)       ***** percent (***** %) one (1) month prior to commencement of
                  Step 4;
         ii)      ***** percent (***** %) at completion of fermentation;
         iii)     ***** percent (***** %) at complexion of downstream
                  processing;
         iv)      ***** percent (***** %) upon delivery by DSM Biologics of any
                  resulting Product.

6.6      The Price,  excluding VAT, for the cGMP batches of Product manufactured
         in Step 5 of the Project  shall be *****  United  States  dollars (US $
         *****) per batch. The total Price for  manufacturing  three (3) batches
         of Product shall thus be ***** United States dollars (US $ *****).

         The Price per batch of Product, including VAT if applicable, shall be
         invoiced to and paid by CYTOGEN as follows:
         iii)     ***** percent (***** %) one (1) month prior to commencement of
                  the manufacture of the Product;
         iv)      ***** percent (***** %) at completion of fermentation of the
                  Product;
         v)       ***** percent (***** %) at completion of downstream processing
                  the Product;
         vi)      ***** percent (***** %) upon delivery by DSM Biologics of
                  Product, all related Documents and Acceptance.

6.7      The Price, excluding VAT, for Step 6 of the Project shall separately be
         agreed upon in good faith between the Parties.

-----------------------------
*****  Confidential portion omitted and filed separately with the Securities and
Exchange Commission

                                       10
<PAGE>

6.8      The Costs  for the  Project,  including  VAT if  applicable,  shall be
         invoiced  to and  paid by  CYTOGEN  when  the  Costs  are  made by DSM
         Biologics.  However,  in respect of raw materials,  CYTOGEN shall, two
         (2) months prior to commencement of Step 5, make an advance payment of
         ***** United States  dollars (US $ *****),  which amount DSM Biologics
         shall use to pay the first  invoices  for raw  materials to be ordered
         for Step 5.

6.9      All invoices  shall be payable by CYTOGEN  within  thirty (30) days of
         receipt of an invoice into the bank account  specified on the invoice.
         Any delay in the  payment by  CYTOGEN  of the Price  and/or the Costs,
         except in the event of a dispute  in respect  of Price  and/or  Costs,
         shall carry an interest  rate as of the first day of delayed  payment,
         which  interest  rate  shall be based  on a  annual  interest  rate of
         fifteen percent (15%).

SECTION 7 - MANAGEMENT OF THE PROJECT
-------------------------------------

7.1      The Parties hereby agree that the Project shall be under the day-today
         supervision of a Project Manager.

7.2      The Parties  shall work in  conjunction  with the  Project  Manager to
         ensure the satisfactory performance of the Project.

7.3      The Project  Manager shall be entitled to propose  recommendations  to
         the Parties to ensure that the Project meets its objectives.

7.4      The  Project  Manager  shall  be  in  charge  of  all  managerial  and
         scientific  aspects of the  Project and shall  maintain  communication
         with the Parties in connection therewith.

7.5      DSM Biologics  shall permit any individual so authorized by CYTOGEN to
         visit,  during regular  business hours,  the site where the Project is
         being  conducted to evaluate the progress  thereof,  unless such visit
         would  conflict  with a  prearranged  visit by  another  client  or an
         inspection by or for another client. Except in exigent  circumstances,
         said  visit  shall be made  subject  to ten (10)  days  notice  of the
         requirement of such visit, such notice to be given to DSM Biologics by
         CYTOGEN.

7.6      The  Parties  may  use  electronic  mail  to  communicate  during  the
         performance  of the  Project.  The  Parties  shall use all  reasonable
         measures to ensure the confidentiality of information so communicated.

-----------------------------
*****  Confidential portion omitted and filed separately with the Securities and
Exchange Commission

                                       11
<PAGE>

SECTION 8 - RECORDS AND REPORTS
-------------------------------

DSM Biologics hereby undertakes that it shall have the Project Manager submit to
CYTOGEN,  after  completion of Step 1 and Step 2 a report detailing the progress
and results of these Steps and highlighting any major issues  encountered during
the previous period.

SECTION 9 - AUDITS AND CYTOGEN REGULATORY APPROVALS
---------------------------------------------------

9.1      DSM  Biologics  grants  CYTOGEN the right to audit or to appoint  third
         parties to audit, under applicable  confidentiality  provisions, at any
         reasonable time, the facilities employed and the documentation utilized
         by  DSM  Biologics  for  performing  the  Project.  Except  in  exigent
         circumstances,  CYTOGEN will notify DSM  Biologics at least twenty (20)
         business  days in advance of such an audit by CYTOGEN  and thirty  (30)
         business  days in  advance of such an audit by a third  party.  All DSM
         Biologics'  expenses  associated  with  such  audits  shall be borne by
         CYTOGEN.

9.2      DSM  Biologics  permits  inspections  of DSM  Biologics'  facilities by
         governmental authorities (such as the United States of America Food and
         Drug Administration and equivalent European regulatory authorities) for
         any registration or pending  registration for manufacturing of Product.
         All DSM Biologics'  expenses associated with inspections as they relate
         directly to manufacturing of Product shall be borne by CYTOGEN.

SECTION 10 - SUBCONTRACTING
---------------------------

DSM Biologics shall be entitled to subcontract  portions of the Project to those
subcontractors  identified in the Schedule to this Agreement.  In addition,  DSM
Biologics  shall be  entitled  to  subcontract  any  portion of its  obligations
hereunder to its Affiliates.  Subcontracting  by DSM Biologics of any portion of
its  obligations  hereunder to any other third party  requires  CYTOGEN's  prior
written  permission  thereto  which  permission  shall  not be  unreasonably  or
untimely withheld.

SECTION 11 - INTELLECTUAL PROPERTY RIGHTS
-----------------------------------------

11.1     CYTOGEN declares that it has the full right and title to make available
         the CYTOGEN  Technology to DSM Biologics.  DSM Biologics  shall use the
         CYTOGEN Technology solely to perform the Project.

                                       12

<PAGE>
11.2     CYTOGEN  Technology  shall  remain the sole and  exclusive  property of
         CYTOGEN.  All DSM  Biologics  Technology  shall  remain  the  sole  and
         exclusive  property of DSM Biologics.  The Product  manufactured in the
         Project,  the Documents and the reports  referred to in Section 8 shall
         be the sole and  exclusive  property of CYTOGEN and all rights and tide
         thereto  shall  vest in and to  CYTOGEN.  In  addition,  CYTOGEN  shall
         exclusively  own  all  Intellectual  Property  Rights  obtained  in the
         Project  specifically  related to the Process.  DSM Biologics shall, as
         soon as possible,  execute and do all instruments and things reasonably
         necessary  to transfer  or vest such  Intellectual  Property  Rights in
         CYTOGEN. DSM Biologics shall, however, have the right to freely use all
         Intellectual  Property  Rights  obtained  in the Project in the general
         field  of   fermentation,   primary   recovery  and   purification   of
         biopharmaceutical products.

SECTION 12 - WARRANTY, LIABILITY AND INDEMNIFICATION
----------------------------------------------------

12.1     DSM Biologics does not grant any warranty, either expressed or implied,
         legal  or  conventional,  with  regard  to the  Project  other  than as
         explicitly  contained or  incorporated  in this Agreement and disclaims
         all implied warranties of merchantability  and fitness for a particular
         purpose  except  to the  extent of DSM  Biologics'  own  processes  and
         facilities.  DSM  Biologics  in  particular  does not  warrant,  either
         expressed  or implied,  that the  performance  by it of the  activities
         contemplated  by the Project in accordance with this Agreement will not
         infringe upon Intellectual Property Rights of any third party.

12.2     DSM Biologics shall indemnify, defend and hold harmless CYTOGEN against
         and in respect of any and all Claims arising out of or based upon:
         i)       the breach by DSM Biologics of any representations,
                  warranties, covenants or terms contained or incorporated in
                  this Agreement; or
         ii)      any gross negligence or willful misconduct by DSM Biologics or
                  its  employees,  agents,  sub-contractors  or suppliers of raw
                  materials in connection  with the  performance of the Project;
                  except to the extent of Claims  being due to  CYTOGEN's or its
                  supplier's negligence or fault and provided that DSM Biologics
                  shall  not  be  liable  for  any  consequential,  indirect  or
                  exemplary  damages  suffered by CYTOGEN and  provided  further
                  that the total of any damages, other than as to Claims against
                  CYTOGEN for personal injury, to be paid by DSM Biologics shall
                  not exceed the Price.

         DSM Biologics shall, at the request of CYTOGEN,  assume the defense of
         any demand,  claim, action, suit or proceeding brought against CYTOGEN
         by reason of the foregoing and shall pay any and all damages up to the
         Price that are

                                       13
<PAGE>
         assessed or that are payable by CYTOGEN as a result of the  disposition
         of any such demand, claim, action, suit or proceeding.  Notwithstanding
         the foregoing,  CYTOGEN may be represented in any such action,  suit or
         proceeding at its own expense and by its own counsel.

12.3     CYTOGEN shall indemnify, defend and hold harmless DSM Biologics against
         and in respect of any and all Claims arising out of or based upon:
         i)       the breach by CYTOGEN of any representations, warranties,
                  covenants or terms contained or incorporated in this
                  Agreement; or
         ii)      any gross  negligence or willful  misconduct by CYTOGEN or its
                  employees, agents, or suppliers of raw materials in connection
                  with the performance of the Project;
         except  to the  extent of Claims  being  due to DSM  Biologics'  or its
         supplier's  negligence  or fault and provided that CYTOGEN shall not be
         liable for any consequential, indirect or exemplary damages suffered by
         DSM Biologics and provided further that the total of any damages, other
         than as to Claims against DSM Biologics for personal injury, to be paid
         by CYTOGEN shall not exceed the Price.

12.4     CYTOGEN shall, at the request of DSM Biologics'  assume the defense of
         any demand,  claim,  action,  suit or proceeding  brought  against DSM
         Biologics by reason of the foregoing and shall pay any and all damages
         up to the Price that are assessed or that are payable by DSM Biologics
         as a result of the disposition of any such demand, claim, action, suit
         or proceeding.  Notwithstanding  the  foregoing,  DSM Biologics may be
         represented in any such action,  suit or proceeding at its own expense
         and by its own counsel.

         Furthermore,  CYTOGEN  agrees to indemnify  DSM Biologics and save and
         hold it harmless from and against any Claims which DSM Biologics is or
         may become liable for or may incur or may be called upon to pay or may
         pay  and  that   result  from  or  are  alleged  to  result  from  the
         infringement  of any  Intellectual  Property Rights through the use by
         DSM  Biologics or its  subcontractors  of CYTOGEN  Technology,  or the
         development,   use  or   manufacturing   by  DSM   Biologics   or  its
         subcontractors  of the  Process  or the  Product,  provided  that  DSM
         Biologics notifies CYTOGEN immediately of any demand,  claim,  action,
         suit or other  proceeding.  CYTOGEN  shall  however  not be  liable to
         indemnify or hold harmless DSM Biologics for payment of any settlement
         unless . : CYTOGEN has consented to the settlement.

         CYTOGEN shall,  at the request of DSM Biologics,  assume the defense of
         any demand,  claim,  action,  suit or  proceeding  brought  against DSM
         Biologics  by  reason  of the  foregoing  and pay  any and all  damages
         assessed  or that are  payable  by DSM  Biologics  as a  result  of the
         disposition of any such demand, claim, action, suit or proceeding.
         Notwithstanding the foregoing, DSM

                                       14
<PAGE>
         Biologics may be represented in any such action,  suit or proceeding at
         its own expense and by its own counsel.

12.5     DSM  Biologics  agrees  to  indemnify  CYTOGEN  and  save  and hold it
         harmless  from and against any Claims  which  CYTOGEN is or may become
         liable  for or may incur or may be  called  upon to pay or may pay and
         that result from or are alleged to result from the infringement of any
         Intellectual  Property  Rights through the use by DSM Biologics or its
         subcontractors of DSM Biologics  Technology for the Project,  provided
         that CYTOGEN notifies DSM Biologics  immediately of any demand, claim,
         action,  suit or other proceeding.  DSM Biologics shall however not be
         liable to  indemnify  or hold  harmless  CYTOGEN  for  payment  of any
         settlement unless DSM Biologics has consented to the settlement.

         DSM Biologics  shall, at the request of CYTOGEN,  assume the defense of
         any demand,  claim,  action, suit or proceeding brought against CYTOGEN
         by reason of the foregoing and pay any and all damages assessed or that
         are  payable  by  CYTOGEN  as a result of the  disposition  of any such
         demand,   claim,  action,  suit  or  proceeding.   Notwithstanding  the
         foregoing.  CYTOGEN  may be  represented  in any such  action,  suit or
         proceeding at its own expense and by its own counsel.

SECTION 13 - REPRESENTATIONS AND WARRANTIES
-------------------------------------------

13.1     DSM Biologics hereby  represents and warrants to CYTOGEN that:
         i)       it is a corporation duly organized, validly existing and in
                  good standing under the laws of The Netherlands,  and has full
                  corporate  power  to  conduct  the  business  in  which  it is
                  presently   engaged   and  to  enter  into  and   perform  its
                  obligations under this Agreement;
         ii)      it has  taken  all  necessary  corporate  action  under  the
                  applicable laws and its articles of incorporation and bylaws
                  to authorize the execution by its  undersigned  officers and
                  consummation of this Agreement. This Agreement constitutes a
                  valid and legally binding agreement,  enforceable against it
                  in  accordance  with  its  terms,   subject  to  bankruptcy,
                  insolvency, fraudulent transfer, reorganization,  moratorium
                  and  similar  laws of general  applicability  relating to or
                  affecting   creditors'   rights   and  to   general   equity
                  principles;
         iii)     the performance by it of its obligations contemplated by the
                  Project in accordance  with this  Agreement will not violate
                  the terms of any other  agreement  to which it is subject to
                  or by which it is bound;
         iv)      it has  the  right  and  power  to  perform  the  activities
                  contemplated by the Project;

                                       15
<PAGE>
         v)       it will not use in any capacity, in connection with performing
                  the Project,  any individual who has been debarred pursuant to
                  the United States Federal Food, Drug and Cosmetic Act; and
         vi)      to its  knowledge,  the  performance  by it of the  activities
                  contemplated  by the Project in accordance with this Agreement
                  will not conflict with any law or regulation applicable to DSM
                  Biologics.

13.2     CYTOGEN hereby represents and warrants to DSM Biologics that:
         i)       it is a corporation  duly organized,  validly  existing and in
                  good  standing  under  the  laws of New  Jersey,  and has full
                  corporate  power  to  conduct  the  business  in  which  it is
                  presently   engaged   and  to  enter  into  and   perform  its
                  obligations under this Agreement:
         ii)      it has  taken  all  necessary  corporate  action  under  the
                  applicable laws and its articles of incorporation and bylaws
                  to authorize the execution by its  undersigned  officers and
                  consummation of this Agreement. This Agreement constitutes a
                  valid and legally binding agreement,  enforceable against it
                  in  accordance  with  its  terms,   subject  to  bankruptcy,
                  insolvency, fraudulent transfer, reorganization,  moratorium
                  and  similar  laws of general  applicability  relating to or
                  affecting   creditors'   rights   and  to   general   equity
                  principles;
         iii)     the performance by it of its obligations contemplated by the
                  Project in accordance  with this  Agreement will not violate
                  the terms of any other  agreement  to which it is subject to
                  or by which it is  bound;  iv) it has the right and power to
                  perform the activities  contemplated by the Project;  and v)
                  to its  knowledge,  the  performance by it of the activities
                  contemplated   by  the  Project  in  accordance   with  this
                  Agreement  will  not  conflict  with  any law or  regulation
                  applicable to CYTOGEN.

SECTION 14 - CONFIDENTALITY
---------------------------

14.1     Unless  agreed to  otherwise in this  Agreement,  DSM  Biologics  shall
         maintain the confidentiality of the CYTOGEN Technology,  the Documents,
         the reports  referred to in Section 8, the  Manufacturing  Instructions
         and the Process  (jointly the "CYTOGEN  Proprietary  Information")  and
         CYTOGEN  shall  maintain  the  confidentiality  of  the  DSM  Biologics
         Technology,  and the  Parties  shall not in any way or at any time make
         use  thereof  for any  purpose  other than  pursuant to and in order to
         carry out the terms and objectives of this Agreement.

14.2     DSM Biologics' obligations contained in Section 14.1 shall not apply to
         CYTOGEN Proprietary Information, and CYTOGEN's obligations contained in
         Section 14.1 shall not apply to DSM Biologics Technology which:

                                       16
<PAGE>

         i)       at the time of disclosure either is or was part of the public
                  knowledge or literature;
         ii)      after  disclosure  becomes  part of the  public  knowledge  or
                  literature through no fault or action of the receiving Party;
         iii)     the receiving Party can establish by competent proof either is
                  or was at the time of disclosure in its lawful possession from
                  a source other than the disclosing Party;
         iv)      after  disclosure  is acquired by the  receiving  Party from a
                  third  party  who  did not  obtain  such  CYTOGEN  Proprietary
                  Information respectively DSM Biologics Technology, directly or
                  indirectly, from the disclosing Party;
         v)       is independently developed by CYTOGEN or DSM Biologics without
                  the use of DSM Biologics Technology respectively CYTOGEN
                  Proprietary Information:

14.3     The obligations set forth under Section 14.1 shall,  furthermore,  not
         apply to CYTOGEN Proprietary  Information or DSM Biologics  Technology
         which the receiving  Party is required to disclose in  prosecuting  or
         defending  litigation  or in complying  with  applicable  governmental
         regulations in such case  reasonable  advance notice shall be given to
         the disclosing Party.

14.4     DSM Biologics shall not disclose CYTOGEN  Proprietary  Information and
         CYTOGEN  shall not disclose DSM  Biologics  Technology  to any persons
         other  than  to  its  shareholders,   Affiliates,  agents,  employees,
         consultants,   subcontractors  and  other  authorized  representatives
         necessarily  connected  with the  Project.  From all such  persons the
         Parties  will,  prior to his or her  receipt  of  CYTOGEN  Proprietary
         Information respectively DSM Biologics Technology, obtain undertakings
         to maintain the confidentiality of any such disclosure  containing the
         obligations as set forth in Section 14.1.

14.5     The obligations as set forth in this Section 14 shall expire five (5)
         years from the date this Agreement terminates.

14.6     The  provisions  of this  Section 14  replace  and annul the terms and
         conditions of the mutual  confidential  disclosure  agreement  entered
         into on  October  8,  1998 by  CYTOGEN  and DSM  Biologics'  Affiliate
         Gist-Brocades/Bio-Intermediair  Inc., now named DSM Biologics  Company
         Inc.

SECTION 15 - TERM AND TERMINATION
---------------------------------

15.1     This  Agreement  shall enter into force as of the date it is signed by
         both  Parties and shall remain in effect until the earlier date of the
         Project being  completed or the Agreement  being  terminated by either
         Party as provided herein. As per the

                                       17
<PAGE>
         date  this  Agreement  enters into force, the  Letter of Commitment
         shall terminate.

15.2     This Agreement  shall  terminate if a go/no go decision to be taken in
         accordance with the Schedule to this Agreement is a no go decision. In
         such event the Agreement  shall  terminate as per the date the Parties
         take this decision.  In the event of such  termination,  CYTOGEN shall
         compensate DSM Biologics for the following costs: i) the Price for all
         work  performed  in the  Project  up to the date of  termination;  ii)
         close-out costs being the Price for the work that is scheduled for the
         three (3) months  following the date of termination as detailed in the
         Schedule.  CYTOGEN  however  retains the right to have such  scheduled
         work  performed in those three (3) months.  In the event  CYTOGEN does
         not make use of this right,  and DSM  Biologics is able to resell part
         or whole of this  three  (3)  month  capacity  to a third  party,  DSM
         Biologics  will so  inform  CYTOGEN  and  will  provide  a good  faith
         discount  to  CYTOGEN  in respect  of the  close-out  costs;  iii) raw
         materials  and supplies  already  ordered by DSM  Biologics  iv) third
         party  commitments,  such as in respect of external  testing,  already
         entered into by DSM Biologics.

15.3     Either Party shall have the right to terminate this Agreement in the
         event that:
         i)       the other Party (the  "Defaulting  Party")  fails to perform
                  any material obligations,  warranty,  duty or responsibility
                  or is in  default  with  respect  to any  material  term  or
                  condition  undertaken  by the  Defaulting  Party  under this
                  Agreement and such failure or default  continues  unremedied
                  for a period  of  ninety  (90)  days  after  written  notice
                  thereof  by the  aggrieved  Party to the  Defaulting  Party;
                  provided  that if such  breach  cannot be  reasonably  cured
                  within  ninety (90) days,  such breach shall be deemed cured
                  if the Defaulting Party commences to cure such breach within
                  such ninety (90) day period and  diligently  continues  such
                  cure and no  material  adverse  impact  will result from the
                  delay;  ii) the  Defaulting  Party  is  affected  by a Force
                  Majeure  which cannot be removed,  overcome or abated within
                  six (6) months (or such-other  period as the Parties jointly
                  shall  determine)  from the date the Defaulting  Party first
                  became affected; or
         iii)     the Defaulting Party ceases or takes material steps to cease
                  carrying on its  business,  or takes any action to liquidate
                  its  assets;  if the  Defaulting  Party  files  a  voluntary
                  petition in bankruptcy or for arrangement, reorganization or
                  other relief under any bankruptcy legislation or any similar
                  law, now or hereafter in effect; or files an answer or other
                  pleading in any proceeding admitting insolvency,  bankruptcy
                  or  inability  to pay its  debts as they  mature;  or within
                  thirty (30) days after the filing

                                       18
<PAGE>
                  of  any   involuntary   proceedings   under  any  bankruptcy
                  legislation or similar law, now or hereafter in effect, such
                  proceedings  shall  not  have  been  vacated;  or  all  or a
                  substantial  part  of  its  assets  are  attached,   seized,
                  subjected to a writ or distress warrant, or are levied upon,
                  unless such attachment,  seizure,  writ,  warrant or levy is
                  vacated  within thirty (30) days, or shall be adjudicated as
                  bankrupt;  or shall make an  assignment  for the  benefit of
                  creditors or shall admit in writing its inability to pay its
                  debts  generally as they become due or shall  consent to the
                  appointment of a receiver or trustee or liquidator of all or
                  the  substantial   part  of  its  property;   or  any  order
                  appointing  a  receiver,   trustee  or   liquidator  of  the
                  Defaulting  Party  of  all  or a  substantial  part  of  its
                  property is not vacated within sixty (60) days following the
                  entry  thereof;  if an  order  shall  be made or  resolution
                  passed  for  the  winding-up  or  the   liquidation  of  the
                  Defaulting  Party or if the Defaulting Party adopts or takes
                  any   corporate   proceedings   for   its   dissolution   or
                  liquidation.

15.4     The  effective  date of  termination  will be the date  stated  in any
         termination notice given hereunder,  which date will not be before the
         expiration  of  any  applicable  cure  period  provided  for  in  this
         Agreement.

15.5     Termination   of  this  Agreement  will  not  affect  the  rights  and
         obligations  of the  Parties  accrued  under this  Agreement  prior to
         termination  nor the provisions  contained in this Agreement  which by
         their purpose have a term beyond the termination of this Agreement.

15.6     Upon the termination of this Agreement:
         i)       DSM   Biologics   shall   return  to  CYTOGEN  or   destroy,
                  immediately  upon  CYTOGEN's  first  request,  any  and  all
                  CYTOGEN  Proprietary  Information which is in DSM Biologics'
                  possession  and  all  documents   containing   such  CYTOGEN
                  Proprietary  Information or any part thereof, and all copies
                  and  extracts  made  thereof,   provided  however  that  DSM
                  Biologics  may keep one (1) copy of all CYTOGEN  Proprietary
                  Information  received by it for its legal files to enable it
                  to determine its  obligations  hereunder and for  regulatory
                  compliance;
         ii)      CYTOGEN   shall   return  to  DSM   Biologics   or  destroy,
                  immediately upon DSM Biologics'  first request,  any and all
                  DSM Biologics  Technology  which is in CYTOGEN's  possession
                  and all documents  containing such DSM Biologics  Technology
                  or any  part  thereof,  and all  copies  and  extracts  made
                  thereof, provided however that CYTOGEN may keep one (1) copy
                  of all DSM Biologics Technology received by it for its legal
                  files to enable it to determine  its  obligations  hereunder
                  and for regulatory compliance;

                                       19
<PAGE>

         iii)     DSM Biologics shall at CYTOGEN's  request and expense,  ship
                  to  CYTOGEN  any  capital   investment   and  raw  materials
                  purchased in the course of and for the Project;
         iv)      unless DSM  Biologics  shall have  terminated  the Agreement
                  pursuant to Section 15.3, DSM Biologics shall assist CYTOGEN
                  in transferring the Process to such facility as indicated by
                  CYTOGEN. Any costs therefor shall be borne by CYTOGEN.

SECTION 16 - NOTICES
--------------------

All notices, requests, demands and other communications hereunder shall be given
in  writing  and  shall be given by  prepaid  registered  mail,  receipt  return
requested, or by telecopier, to the other Party at the following addresses:

if to CYTOGEN:    Cytogen Corporation
                           600 College Road East
                           Princeton, New Jersey 08540-5308
                           United States of America

                           FaxTelecopier: 1-609-7508122
                           Attention: Mr. M. Titus
                           with a copy to: General Counsel

if to DSM Biologics:       DSM Biologics Company B.V.
                           72/2 Zuiderweg
                           9744 Groningen
                           The Netherlands

                           FaxTelecopier: 31-50-5222333
                           Attention: CEO
                           with a copy to: Legal Counsel

or at such other address as a Party may have  previously  indicated to the other
Party in writing in conformity  with the  foregoing.  Any such notice,  request,
demand or other  communication  shall be deemed  to have  been  received  on the
seventh  (7th)  business  day  following  the  date  of its  mailing  if sent by
registered  mail,  or the next  business day  immediately  following the date of
transmission if sent by telecopier.

SECTION 17 - ASSIGNMENT
-----------------------

This Agreement will be to the benefit of the permitted  successors and assign of
the Parties  hereto.  Neither  Party will be entitled to assign its rights under
this Agreement to any

                                       20
<PAGE>
individual, partnership or other entity, including Affiliates, without the prior
written consent of the other Party hereto and any attempted  assignments without
such  written  consent  shall be of no effect.  Notwithstanding  the  foregoing,
either Party shall be entitled,  without the prior written  consent of the other
Party,  to assign all or part of its rights under this  Agreement to a purchaser
of all or substantially all of its assets, or an entity with which it may merge,
provided  that  the  assignee  agrees  in  writing  to  assume  all  obligations
undertaken by its assignor in this  Agreement.  No assignment  shall relieve the
assigning Party of responsibility  for the performance of any of its obligations
hereunder.

SECTION 18 - DISPUTES AND APPLICABLE LAW
----------------------------------------

18.1     In the  event of a dispute  between  the  Parties,  the  Parties  shall
         firstly  make  every  effort  to find an  amicable  settlement  to such
         dispute.  Before having recourse to litigation  under Section 18.2, the
         Chief  Executive  Officers of the  Parties,  or their  nominees,  shall
         within one (1) month  (which time may be extended by mutual  agreement)
         from a request  by either  Party  meet and use their  best  efforts  to
         resolve any  disputes.  Failing  such  settlement,  the  provisions  of
         Section 18.2 shall apply.

18.2     All disputes which cannot be settled  amicably shall be finally settled
         by binding  arbitration under the rules of conciliation and arbitration
         of the International Chamber of Commerce.

18.3     This Agreement is governed by and  interpreted  in accordance  with the
         laws of England without regard to conflicts of laws principles.

SECTION 19 - FAILURE TO ACT
---------------------------

Notwithstanding any other provision of this Agreement, whenever a Party is given
a time period pursuant to this Agreement in which to exercise an option, make an
election, give a notice or the like, failure to act during such time period will
be conclusively deemed a decision not to exercise the option, make the election,
give the notice or the like, as fully as if the Party with the option, election,
right to give notice or the like had provided  written  notice of a decision not
to exercise the option, make the election, give the notice or the like.

SECTION 20 - FORCE MAJEURE
--------------------------

20.1     The obligations of either Party hereunder shall be suspended during the
         time and

                                       21
<PAGE>
         circumstance  beyond the control and without the fault or negligence of
         that Party so affected ("Force  Majeure")  including but not limited to
         inevitable  accidents,  perils of  navigation,  floods,  fire,  storms,
         epidemics,  acts of god, earthquakes,  explosions,  hostilities,  civil
         commotion,   war  (declared  or  undeclared),   orders,   requisitions,
         regulations  or  acts  of any  government  or  governmental  authority,
         whether de jure or de facto or any official purporting to act under the
         authority of any such government,  illegality  arising from domestic or
         foreign  laws or  regulations,  insurrections,  failure or  slowdown of
         public utilities or common carriers, inability to procure raw materials
         or other circumstances or conditions of a similar nature, quarantine or
         custom  restrictions,  damage  in  factories  or  warehouses,  strikes,
         lockouts or any other labor  difficulty at the Parties and/or suppliers
         of  goods,  raw  materials  and/or  excipients,   lack  of  conveyance,
         resulting in hindrance of this Agreement.

20.2     As soon as possible after being affected by a Force Majeure,  the Party
         so affected  shall  furnish to the other Party all  particulars  of the
         Force  Majeure  and the  manner in which  its  performance  is  thereby
         prevented or delayed.  The Party whose obligations  hereunder have been
         suspended shall promptly and diligently  pursue  appropriate  action to
         enable it to perform such  obligations,  except that the Parties  shall
         not  be  obligated  to  settle  any  strike,  lockout  or  other  labor
         difficulty on terms contrary to their wishes.

20.3     In the event that any Force  Majeure  cannot be  removed,  overcome  or
         abated  within  six (6) months  (or such  other  period as the  Parties
         jointly shall  determine) from the date the Party affected first became
         affected,  then either Party may, at the  expiration  of such period by
         notice to the other Party terminate this Agreement.

SECITION 21 - MISCELLANEOUS PROVISIONS
--------------------------------------

21.1     DSM  Biologics  shall  obtain all  permits  and  governmental  licenses
         required in connection  with its  activities  under this  Agreement and
         shall,  in  addition,  comply with  applicable  law in  performing  its
         obligations hereunder.

21.2     All  rights  and  recourses  of  a  Parts,  under  this  Agreement  are
         cumulative  and  the  exercise  by a  Party  of any of  its  rights  or
         recourses  will not  prevent  it from  exercising  any  other  right or
         recourse  available  under this Agreement or at law. All obligations of
         the Parties under this Agreement are indivisible.

21.3     If any covenant, obligation or term hereunder or the application of any
         part of this Agreement to any person,  party or circumstance  shall, to
         any  extent,  be  invalid  or  unenforceable,  the  remainder  of  this
         Agreement  or  the  application  of  such   covenants,   agreements  or
         obligations other than those which are held to be

                                       22
<PAGE>
         invalid  or  unenforceable  shall  not be  affected  thereby  and  each
         covenant, obligation and agreement contained herein shall be separately
         valid and enforceable to the full extent permitted by law.

21.4     This is an  agreement  between  separate  entities  and  neither is the
         agent,  representative,  master or servant of or possesses the power to
         obligate  the other or to make any  warranties  or  representations  on
         behalf of the other.  Nothing in this  Agreement will be interpreted so
         as to  create a  relationship  of  partners'  joint  ventures,  agents,
         mandate,  fiduciaries  or any other  similar  relationship  between the
         Parties.

21.5     Failure  by either  Party to take  action  against  the other  will not
         affect its right to require full  performance  of this Agreement at any
         time  thereafter.  The waiver by either Party of the breach of any term
         of this Agreement by the other Party will not operate or be interpreted
         as a waiver of any  subsequent  breach by such  Party.  No term of this
         Agreement  will be deemed to have been  waived by either  Party  unless
         such waiver is in writing.

21.6     This Agreement and the documents  referred to in it or attached to this
         Agreement  constitute  the entire  agreement  between the Parties  with
         respect  to  the  subject   matter   hereof  and  supersede  all  prior
         discussions,  negotiations  and  agreements  with respect  thereto.  No
         amendment of, change to or variance from this Agreement will be binding
         on either Party unless in writing and signed by the Parties.

21.7     Each of the Parties agrees to perform such acts,  sign and deliver such
         other  agreements' cause such meetings to be held,  resolutions  passed
         and  by-laws  enacted,  exercise  their  vote and  influence  as may be
         necessary or  desirable  from time to time in order to give full effect
         to this Agreement.

21.8     This Agreement may be executed in two (2)  counterparts,  each of which
         shall be an original and all of which shall constitute together but one
         and the same document.

21.9     The headings and  subheadings  of the sections of this  Agreement  have
         been included solely for ease of reference and do not form part of this
         Agreement.

21.10    All words and  personal  pronouns  relating  thereto  shall be read and
         construed as the number and gender of the Party or Parties  referred to
         in each case require and the verb shall be  construed as agreeing  with
         the required word and/or pronoun.

                                       23
<PAGE>
21.11    This  Agreement  will not be binding upon the Parties until it has been
         signed  below on  behalf  of each  Party,  in  which  event it shall be
         effective as of the date of signing.

IN WITNESS  WHEREOF,  the  Parties  have  signed on the date  first  hereinabove
mentioned.

DSM BIOLOGICS COMPANY B.V.         CYTOGEN CORPORATION

/s/ G.P. Algra                     /s/ J.W.R. den Toom
------------------                 -----------------------------
G.P. Algra                         J.W.R. den Toom
President & CEO                    Director Marketing, Sales and
                                   Strategic Development

                                       24

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