Document:

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                                                                     EXHIBIT 4.2

                           PROBUSINESS SERVICES, INC.

                             1996 STOCK OPTION PLAN

                                 (As Amended(1))
                       (Restated as of December 15, 2000)

             1. Purposes of the Plan. The purposes of this Stock Plan are:

             -        to attract and retain the best available personnel for
positions of substantial responsibility,

             -        to provide additional incentive to Employees and
Consultants, and

             -        to promote the success of the Company's business.

             Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.

             2. Definitions. As used herein, the following definitions shall
apply:

                  (a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.

                  (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

                  (c) "Board" means the Board of Directors of the Company.

                  (d) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (e) "Committee" means a committee of Directors appointed by
the Board in accordance with Section 4 of the Plan.

                  (f) "Common Stock" means the Common Stock of the Company.

                  (g) "Company" means ProBusiness Services, Inc., a Delaware
corporation.

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(1) Amendments to the 1996 Stock Option Plan were approved by the Company's
stockholders on November 12, 1998 and November 18, 1999.
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                  (h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity, and any Director of the Company whether compensated for such services or
not.

                  (i) "Director" means a member of the Board.

                  (j) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

                  (l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                  (m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                  (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                  (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

                  (n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

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                  (o) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.

                  (p) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.

                  (q) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

                  (r) "Option" means a stock option granted pursuant to the
Plan.

                  (s) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

                  (t) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.

                  (u) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

                  (v) "Optionee" means the holder of an outstanding Option
granted under the Plan.

                  (w) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (x) "Plan" means this 1996 Stock Option Plan.

                  (y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

                  (z) "Section 16(b)" means Section 16(b) of the Exchange Act.

                  (aa) "Service Provider" means an Employee, Director or
Consultant.

                  (bb) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

                  (cc) "Subsidiary" means a "subsidiary corporation", whether
now or hereafter existing, as defined in Section 424(f) of the Code.

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         3. Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 6,457,178 Shares(2), plus any Shares issued or subject to
issuance pursuant to options under the Company's Amended 1989 Stock Option Plan
(the "1989 Plan") that are forfeited to the Company under the terms of such
options subsequent to September 25, 1998. In addition, the maximum aggregate
number of Shares that may be optioned and sold under the Plan shall be increased
on each anniversary date of the adoption of the Plan by a number of Shares equal
to the lesser of (i) 375,000 Shares, (ii) two percent (2%) of the outstanding
Shares on such date or (iii) a lesser number determined by the Board. The Shares
may be authorized, but unissued, or reacquired Common Stock.

         If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan, whether upon
exercise of an Option, shall not be returned to the Plan and shall not become
available for future distribution under the Plan.

         4. Administration of the Plan.

                  (a) Procedure.

                           (i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

                           (ii) Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                           (iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

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(2) Includes (i) 750,000 authorized Shares (of which 611,667 were issued and
exercised, 130,753 were issued and unexercised and 7,580 were unissued as of the
date the Executive Stock Option Plan became this Plan) from the Executive Stock
Option Plan, (ii) 995,588 authorized and unused Shares from the 1989 Plan that
transferred into this Plan, (iii) 90,290 Shares added pursuant to Shares issued
or subject to issuance pursuant to options under the 1989 Plan that were
forfeited to the Company between the Company's initial public offering and
September 25, 1998, (iv) 335,574 Shares added pursuant to an annual increase
equal to 2% of the outstanding Shares on February 12, 1998, (v) 1,085,726 Shares
added pursuant to a 3:2 stock split on August 7, 1998, (vi) 950,000 Shares added
pursuant to approval by the Company's board of directors on July 23, 1998 and
the Company's stockholders on November 12, 1998, (vii) 375,000 Shares added
pursuant to an annual increase on February 12, 1999, (viii) 1,500,000 Shares
added pursuant to approval by the Company's board of directors on September 28,
1999 and the Company's stockholders on November 18, 1999, and (ix) 375,000
Shares added pursuant to an annual increase on February 12, 2000.

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                           (iv) Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

                  (b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                           (i) to determine the Fair Market Value;

                           (ii) to select the Service Providers to whom Options
may be granted hereunder;

                           (iii) to determine the number of shares of Common
Stock to be covered by each Option granted hereunder;

                           (iv) to approve forms of agreement for use under the
Plan;

                           (v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                           (vi) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;

                           (vii) to institute an Option Exchange Program;

                           (viii) to construe and interpret the terms of the
Plan granted pursuant to the Plan;

                           (ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                           (x) to modify or amend each Option (subject to
Section 14(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                           (xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the

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Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;

                           (xii) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                           (xiii) to make all other determinations deemed
necessary or advisable for administering the Plan.

                  (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

         5. Eligibility. Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

         6. Limitations.

                  (a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

                  (b) Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as
a Service Provider with the Company, nor shall they interfere in any way with
the Optionee's right or the Company's right to terminate such relationship at
any time, with or without cause.

                  (c) The following limitations shall apply to grants of
Options:

                           (i) No Service Provider shall be granted, in any
fiscal year of the Company, Options to purchase more than 187,500 Shares.

                           (ii) Over the remaining term of the Plan, a Service
Provider may be granted Options to purchase up to an additional 375,000 Shares
which shall not count against the limit set forth in subsection (i) above.

                           (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.

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                           (iv) If an Option is cancelled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 12), the cancelled Option will be counted
against the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.

         7. Term of Plan. Subject to Section 18 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 14 of the Plan.

         8. Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

         9. Option Exercise Price and Consideration.

                  (a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                           (i) In the case of an Incentive Stock Option

                                    (A) granted to an Employee who, at the time
the Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                                    (B) granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                           (ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator. In the case
of a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                           (iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.

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                  (b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised.

                  (c) Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                           (i) cash;

                           (ii) check;

                           (iii) promissory note;

                           (iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                           (v) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

                           (vi) a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

                           (vii) any combination of the foregoing methods of
payment; or

                           (viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

         10. Exercise of Option.

                  (a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

                           An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to

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exercise the Option, and (ii) full payment for the Shares with respect to which
the Option is exercised. Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall be issued
in the name of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse. Until the Shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 12 of the Plan.

                           Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

                  (b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                  (c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

                  (d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's

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termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                  (e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted based
on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

         11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

         12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

                  (a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

                  (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent

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it has not been previously exercised, an Option will terminate immediately prior
to the consummation of such proposed action.

                  (c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option, the Optionee shall
fully vest in and have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option shall terminate upon the expiration
of such period. For the purposes of this paragraph, the Option shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Optioned Stock subject to the Option,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the merger or sale of assets.

         13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

         14. Amendment and Termination of the Plan.

                  (a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

                  (b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

                  (c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to

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exercise the powers granted to it hereunder with respect to options granted
under the Plan prior to the date of such termination.

         15. Conditions Upon Issuance of Shares.

                  (a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

                  (b) Investment Representations. As a condition to the exercise
of an Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

         16. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

         17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

         18. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

                                       12<PAGE>

                                                                  EXHIBIT 10.19

                         LICENSE AND MARKETING AGREEMENT

                                 BY AND BETWEEN

                               CYTOGEN CORPORATION

                                       AND

                            ADVANCED MAGNETICS, INC.

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<S>                                                                                                            <C>
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...........................................................................................13
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...................................................................................................21
10.  Supply; Royalties...........................................................................................21
   10.1   Payment................................................................................................22
   10.2   Minimum Sales..........................................................................................22
11.  Obligation of Cytogen to Market Agent.......................................................................23
12.  Reports and Accounting for Agent............................................................................24
   12.1   Payments and Monthly Reports for Agent Net Sales.......................................................24
   12.2   Annual Reports.........................................................................................24
   12.3   Records................................................................................................25
   12.4   Currency...............................................................................................25
13.  Compliance with Regulations.................................................................................25
14.  Representations and Warranties..............................................................................25
   14.1  By AM...................................................................................................25
   14.2  By Cytogen..............................................................................................26
   14.3  Limitations.............................................................................................28
15.  Term and Termination........................................................................................28
   15.1  Term....................................................................................................28
   15.2  Termination Events......................................................................................28
   15.3  Partial Termination for Certain Agents..................................................................29
   15.4  Effect of Expiration or Termination.....................................................................29
16.  General Provisions..........................................................................................30

                                      -i-

<PAGE>

   <S>                                                                                                           <C>
   16.1  Force Majeure...........................................................................................30
   16.2  Waiver..................................................................................................30
   16.3  Publicity...............................................................................................31
   16.4  Notices.................................................................................................31
   16.5  Entire Agreement........................................................................................32
   16.6  Headings................................................................................................33
   16.7  Assignment..............................................................................................33
   16.8  Independent Contractors.................................................................................33
   16.9  Governing Law...........................................................................................33
   16.10  Severability...........................................................................................34
</TABLE>

                                      -ii-

<PAGE>

                         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.

<PAGE>

                  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

                                       2

<PAGE>

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 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.

                                       3
<PAGE>

                  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 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

                                       4
<PAGE>

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.

                  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.

                                       5
<PAGE>

                  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.

                  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.

                  1.398 "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

                                       6
<PAGE>

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 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

                                       7
<PAGE>

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 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

                                       8
<PAGE>

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. 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.

                                       9
<PAGE>

         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.

                  (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

                                       10
<PAGE>

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 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.

-----------------------------------

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

                                       11
<PAGE>

                  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.

                           (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

                                       12
<PAGE>

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 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

                                       13
<PAGE>

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 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

                                       14
<PAGE>

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 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.

                                       15
<PAGE>

                  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
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

                                       16
<PAGE>

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.

                  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

------------------------------
***** Confidential portion omitted and filed separately with the Securities and
      Exchange Commission.
                                       17
<PAGE>

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 AM for 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 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

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

                                       18
<PAGE>

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 Section 8.2(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 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.

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

                                       19
<PAGE>

                  (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 competent
jurisdiction or (y) make such Agent commercially unviable to either Party, then
either Party

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

                                       20
<PAGE>

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

                                       21
<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                         *****

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

                                       22
<PAGE>

         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.

                  (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

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

                                       23
<PAGE>

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 ***** 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

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

                                       24
<PAGE>

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 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.

                                       25
<PAGE>

                       (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.

                       (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.

                                       26
<PAGE>

                  (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 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

                                       27
<PAGE>

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.

         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

                                       28
<PAGE>

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 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

                                       29
<PAGE>

              (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.

              (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

                                       30
<PAGE>

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 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.

                                       31
<PAGE>

              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 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

                                       32
<PAGE>

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 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

                                       33
<PAGE>

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]

                                       34
<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: Chief Executive Officer     Title: President and Chief Executive Officer
      ------------------------           --------------------------------------

                                       35
<PAGE>

<TABLE>
<CAPTION>
                                    EXHIBIT A
                                 ISSUED PATENTS

COUNTRY                           PATENT NO.                                ISSUANCE DATE
<S>                              <C>                                        <C>
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
</TABLE>

                               PATENT APPLICATIONS

<TABLE>
<CAPTION>
COUNTRY               APPLICATION SERIAL NO.                                FILE DATE
<S>                                   <C>                                   <C>
U.S.                                  *****                                 3/8/00
</TABLE>

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

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