Document:

Exhibit 10.1

 

TERMINATION AND SETTLEMENT AGREEMENT 

 

AGREEMENT, dated
as of the 27th day of April 2006, among Iconix Brand Group, Inc., a Delaware
corporation (“Iconix”), Moss Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Iconix (“MAC”), and Cherokee, Inc. a Delaware
corporation (“Cherokee”).

W  I  T  N  E
S  S  E  T  H :

 

WHEREAS, Iconix
entered into an Agreement and Plan of Merger dated as of March 31, 2006, with
MAC, Mossimo, Inc., a Delaware corporation (“Mossimo”), and Mossimo Giannulli,
the majority stockholder of Mossimo (the “Merger Agreement”); and

 

WHEREAS, Mossimo
and Cherokee have entered into that certain Cherokee-Mossimo Finders Agreement
dated March 27, 2000 (the “Finders Agreement”); and

 

WHEREAS,
subsequent to the execution of the Merger Agreement, Cherokee issued a
non-binding public proposal on April 17, 2006 to acquire all the outstanding
shares of Mossimo  (the “Unsolicited
Proposal”); and

 

WHEREAS, Cherokee
has determined to withdraw the Unsolicited Proposal pursuant to the terms and
subject to the conditions set forth herein;

 

NOW, THEREFORE, in
consideration of the foregoing premises and the respective representations,
warranties, covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:

 

1.             Termination of Finders Agreement. Upon
satisfaction of the conditions of Section 4 of this Agreement and simultaneous
with the effective time of the merger (the “Closing Date” or the “Termination
Date”) (i) the Finders Agreement shall be terminated in its entirety and be of
no further force or effect and (ii) Iconix will pay to Cherokee by wire
transfer in immediately available funds the sum of Thirty-Three Million Dollars
($33,000,000) (the “Termination Fee”).

 

2.             Representations
and Warranties.

 

2.1           Representations
and Warranties of Iconix. 
Iconix hereby represents and warrants that (a) this Agreement has been
duly authorized, executed and delivered by Iconix and is the valid and binding
obligation of Iconix, enforceable against Iconix in accordance with its terms
and (b) no consent of any third party is required for the execution,
delivery and performance of this Agreement by Iconix.

 

2.2           Representations
and Warranties of Cherokee. 
Cherokee hereby represents and warrants that: (a) this Agreement has
been duly authorized, executed and delivered by Cherokee and is the valid and
binding obligation of Cherokee, enforceable against Cherokee in accordance with
its terms; (b) the Finders Agreement is in full force and effect and is a
valid and binding obligation of Cherokee and Cherokee is not in material
violation of or in default of any term or condition of the Finders Agreement;
(c) Cherokee’s right, title, or interest in the Finders Agreement or any
amounts due thereunder has not been pledged, assigned, hypothecated, subjected
to any lien or security interest, or encumbered in any manner whatsoever; and
(d) no consent of any third party is required for the execution, delivery
and performance of this Agreement by Cherokee.

 

3.             Covenants
of Cherokee.  Cherokee
hereby covenants and agrees that:

 

3.1           Immediately after
execution of this Agreement, Cherokee shall withdraw the Unsolicited Proposal
and notify Mossimo in writing of such withdrawal.  In addition, unless the Merger Agreement
shall have been terminated, Cherokee agrees not to, directly or indirectly,
through any affiliate or otherwise, reinstate or make any new offer to purchase
shares of Mossimo capital stock or any other type of acquisition of all, or
substantially all, of the capital stock or assets of Mossimo, whether by merger
or any other type of business combination with Mossimo or otherwise.

 

 

3.2           From and after the
date hereof, Cherokee shall not interfere with the consummation of the Merger
Agreement, and hereby agrees to vote any and all shares of Mossimo common stock
owned or held by it or any affiliate in favor thereof.  From the date of this Agreement through the
Termination Date, other than in the ordinary course of business, Cherokee
further agrees not to take any action or omit to take any action which would
adversely affect the relationship of Mossimo or Iconix or any of their
respective affiliates with Target Brands, Inc., or its affiliates.  Cherokee agrees that Cherokee and its
affiliates will take no action which is intended to, or would reasonably be
expected to, harm or disparage Mossimo or Iconix or any of their affiliates.

 

3.3           From and after the
date of this Agreement through the Closing Date, Cherokee shall not pledge,
assign, sell, lease, license, mortgage, hypothecate, or otherwise encumber or
subject to any lien or security interest in any manner whatsoever its right,
title, or interest in the Finders Agreement or any amounts due Cherokee
thereunder.

 

4.             Covenants of Iconix. Iconix hereby
covenants and agrees that:

 

4.1           Iconix agrees to use its best efforts to
cause all conditions precedent to its obligations (and to the obligations of
the other parties under the Merger Agreement to consummate the transactions
contemplated thereby) to be satisfied, including, but not limited to, using
best efforts to obtain all required (if so required by the Merger Agreement)
consents, waivers, amendments, modifications, approvals, authorizations,
notations and licenses.

 

4.2           From the date of
this Agreement through the Termination Date, other than in the ordinary course
of business, Iconix further agrees not to take any action or omit to take any
action which would adversely affect the relationship of Cherokee or any of its
affiliates with Target Brands, Inc., or its affiliates.  Iconix agrees that Iconix and its affiliates
will take no action which is intended to, or would reasonably be expected to,
harm or disparage Cherokee or any of its affiliates.

 

5.             Conditions
to Closing.  The closing
of the transactions contemplated by this Agreement and the payment of the
Termination Fee shall take place upon the satisfaction of the following
conditions:

 

5.1           Cherokee shall have
timely withdrawn the Unsolicited Bid and otherwise complied with all of the
covenants set forth in Section 3 hereof.

 

5.2           The Merger Agreement
shall have been consummated and the Effective Time (as such term is defined in
the Merger Agreement) shall have occurred.

 

5.3           The representations
and warranties of Cherokee set forth in Section 2 shall be true and correct in
all respects as of the date of the Closing.

 

6.             Net
Revenues.  In the event
that the closing under the Merger Agreement occurs, Iconix shall cause MAC to
promptly pay Cherokee all earned but unpaid Finder’s Fees (as such term is
defined in the Finders Agreement) through and including the Closing Date of
this Agreement; provided, however, that Net Revenues (as that term is defined
in the Finders Agreement) shall not be reduced by the payment to Target
referenced in the Current Report on Form 8-K filed by Mossimo on March 31, 2006
and due on or before June 30, 2006.Payment of such Finder’s Fees shall be
accompanied by a written report setting forth the Net Revenues actually
received by Mossimo (broken down by date and amount received) since the date of
the last report delivered to Cherokee by Mossimo and such other information as
is necessary to enable Cherokee to verify the Net Revenues reported by Iconix
and/or Mossimo.  Finder’s Fees shall be
payable in United States Dollars. 
Interest at the maximum legal rate shall be paid on any Finder’s Fees
not paid when due.

 

7.             Liquidated
Damages; Termination.

 

7.1           In the event that the Merger
Agreement is terminated pursuant to Section 7.1(a), 7.1(d) or 7.1(g), Iconix
shall pay to Cherokee the sum of One Million Dollars ($1,000,000) as liquidated
damages within two business days of such termination. Upon receipt by Cherokee
of the payment required by Section 7 subsequent to the

 

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termination of the Merger Agreement, the obligations of the parties
hereto shall expire and be of no further force or effect, except for the
provisions of Sections 7, 8 and 9 hereof, which shall survive.

 

7.2           In the event that
the Merger Agreement is terminated for any reason other than as specified in
Section 7.1, then the obligations of the parties hereto shall expire and be of
no further force or effect, except for the provisions of Sections 7, 8 and 9
hereof, which shall survive.

 

8.             Releases.

 

8.1           Releases
by Cherokee.  Effective as
of the Closing Date, Cherokee for itself and for each of its respective past
and present agents, officers, directors, employees, attorneys, shareholders,
parents, subsidiaries, and each of their affiliated legal or business entities,
insurers, successors and assigns, both individually and in their representative
capacities (jointly and severally the “Cherokee Releasing Parties”) hereby
jointly and severally, release and discharge Iconix, Mossimo and each of their
affiliates, parents, subsidiaries, officers, directors, stockholders,
employees, agents, attorneys, accountants and other advisors, and the heirs,
executors and administrators, if applicable, and the predecessors, successors
or assigns of each of the foregoing (collectively the “Cherokee Released
Parties”) from all actions, causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims, and demands whatsoever (“Claims”), in law or
equity, which against any or all of the Cherokee Released Parties, any or all
of the Cherokee Releasing Parties ever had, now have or hereafter can, shall or
may have, for, upon, or by reason of any matter, cause or thing whatsoever from
the beginning of the world to the Termination Date arising out of or relating
to the Finders Agreement or its termination.

 

8.2           Release
by Iconix.  Effective as
of the Closing Date, Iconix, for itself and for each of its respective past and
present agents, officers, directors, employees, attorneys, shareholders,
parents, subsidiaries, and all of its affiliated legal or business entities,
insurers, successors and assigns, both individually and in their representative
capacity (jointly and severally the “Iconix Releasing Parties”) hereby jointly
and severally, release and discharge Cherokee and each of its affiliates,
parents, subsidiaries, officers, directors, stockholders, employees, agents,
attorneys, accountants and other advisors, and the heirs, executors and
administrators, if applicable, and the predecessors, successors or assigns of
each of the foregoing (collectively the “Iconix Released Parties”) from all
Claims, in law or equity, which against any or all of the Iconix Released
Parties, any or all of the Iconix Releasing Parties ever had, now have or
hereafter can, shall or may have, for, upon, or by reason of any matter, cause
or thing whatsoever from the beginning of the world to the Termination Date
arising out of or relating to the Finders Agreement or its termination.

 

8.3           Exceptions,
Indemnification. 
Notwithstanding anything contained in this Section 8 to the contrary,
this Section 8 shall not apply to any Claims arising out of breach of the
obligations contained in this Agreement. 
Each of Iconix and Cherokee hereby agree to indemnify and hold the other
harmless from any and all loses, liabilities, expenses and costs (including
reasonable attorneys’ fees) arising out of, resulting from, or relating to
(a) any breach of any representation or warranty made herein by such party
or (b) any breach of any covenant or agreement made by any party herein.

 

9.             Miscellaneous.

 

9.1           Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made as of the date delivered or mailed if delivered personally
or mailed by registered or certified mail, postage prepaid, return receipt
requested, to the parties at their respective addresses set forth below:

 

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If to Iconix or MAC:

 

	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
  Iconix Brand Group, Inc.

  	
  Blank Rome LLP

  
	
  1450 Broadway, 4th Floor

  	
  405 Lexington Avenue

  
	
  New York, New York 10018

  	
  New York, New York 10174

  
	
  Attn: Neil Cole, CEO

  	
  Attn: Robert J. Mittman, Esq.

  
	
  Fax: (212) 391-0127

  	
  Fax: (212) 885-5001

  

 

	
  If to Cherokee:

  	
   

  	
  With a copy to:

  

 

	
  Cherokee, Inc.

  	
  Morrison & Foerster LLP

  
	
  6835 Valjean Avenue

  	
  12531 High Bluff Drive, Suite 100

  
	
  Van Nuys, CA 91406

  	
  San Diego, CA 92130

  
	
  Attn: Robert Margolis, Chairman & CEO

  	
  Attn: Scott M. Stanton

  
	
  Fax: (818) 908-9191

  	
  Fax: (858) 523-5941

  

 

9.2           Press
Release.  Immediately
following the execution and delivery of this Agreement, Cherokee and Iconix
shall each issue a press release announcing the execution of this Agreement,
which press releases shall be subject to the prior review and approval of the
other party.  None of the parties hereto
will make any public statements (including in any filing with the SEC or any
other regulatory or governmental agency, including any stock exchange) that are
inconsistent with, or otherwise contrary to, the statements in the press Releases
issued pursuant to this Section 9.2.

 

9.3           Entire Agreement.  This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.

 

9.4           Choice of Law/Governing Law.  This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Delaware without
reference to its conflicts of laws provisions.

 

9.5           Further Assurances.  The Parties hereto agree to, at their own
expense, execute and deliver such other instruments of conveyance, transfer or
termination and take such other actions as any other party may reasonably
request, including obtaining the signatures of parties not Party to this
Agreement,  in order to more effective
consummate the transactions contemplated hereby.

 

9.6           Amendment.  This Agreement may only be modified by a
written instrument, which is executed by each of the parties hereto.

 

9.7           Severability.  This Agreement shall be deemed severable, and
the invalidity or unenforceability of this Agreement or any other term or
condition hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto agree that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.

 

9.8           Headings.  The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms of this Agreement.

 

9.9           Binding
Effect; Benefit.  This
Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective heirs, legal representatives, successors and
assigns.

 

9.10         Counterparts and
Facsimile.  This Agreement
may be executed in one or more counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same
instrument.  For purposes of this Agreement
signatures received by facsimile shall have the same force and effect as
original signatures.

 

4

 

IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto
as of the date first above written.

 

 

	
   

  	
  ICONIX BRAND GROUP,
  INC.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Neil Cole

  	
   

  	 

	
   

  	
  Name:

  	
  Neil Cole

  	 

	
   

  	
  Title:

  	
  Chairman of the Board,
  Chief Executive

  	 

	
   

  	
  Officer and Treasurer

  	 

	
   

  	
   

  	 

	
   

  	
  MOSS ACQUISITION CORP.

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Neil Cole

  	
   

  	 

	
   

  	
  Name:

  	
  Neil Cole

  	 

	
   

  	
  Title:

  	
  President

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  CHEROKEE INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert Margolis

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert Margolis

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board
  and Chief

  
	
   

  	
   

  	
  Executive Officer

  
													

 

5Exhibit 10.1

 

NEORX CORPORATION

 

INDEMNIFICATION
AGREEMENT

 

This Indemnification Agreement (this “Agreement”), dated as of April 26,
2006, is entered into by and between NeoRx Corporation, a Washington
corporation (the “Company”), and [Name of
Director*] (“lndemnitee”).

 

RECITALS

 

A.            The
Company and lndemnitee recognize the litigation risks inherent in service as a
director and/or officer of a publicly traded company, including the substantial
costs involved in defending such matters.

 

B.            The
Company’s articles of incorporation (the “Articles”)
and bylaws (the “Bylaws”) contain certain
provisions, approved by the Company’s shareholders, for indemnification of the
Company’s directors and/or officers to the full extent permitted by the
Washington Business Corporation Act (the “Statute”).

 

C.            The
Articles, the Bylaws and the Statute specifically provide that they are not
exclusive, and contemplate that contracts may be entered into between the
Company and its directors and/or officers with respect to indemnification.

 

D.            The
lndemnitee has indicated a desire to supplement the indemnification
provisions in the Articles and Bylaws to provide additional protections against
the risks associated with his service to the Company and further clarify his
rights with respect to indemnification in certain circumstances.

 

E.             To
induce Indemnitee to accept the position or continue service as a director
and/or officer of the Company, the Company and the Indemnitee now agree
that they should enter into this Indemnification Agreement.

 

AGREEMENT

 

1.                                      Indemnification of Indemnitee

 

1.1                               Scope

 

Subject to Section 4.1 and all other terms and
conditions of this Agreement, the Company agrees to indemnify and hold harmless
Indemnitee, to the full extent permitted by law, whether or not specifically
authorized by this Agreement, the Articles, the Bylaws, the Statute or
otherwise, for any Indemnifiable Losses (as defined below) which the
Indemnitee is or becomes legally obligated to pay in connection with any
Proceeding. 
In the event of any change, after the date of this Agreement, in any
applicable law, statute or rule regarding the right of a Washington
corporation to indemnify a director and/or officer, such changes, to the extent
that they would expand Indemnitee’s indemnification rights, shall be within the
purview of Indemnitee’s rights and the Company’s obligations under this
Agreement, and, to the extent that they would narrow Indemnitee’s
indemnification rights, shall not affect or limit the scope of this Agreement;
provided, however, that

 

 

any
change that is required by applicable laws, statutes or rules to be
applied to this Agreement shall be so applied regardless of whether the effect
of such change is to narrow Indemnitee’s rights.

 

1.2                               Nonexclusivity

 

The indemnification provided by this Agreement is not
exclusive of any rights to which Indemnitee may be entitled under the Articles,
the Bylaws, any other agreement, any vote of shareholders or disinterested
directors, the Statute, or otherwise, whether as to action in Indemnitee’s
official capacity or otherwise.

 

1.3                               Definition of Indemnifiable Losses

 

For purposes of this Agreement, the term “Indemnifiable Losses” shall include
(without limitation) any and all damages (compensatory, exemplary, punitive or otherwise), judgments,
fines, penalties, settlements, costs, attorneys’ fees and disbursements, costs
of attachment or similar bonds, investigations, expenses of establishing a
right to indemnification under this Agreement, and any other losses, claims, liabilities or other expenses
incurred in connection with a Proceeding, subject to the limitations set forth
in Section 4.1 below.

 

1.4                               Definition of Proceeding

 

For purposes of this Agreement, the term “Proceeding” shall include (without
limitation) any threatened, pending or completed claim, action, suit or
proceeding, whether brought by or in the right of the Company or otherwise, and
whether of a civil, criminal, administrative or investigative nature, in which
the Indemnitee may be or may have been involved as a party or otherwise
(including without limitation as a witness), (a) by reason of the fact
that Indemnitee is or was, or has agreed to become, a director and/or officer
of the Company, (b) by reason of any actual or alleged error or
misstatement or misleading statement made or suffered by the Indemnitee, (c) by
reason of any action taken by Indemnitee or of any inaction on Indemnitee’s
part while acting as such director and/or officer, or (d) by reason of the
fact that Indemnitee was serving at the request of the Company as a director,
trustee, officer, employee or agent of the Company or another corporation,
partnership, joint venture, trust or other enterprise (including without limitation employee benefit plans and administrative
committees thereof) (which request will be conclusively presumed in the
case of any of the foregoing that are “affiliates” of the Company as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended); provided, however, that, except with respect to
an action to enforce the provisions of this Agreement, the term “Proceeding”
shall not include any action, suit, claim or proceeding instituted by or at the
direction of Indemnitee unless such action, suit, claim or proceeding is or was
authorized or ratified by the Company’s Board of Directors.

 

1.5                               Determination of Entitlement

 

In the event that a determination of Indemnitee’s
entitlement to indemnification is required pursuant to Section 23B.08.550
of the Statute or its successor or pursuant to other applicable law, the party
specified therein as the determining party shall make such determination;
provided, however, (a) that Indemnitee shall initially be presumed in all
cases to be entitled to indemnification, (b) that Indemnitee may establish
a conclusive presumption of any fact necessary to such a determination by
delivering to the Company a declaration made under penalty of perjury that such
fact is true and (c) that, unless the Company shall deliver to Indemnitee
written notice of a determination that Indemnitee is not entitled to
indemnification within twenty (20) days of the Company’s receipt of

 

2

 

Indemnitee’s
initial written request for indemnification, such determination shall
conclusively be deemed to have been made in favor of the Company’s provision of
indemnification and Company agrees not to assert otherwise.

 

1.6                               Survival

 

The indemnification provided under this Agreement shall
apply to any and all Proceedings, notwithstanding that Indemnitee has ceased to
serve in a capacity referred to in Section 1.4(a)-(d).

 

2.                                      Expense Advances

 

2.1                               Generally

 

The right to indemnification for Indemnifiable Losses
conferred by Section 1 shall include the right to have the Company pay
Indemnitee’s expenses in any Proceeding as such expenses are incurred and in
advance of such Proceeding’s final disposition (such right is referred to
hereinafter as an “Expense Advance”), subject to
Sections 2.2, 4 and 5 and all other terms and conditions of this Agreement.

 

2.2                               Conditions to Expense Advance

 

The Company’s obligation to provide an Expense Advance
is subject to (a) Indemnitee or his representative having first executed
and delivered to the Company an undertaking, which need not be secured and
shall be accepted without reference to Indemnitee’s financial ability to make
repayment, by or on behalf of Indemnitee to repay all Expense Advances if and
to the extent that it shall ultimately be determined by a final, unappealable
decision rendered by a court having jurisdiction over the parties and the
subject matter of the dispute that Indemnitee is not entitled to be indemnified
under this Agreement or otherwise; and (b) Indemnitee furnishing, upon
request by the Company and if required under applicable law, a written
affirmation of Indemnitee’s good faith belief that Indemnitee has met any
applicable standards of conduct.

 

2.3                               Subrogation

 

In the
event of payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of the Indemnitee, who
shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.

 

3.                                      Procedures for Enforcement

 

3.1                               Enforcement

 

In the event that a claim for indemnification hereunder
is made and is not paid in full within sixty days after written notice of such
claim has been received by the Company, except in the case of a claim for
advance expenses, in which case the applicable period shall be twenty days,
Indemnitee may, but need not, at any time bring suit against the Company to recover
the unpaid amount of the claim (an “Enforcement Action”),
subject to all other terms, conditions and limitations of this Agreement.

 

3

 

3.2                               Presumptions in Enforcement Action

 

In any Enforcement Action the following presumptions
(and limitation on presumptions) shall apply:

 

(a)           The Company shall conclusively be
presumed to have entered into this Agreement and assumed the obligations
imposed on it to induce Indemnitee to accept the position of, or to continue as
a director and/or officer of the Company; and

 

(b)           Neither (i) the failure of the
Company (including its Board of Directors, independent or special legal counsel
or the Company’s shareholders) to have made a determination prior to the
commencement of the Enforcement Action that indemnification of Indemnitee is
proper in the circumstances nor (ii) an actual determination by the
Company, its Board of Directors, independent or special legal counsel or the
shareholders that Indemnitee is not entitled to indemnification shall be a
defense to the Enforcement Action or create a presumption that Indemnitee is
not entitled to indemnification.

 

3.3                               Attorneys’ Fees and Expenses for Enforcement
Action

 

The Company shall indemnify and hold harmless Indemnitee
against all of Indemnitee’s reasonable fees and expenses in bringing and
pursuing any Enforcement Action (including reasonable attorneys’ fees at any
stage, including on appeal); provided, however, that the Company shall not be
required to provide such indemnity (a) if a court of competent
jurisdiction determines that all the material assertions made by Indemnitee in
such Enforcement Action were not made in good faith or were frivolous or (b) to
the extent limited under Section 4.1 below.

 

4.                                      Limitations

 

4.1                               Limitation on Indemnity

 

Notwithstanding any other provision of this Agreement,
the Company shall not be obligated to provide indemnification pursuant to this
Agreement:

 

(a)           on account of any suit in which a
final, unappealable decision is rendered by a court having jurisdiction over
the parties and the subject matter of the dispute for an accounting of profits
made from the purchase or sale by Indemnitee of securities of the Company in
violation of the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto;

 

(b)           for Indemnifiable Losses that have
been paid directly to Indemnitee by an insurance carrier under a policy of
insurance maintained by the Company;

 

(c)           on account of Indemnitee’s conduct
which is finally adjudged with no further right of appeal to have been
intentional misconduct, a knowing violation of law, a violation of
RCW 23B.08.310 or any successor provision of the Statute, or a transaction
from which Indemnitee derived personal benefit in money, property or services
to which Indemnitee was not legally entitled;

 

(d)           to the extent that the
Indemnitee is indemnified and actually paid otherwise than pursuant to this
Agreement;

 

4

 

(e)           if a final, unappealable decision is
rendered by a court having jurisdiction over the parties and the subject matter
of the dispute finding that paying such indemnification is prohibited by
applicable law;

 

(f)            to the extent that attorneys’ fees,
costs and disbursements, or similar expenses, that otherwise would constitute
Indemnifiable Losses hereunder are determined to be unreasonable by a final,
unappealable decision rendered by a court having jurisdiction over the parties
and the subject matter of the dispute, provided that the burden of proof that
any Indemnifiable Losses are unreasonable shall be on the Company; or

 

(g)           to the extent such Indemnifiable Losses
have been incurred by Indemnitee in violation of the terms of Section 5
below.

 

4.2                               Partial Indemnification

 

If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Losses in connection with a Proceeding, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion of such Indemnifiable Losses to which Indemnitee is entitled.

 

4.3                               Mutual Acknowledgment

 

The Company and Indemnitee acknowledge that, in certain
instances, federal law or public policy may override applicable state law and
prohibit the Company from indemnifying Indemnitee under this Agreement or
otherwise.  For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission has taken
the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and federal legislation prohibits
indemnification for certain ERISA violations. 
Furthermore, Indemnitee understands and acknowledges that the Company
has undertaken or may be required in the future to undertake with the
Securities and Exchange Commission to submit the question of indemnification to
a court in certain circumstances for a determination of the Company’s right
under public policy to indemnify Indemnitee.

 

5.                                      Notification and Defense of Claim

 

5.1                               Notification

 

Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee will, if a claim is to be made
against the Company under this Agreement, notify an officer of the Company in
writing of the nature and status of the Proceeding; provided, however, that the
omission so to notify an officer of the Company will not relieve the Company
from any obligation which it may have to Indemnitee under this Agreement or
otherwise unless and only to the extent that such omission can be shown to have
prejudiced the Company.

 

If, at the time of the receipt of a notice of a claim
pursuant to this Section 5.1, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies (unless the Indemnitee’s
involvement in such Proceeding is solely as a witness or there is otherwise no
basis for asserting coverage).  The
Company shall take all necessary action to

 

5

 

cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such Proceeding in accordance with the terms of such policies.

 

5.2                               Defense of Claim

 

With respect to any such Proceeding as to which
Indemnitee notifies the Company of the commencement thereof or otherwise seeks
indemnification hereunder:

 

(a)           The Company may participate at its
own expense in such Proceeding;

 

(b)           The Company, jointly with any other
indemnifying party similarly notified, may assume the defense of the Proceeding
with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee
of its election to assume the defense, the Company shall not be liable to
Indemnitee under this Agreement or otherwise for any legal or other expenses of
counsel (other than reasonable costs of investigation) subsequently incurred by
Indemnitee in connection with the defense of such Proceeding, unless (i) the
employment of counsel by Indemnitee has been authorized in advance by the
Company in writing, (ii) Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and Indemnitee in the
conduct of the defense of such action and notified the Company in writing to
that effect in advance of the expense, (iii) the Company shall not in fact
have employed counsel to assume the defense of such action, or (iv) the
Company is not financially or legally able to perform its indemnification
obligations, in each of which cases the fees and expenses of counsel shall be
at the expense of the Company.  The
Company shall not be entitled to assume the defense of any action, suit or
proceeding brought by or on behalf of the Company or as to which Indemnitee
shall have made the conclusion provided for in (ii) or (iv) above;

 

(c)           The Company shall not settle any
action or claim in any manner which would impose any penalty or limitation on
Indemnitee that would not be an Indemnifiable Loss hereunder for which
indemnification would be provided by the Company without Indemnitee’s written
consent.

 

6.                                      Miscellaneous

 

6.1                               Entire Agreement

 

This Agreement is the entire agreement of the parties
regarding its subject matter and supersedes all prior written or oral
communications or agreements.

 

6.2                               Severability

 

Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law.  The Company’s
inability, pursuant to court order, to perform its obligations under this
Agreement shall not constitute a breach of this Agreement.  The provisions of this Agreement shall be
severable.  If this Agreement or any
portion shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the
full extent permitted by any portion of this Agreement not invalidated, and the
balance of this Agreement shall be enforceable in accordance with its terms.

 

6

 

6.3                               Notices

 

Notices given pursuant to this Agreement shall be deemed
duly given on the date of personal delivery, on the date sent by fax or three
days after mailing if mailed by certified or registered mail, return receipt
requested, postage prepaid, to the party at its address below or such other
address of which the addressee may subsequently notify the other parties in
writing.

 

6.4                               Governing Law

 

This Agreement and the rights and obligations of the
parties shall be governed by and construed in accordance with the laws of the
state of Washington, without giving effect to principles of conflicts of law.

 

6.5                               Counterparts

 

This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.

 

6.6                               Amendments; Waivers

 

Neither this Agreement nor any provision may be amended
except by written agreement signed by the parties.  No waiver of any breach or default shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default.

 

6.7                               Successors and Assigns

 

This Agreement shall be binding upon the Company and its
successors (including, without limitation, any direct or indirect successors by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and assets of the Company) and assigns, and inure to the benefit of
Indemnitee and Indemnitee’s heirs, legal representatives and assigns.

 

(Signature
page follows)

 

7

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  NEORX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name
  of Officer]

  
	
   

  	
   

  	
  Its
  [Title]

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  300
  Elliott Avenue West, Suite 500

  
	
   

  	
   

  	
  Seattle,
  Washington 98991

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name
  of Director*]

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					

 

* The
following directors of NeoRx have executed this form of Indemnification
Agreement:  Gerald McMahon, Fred B.
Craves, E. Rolland Dickson, Carl S. Goldfischer, Alan Glassberg, Robert M.
Littauer, Nicholas J. Simon III, Alan A. Steigrod and David R. Stevens.

 

8

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