Document:

EXHIBIT 10.34

          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

                   PRODUCT MANUFACTURING AND SUPPLY AGREEMENT
                   ------------------------------------------

                                    BETWEEN:
                                    --------

                               CYTOGEN CORPORATION
                               -------------------

                                       AND
                                       ---

                                 DRAXIMAGE INC.
                                 --------------

                                      DATED
                                      -----

                                DECEMBER 5, 2000
                                ----------------

<PAGE>

                                    CONTENTS
                                    --------

ARTICLE 1  - INTERPRETATION

ARTICLE 2  - MANUFACTURING, SUPPLY AND RELATED SERVICES

ARTICLE 3  - QUALITY ASSURANCE

ARTICLE 4  - PRODUCT SUPPLY AND QUANTITIES

ARTICLE 5  - DELIVERY AND TITLE TO PRODUCTS

ARTICLE 6  - REPRESENTATIONS AND WARRANTIES

ARTICLE 7  - THIRD PARTY LIABILITY

ARTICLE 8  - TERM AND TERMINATION

ARTICLE 9  - DISPUTE RESOLUTION

ARTICLE 10  - CONFIDENTIALITY

ARTICLE 11  - FORCE MAJEURE

ARTICLE 12  - ASSIGNMENT AND SUBLICENSING

ARTICLE 13  - MISCELLANEOUS

<PAGE>
                   PRODUCT MANUFACTURING AND SUPPLY AGREEMENT

THIS AGREEMENT is effective from the 5th day of December, 2000

       BETWEEN:          CYTOGEN  CORPORATION,  a corporation incorporated under
                         the laws of Delaware, having  its head  office at 600
                         College  Road East - CN 5308, Princeton, New Jersey
                         08540-5308

                         ("Cytogen")

       AND:              DRAXIMAGE INC., a corporation  incorporated under the
                         laws of Canada having its principal  place of business
                         at 16751 Trans Canada Highway,  Kirkland,  Quebec,
                         H9H 4J4

                         ("DRAXIMAGE");

WHEREAS concurrent with the execution of this Agreement, the Parties shall enter
into a license and  distribution  agreement  wherein  DRAXIMAGE  will license to
Cytogen  the  Products  for  distribution  and  sale  within  the  Territory  in
accordance with the terms therein (the "License Agreement");

AND WHEREAS Cytogen desires to have DRAXIMAGE manufacture and supply the
Products;

AND WHEREAS DRAXIMAGE desires to manufacture and supply such Products;

AND WHEREAS the Parties are willing to carry out the  foregoing  pursuant to the
terms and conditions set forth in this Agreement;

NOW THEREFORE in  consideration  of the mutual  covenants and agreements in this
Agreement, Cytogen and DRAXIMAGE agree with each other as follows:

ARTICLE 1 -       INTERPRETATION

1.1      Defined Terms.  As used in this  Agreement,  the following  terms have
         the following  meanings  unless the context clearly requires otherwise:

         "Affiliate(s)"  as applied to DRAXIMAGE or Cytogen shall mean any legal
         entity other than DRAXIMAGE or Cytogen, as the case may be, in whatever
         country organized, controlled by or under common control with DRAXIMAGE
         or  Cytogen.  "Affiliate"  shall  also mean any  company  which owns or
         controls at least  fifty per cent (50%) of the voting  stock of Cytogen
         or  DRAXIMAGE,  or any other  company at least  fifty per cent (50%) of
         whose voting stock is owned by or controlled by such company.  The term
         "control" means possession,  direct or indirect, of the power to direct
         or cause the direction of the  management  and policies of such entity,
         whether pursuant to the ownership of voting securities,  by contract or
         otherwise.

         "Agreement"  means this Product  Manufacturing and Supply Agreement and
         all schedules and instruments supplemental to or amending or confirming
         it.

         "Batch"  means a production  batch of Products as specified in Schedule
         "A".

                                      -1-
<PAGE>
         "Business Day(s)" means a day other than a Saturday or Sunday, on which
         Canadian  chartered  banks  are open for the  transaction  of  domestic
         business in the City of Montreal, Province of Quebec.

         "Calendar Year" means January 1 to December 31 of any given year.

         "CFR" means the U.S. Code of Federal Regulation.

         "cGMP" or "Current Good Manufacturing  Practices" means as the case may
         be the  practices  set  out in the  guidelines  published  as the  Good
         Manufacturing  Practices  for Drug  Manufacturers  and Importers by the
         Health  Protection  Branch of Health  Canada,  as amended  from time to
         time, for the  manufacture of  pharmaceutical  products and the Current
         Good Manufacturing  Practices as defined in United States 21 CFR - 820,
         et seq., as amended from time to time.

         "CNSC" means the Canadian Nuclear Safety Commission or any successor to
         it.

         "Commercially  Reasonable  Efforts" shall mean  reasonable  efforts and
         resources  at  least  equal  to  those  normally  used  by a  reputable
         pharmaceutical or biotechnology company, under similar circumstances as
         the Parties to this Agreement,  for a compound,  formulation or product
         owned by it or to which  it has  rights,  which  has a  similar  market
         potential  to the  Products  at a similar  stage in its  product  life,
         taking   into   account   the   formulation   of  the   Products,   the
         competitiveness of the Products' marketplace,  the proprietary position
         of the Products,  the applicable  regulatory structure and requirements
         for  the  Products,   the  clinical  and  pre-clinical   study  results
         pertaining to the Products,  time and cost of completion of development
         of the  Products,  the  profitability  of the  Products,  the  size and
         location of the subject  market of the Products  within the  Territory,
         and any other relevant factors.

         "Distribution"  means the logistical and financial  aspects  related to
         the shipment of Product  from the  Facility to  Cytogen's  customers in
         accordance  with  applicable  Laws and  includes,  without  limitation,
         arranging  and paying  for  adequate  Product  insurance,  freight  and
         customs matters.

         "Facility"  means  DRAXIMAGE's  facility  located at 16751 Trans Canada
         Highway,  Kirkland,  Quebec, Canada including,  without limitation, the
         hot lab  section  of same  and,  subject  to  Cytogen's  prior  written
         approval, such other facilities used by DRAXIMAGE in the Fabrication of
         Products hereunder.

         "FDA"  means the  United  States  Food and Drug  Administration  or any
         successor to it.

         "Fabricate" or "Fabricated" means to effect Fabrication.

         "Fabrication"  means any operation required in the  manufacturing,  the
         processing,  the testing, the packaging and the labelling,  as the case
         may be, of the Products by DRAXIMAGE  at its  Facility  (but  expressly
         does not include the Distribution of the Products).

         "Force Majeure Event" has the meaning ascribed thereto in Article 11.1.

         "Governmental Authority" or "Governmental Authorities" means any court,
         tribunal,  arbitrator,  agency,  administration  (including  the  FDA),
         commission   (including   the  NRC  and   CNSC),   official   or  other
         instrumentality of the United States,  Canada or any foreign country or
         any  territory,  or any domestic or foreign state,  province,  country,
         city or other political subdivision thereof.

                                      -2-
<PAGE>
         "Indemnitee"  means either Party,  as the case may be, and that Party's
         shareholders,    directors,    officers,    employees,    agents    and
         representatives.

         "Initial  Capacity" shall have the meaning  ascribed thereto in Article
         4.2 hereof.

         "Law(s)" means any law, statute, rule, regulation, guideline (including
         Current Good Manufacturing Practices), ordinance or other pronouncement
         of any  Governmental  Authority  having the effect of law in the United
         States, Canada, any foreign country or any territory or any domestic or
         foreign state, province, county, city or other political subdivision.

         "License(s)"  means the  licenses  required  or issued  to  Cytogen  or
         DRAXIMAGE,  as the case may be, by the relevant Governmental  Authority
         in  respect  of the  Fabrication,  marketing  and  Distribution  of the
         Products.

         "License  Agreement"  shall have the  meaning  ascribed  thereto in the
         recitals to this Agreement, which are incorporated by reference.

         "Losses"  mean  any and  all  direct  damages,  recalls  (voluntary  or
         involuntary),   fines,  fees,   settlements,   payments,   obligations,
         penalties,  deficiencies,  direct losses, costs and expenses (including
         without  limitation,   interest,   court  costs,   reasonable  fees  of
         attorneys,  accountants and other experts and other reasonable expenses
         of  litigation  or  other  Proceedings  or of  any  claim,  default  or
         assessment).

         "NRC" means the United  States  Nuclear  Regulatory  Commission  or any
         successor to it.

         "Party"  means either  Cytogen or  DRAXIMAGE,  individually;  "Parties"
         means Cytogen and DRAXIMAGE collectively.

         "Person(s)"  means any natural  person,  entity,  corporation,  general
         partnership,  limited  partnership,   proprietorship,   other  business
         organization, trust, union, association or Governmental Authority.

         "Price(s)"  means the prices to be paid by Cytogen to DRAXIMAGE for the
         Fabrication  of the  Products by  DRAXIMAGE  as listed in the  attached
         Schedule "B" to this Agreement.

         "Proceeding(s)"  means  applicable  action,  claim,  complaint,   suit,
         arbitration   or   Governmental    Authority   action,    notification,
         investigation or audit.

         "Product"  or   "Product(s)"   means,   singularly   or   collectively,
         DRAXIMAGE's       titanium-encapsulated       brachytherapy       seeds
         ("BrachySeed(TM)")   based  on  the  radioisotope   Iodine-125   ("I125
         Product")  or  Palladium-103  ("Pd103  Product")  as  approved  in  the
         Territory,  for  the  indication  of  cancer  of  the  prostate  and as
         Fabricated in accordance with the Specifications.

         "Proprietary Information" includes,  without limitation,  compilations,
         formulae,   processes,  plans,  blueprints,   formulations,   technical
         information, new product information, methods of product delivery, test
         procedures,  know-how,  software,  customer addresses,  customer lists,
         market  plans  or  strategies,   sales   information,   specifications,
         scientific,  clinical,  commercial  and any other  information  or data
         considered  confidential in nature,  whether communicated in writing or
         orally,  which  is of  competitive  advantage  to  either  Party in the
         conduct of its business.

                                      -3-
<PAGE>

         "Raw  Material  Costs"  shall  mean the  direct  costs  related  to the
         purchase of raw materials from third party suppliers that are necessary
         and  allocable to the  Fabrication  of the  Products,  as determined in
         accordance with generally accepted accounting principles,  consistently
         applied  and  expressly  includes,  without  limitation,  the  costs of
         purchasing   I125   and   Pd103    radioisotopes   and   titanium   and
         platinum/iridium components, but expressly excludes indirect costs such
         as labour overhead allocations and third party license fees, royalties,
         milestone or other payments related to the Products.

         "Regulatory  Approval(s)"  shall  mean  a  510-K  clearance,  premarket
         approval  and/or any similar or successor  approval issued from time to
         time by the FDA, or any successor  agency,  and any required  approvals
         from the NRC or the CNSC,  or any successor  agency,  which is required
         for the manufacturing,  supply,  transportation,  marketing and selling
         (with the exception of Cytogen's promotional material and other similar
         documentation) of the Products in the Territory.

         "Specifications"  means the  procedures,  requirements  (regulatory  or
         otherwise),  standards  and other  items  necessary  to  Fabricate  the
         Products,  as described in Schedule "A" to this Agreement,  as approved
         by the FDA.

         "Term"  means the term of this  Agreement  as defined  in  Article  8.1
         hereof.

         "Territory" means the United States and its territories.

         "Volume Discount" has the meaning ascribed thereto in Schedule "B".

1.2      Incorporation  of Schedules.  Schedules and other documents  attached
         or referred to in this Agreement are an integral part of this
         Agreement, including the following:

                  Schedule "A"      Existing Product Specifications

                  Schedule "B"      Prices for Fabrication of the Products

1.3      Currency.  Except as otherwise  expressly stated,  all dollar amounts
         referred to in this Agreement are in United States ("US") dollars.

1.4      General.  Article  headings in this Agreement are for convenience  only
         and shall not be used in interpreting  this  Agreement.  This Agreement
         shall be read with  such  changes  in  gender or number as the  context
         requires.

ARTICLE 2 - MANUFACTURING, SUPPLY AND RELATED SERVICES
------------------------------------------------------

2.1      Terms of Supply.
         ----------------

          (a)  Subject to early termination of this Agreement in accordance with
               the  provisions of Article 8 hereof,  DRAXIMAGE  shall during the
               Term  exclusively  (i) Fabricate the Products in the Facility for
               Cytogen  and (ii)  supply  Products to  Cytogen's  customers  (as
               requested by Cytogen) in accordance with the terms and conditions
               set out in this Agreement.

          (b)  In  consideration  of the Fabrication of Products for Cytogen and
               supply of Products to Cytogen's customers in accordance with this
               Agreement,  Cytogen  shall  purchase all  quantities  of Products
               required for the Territory exclusively from DRAXIMAGE. Subject to
               the  provisions  of the License  Agreement,  Cytogen shall be the
               sole and exclusive distributor of Product in the Territory.

                                      -4-
<PAGE>

          (c)  Subject to the  provisions of Article 2.3, all costs required for
               the  Facility  to  Fabricate  the  Products  shall  be  borne  by
               DRAXIMAGE.

2.2      Consideration.
         --------------

          (a)  Price of Products. Subject to the provisions of Articles 13.6 and
               13.7 Cytogen shall purchase the Products in consideration for the
               Prices set out in Schedule "B", as amended only by mutual written
               consent  of the  Parties,  and shall be  entitled  to the  Volume
               Discount  set  forth  on  Schedule  "B".   Cytogen  shall  solely
               determine  the price  Cytogen  charges to its  customers  for the
               Product.

          (b)  Payment. Cytogen shall pay DRAXIMAGE,  within thirty (30) days of
               the date of invoice by DRAXIMAGE, for all Products Fabricated for
               the Territory and  purchased  under the terms of this  Agreement.
               DRAXIMAGE shall invoice  Cytogen on a monthly basis.  Interest on
               late  accounts  of  Cytogen  shall be  charged at the rate of the
               National Bank of Canada prime plus one percent (1%) per annum.

          (c)  Taxes.  The  Parties  believe  that as of the date hereof no use,
               consumption,  sales or excise  taxes or duties will be payable to
               any  taxing   authority  in  relation  to  the   Fabrication  and
               Distribution  of the  Products.  In the event that any such taxes
               are or become exigible, however, the amount of such taxes will be
               added  to the  Price of the  Products  in  effect  at the time of
               shipment thereof and will be reflected in the invoices  submitted
               to Cytogen by DRAXIMAGE pursuant to Article 2.2(b) hereof.

          (d)  Distribution  Costs.  In accordance with the provision of Article
               5, Cytogen shall be responsible  for and pay all costs related to
               the  Distribution  of the Products from the Facility to Cytogen's
               customers.  For greater certainty and for clarification purposes,
               but without limitation,  Cytogen shall be financially and legally
               responsible for all applicable  logistical  services,  insurance,
               freight and customs fees and levies  related to the  Distribution
               of the Products save and except for License costs  referred to in
               Article  2.5  which  shall be the  obligation  of  DRAXIMAGE.  If
               requested by Cytogen,  DRAXIMAGE  will  provide  such  logistical
               services to Cytogen on a  subcontracted  basis,  at a price to be
               agreed upon in writing by the Parties; provided, however, that if
               a  price  cannot  be  agreed  upon,   Cytogen   shall  be  solely
               responsible for making its own logistical services  arrangements.
               Such  logistical  services  shall  include  but not be limited to
               coordinating with carriers and purchasing insurance.

2.3      Packaging.  DRAXIMAGE shall package the Products in accordance with the
         requirements  of  Schedule  "A" in  respect  of  each  Product  and all
         applicable Laws regarding the labelling on the packaging  materials and
         containers.  All  packaging  materials  for the Products  will have the
         "DRAXIMAGE" logo; provided,  however,  that the package inserts for the
         Products will have the "Cytogen" logo.  Notwithstanding  the above, the
         determination  of  packaging  formats are solely at the  discretion  of
         DRAXIMAGE.  All  one-time  costs  associated  with any  changes to such
         Product  and  packaging  formats  reasonably  requested  by Cytogen and
         acceptable to  DRAXIMAGE,  in its sole  discretion,  shall be Cytogen's
         responsibility.

                                      -5-
<PAGE>

2.4      DRAXIMAGE  Fabrication  Requirements.  DRAXIMAGE  shall  Fabricate the
         Products in accordance  with the  Specifications  and applicable  Laws
         including,  without  limitation,  U.S. Food, Drug and Cosmetic Act, 21
         U.S.C.  Sec. 201 et seq., and  DRAXIMAGE's  technical  specifications.
         DRAXIMAGE  shall  provide  Cytogen  with  a  copy  of  such  technical
         specifications  and  not  materially  change  them  without  notifying
         Cytogen.  Each Party shall  promptly  notify the other of knowledge of
         any new  instructions  or  specifications  required in order to comply
         with  applicable  Laws,  and shall  cooperate  in agreeing on the best
         means to comply with any new requirements.

2.5      Regulatory Matters. DRAXIMAGE shall be responsible for the costs of any
         Regulatory  Approvals  and,  subject to the  applicable  provisions  of
         Articles  2.2(d)  and  5.1(a),   Licenses  required  to  Fabricate  and
         Distribute the Products including,  without limitation,  changes to the
         Specifications  and  costs  associated  with  Regulatory   Approval  of
         DRAXIMAGE's plant master/site  registration file including site license
         fees; provided,  however, that, subject to the applicable provisions of
         the  License  Agreement,  Cytogen  shall  obtain and  maintain  in good
         standing  all other  applicable  non-regulatory  permits  and  licenses
         necessary  or  advisable  for it to  market,  sell and  Distribute  the
         Product(s) in the Territory.

2.6      Customer  Service.  DRAXIMAGE  shall  establish  at  Cytogen's  cost  a
         1-800-telephone  line to be  located  at the  Facility  to assist  with
         customer  inquiries  regarding  the  Products.  The Parties shall share
         equally the costs associated with hiring one (1) customer service clerk
         as an employee of DRAXIMAGE to be located at the Facility to handle all
         1-800  inquiries  regarding  the  Products  for  both  Canada  and  the
         Territory;  provided,  however,  that  it  shall  be  DRAXIMAGE's  sole
         responsibility  to comply with  applicable  withholding  and employment
         standards laws in relation to this employee.  Although this  individual
         will be an employee of DRAXIMAGE,  Cytogen shall have reasonable  input
         into the hiring of this individual and replacement if dissatisfied with
         his  or  her  services.  For  greater  certainty,  but  subject  to the
         provisions  of Article  3.1,  the  customer  service  clerk  shall have
         sufficient  expertise  and  understanding  of the  Products  to  answer
         various general customer questions and shall, where appropriate, direct
         customer inquiries to Cytogen's web site or phone center.

ARTICLE 3 - QUALITY ASSURANCE
-----------------------------

3.1      Complaints.  DRAXIMAGE  agrees to provide all  reasonable and customary
         assistance to Cytogen in addressing all Cytogen customer and regulatory
         complaints  related  strictly  to  the  quality  of  the  Products  and
         reporting  of  adverse  events as set forth in Article  7.2;  provided,
         however,  that all other customer and regulatory  complaints related to
         all  other   matters  in  relation  to  the  selling,   marketing   and
         Distribution  of the  Products  in the  Territory,  shall  be the  sole
         responsibility of Cytogen.

3.2      Recalls. In the event that a Regulatory Authority issues a recall order
         or if the Parties  determine  that a Product recall in the Territory is
         necessary,  then the  Parties  shall work  together to  coordinate  all
         necessary  actions  in order to recall  the  Product.  DRAXIMAGE  shall
         reimburse  Cytogen for all out-of-pocket  expenses  associated with any
         such  recall  caused  in whole  or in part by  DRAXIMAGE's  failure  to
         Fabricate the Product(s) in accordance  with the  requirements  of this
         Agreement;  provided, however, that if any Product recall or withdrawal
         is  caused in whole or in part by any act of  negligence  of a Party or
         its agents, or any breach by a Party of the terms of this Agreement, or
         non-compliance  with  applicable  Laws by a Party or its  agents,  such
         direct out of pocket expenses shall be apportioned  accordingly between
         DRAXIMAGE and Cytogen to the extent that such recall is attributable to
         a particular Party's acts or omissions.

                                      -6-
<PAGE>
          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

ARTICLE 4 - PRODUCT SUPPLY AND QUANTITIES
-----------------------------------------

4.1      Ordering.  Commencing  January 21, 2001,  Cytogen's  customers  shall
         provide daily orders to DRAXIMAGE on any Business Day during 8:00 A.M.
         to 6:00 P.M. EST.

4.2      Capacity.  Cytogen  shall  provide in  writing  at least  [**]  advance
         warning ("Notice Period") to DRAXIMAGE of any significant  increases in
         production capacity it anticipates will be required; provided, however,
         that  DRAXIMAGE  will only be  obligated  to provide up to a maximum of
         [**] units of the  Product  [**] for the [**]  Calendar  Year 2001 (the
         "Initial Capacity"). As used in this Agreement, "significant increases"
         shall mean a [**] percent  ([**]%)  increase of purchase of the Product
         by Cytogen over the [**] period immediately prior to the Notice Period.

4.3      Failure to Supply.  Subject to Articles 4.1, 4.2, 6.2, 7.3 and 11.2, if
         DRAXIMAGE  fails to supply the  quantities  of the  Product  ordered by
         Cytogen's customers, DRAXIMAGE shall undertake all reasonable necessary
         steps to cure this failure forthwith to the reasonable  satisfaction of
         Cytogen.  Cytogen shall be DRAXIMAGE's preferred distributor of Product
         and DRAXIMAGE  shall fulfill  Cytogen's  orders prior to fulfilling any
         order from another licensee or distributor or fulfilling its own needs.
         At any time  during  such  failure,  Cytogen  may,  at its  discretion,
         purchase  the  quantities  of similar or  competitive  products  to the
         Products  necessary to meet its requirements  without violation of that
         certain  non-compete  provision  contained  in  Article  9.1(a)  of the
         License Agreement; provided, however, that as soon as DRAXIMAGE is in a
         position to supply once again the quantities of the Products ordered by
         Cytogen's customers, Cytogen shall recommence purchasing the quantities
         of  Products   exclusively   from  DRAXIMAGE   necessary  to  meet  its
         requirements in accordance with the provisions of this Agreement.

4.4      Seed Disposal. Cytogen shall have the sole responsibility to dispose of
         any  unwanted  seeds in the  Territory  and  shall  provide  acceptable
         documentary  evidence  of any  such  disposal  to  DRAXIMAGE  forthwith
         confirming  the  safe  disposal  of  such  seeds  in  accordance   with
         applicable Laws; provided, however, that DRAXIMAGE shall assist Cytogen
         with related  logistical  aspects to such  disposal and may at its sole
         discretion  agree to take possession of such unwanted seeds for its own
         purposes at Cytogen's cost.

ARTICLE 5 - DELIVERY AND TITLE TO PRODUCTS
------------------------------------------

5.1      Delivery.

          (a)  Cytogen shall be responsible for all aspects (financial, legal or
               otherwise) of the  Distribution  of the Products to its customers
               save and except for  License  costs  referred  to in Article  2.5
               which shall be the obligation of DRAXIMAGE. The Products shall be
               shipped  F.O.B.  the  Facility.  DRAXIMAGE  is prepared to assist
               Cytogen  with  respect to the  Distribution  of the  Products  in
               accordance  with the  provisions  of  Article  2.2(d);  provided,
               however,  it is  expressly  understood  by the Parties that in so
               assisting Cytogen, DRAXIMAGE shall receive customary and adequate
               consideration  for such assistance (which shall be in addition to
               the Prices).

                                      -7-
<PAGE>

          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

          (b)  For the first [**] of shipments of the Products,  DRAXIMAGE shall
               ensure that the Products are ready for shipment from the Facility
               within  [**]from  the  time it  receives  orders  from  Cytogen's
               customers in accordance with the provisions of Article 4.1. After
               this  initial  [**]  period,  the  Products  shall be  ready  for
               shipment  from  the  Facility   within  [**]  from  the  time  of
               DRAXIMAGE's  receipt  of an order  from  Cytogen's  customers  in
               accordance  with the  provisions  of Article 4.1.  [**] after the
               initial  [**] period,  the  Products  shall be ready for shipment
               from the  Facility  within [**] from its receipt of an order from
               Cytogen's  customers in accordance  with Article 4.1. For greater
               certainty  and  illustration  purposes,  "Business  Day hours" as
               referenced  in  this  Article  means,  for  example,  that if the
               Products  are to be ready for shipment  from the Facility  within
               [**] as  referred  to above,  an order for  Products  placed by a
               Cytogen customer on a Friday,  would be shipped from the Facility
               [**].

          (c)  Title to and risk for the Products supplied to Cytogen under this
               Agreement  passes to Cytogen at DRAXIMAGE's  Facility at the time
               the Products are loaded onto the designated  carrier for shipment
               to Cytogen's customers.  DRAXIMAGE shall not be liable to Cytogen
               for loss of any kind  arising  out of or in relation to damage to
               Products,  however  caused,  which occurs after title to and risk
               for the Products  passes to Cytogen,  nor shall any  liability of
               Cytogen  to  DRAXIMAGE  under this  Agreement  be  diminished  or
               extinguished  by  reason of such  loss.  For  greater  certainty,
               Cytogen  shall be liable for all risk of loss while  Products are
               in transit, and Cytogen is responsible for ensuring that adequate
               insurance  coverage is obtained and  maintained  for the Products
               from the time title passes to Cytogen.  Subject to the provisions
               of Article 5.2 hereof, lost or returned shipments of Products are
               at the cost of Cytogen.

5.2      Replacement   Products.   If  Cytogen  reasonably   determines,   after
         consultation  with DRAXIMAGE,  where  reasonably  practicable to do so,
         that a  Products  fails  in  whole  or in  part  to  conform  with  the
         Specifications  ("Rejected  Products"),  DRAXIMAGE  agrees  to use  its
         Commercially Reasonable Efforts to deliver replacement Products for the
         Rejected  Products  ("Replacement  Products")  within  [**] of when the
         Parties  agree  that a Product  fails to  conform.  DRAXIMAGE  shall be
         responsible for all costs associated with the returning of the Rejected
         Products and shipment of the Replacement  Products and all risk of loss
         while the  Rejected  Products or  Replacement  Products are in transit.
         Should DRAXIMAGE disagree with Cytogen's determination,  the provisions
         of  Article  9 shall  apply.  Cytogen  shall  have  the  right to audit
         DRAXIMAGE's  Facility once yearly to perform  reasonable  and customary
         quality assurance tests in order to ensure the Product is in accordance
         with the Specifications. In addition, upon Cytogen's reasonable request
         from time to time,  DRAXIMAGE will provide appropriate  certificates of
         analysis and other  customary  test results to Cytogen in order to give
         effect to this Article.

ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
------------------------------------------

6.1      DRAXIMAGE Warranties.  DRAXIMAGE represents and warrants that:

          (a)  it shall obtain all necessary  Regulatory  Approvals and Licenses
               required  for it to  Fabricate  the  Products  and to perform its
               obligations  to Cytogen  under this  Agreement  and in accordance
               with applicable Law(s);

                                      -8-

<PAGE>

          (b)  all Products shipped from the Facility will be in compliance with
               the Specifications,  all applicable  regulatory  requirements and
               cGMP;

          (c)  all  quantities of Products  supplied  pursuant to this Agreement
               shall be marked by lot number or  otherwise  in  accordance  with
               DRAXIMAGE's standard marking procedures; and

          (d)  it has  the  right  to  grant  Cytogen  the  exclusive  right  to
               distribute the Products as specified in Section 2.1(b).

         The above noted  representations and warranties in this Article 6.1 are
         in addition to any other  representations  and  warranties of DRAXIMAGE
         contained in the License Agreement.

6.2      Cytogen Warranties.  Cytogen represents and warrants that:

          (a)  it shall obtain and maintain all necessary permits, registrations
               and Licenses  required for it to sell,  market and Distribute the
               Products  in the  Territory  and to perform  its  obligations  to
               DRAXIMAGE  under this Agreement and in accordance with applicable
               Law(s).

         The above noted  representation and warranty in this Article 6.2 are in
         addition  to  any  other  representations  and  warranties  of  Cytogen
         contained in the License Agreement.

6.3      Government  Inspections  and  Communications.   Each  Party  agrees  to
         promptly  notify  the  other  of any  inspections  of any  Governmental
         Authority pending as of the date hereof or as notice of same may arise,
         and  of  any  communications  to or  from  any  Governmental  Authority
         (including  the reporting of adverse drug  experiences or field alerts)
         which might (i) reasonably be expected to affect adversely a respective
         Party's  ability to perform its obligations  under this  Agreement,  or
         (ii) result in an  inspection  of the relevant  areas of the  Facility.
         Further  each Party shall keep the other  apprised if any  Governmental
         Authority  pursues any actions as specified in subsections  (i) or (ii)
         above.

ARTICLE 7 - THIRD PARTY LIABILITY
---------------------------------

7.1      Each  Party  shall  indemnify,  defend  and hold the  other,  and their
         respective employees, directors, representatives and advisors, harmless
         from and against  any and all  non-Affiliate  third party  liabilities,
         actions, suits, claims, demands, prosecutions, damages, costs, expenses
         or money judgements (including reasonable solicitors' fees) which arise
         out of:

          (a)  the  intentional  misconduct or  negligence  of the  indemnifying
               Party with respect to its acts or omissions  under this Agreement
               or pertaining to the Products; or

          (b)  the breach by the indemnifying Party of its  representations  and
               warranties contained in this Agreement;

         except to the  extent  of an  indemnity  obligation  on the part of the
         other Party under this Article.  In the event of a claim which may give
         rise to a right of indemnity under this Article, the Party intending to
         claim indemnity shall give the indemnifying  Party notice in writing as
         soon as practicable of any such claim or lawsuit.

                                      -9-

<PAGE>

         In any such claim or lawsuit:

               (i)  The Party  claiming  indemnity  will  give the  indemnifying
                    Party full  opportunity to control the response  thereto and
                    the defense thereof, including any agreement relating to the
                    settlement  thereof,  provided that the  indemnifying  Party
                    shall not settle any such claim or action  without the prior
                    written consent of the Party claiming indemnity (which shall
                    not be unreasonably withheld or delayed);

               (ii) the  Party  claiming  indemnity  will,  at the  indemnifying
                    Party's expense,  cooperate reasonably in the defense of the
                    non-Affiliate  third party's claim, and shall have the right
                    to  participate  in such  defense to the extent  that in its
                    judgement  the Party  claiming  indemnity  may be prejudiced
                    thereby;

               (iii)the Party  claiming  indemnity  shall not  settle,  offer to
                    settle or admit  liability  in any claim or suit without the
                    written  consent of an officer  of the  indemnifying  Party,
                    which consent shall not be unreasonably withheld.

         The Party claiming  indemnity may participate,  at its own expense,  in
         such  defense  and in any  settlement  discussions  directly or through
         counsel of its choice on a monitoring,  non-controlling  basis but such
         participation  shall not be deemed a waiver by that Party of any rights
         or recourse,  for  indemnification or otherwise,  it might have against
         the indemnifying Party.

7.2      Cytogen  and  DRAXIMAGE  shall  advise  each other  immediately,  to be
         confirmed  in writing,  of any  occurrence  which  involves a claim for
         death or  injury  following  administration  of the  Products  supplied
         hereunder,  or any  matter  arising  out of  this  Agreement  which  is
         required  to  be  reported  other  than  in a  routine  manner  to  the
         regulatory  authorities  by either  Party.  The Parties will  cooperate
         reasonably  to  facilitate  and  develop  written  procedures  for  the
         reporting of adverse events for the Products to appropriate  regulatory
         agencies within the Territory.  It is understood that DRAXIMAGE will be
         responsible  for the reporting to the applicable  regulatory  agency of
         adverse  events  within the  Territory  and that  Cytogen  will  render
         assistance as reasonably requested.

7.3      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.  The  limitation set forth in
         this  Article 7.3 shall not apply with  respect to the  obligations  of
         either Party to indemnify the other Party under Article 7 in connection
         with a liability to a non-Affiliate third party.

ARTICLE 8 - TERM AND TERMINATION
--------------------------------

8.1      This Agreement  shall become  effective on the Effective Date and shall
         terminate on December 31, 2010, unless earlier terminated in accordance
         with the provisions of this Agreement (the "Term").  Beginning no later
         than one (1) year and ending  not later  than six (6)  months  prior to
         such  expiration,  the Parties will enter into good faith  discussions,
         without  obligation,  about possible  renewal of this Agreement and the
         terms of any such renewal.

8.2      This Agreement shall automatically  terminate in the event that the
         License Agreement terminates.

8.3      Subject to the provisions of Article 11.2,  either Party hereto may, at
         its option, terminate this Agreement by giving to the other Party prior
         notice in writing to that  effect of not less than  ninety (90) days in
         the event the other  Party  commits a  material  breach of either  this
         Agreement or the License  Agreement  (thirty (30) days,  in the case of
         any payment  default),  and has failed to cure such  breach  during the

                                      -10-

<PAGE>

         ninety  (90) day  period  or thirty  (30) day  period,  as  applicable,
         following receipt of said notice from the non-breaching  Party, or such
         longer period as may  reasonably  be necessary,  provided the breaching
         Party continues its diligent efforts to cure. Any such cancellation and
         termination  pursuant  to  this  Article  8.3  shall  not  release  the
         breaching Party from any obligations hereunder incurred prior thereto.

8.4      Either Party hereto may terminate  this  Agreement  immediately  if the
         other Party becomes insolvent,  or voluntary or involuntary proceedings
         are  instituted  against the other Party  under any  federal,  state or
         local  bankruptcy or  insolvency  laws, or a receiver or trustee of the
         Party's  property  shall be appointed or the Party makes an  assignment
         for the benefit of its creditors.  In such a circumstance,  the Parties
         acknowledge, without limitation, that it is their intent to provide the
         maximum  protection  available  under  applicable  law for an exclusive
         licensor  and  licensee  under the  circumstances  referred  to in this
         Article 8.4;  provided,  however,  that the Parties in so acknowledging
         are not  obligated  to incur any costs in order to give legal force and
         effect to such an intention.

8.5      In the event of expiration of this Agreement, or the termination of any
         rights  granted  hereunder with respect to a given Product prior to the
         expiration or termination  of this  Agreement in its entirety,  Cytogen
         shall  have no further  rights in the  affected  Intellectual  Property
         Rights  or  Trademarks  (as  those  terms are  defined  in the  License
         Agreement), Regulatory Approvals or Products. Any expiration or partial
         or complete  termination of this Agreement shall not affect the rights,
         obligations  and remedies of either Party accrued as of such expiration
         or termination.

ARTICLE 9 - DISPUTE RESOLUTION
------------------------------

9.1      The  Parties  will  attempt  in good  faith,  in  accordance  with  the
         provisions  of Article  7.3 of the  License  Agreement,  to resolve any
         dispute or claim arising out of or relating to this Agreement.

9.2      Should the Parties fail to settle a dispute  pursuant to the provisions
         of Article 7.3 of the License  Agreement,  the matter  shall be finally
         settled  by  arbitration  in  accordance  with  the  provisions  of the
         Arbitration  Act,  1991,  Ontario  and  any  amendments  thereto.   The
         following rules shall apply to the arbitration:

          (a)  The  arbitration  tribunal shall consist of one arbitrator who is
               not  affiliated  with  either of  Cytogen or  DRAXIMAGE,  who has
               relevant industry knowledge, expertise and credibility and who is
               appointed by mutual agreement of Cytogen and DRAXIMAGE or, in the
               event of failure to reach an agreement within ten (10) days after
               the Settlement Date,  either Party may request the  Co-ordinator,
               ADR Chambers,  48 Yonge Street, Suite 1100, Toronto,  Ontario M5E
               1G6  (or  any  successor  thereto)  to  provide  a list  of  five
               arbitrators   from   amongst   its   members    outlining   their
               qualifications.  Within three (3) Business Days of the receipt of
               the list,  Cytogen and  DRAXIMAGE  shall  independently  rank the
               proposed candidates,  shall simultaneously exchange rankings, and
               shall  select as the  arbitrator  the  individual  receiving  the
               highest  combined  ranking who is available  to serve.  If either
               Party  does not rank and  provide  a copy of the  ranking  to the
               other Party,  the Party who does rank the arbitrator will be able
               to select the arbitrator.

          (b)  The arbitrator shall be instructed that time is of the essence in
               proceeding with his or her  determination of any dispute,  claim,
               question or difference.  The arbitration tribunal shall determine
               the  time,   date  and   place  of   arbitration,   taking   into
               consideration   the   Parties'    convenience   and   the   other
               circumstances of the case.

                                      -11-

<PAGE>

          (c)  Cytogen  and  DRAXIMAGE  will  agree,  in  consultation  with the
               arbitrator, on the rules for the arbitration. Absent agreement to
               the  contrary,  the  following  rules,  designed to save time and
               expense for the Parties, will apply:

                    (i)  Statements  shall be in  writing  and  shall be no more
                         than five (5) pages in length;  and shall be  submitted
                         to the arbitration  tribunal and to the other Party two
                         (2) days prior to the arbitration;

                    (ii) Each  Party  will  provide  to the other  access to any
                         documents that may be relevant to the arbitration. Each
                         Party will also  provide to the other a list and copies
                         of up to (but not exceeding) twenty (20) documents that
                         the Party intends to rely on at the  arbitration.  Such
                         access will be during  normal  business  hours and will
                         commence   one  day  after  the   appointment   of  the
                         arbitration  tribunal and shall terminate one day prior
                         to submission of the statements;

                    (iii)Each Party will be  entitled to oral  discovery  of one
                         representative  of  the  other  Party  if it  deems  it
                         appropriate  at a mutually  agreed upon date,  time and
                         location.  Each  Party  may  only  discover  the  other
                         Party's  representative  for a maximum of one (1) eight
                         (8) hour day. Any questions  refused will be put to the
                         arbitrator  for the  arbitrator's  determination  as to
                         whether the questions are appropriate and relevant;

                    (iv) At the  hearing,  opening  argument  will be limited to
                         one-half (1/2) hour per Party;

                    (v)  Each  Party may  produce  up to two (2)  witnesses  for
                         direct examination. The total time permitted for direct
                         examination  will be two (2)  hours  for each  witness.
                         Total time for  cross-examination  will also be two (2)
                         hours for each witness;

                    (vi) A Party may introduce any of its twenty (20)  documents
                         through either of its  witnesses.  The other Party may,
                         if  appropriate,  challenge  the  authenticity  of  any
                         document produced through those witnesses;

                    (vii)Closing  arguments  will be limited to one (1) hour for
                         each Party; and

                    (viii) The  arbitrator  will  attempt  to produce a decision
                         within seven (7) calendar days of the conclusion of the
                         arbitration,  and written reasons within two (2) months
                         of the arbitration.

          (d)  The  arbitration  shall be  conducted  in English  and shall take
               place in Toronto, Ontario.

          (e)  The  arbitration  awards  shall be given in writing  and shall be
               final,  and binding on Cytogen and DRAXIMAGE,  not subject to any
               appeal  whatsoever,  and shall deal with the question of costs of
               the arbitration and all matters  related  thereto.  In his or her
               award of costs,  the  arbitrator may consider each Party's effort
               to resolve the dispute  through bona fide good faith  negotiation
               efforts and has the authority,  if he or she deems advisable,  to
               award  solicitor  and client costs  against a Party that fails to
               demonstrate such bona fide good faith efforts.

          (f)  Judgement  upon the award  rendered may be entered into any court
               having jurisdiction, or application may be made to such court for
               judicial  recognition  of the award or an order  for  enforcement
               thereof, as the case may be.

                                      -12-

<PAGE>

          (g)  The  arbitrator  will not be  empowered  to and  shall  not award
               punitive,   exemplary,   special,   consequential  or  incidental
               damages.

          (h)  Notwithstanding the foregoing,  either Party shall be entitled to
               pursue equitable  remedies in a court of competent  jurisdiction,
               including, without limitation,  injunctive relief in any court in
               the event that legal or monetary damages are inadequate.

ARTICLE 10 - CONFIDENTIALITY
----------------------------

10.1     A Party receiving  Proprietary  Information from the other, directly or
         indirectly,  will treat such  information as confidential  and will use
         efforts  at  least   equivalent  to  those  used  to  protect  its  own
         Proprietary  Information  but in no event shall the receiving Party use
         less than reasonable efforts.  Except (i) to enable Cytogen to exercise
         its  rights to grant  sublicenses  as set forth in  Article  2.4 of the
         License Agreement; and (ii) as set forth in Article 10.2 following, all
         information  or data  communicated  from one Party to the other will be
         deemed and treated as Proprietary  Information  unless otherwise agreed
         to in writing. All oral  communications,  whether or not summarized and
         reduced to writing,  shall also be considered  confidential.  Access to
         such  Proprietary  Information  will be limited to  employees,  agents,
         advisors or consultants  of the Party or its Affiliates  receiving such
         information,  who reasonably require such information and who are bound
         to  said  Party  by a  like  obligation  of  confidentiality.  A  Party
         receiving Proprietary Information will not use such information for its
         own benefit or for the  benefit of others or in any way not  consistent
         with the purposes set out in this Agreement.

10.2     Nothing  contained  herein  will in any way  restrict  or  impair  each
         Party's right to use,  disclose or otherwise deal with any  Proprietary
         Information which:

          (a)  at the time of  disclosure  is in the public domain or thereafter
               becomes  part of the public  domain by  publication  or otherwise
               through no act of the Party receiving such information;

          (b)  the Party receiving such information can  conclusively  establish
               was in its possession prior to the time of the disclosure;

          (c)  is independently made available as a matter of right to the Party
               receiving  such  information  by a  third  party  who  is  not in
               violation of a confidential relationship with the other Party;

          (d)  is  developed  by  a  Party   independently  of  the  Proprietary
               Information received from the other Party; or

          (e)  is  information  required to be disclosed by legal  process or in
               connection with a disclosing  Party's  periodic  filings with the
               United States Securities and Exchange  Commission;  provided,  in
               such case,  the  disclosing  Party  timely  informs the other and
               discloses the minimum  amount of  information  necessary to be in
               compliance and maintain  confidentiality  to the extent  possible
               and cooperates  reasonably  with the other Party in attempting to
               limit such disclosure.

                                      -13-
<PAGE>

10.3     The Party receiving Proprietary Information will obtain no right of any
         kind,  or license  under any patent  application  or patent,  except as
         expressly stated in the License Agreement.  All Proprietary Information
         will remain the sole property of the Party  disclosing such information
         or data.

10.4     Upon  termination  of this  Agreement,  the Party to which  Proprietary
         Information has been disclosed will upon request,  return within thirty
         (30)  days  all such  information,  including  any hard and  electronic
         copies  thereof,  and cease  its use,  or at the  request  of the Party
         transmitting  such Proprietary  Information,  will promptly destroy the
         same and certify such destruction to the transmitting  Party,  provided
         that each Party may retain one copy of the Proprietary Information in a
         secure location for compliance and record keeping purposes only.

10.5     Termination  of this  Agreement  shall not relieve the Parties of their
         obligations  under this  Article  10. The  confidentiality  obligations
         pursuant  to this  Article  10 shall  remain in full  force and  effect
         throughout the Term of this Agreement plus five (5) years thereafter.

ARTICLE 11 - FORCE MAJEURE
--------------------------

11.1     Neither Party shall be liable in damages for, nor shall this  Agreement
         be terminable or cancellable by reason of, any delay or default in such
         Party's  performance  hereunder  if such  default or delay is caused by
         events  beyond  such  Party's  reasonable  control  including,  but not
         limited to, acts of God,  regulation  or law or other action or failure
         to act of any government or agency thereof, war or insurrection,  civil
         disturbance,  destruction  of  production  facilities  or  materials by
         earthquake,  fire, ice, flood or storm, labour disturbances,  epidemic,
         or  failure  of  public  utilities  or common  carriers  to act for the
         reasons  listed above  (collectively  or  individually  "Force  Majeure
         Event");  provided,  however,  that the Party seeking relief  hereunder
         shall  immediately  notify the other Party of such cause(s) beyond such
         Party's  reasonable  control.  The Party which may invoke this  Article
         11.1  shall  use  all  reasonable  efforts  to  reinstate  its  ongoing
         obligations  to the other as quickly as  possible  and the other  Party
         should provide all reasonable  assistance to help the invoking Party in
         this respect.

11.2     The  Parties  shall  have any  Force  Majeure  Event  dealt  with on an
         expedited  basis by the Liaison  Committee  (as that term is defined in
         the License Agreement) in accordance with the provisions of Article 7.3
         of the License Agreement.  Notwithstanding  the above, if a Party fails
         to perform any of its obligations  under this Agreement for one hundred
         and  twenty  (120)  consecutive  Business  Days due to a Force  Majeure
         Event, unless within such period the non-performing  Party has begun to
         remedy  substantially its inability to perform, the other Party may, if
         itself is not in material breach under this  Agreement,  terminate this
         Agreement by providing written notice to the  non-performing  Party. In
         the event of such  termination,  both  Parties'  respective  rights and
         obligations under this Agreement shall terminate except for any amounts
         previously  due and owing by one Party to the other and  except for any
         obligations which this Agreement  expressly  provides shall survive the
         termination  such as,  without  limitation,  the provisions of Articles
         2.2(b), 7, 10, 13.2 and 13.4

ARTICLE 12 - ASSIGNMENT AND SUBLICENSING
----------------------------------------

12.1     Neither Party may without written approval of the other Party (and such
         approval shall not be unreasonably withheld):

          (a)  assign or  sublicense  this  Agreement  or  transfer  its rights,
               obligations  or interest or any part thereof under this Agreement
               to any third party which is not an Affiliate; or

                                      -14-
<PAGE>

          (b)  designate  or cause any third party not an  Affiliate  to perform
               all or part of its activities  hereunder,  or to have the benefit
               of all or part of its rights hereunder.

12.2     Either  Party may,  upon written  notice to the other,  assign all or a
         part of its rights or obligations  hereunder to an Affiliate,  provided
         that such  assignment  shall not lessen or release the prior or ongoing
         obligations  of the assignor to the other Party to this  Agreement  and
         that the applicable  Affiliate shall agree, in writing,  to be bound by
         the terms and conditions of this Agreement.

ARTICLE 13 - MISCELLANEOUS
--------------------------

13.1     Relationship of the Parties.  The relationship  between  DRAXIMAGE and
         Cytogen created pursuant to this Agreement is intended to be  that of
         independent contractors.

13.2     Insurance.  Each Party will maintain  throughout  the Term, and for at
         least  three (3) years  thereafter,  comprehensive  general  liability
         insurance,  including blanket contractual liability insurance covering
         the indemnification, defense and other obligations of that Party under
         this Agreement,  which insurance  affords limits of not less than Five
         Million Dollars ($5,000,000) for each person, and Five Million Dollars
         ($5,000,000)  for  each  occurrence,  for  bodily  injury,  liability,
         personal  injury  liability,   products  liability,   property  damage
         liability, contractual liability, and completed operations liability.

         Each  Party  will  provide  to the  other a  Certificate  of  Insurance
         evidencing the above coverage,  this  Certificate to be provided to the
         other  Party  within  sixty  (60)  days  after  the  execution  of this
         Agreement.  This  Certificate  of Insurance  shall show the name of the
         Party,  the name of the issuing  company,  the type of  insurance,  the
         policy number,  the effective date, the expiration date, and the limits
         of liability.  The insurance shall provide for a minimum of thirty (30)
         days written notice to the recipient of the Certificate of Cancellation
         or material change in the insurance.

         A Party's  liability to the other is in no way limited to the extent of
         the other Party's insurance coverage.

13.3     Further Assurances.  Each Party will at any time and from time to time,
         upon the reasonable request of the other Party and at the other Party's
         expense, execute and deliver such further documents and do such further
         acts and things as the other Party may reasonably  request to evidence,
         carry out and give full  effect to the  terms,  conditions,  intent and
         meaning of this Agreement.

13.4     Non-Competition and Non-Solicitation. The Parties acknowledge that the
         License  Agreement  contains   non-competition  and   non-solicitation
         provisions in Article 9.

13.5     Notices.  Any notice or other  communication  made under this Agreement
         (other than  routine  business  communication)  shall be in writing and
         shall  be  properly  given:  (i)  when  delivered  if sent by  personal
         delivery;  (ii) when transmitted if sent by facsimile with confirmation
         of  transmission;  or (iii)  three days after  being  posted if sent by
         registered mail return receipt requested, addressed:

             If to Cytogen:             Cytogen Corporation
                                        600 College Road East - CN 5308
                                        Princeton, New Jersey 08540-5308
                                        United States of America
                                        Attention:  President
                                        ---------------------
                                        Facsimile:  609-750-8124

                                      -15-
<PAGE>
          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

             If to DRAXIMAGE :         DRAXIMAGE Inc.
                                       16751 Trans Canada Highway
                                       Kirkland, Quebec H9H 4J4
                                       Canada
                                       Attention:  President
                                       ---------------------
                                       Facsimile:  514-630-7201

             With a copy to:           DRAXIS Health Inc.
                                       2nd Floor, 6870 Goreway Drive
                                       Mississauga, Ontario L4V 1P1
                                       Canada
                                       Attention:  General Counsel
                                       ---------------------------
                                       Facsimile:  905-677-5494

         A Party may change its address for notice by notifying  the other Party
at any time.

13.6     Hardship Clause.  Notwithstanding any other provision contained in this
         Agreement, should:

          (a)  the  standard  market  selling  price in the  Territory  for I125
               Product at any time  during the Term falls to or below  $[**] per
               seed on a weighted  average basis,  as demonstrated by Cytogen by
               competent proof; or

          (b)  if the Raw Material Costs for the Products  increases at any time
               during  the Term by greater  than  [**]percent  ([**]%)  from the
               average 2001 Raw Material Costs for the Products; or

          (c)  the standard market selling price on a weighted  average basis in
               the Territory for Pd103 Product at any time during the Term falls
               below [**] percent  ([**]%) of the 2000 weighted  average selling
               price for the PD103 Product in the Territory,  as demonstrated by
               Cytogen by competent proof,

         the Parties  shall meet at the request of the  disadvantaged  Party for
         the purpose of discussing  methods of addressing (a), (b) or (c) above.
         If,  within a period  of  [**],  the  Parties  are  unable  to agree on
         amendments to this  Agreement  which would resolve such  concerns,  the
         disadvantaged  Party may at its sole option upon giving a [**]  written
         notice  to  the  other  Party  submit  the  matter  to  arbitration  in
         accordance  with  Article  9.2  herein.  In  rendering  their  decision
         pursuant to the provisions of this Article 13.6, the arbitrator(s),  in
         addition  to all  other  jurisdiction  they  may have  pursuant  to the
         provisions  of Article  9.2  herein,  shall also be  entitled  to order
         amendments  to this  Agreement  which in their  opinion will remedy the
         inequality  of either (a),  (b) or (c) above and the  Parties  shall be
         bound thereby by such  amendments.  The Parties  acknowledge  and agree
         that the intent of this Article 13.6 is to address situations where the
         occurrence of event (a), (b) or (c) above results in a significant  and
         material   impairment   or   disadvantage   to  the   business  of  the
         disadvantaged  Party.  The Parties also acknowledge and agree that they
         shall make all  reasonable  and necessary good faith efforts to resolve
         any issues arising under this Article 13.6 to their  commercial  mutual
         benefit prior to referring the matter to arbitration.

                                      -16-
<PAGE>

13.7     Waiver  and  Amendment.  No delay or  failure on the part of a Party in
         exercising  any rights  under this  Agreement  shall affect any of such
         Party's rights. This Agreement may not be modified or amended except by
         further written statement signed by both Parties.

13.8     Severability.  Any  provision  of  this  Agreement  that  is held to be
         inoperative,  unenforceable  or  invalid in any  jurisdiction  shall be
         inoperative,  unenforceable  or  invalid in that  jurisdiction  without
         affecting  any  other  provision  hereof  in that  jurisdiction  or the
         operation,  enforceability  or validity of that  provision in any other
         jurisdiction,  and to this end the provisions hereof are declared to be
         severable.

13.9     Entire  Agreement.  This Agreement  constitutes  the entire  agreement
         between   the  Parties   and   cancels   and   supersedes   any  prior
         understandings  and agreements between the Parties with respect to the
         matters contained herein.

13.10    Incorporation  of Schedules.  The schedules  attached to this Agreement
         are incorporated by reference herein and made a part hereof.

13.11    Governing  Law. This Agreement has been made in the Province of Ontario
         and shall be governed by and construed in  accordance  with the laws of
         the Province of Ontario and Canada applicable  thereto,  without regard
         to its choice of law principles.

13.12    Counterparts.  This Agreement may be executed in counterparts,  each of
         which  shall be  deemed to be an  original  and  which  together  shall
         constitute one and the same agreement.

13.13    English Language. The Parties declare that they have required that this
         Agreement and any documents relating thereto be drawn up in the English
         language.  Les parties aux presentes  declarent  qu'elles ont exige que
         cette entente et tous les documents y afferant soient rediges en langue
         anglaise.

13.14    Public  Disclosure.   Subject  to  applicable   securities   regulatory
         disclosure  requirements,  a Party  may not  disclose  the  non-general
         details of this Agreement to a  non-Affiliate  without first  obtaining
         the consent of the other  Party,  such  consent not to be  unreasonably
         withheld.  Upon execution of this  Agreement,  the Parties will issue a
         joint press release which is mutually  satisfactory  to the Parties and
         full  consideration  and  representation  of the  respective  roles and
         contributions of both Parties shall be given in any such press release.
         Other than as  specified  in the  immediately  preceding  sentence  and
         subject to applicable securities  regulatory  disclosure  requirements,
         neither Party will issue any press  release  regarding  this  Agreement
         without the prior written consent of the other Party,  such consent not
         to be unreasonably  withheld.  In the event that a Party is required to
         disclose  publicly any information  directly or indirectly  relating to
         this  Agreement  to  comply  with  applicable   regulatory   disclosure
         requirements,   it  shall  in  good  faith,   wherever  reasonable  and
         practicable  to do so,  confer  with the other  Party on the content of
         such disclosure before it is publicly released.

                           [Left Intentionally Blank]

                                      -17-
<PAGE>

IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered into by
their duly authorized officers as of the day and year first set forth above.

DRAXIMAGE INC.

         /s/Raymond Dore
         -----------------------------------
By:      Raymond Dore
Title:   President

Date:    December 5, 2000
         --------------------------------------------

CYTOGEN CORPORATION

         /s/ H. Joseph Reiser
         --------------------------------------------
By:      H. Joseph Reiser, PhD
Title:   President & CEO

Date:    January 5, 2001
         --------------------------------------------

                                      -19-
<PAGE>

          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

                                  SCHEDULE "A"

                         EXISTING PRODUCT SPECIFICATIONS

                               BRACHYSEED(TM) [**]

Product number:   502050
Issue Date:       31/OC/00
Superseded Date:  11/AU/00
Revision number:  1

Analytical Specifications:

               Colour                        Metallic (titanium).

               Form                          Capsular in shape.

               Appearance                    Clean, free from visible defects.
                                             A clean,  smooth weld is  visible
                                             around the circumference at  the
                                             centerline of each seed.  The vial
                                             and seeds are in good  condition.
                                             The labeled name, lot number and
                                             expiry date correspond to the
                                             information on the batch
                                             manufacturing record.

               Radioisotopic                 Identity [**]

               Total Radioactivity           Labelled radioactivity [**]

               Radioactivity per Seed        No seed may be more than [**] of
                                             the target activity.

               Leak Test                     [**] per seed.

               Delivered Quantity            Confirm Labelled quantity.

                                      -19-
<PAGE>

          Confidential Materials omitted and filed separately with the
        Securities and Exchange Commission. Asterisks denote omissions.

                                  SCHEDULE "B"

                     PRICES FOR FABRICATION OF THE PRODUCTS

--------------------------------------------------------------------------------
I125 Product unit cost price *:         $[**] per seed, F.O.B., DRAXIMAGE 's
                                        loading dock.
--------------------------------------------------------------------------------
Pd103 Product unit cost price:          Initial price to be determined by the
                                        Parties  at  the  time  the  Pd103
                                        Product   is   launched   in   the
                                        Territory; provided, however, that
                                        such  price is not to exceed  [**]
                                        percent   ([**]%)   of  the   I125
                                        Product   seed  unit  cost   price
                                        existing at the time of the launch
                                        of  the  Pd103  Product  into  the
                                        Territory.
--------------------------------------------------------------------------------
Volume Discount                         Cytogen will be eligible for an annual
                                        volume rebate ("Volume Discount") from
                                        DRAXIMAGE equal to the sum of:

                                        1. $[**] per seed of Product sold in a
                                           Calendar Year in excess of [**]seeds,
                                           to a limit of [**] seeds; and

                                        2. $[**] per seed of Product sold in a
                                           Calendar Year in excess of [**]
                                           seeds.

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

*    All above quoted Product unit cost prices  include all materials  (cartons,
     styrofoam,  fibre,  drums, lead pots and glass vials) and labour related to
     the Fabricating and packaging of the Product at the Facility; but expressly
     exclude  payments of all applicable taxes in accordance with the provisions
     of Article 2.2(c) of this Agreement,  Distribution  costs to be incurred by
     Cytogen in accordance  with the provisions of Articles 2.2(d) and 5.1(a) of
     this  Agreement,  any  interest  on late  accounts  payable  by  Cytogen in
     accordance with the provisions of Article 2.2(b) of this Agreement, and any
     other monies owed to DRAXIMAGE by Cytogen  pursuant to any other applicable
     terms of this Agreement and/or the License Agreement. For greater certainty
     and  clarification,  no Bad Debts (as that term is defined  in the  License
     Agreement) may be deducted from the above quoted Product unit cost prices.

                                      -20-
<PAGE>EXHIBIT 10.35

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                       LICENSE AND DISTRIBUTION AGREEMENT

                                    BETWEEN:

                               CYTOGEN CORPORATION

                                       AND

                                 DRAXIMAGE INC.

                                      DATED

                                DECEMBER 5, 2000

<PAGE>

                                    CONTENTS
                                    --------

ARTICLE 1 - DEFINITIONS

ARTICLE 2  - EXCLUSIVE LICENSE (WITH RIGHT TO SUBLICENSE)

ARTICLE 3  - MILESTONES AND ROYALTIES

ARTICLE 4  - PROMOTIONAL ACTIVITIES; MINIMUM SALES AND NON-EXCLUSIVITY

ARTICLE 5  - OWNERSHIP AND JOINT DEVELOPMENTS

ARTICLE 6  - CONFIDENTIALITY

ARTICLE 7  - LIAISON COMMITTEE

ARTICLE 8  - SUPPLY

ARTICLE 9  - NON-COMPETITION AND NON-SOLICITATION

ARTICLE 10  - REPRESENTATIONS AND WARRANTIES

ARTICLE 11  - LIABILITY AND INSURANCE

ARTICLE 12  - LIMITATION OF LIABILITY

ARTICLE 13  - INTELLECTUAL PROPERTY AND REGULATORY APPROVALS

ARTICLE 14  - FORCE MAJEURE

ARTICLE 15  - TERM AND TERMINATION

ARTICLE 16  - DISPUTE RESOLUTION

ARTICLE 17  - INDEPENDENT CONTRACTOR

ARTICLE 18  - ASSIGNMENT AND SUBLICENSING

ARTICLE 19  - MISCELLANEOUS

<PAGE>

                       LICENSE AND DISTRIBUTION AGREEMENT
                       ----------------------------------

THIS LICENSE AND  DISTRIBUTION  AGREEMENT is made as of the 5th day of December,
2000 (the  "Effective  Date"),  by and between  DRAXIMAGE  Inc.,  a  corporation
incorporated   pursuant  to  the  laws  of  Canada   ("DRAXIMAGE")  and  Cytogen
Corporation,  a  corporation  incorporated  pursuant  to the  laws  of  Delaware
("Cytogen").

                                    RECITALS
                                    --------

1.  DRAXIMAGE  owns the rights to the Products in the  Territory  and desires to
enter into an  exclusive  agreement  with Cytogen for the  commercialization  of
those  Products in the Territory on the terms and  conditions  contained in this
Agreement.

2. Concurrent with the execution of this Agreement, the Parties shall also enter
into  a  supply  agreement   wherein   DRAXIMAGE  will  supply  to  Cytogen  its
requirements  of Products  for  distribution  and sale within the  Territory  in
accordance with the terms therein ("Supply Agreement").

                                    AGREEMENT
                                    ---------

NOW, THEREFORE, IT IS AGREED between the Parties as follows:

ARTICLE 1 -  DEFINITIONS
------------------------

1.1      "Affiliate(s)"  as applied to DRAXIMAGE or Cytogen shall mean any legal
         entity other than DRAXIMAGE or Cytogen, as the case may be, in whatever
         country organized, controlled by or under common control with DRAXIMAGE
         or  Cytogen.  "Affiliate"  shall  also mean any  company  which owns or
         controls at least fifty percent (50%) of the voting stock of Cytogen or
         DRAXIMAGE,  or any other  company at least fifty percent (50%) of whose
         voting  stock is  owned  by or  controlled  by such  company.  The term
         "control" means possession,  direct or indirect, of the power to direct
         or cause the direction of the  management  and policies of such entity,
         whether pursuant to the ownership of voting securities,  by contract or
         otherwise.

1.2      "Bad Debts" shall mean any payments owing to Cytogen from its customers
         related to the Products  which remain  uncollected  after three hundred
         and sixty (360) days from  invoicing and only to the extent they remain
         uncollected.  For greater  certainty and  clarification  if, and to the
         extent,  such debts are  eventually  collected by Cytogen (by direct or
         indirect  means),  such  amounts  shall not be deemed bad debts for the
         purposes  of Article  1.14 hereof and  accordingly  shall be subject to
         royalty entitlements pursuant to Article 3.2 hereof.

                                      -1-
<PAGE>

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

1.3      "Commercially  Reasonable  Efforts" shall mean  reasonable  efforts and
         resources  at  least  equal  to  those  normally  used  by a  reputable
         pharmaceutical or biotechnology company, under similar circumstances as
         the Parties to this Agreement,  for a compound,  formulation or product
         owned by it or to which  it has  rights,  which  has a  similar  market
         potential  to the  Products  at a similar  stage in its  product  life,
         taking   into   account   the   formulation   of  the   Products,   the
         competitiveness of the Products' marketplace,  the proprietary position
         of the Products,  the applicable  regulatory structure and requirements
         for  the  Products,   the  clinical  and  pre-clinical   study  results
         pertaining to the Products,  time and cost of completion of development
         of the  Products,  the  profitability  of the  Products,  the  size and
         location of the subject  market of the Products  within the  Territory,
         and any other relevant factors.

1.4      "Effective Date" shall mean the date stated in the first paragraph
         above.

1.5      "First Sale" shall mean the first commercial sale of a Product in the
         Territory.

1.6      "First  Shipment" shall mean the first shipment for commercial sale of
         the applicable Product, F.O.B. DRAXIMAGE's facility.

1.7      "Force  Majeure Event" shall have the meaning  ascribed  thereto in
         Article 14.1 hereof.

1.8      "Free Goods"  shall mean the  shipments  of the Product  supplied to
         twenty-five  (25)  patients for I125 Product  during its initial launch
         in the Territory.

1.9      "Improvements"   shall  mean  any   enhancement  in  the   formulation,
         ingredients,  preparation,  presentation,  means of delivery, dosage or
         packaging for the Products or to the  Intellectual  Property  Rights or
         Know-How.

1.10     "Initial Marketing Plan" is attached hereto as Schedule "A" and
         incorporated by reference.

1.11     "Intellectual   Property   Rights"   means  the   patents   and  patent
         applications   (until  such  time  as  such  applications  are  denied,
         abandoned or issued into patents) and  Product-related  trademarks  and
         tradenames such as BrachySeed(TM), which are specified in Schedule "B",
         attached  hereto  and   incorporated  by  reference,   and  any  future
         Product-related   trademarks   and   tradenames,   patents  and  patent
         applications,  continuations,  divisionals  and  reissues  as  part  of
         patents and patent applications in the Territory regarding the Products
         and any  Improvements  thereto,  which  DRAXIMAGE  owns or under  which
         DRAXIMAGE is licensed with the right to sublicense in the Territory.

1.12     "Know-How"  shall mean any of  DRAXIMAGE's  information  and  materials
         anywhere  in  the  Territory  relating  to  the  Regulatory  Approvals,
         marketing, use or sale of the Products including any existing dosimetry
         and  marketing  outcome  studies  necessary  for Cytogen to exploit its
         rights under Article 2.1 hereof.

1.13     "Liaison Committee" shall have the meaning ascribed thereto in Article
         7.1 hereof.

1.14     "Minimum  Sales  Targets"  shall mean an amount  equal to [**]  percent
         ([**]%) of the Net Sales volumes  referenced  in the Initial  Marketing
         Plan and in subsequent marketing plans as set forth therein, subject to
         the provisions of Article 4.1 herein.

                                      -2-
<PAGE>

1.15     "Negotiators" shall have the meaning ascribed thereto in Article 7.3
         hereof.

1.16     "Net Sales" shall mean the gross  invoiced  sales for Products  sold or
         commercially  disposed  of for value to a third  party by Cytogen or by
         its Affiliates, after deduction of the following amounts:

               (i)  credits or allowances  given or made for rejection or recall
                    of  previously  sold  Products  actually  taken or  allowed,
                    and/or allowances for Bad Debts related to the Products;

               (ii) any tax or government  charge  (including  any tax such as a
                    value added or similar tax or  government  charge other than
                    an  income  tax)  levied  on  the  sale,  transportation  or
                    delivery of a Product and borne by the seller thereof;

               (iii)freight, insurance and duties on shipments of Products;

               (iv) Free Goods; and

               (v)  chargeback  payments  and  rebates  related to the  Products
                    granted to managed health care  organizations or to federal,
                    state  and  local  governments,  their  agencies,  and other
                    purchasers and reimbursers or to trade customers,  including
                    but not  limited  to,  wholesalers  and chain  and  pharmacy
                    buying groups.

1.17     "Party" means either Cytogen or DRAXIMAGE, individually; "Parties"
         means Cytogen and DRAXIMAGE collectively

1.18     "Product" or "Products" means, singularly or collectively,  DRAXIMAGE's
         titanium-encapsulated   brachytherapy  seeds  ("BrachySeed(TM)")  which
         incorporate  the  Intellectual  Property  Rights  and are  based on the
         radioisotope  Iodine-125  ("I125  Product")  or  Palladium-103  ("Pd103
         Product") for the indication of cancer of the prostate.

1.19     "Proprietary Information" includes,  without limitation,  compilations,
         formulae,   processes,  plans,  blueprints,   formulations,   technical
         information, new product information, methods of product delivery, test
         procedures,   Know-How,  software,  customer  lists,  market  plans  or
         strategies, sales information,  specifications,  scientific,  clinical,
         commercial and any other information or data considered confidential in
         nature,  whether  communicated  in  writing  or  orally,  which  are of
         competitive advantage to either Party in the conduct of its business.

1.20     "Regulatory Approvals" shall mean a 510-K clearance, premarket approval
         ("PMA"),  and/or any similar or successor  approval issued from time to
         time by the United States Food and Drug Administration  ("FDA"), or any
         successor  agency,  and any required  approvals  from the United States
         Nuclear  Regulatory  Commission  ("NRC"),  the Canadian  Nuclear Safety
         Commission  ("NSC")  or its  predecessor  the  Canadian  Atomic  Energy
         Control Board ("AECB"),  or any successor agency, which is required for
         the manufacturing, supply, transportation, marketing and sale (with the
         exception  of  Cytogen's   promotional   material  and  other   similar
         documentation) of the Products in the Territory.

1.21     "Settlement Date" shall have the meaning ascribed thereto in Article
         7.3 hereof.

1.22     "Supply  Agreement"  shall have the meaning  ascribed  thereto in the
         recitals to this  Agreement,  which are  incorporated by reference.

                                      -3-
<PAGE>

1.23     "Term" shall have the meaning ascribed thereto in Article 15.1 hereof.

1.24     "Territory" means the United States and its territories.

1.25     "Trademarks"   shall  mean  the  registered   trademarks  or  trademark
         applications  for the Products in the Territory  listed in Schedule "B"
         and incorporated by reference.

ARTICLE 2 - EXCLUSIVE LICENSE (WITH RIGHT TO SUBLICENSE)
--------------------------------------------------------

2.1      Subject to the other  provisions of this  Agreement,  DRAXIMAGE  hereby
         grants to Cytogen  and  Cytogen  hereby  accepts an  exclusive  license
         (exclusive even as to DRAXIMAGE except as expressly  provided otherwise
         herein)  under  the  Intellectual  Property  Rights,  Know-How  and the
         Regulatory  Approvals now or hereafter owned or controlled by DRAXIMAGE
         for the sole and exclusive purpose of importing,  using,  distributing,
         offering  for  sale,   marketing,   promoting   and  selling  (but  not
         manufacturing)  the Products in the  Territory,  for the  indication of
         cancer of the prostate.

2.2      Subject to the other  provisions of this  Agreement,  DRAXIMAGE  hereby
         grants to Cytogen an exclusive license  (exclusive even as to DRAXIMAGE
         except as expressly  provided otherwise herein) to use the Intellectual
         Property  Rights,  Know-How  and  Regulatory  Approvals  on  packaging,
         labeling and other materials used in connection with  commercialization
         of Products in the Territory for so long as this  Agreement  remains in
         effect.  Cytogen  agrees  that it will  use the  Intellectual  Property
         Rights,  Know-How  and  Regulatory  Approvals  only in promotion of the
         Products, and in accordance with standard industry practices.

2.3      Upon execution of this Agreement,  DRAXIMAGE shall disclose to Cytogen,
         in  writing,  or  via  electronic  media  acceptable  to  Cytogen,  all
         Know-How.  In addition,  during the Term of this  Agreement,  DRAXIMAGE
         shall as soon as practicable  disclose to Cytogen,  in writing,  or via
         electronic  media  acceptable  to Cytogen,  on an ongoing basis all new
         Know-How.  Such Know-How shall be automatically deemed to be within the
         scope of the license  grant herein  without  payment of any  additional
         compensation.

2.4      The license  granted under this Article 2 confers on Cytogen the right,
         at Cytogen's sole  discretion,  to appoint an  independent  third party
         distribution  sales  force  for  the  Territory;   provided  that  such
         independent  third  party  distributors  shall be  subject  to the same
         obligations as Cytogen pursuant to this Agreement.

ARTICLE 3 - MILESTONES AND ROYALTIES
------------------------------------

3.1       In  consideration  of granting the rights  described in Article 2, and
          subject to the provisions of Articles 3 and 4.1,  Cytogen shall pay to
          DRAXIMAGE  milestones  aggregating Two Million Dollars ($2,000,000) to
          be paid by Cytogen in cash as follows:

          (a)  $500,000  upon   execution  of  this  Agreement  and  the  Supply
               Agreement  (upon  delivery  of  such  executed   agreements,   to
               Cytogen's solicitors for release of such funds held in escrow for
               this purpose); and

          (b)  $500,000  upon the First Sale of the I125 Product from  DRAXIMAGE
               to Cytogen; and

                                      -4-
<PAGE>
          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

          (c)  $1,000,000 upon the First Sale of Pd103 Product from DRAXIMAGE to
               Cytogen.

3.2      In consideration of DRAXIMAGE  granting the rights described in Article
         2, and subject to the provisions of this Article 3, Cytogen also agrees
         to pay to  DRAXIMAGE  royalties  based  on  Cytogen's  Net  Sales on an
         aggregate basis for the Territory calculated as follows:

          (a)  On Net Sales made during the period  commencing on the First Sale
               of any Product and ending on December 31, 2001, a royalty of [**]
               percent  ([**]%)  of  such  Net  Sales  of  the  Products  in the
               Territory;

          (b)  On Net Sales made  during the period  commencing  January 1, 2002
               and  ending  on the date  which is the  last day of the  Term,  a
               royalty on such Net Sales of the  Products  in the  Territory  as
               follows:

               (i)  Net Sales less than or equal to $[**]: [**]%

               (ii) Net  Sales  greater  than  $[**]  but less  than or equal to
                    $[**]: [**]%

               (iii) Net Sales greater than $[**]: [**]%

3.3      Cytogen shall make royalty payments on Net Sales referred to in Article
         3.2 within sixty (60) days after the end of each calendar  quarter end,
         and each  payment  shall be  accompanied  by a report  identifying  the
         Products, Net Sales, and any amount(s) payable to DRAXIMAGE, as well as
         computation  thereof.  Such  reports  shall  be  kept  confidential  by
         DRAXIMAGE  and  not  disclosed  to any  other  party  (other  than  its
         Affiliates  and their  accountants  or the original  licensor(s) of the
         Products   who   shall  be   subject   to  the  same   obligations   of
         confidentiality as those imposed on DRAXIMAGE hereunder) and shall only
         be used for the purposes of this Agreement.

3.4      Cytogen   shall,   and  shall  cause  its   Affiliates   and  permitted
         sublicensees to, keep full and accurate books and records setting forth
         gross sales, Net Sales,  and amounts payable to DRAXIMAGE.  Cytogen and
         DRAXIMAGE  may once every  calendar  year  appoint  mutually  agreeable
         independent  qualified public  accountants to audit Cytogen's books and
         records  in order to  ensure  the  accuracy  of the  DRAXIMAGE  royalty
         entitlements.  Such  independent  qualified  public  accountants  shall
         provide two (2) weeks prior written  notice to Cytogen of such an audit
         and shall conduct such audit during Cytogen's normal business hours. No
         audit  shall be  permitted  later  than three (3) years  following  the
         rendering  of any such  reports,  accountings  and  payments,  save and
         except in relation to issues arising between the Parties  regarding Bad
         Debts.  The opinion of such independent  qualified  public  accountants
         regarding  such reports,  accountings  and payments shall be binding on
         the Parties hereto.  DRAXIMAGE shall bear the expense of such accounts;
         provided,  however, that if the audit for any given year establishes an
         underpayment  of greater than five  percent  (5%) of the total  royalty
         entitlements  payable to DRAXIMAGE for that calendar year,  Cytogen not
         DRAXIMAGE  shall promptly pay all the  reasonable  fees and expenses of
         such audit.

3.5      Any payments due hereunder which are not paid on or before the due date
         shall bear interest at the Canadian  prime rate of interest as reported
         by the  National  Post or Globe and Mail  newspapers  from time to time
         plus one percent  (1%),  or a maximum  rate  permitted  by Ontario law,
         whichever is lower.

                                      -5-
<PAGE>
          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

3.6      Any  withholding  or other tax required to be withheld by Cytogen under
         the laws of the  Territory  for the account of  DRAXIMAGE in respect of
         payments  to be made by Cytogen  hereunder  shall be  promptly  paid by
         Cytogen  for  and  on  behalf  of  DRAXIMAGE  to  the  appropriate  tax
         authorities,  and Cytogen shall,  within sixty (60) days of making such
         payment,  furnish  DRAXIMAGE with proof of payment of such tax together
         with tax  receipts or other  evidence of payment  sufficient  to enable
         DRAXIMAGE  to support a claim in respect  of any sum so  withheld.  Any
         such tax required to be withheld  shall be borne  solely by  DRAXIMAGE.
         Cytogen shall cooperate with DRAXIMAGE in taking reasonable and legally
         authorized  steps to reduce or to eliminate  such  withholding or other
         taxes.

ARTICLE 4 - PROMOTIONAL ACTIVITIES; MINIMUM SALES AND NON-EXCLUSIVITY
---------------------------------------------------------------------

4.1      Notwithstanding the provisions of Articles 2.1 and 2.2, the granting of
         the exclusive license to use the Intellectual Property Rights, Know-How
         and the  Regulatory  Approvals  is  subject to  Cytogen  achieving  its
         Minimum Sales Targets; provided, however, that Cytogen's obligations to
         achieve its Minimum  Sales  Targets shall be waived for as long as, and
         to the extent that:

          (i)  DRAXIMAGE is not able to supply  Cytogen's  needs of the Products
               in  accordance  with  the  provisions  of the  Supply  Agreement;
               provided,  however,  that  Cytogen's  obligations  to achieve its
               Minimum Sales Targets shall be reduced for the calendar year 2001
               in  recognition of DRAXIMAGE's  production  capacity  constraints
               during  the  Initial  Capacity  (as that term is  defined  in the
               Supply  Agreement)  from [**]  Dollars  ($[**])  to [**]  Dollars
               ($[**]);

          (ii) DRAXIMAGE  does  not  obtain  Regulatory  Approvals  for  all the
               Products;

          (iii)DRAXIMAGE  does  not  make  Commercially  Reasonable  Efforts  to
               protect its Intellectual Property Rights or Know-How; or

          (iv) DRAXIMAGE breaches Articles 10.1(b), (f), (g), (h), (i) or (j).

         Other than as provided for above,  in the event that  Cytogen  fails to
         meet  the  applicable  Minimum  Sales  Targets  in a  given  year,  the
         exclusive license provided pursuant to the provisions of this Agreement
         shall,  at  DRAXIMAGE's  sole  discretion,   become  non-exclusive  and
         DRAXIMAGE  may,  at  its  sole  discretion,  license  the  use  of  the
         Intellectual Property Rights, Know-How and the Regulatory Approvals for
         the  Territory  to other  third  parties  or to one of its  Affiliates;
         provided,  however,  that under such  circumstances,  the Minimum Sales
         Targets  shall be waived by  DRAXIMAGE  and  Cytogen  shall be under no
         obligation to meet such  remaining  Minimum  Sales  Targets  unless the
         license grant is made exclusive again as evidenced in writing signed by
         both Parties hereto.

         Should the Agreement be non-exclusive  immediately  before DRAXIMAGE is
         ready to ship Pd103  Product to Cytogen  for the  purposes of the First
         Sale of Pd103 Product in the Territory,  then Cytogen shall be relieved
         from its milestone payment obligations to DRAXIMAGE pursuant to Article
         3.1(c);  provided,  however,  that as  consideration  for such  payment
         relief, Cytogen shall immediately relinquish any rights it has pursuant
         to the  Agreement  with  respect  to the Pd103  Product  and  expressly
         acknowledges  that  DRAXIMAGE  may  license at that time to other third
         parties  or to  one  of  its  Affiliates  (on  an  exclusive  basis  or
         otherwise) the use of the Intellectual  Property  Rights,  Know-How and
         the  Regulatory  Approvals  for  the  Territory  related  to the  Pd103
         Product.

                                      -6-
<PAGE>

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

         Should  DRAXIMAGE  not exercise its  discretion  and make the exclusive
         license  non-exclusive in accordance with the above referred failure by
         Cytogen to meet the  applicable  Minimum Sales Targets in a given year,
         Cytogen  shall be  deemed  to have  met the  applicable  Minimum  Sales
         Targets  for the  given  year and not be deemed to be in breach of this
         Agreement in this regard. Similarly,  should DRAXIMAGE not exercise its
         discretion  and  make  the  exclusive  license  non-exclusive  and  the
         Agreement  remains exclusive at the time of the First Shipment of Pd103
         Product,  then  Cytogen's  milestone  payment  obligations to Draximage
         pursuant to Article 3.1(c) remain.

4.2      Cytogen shall use Commercially Reasonable Efforts to:

          (a)  promote under the brand name  BrachySeed(TM) (or other applicable
               DRAXIMAGE  brand  name(s)  as  agreed by  DRAXIMAGE  from time to
               time),  within  the  bounds  set by  any  applicable  statute  or
               regulation,  the sale and  distribution  of the  Products  in the
               Territory; and

          (b)  undertake a launch of the Products and commence  marketing of the
               Products (either through an Affiliate, a permitted sublicensee or
               one or more  distributors  in accordance  with the  provisions of
               this Agreement) in the Territory as soon as practicable after the
               execution of this  Agreement and the Supply  Agreement but in any
               event not later than [**] months after the  execution of same
               or  receipt  of  the  necessary   applicable  Product  Regulatory
               Approvals  to  launch,  whichever  is later;  provided,  however,
               Cytogen's obligations of undertaking a launch shall be waived for
               as long as,  and to the  extent  that,  DRAXIMAGE  is not able to
               supply  Cytogen's  needs of the Products in  accordance  with the
               provisions  of the  Supply  Agreement;  DRAXIMAGE  does  not make
               Commercially  Reasonable  Efforts  to  protect  its  Intellectual
               Property  Rights or Know-How;  or DRAXIMAGE  breaches of Articles
               10.1(b), (f), (g), (h) or (i).

4.3      Other than as  provided  for above,  if Cytogen  fails to  undertake  a
         launch  of the  Products  in  the  Territory  in  accordance  with  the
         provisions  of Article  4.2(b),  Cytogen  will within [**] days
         reassign or transfer  ownership  of the  license to  DRAXIMAGE  and all
         rights under this Agreement and the Supply Agreement. The Parties agree
         that a failure  by  Cytogen to launch  the  Products  in the  Territory
         within the specified  time period set forth in Article  4.2(b) (as such
         time period may be extended by the  occurrence of a Force Majeure Event
         as set out in  Article  14) is deemed to be a  material  breach of this
         Agreement.

ARTICLE 5 - OWNERSHIP AND JOINT DEVELOPMENTS
--------------------------------------------

5.1      All  existing or  subsequently  developed  Proprietary  Information  of
         DRAXIMAGE  will be owned by  DRAXIMAGE.  All  existing or  subsequently
         developed Proprietary  Information of Cytogen will be owned by Cytogen.
         Subject  to  Article  6, each  Party  will have  access to  Proprietary
         Information of the other as is reasonable and  appropriate to carry out
         the intent of this Agreement.

5.2      In the event that an  Improvement  is made by either Party,  or jointly
         under this  Agreement,  such a development,  whether  patentable or not
         ("Invention(s)"),  will be owned by the Party making such  Invention or
         if jointly made by the Parties,  the Invention  will be jointly  owned.
         Notwithstanding the foregoing, DRAXIMAGE will own the Invention if such
         Invention directly arises from an enhancement or modification to any of
         the Products and  enhancements  or  modifications  will be deemed to be
         Improvements.

                                      -7-
<PAGE>

5.3      In case  Inventions  made  pursuant  to  Article  5.2  are  patentable,
         DRAXIMAGE and Cytogen each agree to reasonably cooperate with the other
         Party and/or its solicitors, at the other Party's expense, in:

          (a)  preparing, filing and prosecuting patent applications;

          (b)  vesting title as herein provided; and

          (c)  providing non-financial assistance as reasonably requested by the
               other  in  enforcing  any  patents  resulting  from  such  patent
               applications.

5.4      The cost of patenting  an  Invention  will be borne by the owner of the
         Invention. In the event of a jointly-owned Invention, the costs will be
         shared equally by both Cytogen and DRAXIMAGE;  provided,  however, that
         if a Party does not pay its share for obtaining  the patent,  including
         but not  limited to any  renewals  thereto,  such Party shall no longer
         have any rights to the  Invention  and the Party  making  the  payments
         shall be deemed the sole owner of the Invention.

5.5      DRAXIMAGE  acknowledges that it shall have sole  responsibility for the
         development,  including but not limited to research and development and
         in vivo and in  vitro  testing,  on the  Products.  DRAXIMAGE  shall be
         solely  responsible  for the costs  associated  with such  development;
         provided,  however,  that  the  Parties  agree  that  DRAXIMAGE  is not
         compelled  by  this  Article   5.5,  or   otherwise,   to  develop  any
         Improvements for the Products.

ARTICLE 6 - CONFIDENTIALITY
---------------------------

6.1      A Party receiving  Proprietary  Information from the other, directly or
         indirectly,  will treat such  information as confidential  and will use
         efforts  at  least   equivalent  to  those  used  to  protect  its  own
         Proprietary  Information  but in no event shall the receiving Party use
         less than Commercially Reasonable Efforts. Except (i) to enable Cytogen
         to exercise its rights to appoint  distributors as set forth in Article
         2.4; and (ii) as set forth in Article 6.2 following, all information or
         data  communicated  from one  Party to the  other  will be  deemed  and
         treated  as  Proprietary  Information  unless  otherwise  agreed  to in
         writing. All oral communications, whether or not summarized and reduced
         to  writing,  shall  also be  considered  confidential.  Access to such
         Proprietary Information will be limited to employees,  agents, advisors
         or  consultants   of  the  Party  or  its  Affiliates   receiving  such
         information,  who reasonably require such information and who are bound
         to  said  Party  by a  like  obligation  of  confidentiality.  A  Party
         receiving Proprietary Information will not use such information for its
         own benefit or for the  benefit of others or in any way not  consistent
         with the purposes set out in this Agreement.

6.2      Nothing  contained  herein will in any way restrict or impair each
         Party's right to use,  disclose or otherwise  deal with any Proprietary
         Information which:

          (a)  at the time of  disclosure  is in the public domain or thereafter
               becomes  part of the public  domain by  publication  or otherwise
               through no act of the Party receiving such information;

          (b)  the Party receiving such information can  conclusively  establish
               was in its possession prior to the time of the disclosure;

                                      -8-
<PAGE>

          (c)  is independently made available as a matter of right to the Party
               receiving  such  information  by a  third  party  who  is  not in
               violation of a confidential relationship with the other Party;

          (d)  is  developed  by  a  Party   independently  of  the  Proprietary
               Information received from the other Party; or

          (e)  is  information  required to be disclosed by legal  process or in
               connection with a disclosing  Party's  periodic  filings with the
               United States Securities and Exchange  Commission;  provided,  in
               such case,  the  disclosing  Party  timely  informs the other and
               discloses the minimum  amount of  information  necessary to be in
               compliance and maintain  confidentiality  to the extent  possible
               and cooperates  reasonably  with the other Party in attempting to
               limit such disclosure.

6.3      The Party receiving Proprietary Information will obtain no right of any
         kind,  or license  under any patent  application  or patent,  except as
         expressly  stated in this Agreement.  All Proprietary  Information will
         remain the sole property of the Party  disclosing  such  information or
         data.

6.4      Upon  termination  of this  Agreement,  the Party to which  Proprietary
         Information has been disclosed will upon request,  return within thirty
         (30)  days  all such  information,  including  any hard and  electronic
         copies  thereof,  and cease  its use,  or at the  request  of the Party
         transmitting  such Proprietary  Information,  will promptly destroy the
         same and certify such destruction to the transmitting  Party,  provided
         that each Party may retain one copy of the Proprietary Information in a
         secure location for compliance and record keeping purposes only.

6.5      Termination  of this  Agreement  shall not relieve the Parties of their
         obligations  under  this  Article  6. The  confidentiality  obligations
         pursuant  to this  Article  6 shall  remain in full  force  and  effect
         throughout the Term of this Agreement plus five (5) years thereafter.

ARTICLE 7 - LIAISON COMMITTEE
-----------------------------

7.1      Within sixty (60) days of the execution of this Agreement,  the Parties
         hereto shall establish a Liaison Committee which shall consist of three
         (3) representatives  from each Party as designated by each of them from
         time to time.  Unless otherwise  agreed to by the Parties,  the Liaison
         Committee shall meet at least once every year.  Either Party shall have
         the  unilateral  right  to call a  meeting  of the  Liaison  Committee;
         provided,  however, that the Liaison Committee shall not meet more than
         four (4) times in any calendar year. The Liaison Committee, or a Party,
         as the case may be, must provide thirty (30) days written notice to the
         Parties  (or  other  Party)  of  any  requested  meeting.  The  Liaison
         Committee shall meet during regular business hours alternatively at the
         offices of Cytogen and DRAXIMAGE,  or as otherwise  agreed,  each Party
         bearing its own expenses in preparing for and attending  such meetings.
         Meetings shall be chaired by one of the Cytogen  representatives who it
         selects.  Between  meetings of the Liaison  Committee  each Party shall
         keep  the  other  generally  informed  as  to  its  progress  with  its
         respective  obligations  under this Agreement and the Supply Agreement.
         Each Party will provide the other  Party's  Liaison  Committee  members
         with advance written reports and agenda items as the Liaison  Committee
         reasonably  determines are appropriate,  including without  limitation,
         reasonable current production,  sales and marketing updates for each of
         the  Products,  any research  and  development  being  conducted on the
         Products and any Improvements that have been made to the Products.

                                      -9-
<PAGE>
          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

7.2      The  Liaison   Committee  shall  provide   strategic   advice  for  the
         development and commercialization of the Products in the Territory.  In
         particular,  the Liaison  Committee  shall have the following  specific
         responsibilities:

          (a)  to review (with no right to modify) an annual  budget,  timeline,
               forecasts,  production and business plans for the Products in the
               Territory and any updates or amendments thereto;

          (b)  to approve  the annual  marketing  plans for the  Products in the
               Territory and any updates or amendments thereto;

          (c)  to review the Products' performance against such plans and budget
               at each meeting of the Liaison Committee; and

          (d)  to review and comment on copies of publications  submitted by the
               other Party which pertain to the Products.

7.3      The Liaison  Committee  shall attempt to operate by consensus,  and all
         decisions of the Liaison Committee shall require majority  support.  In
         the event of a dispute  among the  Liaison  Committee  which  cannot be
         resolved by consensus, after further informal discussion,  such dispute
         shall be referred to the  Presidents of DRAXIS  Health Inc.  ("DRAXIS")
         and Cytogen  (collectively  the  "Negotiators"),  who shall discuss the
         matter  and  attempt  to  reach  an  amicable   solution.   Should  the
         Negotiators fail to reach an amicable  solution within ten (10) days of
         the first  meeting of the  Negotiators  to  resolve  the  dispute  (the
         "Settlement   Date"),  the  matter  shall  proceed  to  arbitration  in
         accordance with the provisions of Article 16.

ARTICLE 8 - SUPPLY
------------------

8.1      Supply of the Products shall be in accordance with the provisions of
         the Supply Agreement.

ARTICLE 9 - NON-COMPETITION AND NON-SOLICITATION
------------------------------------------------

9.1       (a)  Subject to the below provisions and Article 4.3 of the Supply
               Agreement, during the Term of this  Agreement,  Cytogen  and  its
               Affiliates  will not,  unless  approved  in advance by  DRAXIMAGE
               acting reasonably, directly or indirectly, manufacture, market or
               distribute in the Territory any product which is competitive  and
               similar (a product which uses a  radioisotope  to treat  prostate
               cancer) with the Products;

          (b)  In the event  DRAXIMAGE  terminates  this Agreement  because of a
               material  breach by Cytogen  pursuant to  Articles  15.3 or 15.4,
               Cytogen and its Affiliates  will not,  unless approved in advance
               by  DRAXIMAGE   acting   reasonably,   directly  or   indirectly,
               manufacture,  market,  distribute  or sell in the  Territory  any
               product which is competitive  and similar (a product which uses a
               radioisotope  to treat  prostate  cancer) with the Products for a
               [**]  period   commencing  upon  the  termination  date  of  this
               Agreement;

                                      -10-

<PAGE>
          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

          (c)  Notwithstanding  the provisions of Article 9.1(a), for as long as
               the  exclusive  license  granted to Cytogen  as  provided  for in
               Article 2 has been made  non-exclusive as provided for in Article
               4.1,  Cytogen shall not,  unless approved in advance by DRAXIMAGE
               acting reasonably, directly or indirectly, manufacture, market or
               distribute in the Territory any product which is competitive  and
               similar (a product which uses a  radioisotope  to treat  prostate
               cancer) with the Products for a [**] period  commencing from when
               the license is made non-exclusive; provided, however, that should
               the  license  be made  exclusive  once  again as agreed to by the
               Parties in  accordance  with the  provisions  of Article 4.1, the
               provisions of Article 9.1(a) shall apply;

          (d)  During  and after  the Term of this  Agreement,  Cytogen  and its
               Affiliates  will not  seek  customers  or  sales of the  Products
               outside the Territory,  unless  approved in advance by DRAXIMAGE,
               acting  reasonably.   Upon  expiration  or  termination  of  this
               Agreement, save and except if terminated by DRAXIMAGE pursuant to
               Articles 14.2, 15.3 and 15.4, DRAXIMAGE will not, for a period of
               [**], sell any Products to Cytogen's  customers to whom DRAXIMAGE
               has  shipped  Product  during the Term unless  DRAXIMAGE  pays to
               Cytogen a royalty  of [**]  percent  ([**]%)  of the net  selling
               price of such Products sold to such customers; provided, however,
               that if  Cytogen  relinquishes  its  right to the  PD103  Product
               pursuant to the provisions of Article 4.1, then  DRAXIMAGE's [**]
               percent ([**]%) royalty obligation to Cytogen referred to in this
               Article shall not apply for shipments of Pd103 Product to Cytogen
               customers  after  termination  or  expiry of this  Agreement,  or
               otherwise.

ARTICLE 10 - REPRESENTATIONS AND WARRANTIES
-------------------------------------------

10.1     DRAXIMAGE hereby represents and warrants to Cytogen as follows:

          (a)  DRAXIMAGE  has the full legal right to enter into this  Agreement
               and to perform its obligations hereunder.  This Agreement is duly
               executed  and  delivered by DRAXIMAGE  and  constitutes  a legal,
               valid and binding  obligation,  enforceable  against DRAXIMAGE in
               accordance with its terms;

          (b)  prior to the supply of the Products, DRAXIMAGE will have obtained
               and  will  maintain  all  Regulatory   Approvals  and  all  other
               necessary   notices,    consents,    licenses,    approvals   and
               authorizations  of all  governmental  authorities and other third
               parties  required in connection with entering into and permitting
               the Parties to perform their  respective  obligations  under this
               Agreement;

          (c)  it has provided to Cytogen a summary of all adverse  events known
               to it relating to the Products;

          (d)  it has  disclosed to Cytogen all relevant  Intellectual  Property
               Rights,   Know-How  and  Regulatory  Approvals  relating  to  the
               Products;

          (e)  the execution and delivery of this Agreement and the  performance
               of  DRAXIMAGE's   obligations   hereunder  (i)  to  the  best  of
               DRAXIMAGE's  knowledge  do  not  conflict  with  or  violate  any
               requirement of applicable laws, rules or regulations, and (ii) do
               not conflict with, or constitute a default under, any contractual
               obligation of DRAXIMAGE;

                                      -11-
<PAGE>

          (f)  DRAXIMAGE  either owns or has exclusive  license in the Territory
               to the  Intellectual  Property  Rights and  Know-How  and has not
               granted to any third party any  license or other  interest of any
               kind  (including  any  charge,  lien or  encumbrance)  under  the
               Intellectual  Property Rights and Know-How in the Territory which
               would  affect  Cytogen's  rights  under  this  Agreement  and the
               Intellectual  Property Rights and Know-How will permit Cytogen to
               practice and exercise the rights granted to it under Article 2;

          (g)  to the best of its knowledge, there are no third party patents or
               trademarks or pending  applications  which, if issued,  may cover
               the manufacture, use, distribution,  promotion, marketing or sale
               of the Products in the Territory;

          (h)  there are no claims,  actions,  judgements or settlements against
               or owed by DRAXIMAGE or to the best of its  knowledge  pending or
               threatened  claims  or  litigation   relating  to  the  Products,
               Intellectual Property Rights and Know-How;

          (i)  to the best of its knowledge the manufacture,  use, distribution,
               promotion,  marketing  or sale of the  Products in the  Territory
               will not infringe the  Intellectual  Property Rights of any third
               party; and

          (j)  DRAXIMAGE shall exercise,  as soon as reasonably  practicable but
               in no event later than March 1, 2001, its  contractual  option to
               obtain from its  sublicensor  the  exclusive  rights to the Pd103
               Product  (which shall be granted  pursuant to U.S.  Patent Number
               6,099,458) for the Territory.

10.2     Cytogen hereby represents and warrants to DRAXIMAGE as follows:

          (a)  Cytogen has the full legal right to enter into this Agreement and
               to perform its  obligations  hereunder.  This  Agreement  is duly
               executed and delivered by Cytogen and constitutes a legal,  valid
               and binding obligation, enforceable against Cytogen in accordance
               with its terms;

          (b)  subject  to  DRAXIMAGE's  obligations  to obtain  all  Regulatory
               Approvals  as  set  forth  in  Article  10.1  Cytogen  will  have
               obtained,  prior  to  the  First  Sale,  all  necessary  notices,
               consents,   approvals  and  authorizations  of  all  governmental
               authorities   and  other  third  parties   required  from  it  in
               connection with entering into and performing this Agreement;

          (c)  the execution and delivery of this Agreement and the  performance
               of Cytogen's  obligations  hereunder (i) to the best of Cytogen's
               knowledge,  do not conflict  with or violate any  requirement  of
               applicable laws,  rules or regulations,  and (ii) do not conflict
               with, or constitute a default under,  any contractual  obligation
               of Cytogen;

          (d)  Cytogen shall institute and maintain adequate internal procedures
               to screen and monitor the credit status of potential and existing
               customers  of  the  Products  in  the  Territory  and  shall  use
               Commercially  Reasonable  Efforts to reduce  customer credit risk
               where  reasonably  possible  and  shall  pursue  unpaid  customer
               receivables and, if necessary, to the full extent of the law;

          (e)  Cytogen shall  disclose  reasonably  promptly to  DRAXIMAGE,  the
               written details of any chargeback  payments and rebates  referred
               to in Article 1.16; and

                                      -12-
<PAGE>
          (f)  Cytogen  shall  ensure  that  DRAXIMAGE  is  made a  third  party
               beneficiary  to any agreements  entered into between  Cytogen and
               independent third party  distributors  pursuant to the provisions
               of Article 2.4 and agrees to  undertake  Commercially  Reasonable
               Efforts to ensure that each independent  third party  distributor
               conforms to the spirit and intent of this Agreement.

ARTICLE 11 - LIABILITY AND INSURANCE
------------------------------------

11.1     Each  Party  shall  indemnify,  defend  and hold the  other,  and their
         respective employees, directors, representatives and advisors, harmless
         from and against  any and all  non-Affiliate  third party  liabilities,
         actions, suits, claims, demands, prosecutions, damages, costs, expenses
         or money judgements (including reasonable solicitors' fees) which arise
         out of:

          (a)  the  intentional  misconduct or  negligence  of the  indemnifying
               Party with respect to its acts or omissions  under this Agreement
               or pertaining to the Products; or

          (b)  the breach by the indemnifying Party of its  representations  and
               warranties contained in this Agreement;

         except to the  extent  of an  indemnity  obligation  on the part of the
         other Party under this Article.  In the event of a claim which may give
         rise to a right of indemnity under this Article, the Party intending to
         claim indemnity shall give the indemnifying  Party notice in writing as
         soon as practicable of any such claim or lawsuit.

         In any such claim or lawsuit:

               (i)  The Party  claiming  indemnity  will  give the  indemnifying
                    Party full  opportunity to control the response  thereto and
                    the defense thereof, including any agreement relating to the
                    settlement  thereof,  provided that the  indemnifying  Party
                    shall not settle any such claim or action  without the prior
                    written consent of the Party claiming indemnity (which shall
                    not be unreasonably withheld or delayed);

               (ii) the  Party  claiming  indemnity  will,  at the  indemnifying
                    Party's expense,  cooperate reasonably in the defense of the
                    non-Affiliate  third party's claim, and shall have the right
                    to  participate  in such  defense to the extent  that in its
                    judgement  the Party  claiming  indemnity  may be prejudiced
                    thereby;

               (iii)the Party  claiming  indemnity  shall not  settle,  offer to
                    settle or admit  liability  in any claim or suit without the
                    written  consent of an officer  of the  indemnifying  Party,
                    which consent shall not be unreasonably withheld.

         The Party claiming  indemnity may participate,  at its own expense,  in
         such  defense  and in any  settlement  discussions  directly or through
         counsel of its choice on a monitoring,  non-controlling  basis but such
         participation  shall not be deemed a waiver by that Party of any rights
         or recourse,  for  indemnification or otherwise,  it might have against
         the indemnifying Party.

                                      -13-
<PAGE>

11.2     Cytogen  and  DRAXIMAGE  shall  advise each other  immediately,  to be
         confirmed in writing,  of any  occurrence  which  involves a claim for
         death or injury  following  administration  of the  Products  supplied
         hereunder,  or any  matter  arising  out of this  Agreement  which  is
         required  to be  reported  other  than  in a  routine  manner  to  the
         regulatory  authorities  by either Party.  The Parties will  cooperate
         reasonably  to  facilitate  and  develop  written  procedures  for the
         reporting of adverse events for the Products to appropriate regulatory
         agencies within the Territory. It is understood that DRAXIMAGE will be
         responsible for the reporting to the applicable  regulatory  agency of
         adverse  events  within the  Territory  and that  Cytogen  will render
          assistance as reasonably requested.

11.3     Each Party will maintain  throughout  the Term,  and for at least three
         (3)  years  thereafter,   comprehensive  general  liability  insurance,
         including  blanket   contractual   liability   insurance  covering  the
         indemnification, defense and other obligations of that Party under this
         Agreement which insurance  affords limits of not less than Five Million
         Dollars   ($5,000,000)  for  each  person,  and  Five  Million  Dollars
         ($5,000,000)  for  each  occurrence,   for  bodily  injury,  liability,
         personal  injury  liability,   products   liability,   property  damage
         liability, contractual liability, and completed operations liability.

11.4     Each  Party  will  provide  to the  other a  Certificate  of  Insurance
         evidencing the above coverage,  this  Certificate to be provided to the
         other  Party  within  sixty  (60)  days  after  the  execution  of this
         Agreement.  This  Certificate  of Insurance  shall show the name of the
         Party,  the name of the issuing  company,  the type of  insurance,  the
         policy number,  the effective date, the expiration date, and the limits
         of liability.  The insurance shall provide for a minimum of thirty (30)
         days written notice to the recipient of the Certificate of Cancellation
         or material change in the insurance.

11.5     A Party's liability to the other is in no way limited to the extent of
         the other Party's insurance coverage.

ARTICLE 12 - LIMITATION OF LIABILITY
------------------------------------

12.1     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.  The  limitation set forth in
         this Article 12.1 shall not apply with  respect to the  obligations  of
         either  Party  to  indemnify  the  other  Party  under  Article  11  in
         connection with a liability to a non-Affiliate third party.

ARTICLE 13 - INTELLECTUAL PROPERTY AND REGULATORY APPROVALS
-----------------------------------------------------------

13.1     DRAXIMAGE  shall,  at its  expense,  use  its  Commercially  Reasonable
         Efforts to prepare,  file,  prosecute  and  maintain  the  Intellectual
         Property  Rights in the  Territory;  provided,  however,  that  Cytogen
         shall,  at  DRAXIMAGE's  expense,  provide all reasonable and customary
         assistance and  cooperation  to DRAXIMAGE and its agents  expected of a
         licensee  under  similar  circumstances.  DRAXIMAGE  shall keep Cytogen
         advised of the status of the actual and  prospective  filings and shall
         as  soon as  practicable  provide  Cytogen  copies  of all  substantive
         documents  related to the filing,  prosecution  and  maintenance of any
         such  filing.  At all  times  during  the  Term of this  Agreement  and
         thereafter, DRAXIMAGE shall be the owner and holder of the Intellectual
         Property Rights and nothing in this Agreement conveys any right,  title
         or interest in same to either Cytogen or its Affiliates.

                                      -14-
<PAGE>

13.2     DRAXIMAGE  shall advise Cytogen as soon as possible of any intention to
         cease prosecution and/or maintenance of a particular filing in relation
         to the  Intellectual  Property  Rights  and,  to the extent that it has
         legal  authority to do so, shall permit  Cytogen,  if it so wishes,  to
         continue  prosecution  and/or maintenance of such filing at DRAXIMAGE's
         expense;  provided,   however,  that  Cytogen  shall  not  acquire  any
         additional rights other than as specified in this Agreement.  DRAXIMAGE
         shall  execute  such  documents  and perform  such acts as it has legal
         authority to do and as may be reasonably  necessary to prosecute and/or
         maintain the filing.  Notwithstanding  the above, the Parties recognize
         that DRAXIMAGE's  ability to prosecute and/or maintain the Intellectual
         Property  Rights  may be  limited  by  restrictions  imposed on it as a
         sublicensee of the Products. Any filings performed by Cytogen shall not
         be considered part of the Intellectual  Property Rights for the purpose
         of determining  royalties  payable to DRAXIMAGE  based on Cytogen's Net
         Sales pursuant to the provisions of Article 3.2.

13.3     If, at any time during the Term of this  Agreement,  either Party shall
         become aware of any third party infringement or threatened infringement
         of any  Intellectual  Property  Rights in the Territory,  the following
         provisions shall apply:

               (i)  The Party  becoming aware shall promptly give written notice
                    to the other and include  evidence to support an  allegation
                    of infringement by such third party.

               (ii) If there is disagreement as to whether the act complained of
                    is in fact an infringement,  as described above, the Parties
                    shall refer such issue to a mutually acceptable  independent
                    United States  patent  counsel  (such  acceptance  not to be
                    unreasonably  withheld),  and the  reasonable  costs of such
                    patent counsel incurred in this regard shall be borne by the
                    Party whose view does not prevail.

               (iii)If patent counsel  pursuant to Article  13.3(ii)  determines
                    there  is  infringement   or  if  DRAXIMAGE,   in  its  sole
                    discretion  decides there is  infringement,  DRAXIMAGE shall
                    use   Commercially    Reasonable   Efforts   to   obtain   a
                    discontinuance  of such  infringement  or bring suit against
                    the third  party  infringer  within two (2) months  from the
                    date of said notice.  In no event shall DRAXIMAGE enter into
                    any settlement,  consent  judgement or other voluntary final
                    disposition  of such  suit that  would in any way  adversely
                    affect Cytogen's  rights under this Agreement  without first
                    obtaining Cytogen's written consent. Any recovery or damages
                    derived from any suit under this Article shall be used first
                    to  reimburse  each Party for its  documented  out of pocket
                    legal expenses relating to the suit, secondly, shall be used
                    to reimburse  each Party for the royalties lost (in the case
                    of DRAXIMAGE)  and lost profits (in the case of Cytogen) and
                    last shall be shared equally by the Parties.

                                      -15-

<PAGE>
          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

               (iv) If  independent   counsel  determines  pursuant  to  Article
                    13.3(ii)  that there is  infringement  and DRAXIMAGE has not
                    overcome  the  allegation  of  infringement  or  obtained  a
                    discontinuance  of  such  infringement  or  filed  a suit to
                    obtain a  discontinuance  of infringement in accordance with
                    the provisions of Article 13.3(iii), then Cytogen shall have
                    the right, but not the obligation, to bring suit against any
                    infringer, provided that Cytogen shall bear all the expenses
                    of such suit. During the period which the action is pending,
                    Cytogen  shall  have the right to offset the  royalties  due
                    DRAXIMAGE  on  sales  of the  allegedly  infringing  Product
                    against its litigation  expenses.  DRAXIMAGE will reasonably
                    cooperate with Cytogen in any suit for  infringement  of any
                    Intellectual  Property Rights or Know-How brought by Cytogen
                    against a third party.  Cytogen  shall incur no liability to
                    DRAXIMAGE  as  a  consequence  of  such  litigation  or  any
                    unfavorable  decision  resulting  therefrom,  including  any
                    decision holding any of the Intellectual  Property Rights or
                    Know-How invalid or  unenforceable.  Any recovery or damages
                    derived from any suit under this Article shall be used first
                    to  reimburse  each Party for its  documented  out of pocket
                    legal expenses relating to the suit, secondly, shall be used
                    to reimburse DRAXIMAGE for [**] percent ([**]%) of royalties
                    lost  (including  the  royalties  offset  against  Cytogen's
                    litigation  expenses as referred to above) and, last,  shall
                    be retained by Cytogen.

13.4     In the event that Cytogen's importing, using, distributing,  marketing,
         promoting,  offering for sale or selling the Products in the  Territory
         infringes,  will  infringe or is alleged by a third party to infringe a
         third party's patent or other  Intellectual  Property Rights, the Party
         becoming aware of same shall promptly notify the other Party. DRAXIMAGE
         shall have the sole  responsibility for dealing with such allegation of
         infringement at its own cost and expense by seeking a license from such
         third  party.  If  DRAXIMAGE  is not able to obtain a license from such
         third party, DRAXIMAGE shall have the responsibility for the defense of
         such litigation using  Commercially  Reasonable  Efforts to defend such
         third party  infringement  suit. If DRAXIMAGE  does not defend  Cytogen
         against  any such  action,  Cytogen  shall have the right,  but not the
         obligation,  to defend  such  action at its sole  cost and  during  the
         period  which the action is  pending,  Cytogen  shall have the right to
         offset the royalties due DRAXIMAGE on sales of the allegedly infringing
         Product  against  its  litigation  expenses.  DRAXIMAGE  shall  provide
         Cytogen  reasonable  and  customary  assistance  in  this  regard.  Any
         recovery  or damages  payable or owed to a third party as a result of a
         suit under this Article  shall be fully paid and covered by  DRAXIMAGE,
         including Cytogen's reasonable solicitor's fees, if applicable.

13.5     Subject to Cytogen's  rights pursuant to Article 13.2,  DRAXIMAGE shall
         at the  earliest  known date give notice to Cytogen of the grant lapse,
         revocation,   surrender,   invalidation   of,  or  abandonment  of  any
         Intellectual Property Rights or Know-How.

13.6     DRAXIMAGE is solely responsible,  at its expense,  for the preparation,
         filing and pursuit of the  application  of Regulatory  Approvals of the
         Products in the Territory.  Pursuant to Article 10.1(b), DRAXIMAGE will
         use  Commercially   Reasonable   Efforts  to  maintain  the  Regulatory
         Approvals.  At  all  times  during  the  Term  of  this  Agreement  and
         thereafter  DRAXIMAGE  shall be the owner and holder of the  Regulatory
         Approvals;  provided, however, Cytogen shall have access to and a right
         to use all Regulatory  Approvals  pursuant to the provisions of Article
         2.1.  DRAXIMAGE  shall keep Cytogen advised of the status of the actual
         and prospective  applications and shall as soon as practicable  provide
         Cytogen  copies  of  all  Regulatory  Approvals  .  DRAXIMAGE  will  be

                                      -16-
<PAGE>
         responsible  for the  payment  of any third  party  costs,  if any,  of
         generating  any  additional  data  required  by the FDA,  NRC, or other
         applicable  regulatory  body  in the  Territory  to  obtain  Regulatory
         Approvals  for  any of the  Products.  Cytogen  shall,  at  DRAXIMAGE's
         expense,  provide  DRAXIMAGE  with such  assistance  as  DRAXIMAGE  may
         reasonably  request from time to time in obtaining or maintaining  such
         Regulatory Approvals,  including without limitation providing DRAXIMAGE
         with a copy of  such  documentation  or  information  within  Cytogen's
         possession  or control as  DRAXIMAGE  may  reasonably  require  for the
         purposes of fulfilling its obligations hereunder.

13.7     Should the Parties mutually agree to undertake  post-marketing  studies
         or further  research and development of the Products for the indication
         of prostate  cancer,  the costs of any such  research  programs  and/or
         studies shall be shared equally by the Parties.

ARTICLE 14 - FORCE MAJEURE
--------------------------

14.1     Neither Party shall be liable in damages for, nor shall this  Agreement
         be terminable or cancellable by reason of, any delay or default in such
         Party's  performance  hereunder  if such  default or delay is caused by
         events  beyond  such  Party's  reasonable  control  including,  but not
         limited to, acts of God,  regulation  or law or other action or failure
         to act of any government or agency thereof, war or insurrection,  civil
         disturbance,  destruction  of  production  facilities  or  materials by
         earthquake,  fire, ice, flood or storm, labour disturbances,  epidemic,
         or  failure  of  public  utilities  or common  carriers  to act for the
         reasons  listed above  (collectively  or  individually  "Force  Majeure
         Event");  provided,  however,  that the Party seeking relief  hereunder
         shall  immediately  notify the other Party of such cause(s) beyond such
         Party's  reasonable  control.  The Party which may invoke this  Article
         14.1  shall  use  all  reasonable  efforts  to  reinstate  its  ongoing
         obligations  to the other as quickly as  possible  and the other  Party
         shall provide all  reasonable  assistance to help the invoking Party in
         this respect.

14.2     The  Parties  shall  have any  Force  Majeure  Event  dealt  with on an
         expedited  basis  by the  Liaison  Committee  in  accordance  with  the
         provisions of Article 7.3.  Notwithstanding  the above,  however,  if a
         Party fails to perform any of its obligations  under this Agreement for
         one hundred and twenty (120)  consecutive  business days due to a Force
         Majeure Event,  unless within such period the non-performing  Party has
         begun to remedy substantially its inability to perform, the other Party
         may,  if  itself  is not  in  material  breach  under  this  Agreement,
         terminate   this   Agreement  by  providing   written   notice  to  the
         non-performing  Party. In the event of such termination,  both Parties'
         respective  rights and obligations under this Agreement shall terminate
         except  for any  amounts  previously  due and owing by one Party to the
         other and except for any  obligations  which this  Agreement  expressly
         provides shall survive the termination such as, without limitation, the
         provisions of Articles 3.5, 5, 6, 9, 10 and 11.1.

ARTICLE 15 - TERM AND TERMINATION
---------------------------------

15.1     This Agreement  shall become  effective on the Effective Date and shall
         terminate on December 31, 2010, unless earlier terminated in accordance
         with the provisions of this Agreement (the "Term").  Beginning no later
         than one (1) year and ending  not later  than six (6)  months  prior to
         such  expiration,  the Parties will enter into good faith  discussions,
         without  obligation,  about possible  renewal of this Agreement and the
         terms of any such renewal.

15.2     This Agreement shall automatically terminate in the event that the
         Supply Agreement terminates.

                                      -17-
<PAGE>

15.3     Subject to the provisions of Article 14.2,  either Party hereto may, at
         its option, terminate this Agreement by giving to the other Party prior
         notice in writing to that  effect of not less than  ninety (90) days in
         the event the other  Party  commits a  material  breach of either  this
         Agreement or the Supply Agreement (thirty (30) days, in the case of any
         payment default),  and has failed to cure such breach during the ninety
         (90) day period or thirty (30) day  period,  as  applicable,  following
         receipt of said notice  from the  non-breaching  Party,  or such longer
         period as may  reasonably  be necessary,  provided the breaching  Party
         continues  its  diligent  efforts to cure.  Any such  cancellation  and
         termination  pursuant  to this  Article  15.3  shall  not  release  the
         breaching Party from any obligations  hereunder incurred prior thereto.
         For greater certainty and without limitation,  breach by Cytogen of the
         provisions in Article 4.2(b) shall be deemed a material  breach of this
         Agreement.

15.4     Either Party hereto may terminate  this  Agreement  immediately  if the
         other Party becomes insolvent,  or voluntary or involuntary proceedings
         are  instituted  against the other Party  under any  federal,  state or
         local  bankruptcy or  insolvency  laws, or a receiver or trustee of the
         Party's  property  shall be appointed or the Party makes an  assignment
         for the benefit of its creditors.  In such a circumstance,  the Parties
         acknowledge, without limitation, that it is their intent to provide the
         maximum  protection  available  under  applicable  law for an exclusive
         licensor  and  licensee  under the  circumstances  referred  to in this
         Article 15.4; provided,  however,  that the Parties in so acknowledging
         are not  obligated  to incur any costs in order to give legal force and
         effect to such an intention.

15.5     In the event of expiration of this Agreement, or the termination of any
         rights  granted  hereunder with respect to a given Product prior to the
         expiration or termination  of this  Agreement in its entirety,  Cytogen
         shall  have no further  rights in the  affected  Intellectual  Property
         Rights, Regulatory Approvals, Trademarks or Products. Any expiration or
         partial or complete  termination of this Agreement shall not affect the
         rights,  obligations  and remedies of either  Party  accrued as of such
         expiration or termination.

ARTICLE 16 - DISPUTE RESOLUTION
-------------------------------

16.1     The Parties will attempt in good faith, in  accordance  with the
         provisions of Article 7.3 above, to resolve any dispute or claim
         arising out of or relating to this Agreement.

16.2     Should  the  Negotiators  fail to  settle  a  dispute  pursuant  to the
         provisions  of  Article  7.3,  the matter  shall be finally  settled by
         arbitration in accordance with the provisions of the  Arbitration  Act,
         1991,  Ontario and any amendments  thereto.  The following  rules shall
         apply to the arbitration:

          (a)  The  arbitration  tribunal shall consist of one arbitrator who is
               not  affiliated  with  either of  Cytogen or  DRAXIMAGE,  who has
               relevant industry knowledge, expertise and credibility and who is
               appointed by mutual agreement of Cytogen and DRAXIMAGE or, in the
               event of failure to reach an agreement within ten (10) days after
               the Settlement Date,  either Party may request the  Co-ordinator,
               ADR Chambers,  48 Yonge Street, Suite 1100, Toronto,  Ontario M5E
               1G6  (or  any  successor  thereto)  to  provide  a list  of  five
               arbitrators   from   amongst   its   members    outlining   their
               qualifications.  Within three (3) business days of the receipt of
               the list,  Cytogen and  DRAXIMAGE  shall  independently  rank the
               proposed candidates,  shall simultaneously exchange rankings, and
               shall  select as the  arbitrator  the  individual  receiving  the
               highest  combined  ranking who is available  to serve.  If either
               Party  does not rank and  provide  a copy of the  ranking  to the
               other Party,  the Party who does rank the arbitrator will be able
               to select the arbitrator.

                                      -18-
<PAGE>

          (b)  The arbitrator shall be instructed that time is of the essence in
               proceeding with his or her  determination of any dispute,  claim,
               question or difference.  The arbitration tribunal shall determine
               the  time,   date  and   place  of   arbitration,   taking   into
               consideration   the   Parties'    convenience   and   the   other
               circumstances of the case.

          (c)  Cytogen  and  DRAXIMAGE  will  agree,  in  consultation  with the
               arbitrator, on the rules for the arbitration. Absent agreement to
               the  contrary,  the  following  rules,  designed to save time and
               expense for the Parties, will apply:

               (i)  Statements  shall be in  writing  and  shall be no more than
                    five (5)  pages in  length;  and shall be  submitted  to the
                    arbitration  tribunal  and to the  other  Party two (2) days
                    prior to the arbitration;

               (ii) Each Party will provide to the other access to any documents
                    that may be  relevant  to the  arbitration.  Each Party will
                    also  provide  to the other a list and  copies of up to (but
                    not exceeding)  twenty (20) documents that the Party intends
                    to rely on at the  arbitration.  Such  access will be during
                    normal  business  hours and will  commence one day after the
                    appointment of the arbitration  tribunal and shall terminate
                    one day prior to submission of the statements;

               (iii)Each  Party  will  be  entitled  to  oral  discovery  of one
                    representative of the other Party if it deems it appropriate
                    at a mutually  agreed  upon date,  time and  location.  Each
                    Party may only discover the other Party's representative for
                    a  maximum  of one (1) eight  (8) hour  day.  Any  questions
                    refused will be put to the arbitrator  for the  arbitrator's
                    determination  as to whether the questions  are  appropriate
                    and relevant;

               (iv) At the hearing, opening argument will be limited to one-half
                    (1/2) hour per Party;

               (v)  Each Party may  produce up to two (2)  witnesses  for direct
                    examination. The total time permitted for direct examination
                    will be two (2)  hours  for  each  witness.  Total  time for
                    cross-examination  will  also  be two  (2)  hours  for  each
                    witness;

               (vi) A Party  may  introduce  any of its  twenty  (20)  documents
                    through  either of its  witnesses.  The other  Party may, if
                    appropriate,  challenge  the  authenticity  of any  document
                    produced through those witnesses;

               (vii)Closing  arguments  will be limited to one (1) hour for each
                    Party; and

               (viii) The arbitrator  will attempt to produce a decision  within
                    seven  (7)   calendar   days  of  the   conclusion   of  the
                    arbitration,  and written  reasons  within two (2) months of
                    the arbitration.

          (d)  The  arbitration  shall be  conducted  in English  and shall take
               place in Toronto, Ontario.

          (e)  The  arbitration  awards  shall be given in writing  and shall be
               final,  and binding on Cytogen and DRAXIMAGE,  not subject to any
               appeal  whatsoever,  and shall deal with the question of costs of
               the arbitration and all matters  related  thereto.  In his or her
               award of costs,  the  arbitrator may consider each Party's effort
               to resolve the dispute  through bona fide good faith  negotiation
               efforts and has the authority,  if he or she deems advisable,  to

                                      -19-

<PAGE>

               award  solicitor  and client costs  against a Party that fails to
               demonstrate such bona fide good faith efforts.

          (f)  Judgement  upon the award  rendered may be entered into any court
               having jurisdiction, or application may be made to such court for
               judicial  recognition  of the award or an order  for  enforcement
               thereof, as the case may be.

          (g)  The  arbitrator  will not be  empowered  to and  shall  not award
               punitive,   exemplary,   special,   consequential  or  incidental
               damages.

          (h)  Notwithstanding the foregoing,  either Party shall be entitled to
               pursue equitable  remedies in a court of competent  jurisdiction,
               including, without limitation,  injunctive relief in any court in
               the event that legal or monetary damages are inadequate.

ARTICLE 17 - INDEPENDENT CONTRACTOR
-----------------------------------

17.1     It is understood that both Parties hereto are  independent  contractors
         and engage in the  operation  of their own  respective  businesses  and
         neither Party hereto is to be  considered  the agent of the other Party
         for any purpose whatsoever and neither Party has any authority to enter
         into any  contract or assume any  obligation  for the other Party or to
         make any warranty or  representation on behalf of the other Party. Each
         Party shall be fully responsible for its own employees and consultants,
         and the  employees  of one Party shall not be deemed to be employees of
         the other Party for any purpose whatsoever.

ARTICLE 18 - ASSIGNMENT AND SUBLICENSING
----------------------------------------

18.1     Subject to Article  2.4,  neither Party may  without  written  approval
         of the other Party (and such approval shall not be unreasonably
         withheld):

          (a)  assign or  sublicense  this  Agreement  or  transfer  its rights,
               obligations  or interest or any part thereof under this Agreement
               to any third party which is not an Affiliate; or

          (b)  designate  or cause any third party not an  Affiliate  to perform
               all or part of its activities  hereunder,  or to have the benefit
               of all or part of its rights hereunder.

18.2     Either  Party may,  upon written  notice to the other,  assign all or a
         part of its rights or obligations  hereunder to an Affiliate,  provided
         that such  assignment  shall not lessen or release the prior or ongoing
         obligations  of the assignor to the other Party to this  Agreement  and
         that the applicable  Affiliate shall agree, in writing,  to be bound by
         the terms and conditions of this Agreement.

ARTICLE 19 - MISCELLANEOUS
--------------------------

19.1     This  Agreement  shall be governed by and construed in accordance  with
         the laws of the  Province  of Ontario  and Canada  applicable  thereto,
         without regard to its choice of law principles.

19.2     Any notice or other communication made under this Agreement (other than
         routine  business  communication)  shall  be in  writing  and  shall be
         properly given: (i) when delivered if sent by personal  delivery;  (ii)
         when   transmitted   if  sent  by  facsimile   with   confirmation   of
         transmission;  or  (iii)  three  days  after  being  posted  if sent by
         registered mail return receipt requested, addressed:

                                      -20-

<PAGE>
           If to Cytogen:             Cytogen Corporation
                                      600 College Road East - CN 5308
                                      Princeton, New Jersey 08540-5308
                                      United States of America

                                      Attention:    President
                                      -----------------------
                                      Facsimile:    609-750-8124

           If to DRAXIMAGE:           DRAXIMAGE Inc.
                                      16751 Trans Canada Highway
                                      Kirkland, Quebec H9H 4J4
                                      Canada

                                      Attention:    President
                                      -----------------------
                                      Facsimile:    514-630-7201

           With a copy to:            DRAXIS Health Inc.
                                      2nd Floor, 6870 Goreway Drive
                                      Mississauga, Ontario L4V 1P1
                                      Canada

                                      Attention:    General Counsel
                                      -----------------------------
                                      Facsimile:    905-677-5494

         A Party may change its address for notice by notifying  the other Party
         at any time.

19.3     Each  Party  agrees  to  comply  with all  applicable  laws,  rules and
         regulations of any government agency or authority in the performance of
         its obligations under this Agreement. In the event one or more terms of
         this  Agreement are found to violate the  provisions of any  applicable
         law, rule or  regulation,  the Parties  hereto shall  negotiate in good
         faith to modify this  Agreement,  but only to the extent  necessary  to
         make the terms of this  Agreement  valid and  enforceable,  having full
         regard  for all  applicable  laws and the intent  and  purposes  of the
         Parties entering into this Agreement.

19.4     This Agreement, including the Schedules, whether annexed at the time of
         execution of this Agreement or later, as provided  herein,  constitutes
         the entire Agreement between the Parties hereto relating to the subject
         matter  hereof,  and this  Agreement  may not be  varied  except  by an
         instrument in writing signed by each Party hereto by a duly  authorized
         officer.

19.5     Should any part of this Agreement be held  unenforceable or in conflict
         with  the  applicable  laws or  regulations  of any  jurisdiction,  the
         invalid or  unenforceable  part or provision  shall be replaced  with a
         provision  which  accomplishes,  to the extent  possible,  the original
         business purpose of such invalid or unenforceable  part or provision in
         a  commercially  reasonable,  valid  and  enforceable  manner,  and the
         remainder  of this  Agreement  shall  remain  binding  upon the Parties
         hereto.

19.6     The  captions  of this  Agreement  are  solely for the  convenience  of
         reference and shall not affect its  interpretation.  This Agreement may
         be executed in one or more  counterparts,  all of which shall  comprise
         the original instrument.

19.7     The following  Articles shall survive termination of this Agreement for
         any reason:  Articles 3.4, 3.5, 5, 6, 9, 10 and 11.1. Termination of
         this Agreement shall not affect any rights previously accrued by either
         Party.

                                      -21-
<PAGE>

19.8     The Parties agree to take all further  actions after the Effective Date
         as may be reasonably  necessary or  appropriate to carry out the intent
         of this Agreement,  including,  without  limitation,  the execution and
         delivery of ancillary documents.

19.9     Subject to applicable securities regulatory disclosure requirements,  a
         Party may not disclose the  non-general  details of this Agreement to a
         non-Affiliate  without first  obtaining the consent of the other Party,
         such consent not to be  unreasonably  withheld.  Upon execution of this
         Agreement,  the  Parties  will  issue a joint  press  release  which is
         mutually  satisfactory  to  the  Parties  and  full  consideration  and
         representation  of the  respective  roles  and  contributions  of  both
         Parties  shall  be  given  in any such  press  release.  Other  than as
         specified  in  the  immediately   preceding  sentence  and  subject  to
         applicable securities regulatory disclosure requirements, neither Party
         will issue any press release regarding this Agreement without the prior
         written consent of the other Party, such consent not to be unreasonably
         withheld.  In the event that a Party is required  to disclose  publicly
         any  information  directly or indirectly  relating to this Agreement to
         comply with applicable regulatory disclosure requirements,  it shall in
         good faith,  wherever  reasonable and practicable to do so, confer with
         the other Party on the content of such disclosure before it is publicly
         released.

19.10    Except as otherwise expressly stated, all dollar amounts referred to in
         this Agreement are in United States ("US") dollars.

19.11    The Parties declare that they have required that this Agreement and any
         documents  relating  thereto be drawn up in the English  language.  Les
         parties aux presentes declarent qu'elles ont exige que cette entente et
         tous les documents y afferant soient rediges en langue anglaise.

                           [Left Intentionally Blank]

                                      -22-
<PAGE>

IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered into by
their duly authorized officers as of the day and year first set forth above.

DRAXIMAGE INC.

         /s/ Raymond Dore
         -----------------------------------
By:      Raymond Dore
Title:   President
Date:    December 5, 2000
         --------------------------------------------

CYTOGEN CORPORATION

         /s/H. Joseph Reiser
         --------------------------------------------
By:      H. Joseph Reiser, PhD
Title:   President & CEO
Date:    January 5, 2001
         --------------------------------------------

<PAGE>

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                                  SCHEDULE "A"
                                  ------------

            SUMMARY OF INITIAL U.S. MARKETING PLAN FOR BRACHYSEED(TM)
            ---------------------------------------------------------

Phase I ([**] - [**])

1.       [**] announcing [**] - ([**])
2.       [**](TM)inclusion on Cytogen web page - ([**])
3.       Review [**] ([**] & [**], [**], etc.) - [**]
4.       Develop initial [**] - ([**]-[**])
5.       Create, and place, [**] in [**] (e.g., [**], [**], etc.)
6.       [**] - ([**])
7.       [**] to key [**] (e.g., [**], [**], [**] groups) to introduce [**]
         and [**]
8.       Finalize [**] & [**] - ([**]-[**])
9.       [**] presentation to [**] (e.g., [**], [**], [**], etc.) - ([**]-[**])
10.      Develop [**](TM)[**] for [**] - ([**])
11.      Extensive [**] - ([**])
(a)      BrachySeed(TM)[**] at [**]
(b)      [**] to discuss [**]
(c)      Market research [**]
(d)      Potential for [**] with BrachySeed(TM)logo
12.      Market research to [**], and [**], [**]
13.      [**] - ([**] as tentative dates)
(a)      Main objective is to [**](TM)to [**] and [**] ([**], [**] & [**]) and
         [**] Cytogen [**]
(b)      [**] surrounding the [**] of [**](TM)
(c)      [**] experience with [**](TM)
(d)      [**] sessions
(e)      Determine [**]
(f)      Identify & establish [**]
(g)      Develop [**] from [**] (i.e., [**], [**] and [**], etc.)
14.      [**] at Western AUA - ([**])
15.      [**] - ([**])
16.      [**](TM)lunch & dinner meetings with [**] - ([**])
17.      [**] & [**] of [**] - ([**]-[**])

                                      -24-
<PAGE>

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

Phase II (**])
--------------

1.       [**] announcement - [**])
2.       Determine, and implement, [**]
3.       Determine [**]
4.       [**] meeting - ([**])
5.       [**]l materials - ([**])
6.       [**] programs
7.       Conduct [**] meetings ([**])
8.       [**] research - ([**])
(a)      [**] as needed
9.       Establish [**] Programs - ([**])

General
-------

1.       Personnel: Hiring of dedicated marketing manager by October 31, 2000
2.       Position in Detail: BrachySeed(TM)to be in first position in Cytogen
         sales force detail through, at least, 12/31/02
3.       Sales Force: Minimum [**] person Cytogen U.S. sales force
4.       Target Volumes: Target sales volumes of US$[**], US$[**] and US$[**]
         in 2000, 2001 and 2002, respectively
5.       Minimum Sales Targets: 2000 - n/a; 2001 - US$[**]; 2002 - US$[**]

                                      -25-
<PAGE>

                                  SCHEDULE "B"
                                  ------------

                                   Trademarks
                                   ----------

1.       U.S. Trademark Application Serial Number: 76097706
         Word Mark:        BRACHYSEED
         Filing Date:      July 27, 2000

2.       U.S. Trademark Application Serial Number: 76097705
         Word Mark:        BRACHYSEED
         Filing Date:      July 27, 2000

                                     Patents
                                     -------

3.       U.S. Patent Number: 6,099,458 (issued August 8, 2000)
         - Encapsulated low-energy brachytherapy sources

                                      -26-

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