Document:

Exhibit 10.1

ADVANCED MAGNETICS, INC.

2006  EMPLOYEE STOCK PURCHASE
PLAN

Article 1 - Purpose.

This 2006 Employee Stock Purchase Plan
(the “Plan”) is intended to encourage stock ownership by all eligible employees
of Advanced Magnetics, Inc. (the “Company”), a Delaware corporation, and its
participating subsidiaries (as defined in Article 17) so that they may
share in the growth of the Company by acquiring or increasing their proprietary
interest in the Company.  The Plan is
designed to encourage eligible employees to remain in the employ of the Company
and its participating subsidiaries.  The
Plan is intended to qualify as an “employee stock purchase plan” as defined in
Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”),
and the regulations promulgated thereunder.

Article 2 - Administration of the Plan.

The Board of Directors or any committee
or person(s) to whom it delegates its authority (the “Administrator”) shall
administer, interpret and apply all provisions of the Plan as it deems
necessary, provided that any such rules and regulations shall be applied on a
uniform basis to all employees under the Plan. 
The Administrator may consult with counsel for the Company on any matter
arising under the Plan.  All
determinations and decisions of the Administrator shall be final, unless
otherwise determined by the Board of Directors. 
No Administrator shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted under it.  Nothing contained in this Section shall be
deemed to authorize the Administrator to alter or administer the provisions of
the Plan in a manner inconsistent with the provisions of Section 423 of the
Code, and the regulations promulgated thereunder.

In the event the Board of Directors fails to appoint or refrains from
appointing an Administrator, the Board of Directors shall have all power and
authority to administer the Plan.  In
such event, the word “Administrator” wherever used herein shall be deemed to
mean the Board of Directors.

Article 3 - Eligible Employees.

All employees of the Company and each of its subsidiaries (as defined
below) that is designated by the Board of Directors of the Company as a
participant in the Plan (such participating subsidiary being hereinafter called
a “participating subsidiary”) shall be eligible to receive options under the
Plan to purchase common stock of the Company, and all eligible employees shall
have the same rights and privileges hereunder. 
Persons who are eligible employees on the first business day of any
Payment Period (as defined in Article 5) shall receive their options as of
such day.  Persons who become eligible
employees after any date on which options are granted under the Plan shall be
granted options on the first day of the next succeeding Payment Period on which
options are granted to eligible employees under the Plan.  In no event, however, may an employee be
granted an option if such employee, immediately after the option was granted, would
be treated as owning stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the Company or of any
parent corporation or subsidiary corporation, as the terms “parent corporation”
and “subsidiary corporation” are defined in Section 424(e) and (f) of the
Code.  For purposes of determining stock
ownership under this paragraph,

 

the
attribution rules of Section 424(d) of the Code shall apply, and stock
which the employee may purchase under outstanding options shall be treated as
stock owned by the employee.

Article 4 - Stock Subject to the Plan.

The stock subject to the options under the Plan shall be shares of the
Company’s authorized but unissued  common stock,
par value $0.01 per share (the “Common Stock”), or shares of Common Stock
reacquired by the Company, including shares purchased in the open market.  The aggregate number of shares which may be
issued pursuant to the Plan is 100,000,
subject to adjustment as provided in Article 12.  If any option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available under the Plan.

Article 5 - Payment Period and Stock Options.

The first Payment Period during which payroll deductions will be
accumulated under the Plan shall commence on June 1, 2007 (the “Effective Date”)
and shall end on November 30, 2007.  For
the remainder of the duration of the Plan, Payment Periods shall consist of the
six-month periods commencing on June 1 and ending on the following November 30
and commencing on December 1 and ending on the following May 31.  Notwithstanding the foregoing, the
Administrator shall have the authority to establish different Payment Periods
and exercise dates, to modify the amount of time between a Payment Period and
an exercise date, to increase or decrease the number of Payment Periods in a
year and to limit the number of shares that may be available in a Payment
Period.

On the first business day of each Payment Period, the Company will
grant to each eligible employee who is then a participant in the Plan an option
to purchase shares of Common Stock on the last day of such Payment Period, at
the Option Price hereinafter provided, a maximum of 1,500 shares of Common
Stock, on condition that such employee remains eligible to participate in the
Plan throughout the remainder of such Payment Period.  The participant shall be entitled to exercise
the option so granted only to the extent of the participant’s accumulated
payroll deductions on the last day of such Payment Period. If the participant’s
accumulated payroll deductions on the last day of the Payment Period would
enable the participant to purchase more than 1,500 shares except for the
1,500-share limitation, the excess of the amount of the accumulated payroll
deductions over the aggregate purchase price of the 1,500 shares shall be
promptly refunded to the participant by the Company, without interest.  The Option Price per share for each Payment
Period shall be the lesser of (i) 85% of the fair market value of the
Common Stock on the first business day of the Payment Period and (ii) 85%
of the fair market value of the Common Stock at the time such Option is
exercised pursuant to Article 6, in either event rounded to the nearest
cent.  The foregoing limitation on the
number of shares subject to option and the Option Price shall be subject to
adjustment as provided in Article 12. 
The Administrator shall have the authority, solely with respect to a
Payment Period that has not commenced, to reduce or eliminate the 15 percent
discount provided in either clause (i) or (ii) of the preceding sentence.  The percentages selected for such clauses (i)
and (ii) do not need to be identical (but shall in all cases be equal or higher
to 85%).

For purposes of the Plan, the term “fair market value” on any date
means (i) the last reported sale price (on that date) of the Common Stock
on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange;
or (ii) the last reported sale price (on that date) of the Common Stock on
the NASDAQ Global Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked
prices last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
Global Market; or (iv) if the Common 

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Stock
is not publicly traded, the fair market value of the Common Stock as determined
by the Administrator after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm’s length.

For purposes of the Plan, the term “business day” means a day on which
there is trading on the NASDAQ Global Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday
or legal holiday in Massachusetts.

No employee shall be granted an option which permits the employee’s
right to purchase stock under the Plan, and under all other Section 423(b)
employee stock purchase plans of the Company and any parent or subsidiary
corporations, to accrue at a rate which exceeds $25,000 of fair market value of
such stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.  The purpose of the limitation in the
preceding sentence is to comply with, and the accrual of rights to purchase
Common Stock shall be determined in accordance with, Section 423(b)(8) of
the Code.  If the participant’s
accumulated payroll deductions on the last day of the Payment Period would
otherwise enable the participant to purchase Common Stock in excess of the
Section 423(b)(8) limitation described in this paragraph, the excess of
the amount of the accumulated payroll deductions over the aggregate purchase
price of the shares actually purchased shall be promptly refunded to the
participant by the Company, without interest.

Article 6 - Exercise of Option.

Each eligible employee who continues to be a participant in the Plan on
the last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
the participant’s accumulated payroll deductions on such date will pay for at
the Option Price, subject to the Section 423(b)(8) limitation described in
Article 5.  If the individual is not
a participant on the last day of a Payment Period, then he or she shall not be
entitled to exercise his or her option. 
Only full shares of Common Stock may be purchased under the Plan.  Unused payroll deductions remaining in a
participant’s account at the end of a Payment Period by reason of the inability
to purchase a fractional share shall be carried forward to the next Payment
Period.

Article 7 - Authorization for Entering the Plan.

An employee may elect to enter the Plan by filling
out, signing and delivering to the Company an authorization:

A.            Stating
the percentage to be deducted regularly from the employee’s pay;

B.            Authorizing
the purchase of stock for the employee in each Payment Period in accordance
with the terms of the Plan; and

C.            Specifying
the exact name or names in which stock purchased for the employee is to be issued
as provided under Article 11 hereof.

Such
authorization must be received by the Company at least ten days before the
first day of the next succeeding Payment Period and shall take effect only if
the employee is an eligible employee on the first business day of such Payment
Period.

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Unless a participant files a new authorization or withdraws from the
Plan, the deductions and purchases under the authorization the participant has
on file under the Plan will continue from one Payment Period to succeeding
Payment Periods as long as the Plan remains in effect.

The Company will accumulate and hold for each participant’s account the
amounts deducted from his or her pay.  No
interest will be paid on these amounts.

Article 8 - Maximum Amount of Payroll Deductions.

An employee may authorize payroll deductions in an amount (expressed as
a whole percentage) not less than one percent (1%) or more than
ten percent (10%) of the employee’s total compensation, including base pay
or salary and any overtime, bonuses or commissions.

Article 9 - Change in Payroll Deductions.

Deductions may be increased or decreased during a Payment Period.  However, a change in payroll deductions shall
be effective for any paycheck only if written notice is received by the Company
at least ten business days prior to the payday for that paycheck.

Article 10 - Withdrawal from the Plan.

A participant may withdraw from the Plan at any time prior to the last
day of a Payment Period by delivering a withdrawal notice to the Company.  Upon withdrawal by a participant, all amounts
of the participant’s accumulated payroll deductions not previously used to
purchase shares under the Plan shall be promptly refunded to the participant by
the Company, without interest.

To re-enter the Plan, an employee who has previously withdrawn must
file a new authorization at least ten days before the first day of the next
Payment Period in which he or she wishes to participate.  The employee’s re-entry into the Plan becomes
effective at the beginning of such Payment Period, provided that he or she is
an eligible employee on the first business day of the Payment Period.

Article 11 - Issuance of Stock.

Certificates for stock issued to participants shall be delivered as
soon as practicable after each Payment Period by the Company’s transfer agent.

Stock purchased under the Plan shall be issued only in the name of the
participant, or if the participant’s authorization so specifies, in the name of
the participant and another person of legal age as joint tenants with rights of
survivorship.

Article 12 - Adjustments.

Upon the happening of any of the following described events, a
participant’s rights under options granted under the Plan shall be adjusted as
hereinafter provided:

A.                 In the event
that the shares of Common Stock shall be subdivided or combined into a greater
or smaller number of shares or if, upon a reorganization, split-up,
liquidation, recapitalization or the like of the Company, the shares of Common
Stock shall be exchanged for other securities of the Company, each participant
shall be entitled, subject to the conditions herein 

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stated, to purchase such number of shares of
Common Stock or amount of other securities of the Company as were exchangeable
for the number of shares of Common Stock that such participant would have been
entitled to purchase except for such action, and appropriate adjustments shall
be made in the purchase price per share to reflect such subdivision,
combination or exchange; and

B.                  In the event
the Company shall issue any of its shares as a stock dividend upon or with
respect to the shares of stock of the class which shall at the time be subject
to option hereunder, each participant upon exercising such an option shall be
entitled to receive (for the purchase price paid upon such exercise) the shares
as to which the participant is exercising his or her option and, in addition
thereto (at no additional cost), such number of shares of the class or classes
in which such stock dividend or dividends were declared or paid, and such
amount of cash in lieu of fractional shares, as is equal to the number of
shares thereof and the amount of cash in lieu of fractional shares,
respectively, which the participant would have received if the participant had
been the holder of the shares as to which the participant is exercising his or
her option at all times between the date of the granting of such option and the
date of its exercise.

Upon the happening of any of the foregoing events, the class and
aggregate number of shares set forth in Article 4 hereof which are subject
to options which have been or may be granted under the Plan and the limitations
set forth in the second paragraph of Article 5 shall also be appropriately
adjusted to reflect the events specified in paragraphs A and B above.  Notwithstanding the foregoing, any
adjustments made pursuant to paragraphs A or B shall be made only after
the Administrator, based on advice of counsel for the Company, determines
whether such adjustments would constitute a “modification” (as that term is
defined in Section 424(h)(3) of the Code). 
If the Administrator determines that such adjustments would constitute a
modification, it may refrain from making such adjustments.

If the Company is to be consolidated with or acquired by another entity
in a merger, a sale of all or substantially all of the Company’s assets or
otherwise (an “Acquisition”), the Administrator or the board of directors of
any entity assuming the obligations of the Company hereunder (the “Successor
Board”) shall, with respect to options then outstanding under the Plan, either
(i) make appropriate provision for the continuation of such options by
arranging for the substitution on an equitable basis for the shares then
subject to such options either (a) the consideration payable with respect
to the outstanding shares of the Common Stock in connection with the
Acquisition, (b) shares of stock of the successor corporation, or a parent
or subsidiary of such corporation, or (c) such other securities as the
Successor Board deems appropriate, the fair market value of which shall not
materially exceed the fair market value of the shares of Common Stock subject
to such options immediately preceding the Acquisition; or (ii) terminate
each participant’s options in exchange for a cash payment equal to the excess
of (a) the fair market value on the date of the Acquisition, of the number
of shares of Common Stock that the participant’s accumulated payroll deductions
as of the date of the Acquisition could purchase, at an option price determined
with reference only to the first business day of the applicable Payment Period
and subject to the Code Section 423(b)(8) and fractional-share limitations
on the amount of stock a participant would be entitled to purchase, over
(b) the result of multiplying such number of shares by such option price.

The Administrator or Successor Board shall determine the adjustments to
be made under this Article 12, and its determination shall be conclusive.

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Article 13 - No Transfer or
Assignment of Employee’s Rights.

An option granted under the Plan may not be assigned, transferred,
pledged or otherwise disposed of, except by will or under the laws of descent
and distribution, and may be exercised only by the participant during the
lifetime of the participant.

Article 14 - Termination of Employee’s Rights.

Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan
shall immediately terminate, and the Company shall promptly refund, without
interest, the entire balance of his or her payroll deduction account under the
Plan.  Notwithstanding the foregoing,
eligible employment shall be treated as continuing intact while a participant
is on military leave, sick leave or other bona fide leave of absence, for up to
90 days, or for so long as the participant’s right to re-employment is
guaranteed either by statute or by contract, if longer than 90 days.

If a participant’s payroll deductions are interrupted by any legal
process, a withdrawal notice will be considered as having been received from
the participant on the day the interruption occurs.

Article 15 - Termination and Amendments to Plan.

Unless terminated sooner as provided below, the Plan shall terminate on
May 31, 2012.  The
Plan may be terminated at any time by the Company’s Board of Directors but such
termination shall not affect options then outstanding under the Plan.  It will terminate in any case when all or
substantially all of the unissued shares of stock reserved for the purposes of
the Plan have been purchased.  If at any
time shares of stock reserved for the purpose of the Plan remain available for
purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to the amount of payroll deductions accumulated on behalf of each
participant that would otherwise be used to purchase stock, and the Plan shall
terminate.  Upon such termination or any
other termination of the Plan, all payroll deductions not used to purchase
stock will be refunded, without interest.

The Administrator or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that
may be issued under the Plan; (ii) change the class of employees eligible
to receive options under the Plan, if such action would be treated as the
adoption of a new plan for purposes of Section 423(b) of the Code; or
(iii) cause Rule 16b-3 under the Securities Exchange Act of 1934
to become inapplicable to the Plan.

Article 16 - Limits on Sale of Stock Purchased under the Plan.

The Plan is intended to provide shares of Common Stock for investment
and not for resale.  The Company does
not, however, intend to restrict or influence any employee in the conduct of
his or her own affairs.  An employee may,
therefore, sell stock purchased under the Plan at any time the employee
chooses, subject to compliance with any applicable federal or state securities
laws, subject to the Company’s Insider Trading and Blackout Policies, and
subject to the notice requirement in Article 20 and any restrictions imposed
under Article 21 to ensure that tax withholding obligations are
satisfied.  THE EMPLOYEE
ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

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Article 17 - Participating Subsidiaries.

The term “participating subsidiary” shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of
the Code, which is designated from time to time by the Board of Directors to
participate in the Plan.  The Board of
Directors shall have the power to make such designation before or after the
Plan is approved by the stockholders.

Article 18 - Optionees Not Stockholders.

Neither the granting of an option to an employee nor the deductions
from his or her pay shall constitute such employee a stockholder of the shares
covered by an option until such shares have been actually purchased by the
employee.

Article 19 - Application of Funds.

The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general corporate
purposes.

Article 20 - Notice to Company of Disqualifying Disposition.

By electing to participate in the Plan, each participant agrees to
notify the Company in writing immediately after the participant transfers
Common Stock acquired under the Plan, if such transfer occurs within
two years after the first business day of the Payment Period in which such
Common Stock was acquired.  Each
participant further agrees to provide any information about such a transfer as
may be requested by the Company or any subsidiary corporation in order to
assist it in complying with the tax laws. 
Such dispositions generally are treated as “disqualifying dispositions”
and have certain tax consequences to participants and to the Company and its
participating subsidiaries under Section 421 of the Code.

Article 21 - Withholding of Additional Income Taxes.

By electing to participate in the Plan, each participant acknowledges
that the Company and its participating subsidiaries are required to withhold
taxes with respect to the amounts deducted from the participant’s compensation
and accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant’s compensation, when amounts are
added to the participant’s account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations.  Each participant further acknowledges that
when Common Stock is purchased under the Plan, the Company and its participating
subsidiaries may be required to withhold taxes with respect to all or a portion
of the difference between the fair market value of the Common Stock purchased
and its purchase price, and each participant agrees that such taxes may be
withheld from compensation otherwise payable to such participant.  It is intended that tax withholding will be
accomplished in such a manner that the full amount of payroll deductions
elected by the participant under Article 7 will be used to purchase Common
Stock.  However, if amounts sufficient to
satisfy applicable tax withholding obligations have not been withheld from
compensation otherwise payable to any participant, then, notwithstanding any
other provision of the Plan, the Company may withhold such taxes from the
participant’s accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the participant pays to the Company, prior to
the exercise date, an amount sufficient to satisfy such withholding
obligations.  Each participant further acknowledges
that the Company and its participating subsidiaries may be required to withhold
taxes in connection with the disposition of stock acquired under the Plan and
agrees that the Company or any participating subsidiary may take whatever
action it considers appropriate to satisfy 

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such
withholding requirements, including deducting from compensation otherwise
payable to such participant an amount sufficient to satisfy such withholding
requirements or conditioning any disposition of Common Stock by the participant
upon the payment to the Company or such subsidiary of an amount sufficient to
satisfy such withholding requirements.

Article 22 - Governmental Regulations.

The Company’s obligation to sell and deliver shares of Common Stock
under the Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of such shares.

Government regulations may impose reporting or other obligations on the
Company with respect to the Plan.  For
example, the Company may be required to identify shares of Common Stock issued
under the Plan on its stock ownership records and send tax information
statements to employees and former employees who transfer title to such shares.

Article 23 - Governing Law.

The validity and construction of the Plan shall be governed by the laws
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.

Article 24 - Approval of Board of Directors and Stockholders of
the Company.

                The
Plan was adopted by the Board of Directors on November 7, 2006 and on such date
the Board of Directors resolved that the Plan was to be submitted to the
shareholders of the Company for approval at the next meeting of
shareholders.  In the event the
shareholders of the Company fail to approve the Plan within twelve months of
the date the plan was adopted by the Board of Directors, the Plan shall
terminate in accordance with Article 15 hereof.

 8Exhibit 10.2

AGREEMENT

This AGREEMENT is made and entered into by and between Advanced
Magnetics, Inc., having its principal place of business at 61 Mooney St.,
Cambridge, MA 02138, and FoxKiser Development Partners LLC, having its
principal place of business at 750 17th St., N.W., Suite 1100, Washington, DC 20006.

In consideration of mutual agreements and covenants set forth below,
Advanced Magnetics and FoxKiser agree as follows.

1.                                      DEFINITIONS

As used in this Agreement, the following terms shall have the following
definitions:

1.1                                 Affiliate.
“Affiliate” of a Party shall mean any company controlling, controlled by or
under common control with such Party. For purposes of this Section, “control”
shall mean (a) in the case of corporate entities, direct or indirect ownership
of at least fifty percent (50%) of the stock or shares having the right to vote
for the election of directors, and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the equity interest
with power to direct the management and policies of such non-corporate
entities. A company shall be considered an “Affiliate” for only so long as such
ownership or control exists.

1.2                                 Combidex
Products. “Combidex Products” shall mean an Advanced Magnetics lymph node
imaging agent containing ferumoxtran-10, alone or in combination with any other
active ingredient.

1.3                                 FDA.
“FDA” means the United States Food and Drug Administration.

1.4                                 First
Commercial Sale.  “First Commercial
Sale” means the first commercial sale of a Combidex Product by Advanced
Magnetics, its Affiliates, or its licensees.

1.5                                 Net
Sales:  “Net Sales” shall mean the
gross amount received by Advanced Magnetics, its Affiliates and licensees from
an unrelated third party on sales or other dispositions of Combidex Products in
the Territory, less the following items: 
(a) trade, cash and quantity discounts, allowances and rebates actually
allowed and taken directly with respect to such sales or disposition, (b)
tariffs, duties, excises, value-added and sales taxes or other taxes imposed
upon and paid with respect to such sales or dispositions (excluding national,
state and local taxes based on income); (c) actual amounts repaid or credited
by reasons of rejections, defects, recalls and returns or because of rebates or
retroactive price reductions; and (d) freight, postage, insurance and other
transportation charges separately invoiced by shipping such Combidex Products.

1.6                                 Party.
“Party” shall mean either Advanced Magnetics or FoxKiser, as applicable. “Parties”
shall mean Advanced Magnetics and FoxKiser, collectively.

 

1.7                                 Services.
“Services” shall mean those professional services provided by FoxKiser or its
Affiliates in connection with Advanced Magnetics’ application for FDA approval
of a Combidex Product. After final approval of the Combidex Product,
compensation for any further services provided by FoxKiser shall be governed by
a separate agreement between the Parties.

1.8                                 Territory.
“Territory” shall mean the United States.

2.                                      CONSIDERATION
FOR SERVICES

2.1                                 Fees.  For Services rendered by FoxKiser under this
Agreement, Advanced Magnetics shall pay to FoxKiser a fixed fee in the amount
of $250,000 within sixty (60) days of the date of First Commercial Sale.

2.2                                 Expenses.
Advanced Magnetics shall reimburse FoxKiser for all reasonable and necessary
out-of-pocket cases and expenses incurred by FoxKiser in connection with
providing Services under this Agreement, including payments made to
consultants, advisors or other third parties retained by FoxKiser with prior
consent of Advanced Magnetics. These expenses will be paid by Advanced
Magnetics within thirty (30) days after receipt of an invoice from FoxKiser.

2.3                                 Royalties.  In further consideration of Services provided
by FoxKiser under this Agreement, Advanced Magnetics shall pay to FoxKiser a
royalty equal to three percent (3%) of the Net Sales of any Combidex Product
sold or otherwise disposed of by Advanced Magnetics, its Affiliates or
licensees. Royalties shall commence on the date of First Commercial Sale and
shall continue until the date six (6) months after the date of market
introduction of an FDA-approved generic version of a Combidex Product. All
royalties due under this Section shall be paid within sixty (60) days after the
end of each calendar quarter by wire transfer to such bank and account as
FoxKiser may from time to time designate in writing. All such payments shall be
made in U.S. Dollars. All payments due under this Section, but not paid by
Advanced Magnetics on the due date, shall bear interest at the U.S. prime rate
of CitiBank N.A., which shall accrue on the balance of unpaid amounts
outstanding from the date on which portions of such amount become due and owing
until payment is made in full.

3.                                      ROYALTY
REPORTS

3.1                                 Contents
of Royalty Reports. Advanced Magnetics shall deliver to FoxKiser within
sixty (60) days after the end of each calendar quarter, beginning with the
calendar quarter in which the First Commercial Sale occurs, a written report
describing, for the applicable quarter: (a) the gross sales of each Combidex
Product by Advanced Magnetics, its Affiliates, and licensees, together with the
deductions therefrom and resulting Net Sales; and (b) the total royalty due on
such Net Sales under this Agreement. Each report shall be accompanied by full
payment to FoxKiser of the royalties payable under this Agreement.

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3.2                                 Royalties
Mistakenly Paid on Returned Combidex Products.  If Advanced Magnetics pays a royalty on a
Combidex Product which has been or is subsequently returned to Advanced
Magnetics or its Affiliate or licensee, the amount of the royalty so paid shall
be deemed a non-refundable credit against royalties payable by Advanced
Magnetics for subsequent calendar quarters.

3.3                                 Books
and Records.  Advanced Magnetics agrees to make and keep,
and agrees to cause its Affiliates and licensees to make and keep, full and
accurate books and records in sufficient detail to enable royalties payable
under this Agreement to be accurately determined. On thirty (30) days’ prior
written notice to Advanced Magnetics, FoxKiser and its certified public
accountants, on one occasion during each calendar year, shall have reasonable
access to such books and records of Advanced Magnetics and its Affiliates and
licensees pertaining to activities under this Agreement, and shall have the
right to make copies from those records at FoxKiser’s expense. FoxKiser and its
certified public accountants shall have such access at reasonable times during
normal business hours. Prompt adjustment shall be made by the proper Party to
compensate for any errors or omissions disclosed by such audit. FoxKiser agrees
to hold confidential all information learned in the course of any examination
of books and records under this Agreement, except when it is necessary for
FoxKiser to reveal such information in order to enforce its rights under this
Agreement, when disclosure is compelled by law, or when such information is
publicly available without breach by FoxKiser.

3.4                                 Reports
Conclusively Correct.  In the absence
of fraud, all reports and payments not disputed as to correctness by FoxKiser
within three (3) years after receipt shall thereafter conclusively be deemed
correct for all purposes.

4.                                      TERM
AND TERMINATION

4.1                                 Term
of Agreement.  Unless terminated
earlier in accordance with Section 4.2, this Agreement shall become effective
on the first date on which both Parties have executed this Agreement as
provided below, and shall continue in force until all royalties due under this
Agreement have been paid in full.

4.2                                 Termination
for Material Breach.  Upon any
material breach of this Agreement by either Party, the other Party may
terminate this Agreement by providing sixty (60) days’ written notice to the
breaching Party, specifying the material breach. The termination shall become
effective at the end of the sixty (60) day period unless. (a) the breaching
Party cures such breach during that period, or (b) the Parties agree to
continue the Agreement despite the breach. Any dispute as to whether a material
breach has occurred shall be resolved by binding arbitration.

4.3                                 Payment
Obligations Continue.  Upon
termination of this Agreement, nothing shall be construed to release Advanced
Magnetics from its obligations to pay FoxKiser any and all fees, expenses and
royalties earned under this Agreement.

 3
 

 

5.                                      MISCELLANEOUS

5.1                                 Assignments.  This Agreement and any and all of the rights
and obligations of any Party shall not be assigned, delegated, sold,
transferred or otherwise disposed of, by operation of law or otherwise, without
the prior written consent of both Parties, which consent shall not be
unreasonably withheld.

5.2                                 Governing
Law.  This Agreement shall be
governed, interpreted and construed in accordance with the laws of the
Commonwealth of Massachusetts.

5.3                                 Waiver.  A waiver of any breach of any provision
of this Agreement shall not be construed as a continuing waiver of other
breaches of the same or other provisions of this Agreement.

5.4                                 Notices.  Any notice required or permitted to be sent
under this Agreement shall be given by facsimile transmission or by registered
or recorded delivery letter to the Parties, to the attention of Allan Fox of
FoxKiser and Jerome Goldstein for Advanced Magnetics at their respective
principal places of business as set forth in the first paragraph of this
Agreement. Any properly addressed notice given by facsimile shall be deemed to
have been received at the time of dispatch, unless that date is not a business
day, in which case the date of deemed receipt shall be the next succeeding business
day, Any properly addressed notice given by registered or recorded delivery
letter shall be deemed to have been received on the first properly documented
date of actual receipt.

5.5                                 Entire
Understanding.  This Agreement
between the Parties embodies the entire understanding between the Parties
relating to the subject matter of this Agreement.

5.6                                 Amendments.  Any amendment or modification of any
provision of this Agreement must be in writing, dated and signed by each Party.

5.7                                 Counterparts.  This Agreement may be executed in any number
of counterparts and each properly executed counterpart shall be deemed to be an
original.

5.8                                 Dispute
Resolution.  All disputes under this
Agreement, including disagreements with respect to the calculation of royalties,
shall be resolved by binding arbitration.

IN WITNESS WHEREOF, the
Parties have signed this Agreement as indicated below.

	
  ADVANCED MAGNETICS, INC.

  	
   

  	
  FOXKISER DEVELOPMENT PARTNERS LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Jerome Goldstein

  	
   

  	
  By:

  	
   

  	
  /s/ Allan Fox

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  April 19, 2002

  	
   

  	
  Date:

  	
   

  	
  April 17, 2002

  

 

 4

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