Document:

Option Agreement

EXHIBIT 10.2 
 
OPTION AGREEMENT 
 
This Option Agreement, with an effective date as of December 23, 2002, is made by and between PSMA Development Company, LLC, a Delaware
limited liability company (“PDC”) and CytRx Corporation, a Delaware corporation (“CytRx”) with reference to the following facts: 
 
A.    PDC desires to acquire an option from CytRx to enter into a license agreement covering certain CytRx poloxamer
intellectual property (the “License Agreement”) the final form of which is attached hereto as Exhibit A. All capitalized terms not defined in this Agreement shall have the meaning ascribed to them in the License Agreement. 
 
B.    CytRx is willing to grant PDC an
option to enter into the License Agreement on the terms and conditions set forth herein. 
 
In consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree as follows: 
 
1.    Grant of Option.    PDC will pay to CytRx a $50,000 fee
(the “Option Fee”) upon execution of this Agreement to obtain a first right of refusal option (the “Option”) to obtain an exclusive worldwide license, with the right to sublicense, to CytRx’s TranzFect CRL 1005 adjuvant (the
“Adjuvant”) on the financial and contractual terms set forth in the License Agreement. 
 
2.    Term of Option.    The term of the Option shall be for twenty-four (24) months from the effective date of this Agreement (the “Option
Period”). The Option shall be exercisable by PDC giving written notice of such exercise to CytRx. However, if during the Option Period CytRx receives a bona fide written third party offer to license the Adjuvant in the Field or in a broader
field that subsumes the Field on financial terms equal or better than those set forth in the License Agreement, then CytRx shall notify PDC in writing of the existence of such bona fide third party offer (the “Put Option”), providing
adequate evidence of the terms and existence of thereof, and then PDC shall have thirty (30) days within which to elect its Option or such Option shall terminate early as of the expiration of such thirty (30) day period. 
 
3.    Credit for Option
Fee.    Except as provided below, the Option Fee shall be non-creditable against the licensing, milestone and royalty payments specified in the License Agreement. In the event CytRx triggers its Put Option as specified above
and PDC elects its Option early in response to CytRx’s exercise of its Put Option, then under those circumstances the Option Fee shall be creditable against the signature licensing fee due upon execution of the License Agreement. 
 
4.    Assignment.    This Agreement may not be assigned by either party without the consent of the other party. Notwithstanding the foregoing, either party hereto may assign this
Agreement without the other party’s consent in connection with a merger into, a consolidation with, or a transfer of all or substantially all of its corporate assets or the transfer of all or substantially all of the assets related to the
product line to which this Agreement pertains as an entirety or to any corporation, partnership or other person or entity, so long as the successor 

surviving person or entity in any such merger, consolidation, partnership or other person or entity
transfer or reorganization assumes in writing the obligations of this Agreement. 
 
5.    Notices.    All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered
personally, sent by telecopier (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by internationally-recognized overnight or second day courier or sent by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows: 
 

	 if to CytRx, to:
	 	 CytRx Corporation
 11726 San Vicente Blvd., Suite 650
 Los Angeles, CA 90049
 Attention: Steven A. Kriegsman
 President &
CEO
 Facsimile No. (310) 826-5529
	 	 
	
	 if to PDC, to:
	 	 PSMA Development Company, LLC
 c/o Progenics Pharmaceuticals, Inc.
 777 Old Saw Mill River Road
 Tarrytown, NY 10591
 Attention: President
 Facsimile No.: 914.789.2817
	 	 

 
or to such other address
as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication shall be deemed to have been given when delivered if personally delivered or sent by telecopier on a business
day, on the business day after dispatch if sent by nationally-recognized overnight courier and on the third business day following the date of mailing if sent by mail. 
 
6.    Applicable Law.    The Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware and the United States without reference to any rules of conflict of laws. 
 
7.    Dispute Resolution.    The parties shall negotiate in good faith and use reasonable
efforts to settle any dispute, controversy or claim arising from or related to this Agreement or the breach thereof. If the parties do not fully settle, and a party wishes to pursue the matter, each such dispute, controversy or claim that is not an
“Excluded Claim” shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”), and
judgment on the arbitration award may be entered in any court having jurisdiction thereof. The arbitration shall be conducted by a panel of three persons experienced in the pharmaceutical business. Within 30 days after initiation of arbitration,
each party shall select one person to act as arbitrator and the two party-selected arbitrators shall select a third arbitrator within 30 days of their appointment. If the arbitrators selected by the parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the AAA. The place of arbitration shall be Wilmington, Delaware. Either party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved. Either party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction 
 

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any injunctive or provisional relief necessary to protect the rights or property of that party pending the
arbitration award. The arbitrators shall have no authority to award punitive or any other type of damages not measured by a party’s compensatory damages. Each party shall bear its own costs and expenses and attorneys’ fees and an equal
share of the arbitrators’ and any administrative fees of arbitration. Except to the extent necessary to confirm an award or as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of an
arbitration without the prior written consent of both parties. In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the
applicable Delaware statute of limitations. As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns (a) the validity or infringement of a patent, trademark or copyright; or (b) any
antitrust, anti-monopoly or competition law or regulation, whether or not statutory. 
 
8.    Entire Agreement.    This Agreement contains the entire understanding of the parties with respect to the subject matter hereof. All express or
implied agreements and understandings, either oral or written, heretofore made are expressly merged in and made a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both
parties hereto. 
 
9.    Waiver.    The waiver by either party hereto of any right hereunder or the failure to perform or of a breach by the other party shall not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other party whether of a similar nature or otherwise. 
 
10.    Counterparts.    This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 
11.    Waiver of Rule of Construction.    Each party has had the opportunity to consult
with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting party shall not apply. 
 
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first set forth above. 
 

	 PSMA Development Company, LLC
	 	 	 	 CytRx Corporation

	
	 By:
	  	 /s/ Ronald J. Prentki

	 	 	 	 By:
	  	 /s/ Steven A. Kriegsman

	 Title:
	  	 President

	 	 	 	 Title:
	  	 CEO

	 Date:
	  	 12-20-02

	 	 	 	 Date:
	  	 2-26-02

 

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EXHIBIT
A 
 
 
LICENSE AGREEMENT 
 
between 
 
PSMA
DEVELOPMENT COMPANY, LLC 
 
and 
 
CYTRX CORPORATION 
 
 

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LICENSE
AGREEMENT 
 
THIS AGREEMENT (this
“Agreement”) effective as of             , 2002, (the “Effective Date”) between PSMA Development Company LLC, a limited liability company organized and existing
under the laws of Delaware (“PDC”) and CytRx Corporation, a corporation organized and existing under the laws of Delaware, U.S.A (“CytRx”). 
 
WITNESSETH: 
 
WHEREAS, CytRx has developed CytRx Know-How (as hereinafter defined) and has rights to Patents Rights (as hereinafter defined),
collectively referred to as CytRx Poloxamer Intellectual Property (as hereinafter defined); and 
 
WHEREAS, CytRx has exclusively licensed to Merck & Co. (“Merck”) CytRx Poloxamer Intellectual Property in a certain field (“Merck License”); and 
 
WHEREAS, CytRx has exclusively licensed to Vical Incorporated
(“Vical”) CytRx Poloxamer Intellectual Property in a certain field (“Vical License”); and 
 
WHEREAS, PDC desires to obtain a license under CytRx Poloxamer Intellectual Property, upon the terms and conditions set forth herein and
CytRx desires to grant such a license; 
 
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree as follows: 
 
ARTICLE I.    DEFINITIONS 
 
Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the
respective meanings set forth below: 
 
1.1.     The term “PSMA” shall mean all compositions and uses of, collectively: (a) molecules that elicit an immune response specific for prostate specific membrane antigen (PSMA), including, without
limitation (i) PSMA protein as defined in U.S. Patent 5,538,866 and 5,935,818, and allelic and species variants thereof; (ii) fragments of the PSMA proteins of (i); (iii) variants of the molecules of (i) or (ii) that elicit a PSMA specific immune
response, including, but not limited to, fusions of PSMA species variants and PSMA proteins containing additions, deletions and/or substitutions of one or more amino acids; (iv) polypeptides that compete with PSMA protein for binding to anti-PSMA
antibodies or compete with PSMA for binding to T-cell receptors; and (v) the molecules of (i), (ii), (iii), and (iv) fused to or delivered with polypeptides or immunostimulatory oligonucleotides solely for increasing an immune response specific to
(i), (ii), (iii), or (iv); (b) nucleic acid based molecules that encode the molecules of (a), and (c) cells that recombinantly contain, express or secrete the molecules of (a) and/or (b), including prime/boost regimes based on PSMA. 
 

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1.2.    The term “TranzFect” shall mean any polyoxypropylene/polyoxyethylene copolymer compound or compositions or preparations of such compounds claimed in or covered by CytRx Poloxamer Intellectual
Property that may be added to Substance to enhance performance of such Substance relative to use of the Substance without Tranzfect. 
 
1.3.    The term “Affiliate” shall mean (i) any corporation or business entity of which fifty percent (50%)
or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by PDC or CytRx; or (ii) any corporation or business entity
which, directly or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership interest permitted by law) or more of the securities or other ownership interests representing the equity, the voting stock or, if applicable, the
general partnership interest, of PDC or CytRx. 
 
1.4.    The term “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31. 
 
1.5.    The term “Calendar Year”
shall mean each successive period of twelve (12) consecutive calendar months commencing on January 1 and ending on December 31. 
 
1.6.    The term “CytRx Know-How” shall mean information and materials, including but not limited to,
discoveries, Improvements, processes, formulas, data, know-how and trade secrets, patentable or otherwise, which (i) are in CytRx’s possession or control at the Effective Date or are developed by CytRx during the term of this Agreement, if any,
(ii) are not generally known, (iii) are necessary to PDC in connection with the research, development, marketing, use or sale of Transfect and/or Licensed Products in the Field in the Territory, and (iv) CytRx has the right to provide to PDC.

 
1.7.    The term “CytRx
Poloxamer Intellectual Property” shall mean (i) Patent Rights; and (ii) CytRx Know-How. 
 
1.8.    The term “Field” shall mean the use of CytRx Poloxamer Intellectual Property limited to protein, DNA or viral vaccines based on PSMA for use in any human
therapeutic and/or prophylactic medical use, subject to Paragraph 1.6 of the Vical License 
 
1.9.    The term “First Commercial Sale” shall mean, with respect to any Licensed Product, the first sale for end use or consumption of such Licensed Product in a country
after all required approvals, including marketing and pricing approvals, have been granted by the governing health authority of such country. 
 
1.10.    The term “Improvement” shall mean any enhancement by CytRx in the synthesis or manufacture of
TranzFect. 
 
1.11.    The term
“PDC Know-How” shall mean any PDC information and materials, including but not limited to, discoveries, improvements, processes, formulas, data, inventions, know-how and trade secrets, patentable or otherwise, which during the term of this
Agreement are not generally known. 
 

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1.12.    The term “Net Sales” shall mean with respect to any Licensed Product, the gross sales price of such Licensed Product in final form invoiced by PDC, its sublicensees and their respective
Affiliates to customers who are not Affiliates or sublicensees (or are Affiliates or sublicensees but are end users of such Product) less, to the extent actually paid or accrued by PDC, its sublicensees or their respective Affiliates (as
applicable), (a) normal and customary credits, allowances, discounts and rebates to, and chargebacks from the account of, such customers for spoiled, damaged, out-dated or returned Licensed Product; (b) normal and customary outer packing, freight
and insurance costs incurred in transporting such Licensed Product in final form to such customers; (c) normal and customary cash, quantity and trade discounts, rebates and other price reductions for such Licensed Product given to such customers;
(d) sales, use, excise, value-added and other taxes (but not income taxes of any kind) imposed upon the sale of such Licensed Product in final form to such customers; and (e) customs duties, surcharges and other governmental charges incurred in
exporting or importing such Licensed Product in final form to such customers. Sales by PDC, its Affiliates or sublicensees at or below the fully burdened cost of manufacturing such Licensed Product or purchasing such Licensed Product from a Third
Party manufacturer (plus, in each case, the costs of shipping), solely for the research or clinical testing of such Licensed Product or for indigent or similar public support or compassionate use programs, shall be excluded from the computations of
Net Sales, provided such sales are billed and set forth separately on the subject invoices. 
 
In the case of a Combination Product, as defined below, for which the agent or ingredient constituting a Licensed Product and each of the other active agents or active ingredients not constituting
Licensed Products have established market prices when sold separately, Net Sales shall be determined by multiplying the Net Sales for each such Combination Product by a fraction, the numerator of which shall be the established market price for the
Licensed Product contained in the Combination Product and the denominator of which shall be the sum of the established market prices for the Licensed Product plus the other active agents or active ingredients contained in the Combination Product.
When such separate market prices are not established, then the parties shall negotiate in good faith to determine a fair and equitable method of calculating Net Sales for the Combination Product in question. For purposes of the foregoing,
“Combination Product” shall mean any product containing both an agent or ingredient, which constitutes a Licensed Product and one or more other active agents which do not by themselves constitute Licensed Products (i.e.: such as a
prime boost vaccine regimen), whether such Combination Product is packaged separately but sold together or are both packaged and sold together. 
 
1.13.    The terms “Patent Rights” or “Patent(s)” shall mean (i) all United States patents and/or
patent applications, patents to be issued pursuant thereto, owned by or licensed to CytRx, including but not limited to those listed in Schedule A, which claim or cover polyoxypropylene/polyoxyethylene copolymer compounds or compositions or
preparations or the manufacture of such compounds which may be added to a Substance to enhance the performance of such a Substance; or (ii) are divisions, continuations, reissues, renewals, extensions, supplementary protection certificates, utility
models and the like of any such patents and patent applications and foreign equivalents thereof. 
 
1.14.    The term “Phase I Clinical Trial” shall mean that portion of the clinical development program which provides for trials of a Licensed Product on human patients to

 

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estimate initial safety and
tolerability and to determine pharmacokinetics of a Licensed Product and any effect on established surrogate endpoints (e.g.: PSA levels) for the desired claims and indications. 
 
1.15.    The term “Phase II Clinical Trial” shall mean that portion of the
clinical development program conducted after the completion of the Phase I Clinical Trials and which provides for human clinical trial(s) in any country which trials are intended to evaluate the effectiveness of a Licensed Product for a particular
indication or indications in patients with the disease or indication under study or that would otherwise satisfy requirements of 21 CFR 312.21(b), any future revisions thereof, any future substitutes therefor, or foreign equivalents thereof.

 
1.16.    The term
“Phase III Clinical Trial” shall mean that portion of the clinical development program which provides for a human clinical trial in any country the results of which could be used to establish safety and efficacy of a Licensed Product as a
basis for a NDA or that would otherwise satisfy requirements of 21 CFR 312.21(c), any future revisions thereof, any future substitutes therefor, or foreign equivalents thereof. 
 
1.17.    The term “Proprietary Information” shall mean all PDC Know-How, CytRx
Know-How, and all other scientific, clinical, regulatory, marketing, financial and commercial information or data, whether communicated in writing or orally or by sensory detection, which is provided by one party to the other party in connection
with this Agreement. 
 
1.18.    The term “Product” shall mean any protein, DNA or viral vaccine based upon Substance and incorporating TranzFect for use in the Field in the Territory. 
 
1.19.    The term “Licensed
Product” shall mean a Product which in the absence of this Agreement would infringe one claim of a Patent or a Product which is made using a process or method covered by a claim of a Patent, or a Product covered by or made, at least in part,
using CytRx Know-How. 
 
1.20.    The term “Territory” shall mean all of the countries in the world. 
 
1.21.    The term “Major Foreign Markets” shall mean any of the Canada, France, Germany, Italy, Spain, or
the United Kingdom. 
 
1.22.    The terms “Party” and “Parties” shall mean CytRx, PDC, and all successors arising from merger, consolidation, changes in control, reorganization, or similar transaction, individually
or jointly depending on context 
 
1.23.    The term “Substance” shall mean any PSMA based protein, virus, viral vector or polynucleotide-based therapeutic or prophylactic, alone or in combination, for use in the Field 
 
1.24.    The term “BLA Approval”
shall mean notification from a regulatory authority in a country that all approvals for the marketing of Licensed Product, including pricing approvals, have been granted. 
 

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ARTICLE II. LICENSE;
DEVELOPMENT AND COMMERCIALIZATION 
 
2.1.    License Grant. 
 
(a)    CytRx hereby grants to PDC an exclusive license in the Territory with the right to sublicense under the Patent Rights to research, develop, use, manufacture, have manufactured, sell, offer to sell
or have sold (i) TranzFect as it relates to use with Substance in the Field; and (ii) Licensed Product. 
 
(b)    CytRx hereby grants to PDC a exclusive license in the Territory with the right to sublicense under CytRx Know
– How to research, develop, use, manufacture, have manufactured, sell, offer to sell or have sold (i) TranzFect as it relates to use with Substance in the Field; and (ii) Licensed Product. 
 
(c)    Contract Manufacture of
CRL-1005. CytRx shall utilize its commercially reasonable best efforts to assist PDC in entering into a contract manufacturing agreement with Organichem for the manufacture of CRL-1005 in the Field on terms no less favorable than those contained
in the Term Sheet dated March 15, 2000 between CytRx and Organichem Corp. 
 
2.2.    Exchange of Information; Supply of Material. 
 
(a)    Initial Data Transfer. Within sixty (60) days of the Effective Date, CytRx shall make available to PDC
in English and in writing for its use, CytRx Know-How in CytRx’s possession as of the Effective Date, including but not limited to the embodiments of such CytRx Know-How as set forth on the attached Schedule B. CytRx also agrees to disclose to
PDC, upon execution of this Agreement CytRx’s pending United States Patent Applications identified in Schedule A of this Agreement. 
 
(b)    Additional Data Transfer. During the term of this Agreement and so long as PDC continues to have an
obligation to pay royalties to CytRx under this Agreement, CytRx shall promptly disclose to PDC in writing on an ongoing basis all CytRx Know-How not previously disclosed. 
 
(c)    Technical and Regulatory Assistance. CytRx agrees, to the extent that the
necessary expertise continues to be present within the CytRx organization, to provide, free of charge, reasonable technical and regulatory assistance based on the needs of the development program designed and implemented by PDC relating to a Product
and the regulatory approval process necessary to obtain marketing approval of Licensed Product. Additionally, CytRx shall provide PDC with a quarterly summary of adverse event reports alleged to relate to TranzFect and immediate notification of
serious adverse events (SAEs), as defined in 21 CFR 312.32 , related or alleged to be related to TranzFect, to the extent, in each instance, that CytRx comes into the possession of such information. 
 
(d)    Reports. During the term of
this Agreement, and upon written request from CytRx, but not more than once per Calendar Year, PDC agrees to provide CytRx with a written report summarizing research and development activities related to the use of Transfect in the Field over the
previous Calendar Year. 
 

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(e)    FDA Communications. During the term of this Agreement, PDC shall provide CytRx with copies of all material FDA and other regulatory agency correspondence relating to any Licensed Product or any of
PDC’s activities under this Agreement and CytRx shall treat such copies and information as the Proprietary Information of PDC pursuant to Article III below. 
 
(f)    Sublicense Agreements. PDC shall provide to CytRx a copy of all sublicense
agreements pertaining to CytRx Intellectual Property within 30 days of execution, with the financial terms redacted. 
 
2.3.    Development and Commercialization. PDC shall use reasonable efforts, consistent with the usual practice
followed by PDC in pursuing the commercialization and marketing of its other similar pharmaceutical products, at its own expense, to develop and commercialize a Licensed Product on a commercially reasonable basis in such countries in the Territory
where in PDC’s reasonable opinion it is commercially viable to do so. 
 
2.4.    Insurance. PDC shall maintain clinical trial and product liability insurance issued by an insurer rated at least AA with CytRx as a named insured in amounts at least
equal to those customary in the industry for products such as the Licensed Products. 
 
ARTICLE III.    CONFIDENTIALITY AND PUBLICATION 
 
3.1.    Nondisclosure Obligation. All Proprietary Information disclosed by a disclosing party to a receiving
party hereunder shall be maintained in confidence by the receiving party and shall not be disclosed to a non-party or used for any purpose except as set forth herein without the prior written consent of the disclosing party, except to the extent
that such Proprietary Information: 
 
(a)    is known by recipient at the time of its receipt, and not through a prior disclosure by the disclosing party, as documented by business records; 
 
(b)    is properly in the public domain; 
 
(c)    is subsequently disclosed to the
receiving party by a third party who may lawfully do so and is not under an obligation of confidentiality to the disclosing party; 
 
(d)    is developed by the receiving party independently of Proprietary Information received from the disclosing party
as documented by business records; 
 
(e)    is disclosed to governmental or other regulatory agencies in order to obtain patents or to gain approval to conduct clinical trials or to market Licensed Product, but such disclosure may be only to the
extent reasonably necessary to obtain patents or authorizations upon prior review and consent of the disclosing party; 
 
(f)    is deemed necessary by PDC to be disclosed to sublicensees, agents, consultants, Affiliates, distributors
and/or other third parties for the research and development, manufacture, use sale or offer for sale of Tranzfect, Substance, or Licensed Product, (or for such parties to determine their interest in performing such activities) in accordance with
this 
 

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Agreement on the condition
that such third parties agree to be bound by the confidentiality obligations contained in this Agreement, provided the term of confidentiality for such third parties shall be no less than ten (10) years; or 
 
(g)    is required to be disclosed by law
or court order, provided that notice is promptly delivered to the other party in order to provide an opportunity to challenge or limit the disclosure obligations. 
 
ARTICLE IV. PAYMENTS; ROYALTIES AND REPORTS 
 
(a)    Consideration for License. In partial consideration for the license granted
herein under the Patent Rights and CytRx Know-How, upon the terms and conditions contained herein, PDC shall pay to CytRx upon the signing of this Agreement a signature payment of one hundred thousand dollars ($100,000) which shall be non-refundable
and not creditable against the royalty called for under Section 4.4. 
 
4.2.    Milestone Payments. Subject to the terms and conditions in this Agreement and as further consideration for the licenses granted herein, PDC shall pay to CytRx the following milestone
payments, that shall be non-refundable and not creditable against the royalty called for under Section 4.4, and which shall be payable only once with respect to the first Licensed Product to reach such milestone: 
 
(a)    Fifty thousand dollars ($50,000)
due within 10 days of enrollment of the first patient in the first Phase I Clinical Trial for the first Licensed Product; 
 
(b)    Two hundred twenty five thousand dollars ($225,000) due within 10 days of enrollment of the first patient in
the first Phase II Clinical Trial for the first Licensed Product; 
 
(c)    One hundred seventy five thousand dollars ($175,000) due within 10 days of enrollment of the first patient in the first Phase III Clinical Trial for the first Licensed Product; 
 
(d)    One hundred fifty thousand dollars
($150,000) upon the acceptance for filing of the first Biologics License Application (“BLA”) in the United States; 
 
(e)    One hundred fifty thousand dollars ($150,000) upon the acceptance for filing of the first foreign equivalent
BLA filed in any one of the Major Foreign Markets; 
 
(f)    Three hundred fifty thousand dollars ($350,000) upon the receipt of the first marketing approval of a Licensed Product in the United States; and 
 
(g)    Two hundred fifty thousand dollars ($250,000) upon the receipt of the first
marketing approval of a Licensed Product in one of the Major Foreign Markets. 
 
Except as otherwise provided above, PDC shall notify CytRx in writing within thirty (30) days upon the achievement of each milestone, such notice to be accompanied by payment of the appropriate
milestone payment. 
 

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4.3.    Diligence Payments. As further consideration for this Agreement and commencing on the first anniversary of this Agreement, PDC shall pay CytRx a diligence fee of $15,000 per year until marketing
approval of a Licensed Product has been received (the “Diligence Fee”). The Diligence Fee payments shall be fully creditable against milestone payments due after the Diligence Fee payments have been made, pursuant to Paragraph 4.2, and
future royalty payments, pursuant to Paragraph 4.4, to be made to CytRx 
 
4.4.    Royalties. 
 
4.4.1    Royalties Payable By PDC. Subject to the terms and conditions of this Agreement, PDC shall pay to CytRx royalties for sales of Licensed Product on a country-by-country basis in an amount
equal to: 
 
(a)    Subject to
Paragraph 4.4.1(c) below, for Net Sales by PDC, its Affiliates, sublicensees and/or distributors of Licensed Products used, sold or otherwise disposed of under the license to Patents granted under Paragraph 2.1(a), a royalty of four percent (4%).

 
(b)    Subject to Paragraph
4.4.1(c) below, in countries where no Patent Rights exist or no Patent Rights are infringed by the manufacture, use or sale of Licensed Products, for Net Sales of Licensed Products by PDC, its Affiliates, sublicensees or distributors used, sold or
otherwise disposed of under the CytRx Know-How license granted in Paragraph 2.1(b), a royalty of two percent (2%). 
 
(c)    If in any country the total royalty payments on a Licensed Product (including royalties payable to CytRx) being
paid by PDC, its Affiliates, or its Sublicensees exceeds (15%), the royalty obligation to CytRx for such country shall be reduced by the formula set forth below, provided that in no event shall the royalty payable to CytRx be reduced by more than
(50%) on a country-by-country basis. It is understood that royalty reductions are intended to be equitably applied to all of PDC’s licensors of technology related to Licensed Products. If PDC concludes that a royalty reduction formula is
applicable, PDC shall inform CytRx of the total amount of its royalty burden on Licensed Product. PDC represents and warrants that as of the Effective Date, it has no reason to know that total royalty payments on Licensed Products (including
royalties payable to CytRx) exceed fifteen percent (15%). 
 
Formula: The amount of royalty obligation exceeding 15% of Net Sales, multiplied by Fifty Percent (50%), multiplied by the fraction of the royalty obligation to CytRx over PDC’s total royalty obligation, equals the
reduction of amount payable to CytRx. 
 
Example: Company royalty 4% and total royalty burden on Licensed Product is 20 %. Reduction would be as follows: 20% minus 15% = 5%; 5% multiplied by 50% = 2.5%; 2.5% multiplied by (4%/20%) = 0.5%. Royalty would drop
from 4% to 3.5%. 
 
(d)    Royalties on Licensed Product at the rates set forth in this Section 4.4.1 shall be effective as of the date of First Commercial Sale of Licensed Product in a country and shall continue until either (1) the
expiration of the last applicable patent on Licensed Product in such country in the case of sales under Subsection 4.4.1(a) or (2) until the seventh (7th) anniversary of the First Commercial Sale in such country in the case of sales of under
Subsection 4.4.1(b) above, subject to the following conditions: 
 

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(i)    that only one royalty shall be due under this Agreement with respect to the each unit of Licensed Product; 
 
(ii)    that no royalties shall be due upon the sale or other transfer among PDC, its Affiliates, sublicensees or
distributors, but in such cases the royalty shall be due and calculated upon PDC’s or its Affiliate’s or its sublicensee’s or its distributor’s Net Sales to the first independent third party; no royalties shall accrue on the
disposition of Licensed Product in reasonable quantities by PDC, its Affiliates, sublicenses or distributors as samples (promotion or otherwise) or as donations (for example, to non-profit institutions, government agencies for a non-commercial
purpose); and 
 
a.    sales
of Licensed Product by PDC, any Affiliate of PDC or any sublicensee of PDC solely for research or clinical testing or for indigent or similar public support or compassionate use programs, which sales are made at or below the cost of goods of such
Licensed Product or at or below the cost of purchasing such Licensed Product from a third party manufacturer if such Licensed Product is so purchased by PDC (plus, in each case, the costs of shipping and administration of such clinical, indigent or
compassionate use program) shall be excluded from the computation of Net Sales. 
 
4.4.2    Royalty Payable Under Managed Pharmaceutical Contract. It is understood by the parties that PDC may sell Licensed Product to an independent third party (such as a
retailer or wholesaler) and may subsequently perform services relating to Licensed Product(s) under a managed pharmaceutical benefits contract or other similar contract. In such cases, it is agreed by the Parties that Net Sales shall be based on the
invoice price to an independent retailer or wholesaler, provided that such invoice price represents a fair market price for such Licensed Product(s). 
 
4.4.3    Reports; Payment of Royalty. During the term of the Agreement following the First Commercial Sale of
Licensed Product, PDC shall furnish to CytRx a quarterly written report for the Calendar Quarter showing the sales of all Licensed Products subject to royalty payments sold by PDC, its Affiliates and its sublicensees in the Territory during the
reporting period and the royalties payable under this Agreement. Reports shall be due on the sixtieth (60th) day following the close of each Calendar Quarter. Royalties shown to have accrued by each royalty report shall be due and payable on the
date such royalty report is due. PDC shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined. Late royalty payments will bear interest at 10% per annum. 
 
4.4.4    Audits. 
 
(a)    Upon the written request of CytRx
and not more than once in each Calendar Year, PDC shall permit an independent certified public accounting firm of nationally recognized standing selected by CytRx and reasonably acceptable to PDC, at CytRx’s expense, to have access during
normal business hours to such of the records of PDC as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any year ending not more than twenty-four (24) months prior to the date of such request. The accounting
firm shall disclose to CytRx only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to CytRx. 
 

13 

 
(b)    If such accounting firm correctly concludes that additional royalties were owed during such period, PDC shall pay the additional royalties within thirty (30) days of the date CytRx delivers to PDC such
accounting firm’s written report so correctly concluding, and will also pay the fees charged by such accounting firm. In addition, if the additional royalties found due exceed 5% of the amounts paid, the PDC will pay CytRx interest on such
additional royalties at the rate of one and one-half per cent (1.5%) per month from the date such additional royalties were due to the date such additional royalties are paid. 
 
(c)    PDC shall include in each sublicense granted by it pursuant to this Agreement a
provision requiring the sublicensee to make reports to PDC, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by CytRx’s independent accountant to the same extent required of PDC under
this Agreement. Upon the expiration of twenty-four (24) months following the end of any year, the calculation of royalties payable with respect to such year shall be binding and conclusive upon CytRx, and PDC and its sublicensees shall be released
from any liability or accountability with respect to royalties for such year. 
 
(d)    CytRx shall treat all financial information subject to review under this Section 4.4.4 or under any sublicense agreement in accordance with the confidentiality provisions of
this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with PDC obligating it to retain all such financial information in confidence pursuant to such confidentiality agreement. 
4.4.5    Payment Exchange Rate. All payments to be made by PDC to CytRx under this Agreement shall be made in
United States dollars and may be paid by check made to the order of CytRx or bank wire transfer in immediately available funds to such bank account in the United States designated in writing by CytRx from time to time. In the case of sales outside
the United States, the rate of exchange to be used in computing the amount of currency equivalent in United States dollars shall be made according to the prevailing rate of exchange on the last business day of the month in which such sales were
recorded as published in the Wall Street Journal. 
4.4.6    Income Tax Withholding. If laws, rules
or regulations require withholding of income taxes or other taxes imposed upon payments set forth in this Article IV, PDC shall make such withholding payments as required and subtract such withholding payments from the payments set forth in this
Article IV. PDC shall submit appropriate proof of payment of the withholding taxes to CytRx within a reasonable period of time. 
 
ARTICLE V. REPRESENTATIONS AND DISCLAIMER OF WARRANTIES 
 
5.1.    NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY CYTRX OF THE VALIDITY OF ANY
OF THE PATENTS OR THE ACCURACY, SAFETY, OR USEFULNESS FOR ANY PURPOSE, OF ANY CYTRX KNOW-HOW AND ANY OTHER TECHNICAL INFORMATION, TECHNIQUES, OR PRACTICES AT ANY TIME MADE AVAILABLE BY CYTRX. CYTRX SHALL HAVE NO LIABILITY WHATSOEVER TO PDC OR ANY
OTHER PERSON FOR OR ON ACCOUNT OF ANY INJURY, LOSS, OR DAMAGE, OF ANY KIND 
 

14 

 
OR NATURE, SUSTAINED BY, OR
ANY DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON PDC OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM (a) THE PRODUCTION, USE, OR SALE OF ANY APPARATUS OR PRODUCT, OR THE PRACTICE
OF THE PATENT RIGHTS AND/OR CYTRX KNOW-HOW; (b) THE USE OF ANY CYTRX KNOW-HOW OR ANY OTHER TECHNICAL INFORMATION, TECHNIQUES, OR PRACTICES DISCLOSED BY CYTRX; OR (c) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES WITH RESPECT TO ANY OF THE
FOREGOING, AND PDC SHALL HOLD CYTRX, ITS OFFICERS, EMPLOYEES, OR AGENTS, HARMLESS IN THE EVENT CYTRX, OR ITS OFFICERS, EMPLOYEES, OR AGENTS, IS HELD LIABLE. 
 
ARTICLE VI.    INVENTIONS AND PATENT PROVISIONS 
 
6.1.    Ownership. 
 
6.1.1    Inventions related to TransFect and PSMA. Regardless of which party makes
the invention, (a) CytRx shall solely own all right, title and interest in TransFect and all technology, inventions, patent rights and other intellectual property rights related solely thereto which arise during the Term of this Agreement, (b) PDC
shall solely own all right, title and interest in and to PSMA and all technology, inventions, patent rights and other intellectual property rights related solely thereto 
 
6.1.2    Inventions related to Combined Materials. Regardless of which party makes
the invention, CytRx and PDC shall jointly own all right title and interest in and to any technology or inventions that relate to a combination of TransFect and PSMA (“Joint Invention”) and all patent rights and other intellectual property
rights therein. Each party shall have the right, subject to the provisions of this Agreement (including, without limitation, the exclusive licenses contemplated hereby), to freely exploit, transfer, license or encumber its rights in any Joint
Invention and the patent rights and other intellectual property rights provided the written consent of the other party is first obtained. 
 
6.2.    Filing, Prosecution and Maintenance of Patents. Each party shall respectively have the sole right to
file, prosecute, and maintain any and all of the patents covering the inventions that are their property and shall have the right to determine whether or not, and where, to file patent applications, to abandon the prosecution of any patent or patent
application, to discontinue the maintenance of any patent or patent application, or to seek patent term restoration or supplemental protection certificates or their equivalents in any country in the Territory where applicable to patents. PDC shall
have the first right (but not the obligation), at the joint expense of PDC and CytRx, to file, prosecute, and maintain any and all of the patents covering the inventions that are Joint Inventions and shall have the right to determine whether or not,
and where, to file patent applications, to abandon the prosecution of any patent or patent application, to discontinue the maintenance of any patent or patent application, or to seek patent term restoration or supplemental protection certificates or
their equivalents in any country in the Territory where applicable to patents. 
 

15 

 
6.3.    Option of PDC to Prosecute and Maintain Patents. CytRx shall give notice to PDC of any desire to cease prosecution and/or maintenance of Patent Rights and, in such case, shall permit PDC, at its
sole discretion, to continue prosecution or maintenance at its own expense. If PDC elects to continue prosecution or maintenance or file a Patent Right, CytRx shall execute such documents and perform such acts at PDC’s expense as may be
reasonably necessary for PDC to perform such prosecution or maintenance or filing. All of the expenses and costs reasonably incurred by PDC to continue prosecution and maintenance of Patent Rights shall be fully creditable against royalties due
under Article IV of this Agreement; provided however, no royalty payment when due, regardless of the number of such credits available to PDC in accordance with the terms of this Agreement, shall be reduced by more than fifty percent (50%). Unused
credits may be carried over into subsequent royalty periods. 
 
6.4.    Interference, Opposition, Reexamination and Reissue. 
 
(a)    CytRx shall, within ten (10) days of learning of such event, inform PDC of any request for, or filing or
declaration of any interference, opposition, or reexamination relating to Patent Rights. PDC and CytRx and to the extent applicable Merck and Vical shall thereafter consult and cooperate fully to determine a course of action with respect to any such
proceeding. To the extent applicable to the Field and the rights licensed hereunder, PDC shall have the right to review and approve any submission to be made in connection with such proceeding. 
 
(b)    CytRx shall not institute any
reexamination, or reissue proceeding relating to Patent Rights without the prior written consent of PDC, which consent shall not be unreasonably withheld. 
 
(c)    In connection with any interference, opposition, reissue, or reexamination proceeding relating to Patent
Rights, PDC and CytRx will cooperate fully and will provide each other with any information or assistance that either may reasonably request. CytRx shall keep PDC informed of developments in any such action or proceeding, including, to the extent
permissible, the status of any settlement negotiations and the terms of any offer related thereto. 
 
(d)    So long as PDC continues to have an obligation to pay royalties under this Agreement, CytRx shall bear the
expense of any interference, opposition, reexamination, or reissue proceeding relating to Patent Rights. Otherwise, such expenses shall be borne by PDC. 
 
6.5.    Enforcement and Defense Rights. Subject to the Merck License, the Vical License and the rights granted
to Merck and Vical and the obligations of CytRx thereunder, CytRx agrees as follows: 
 
(a)    CytRx shall give PDC notice of either (i) any infringement of Patent Rights, or (ii) any misappropriation or misuse of CytRx Know-How, that may come to CytRx’s
attention. PDC and CytRx shall thereafter consult and cooperate fully to determine a course of action, including but not limited to the commencement of legal action by either or any combination of PDC, Vical, Merck and CytRx, to terminate any
infringement of Patent Rights or any misappropriation or misuse of CytRx Know-How. However, CytRx, Vical and / or Merck upon notice by CytRx to PDC, shall have the first right to initiate and prosecute such legal action at CytRx’s, Vical’s
and / or Merck’s own expense and in the name of CytRx and, if necessary, 
 

16 

 
PDC, Merck and / or Vical, or
to control the defense of any declaratory judgment action relating to Patent Rights or CytRx Know-How. CytRx shall promptly inform PDC if all of CytRx, Merck and Vical elect not to exercise such first right and PDC shall thereafter have the right to
either initiate and prosecute such action or to control the defense of such declaratory judgment action in the name of PDC and, if necessary, CytRx. 
 
(b)    In the event that all of CytRx, Merck and Vical elect not to initiate and prosecute an action as provided in
paragraph (a), and PDC elects to do so, the costs of any course of action to terminate infringement of Patent Rights or misappropriation or misuse of CytRx Know-How, including the costs of any legal action commenced or the defense of any declaratory
judgment, shall be shared equally by CytRx and PDC. 
 
(c)    For any action to terminate any infringement of Patent Rights or any misappropriation or misuse of CytRx Know-How, in the event that PDC is unable to initiate or prosecute such action solely in its own
name, CytRx will join such action voluntarily and will execute and cause its Affiliates to execute all documents necessary for PDC to initiate litigation to prosecute and maintain such action. In connection with any action, PDC and CytRx will
cooperate fully and will provide each other with any information or assistance that either may reasonably request. Each party shall keep the other informed of developments in any action or proceeding, including, to the extent permissible by law, the
status of any settlement negotiations and the terms of any offer related thereto. 
 
(d)    Any recovery obtained by either or any combination of PDC, Vical, Merck, and CytRx in connection with or as a result of any action contemplated by this section, whether by
settlement or otherwise, shall be shared in order as follows: 
 
(i)    the party which initiated and prosecuted the action shall recoup all of its costs and expenses incurred in connection with the action; 
 
(ii)    the other party or parties shall then, to the extent possible, recover its costs
and expenses incurred in connection with the action; and the amount of any recovery remaining shall then be allocated between the parties on a pro rata basis under which CytRx shall receive a proportion based on the royalties it lost and PDC and to
the extent applicable Merck and/or Vical shall receive any remaining amounts. 
 
(e)    CytRx shall immediately give notice to PDC of any certification regarding any Patent Rights it has received pursuant to the United States “Drug Price Competition and
Patent Term Restoration Act of 1984” under either 21 U.S.C. §§355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or equivalent foreign provision and shall provide PDC with a copy of such certification within (5) days of receipt. CytRx’s and
PDC’s rights with respect to the initiation and prosecution of any legal action as a result of such certification or any recovery obtained as a result of such legal action shall be defined in paragraphs (a)-(d) hereof, provided, however, if all
of CytRx, Merck and Vical decide not to bring infringement proceedings against the entity making such a certification, CytRx shall give notice to PDC of such decision not to bring suit within thirty (36) days after receipt of notice of such
certification. PDC may then, but is not required to, bring suit against the party that filed the certification. Any such suit by PDC, Vical, 
 

17 

 
Merck, or CytRx shall either
be in the name of PDC, in the name of Vical, in the name of Merck, or in the name of CytRx, or jointly by any combination of PDC, Vical, Merck and CytRx. For this purpose, the party not bringing suit shall execute such legal papers necessary for the
prosecution of such suit as may be reasonably requested by the party bringing suit. 
 
(f)    During the term of this Agreement, PDC shall bring to CytRx’s attention any prior art or other information known to PDC which is relevant to the patentability or
validity of any of the Patents and which might cause a court to deem any of the Patents wholly or partly inoperative or invalid. PDC shall particularly specify such prior art or other information to CytRx at the time it learns thereof and not less
than ninety (90) days prior to bringing any action against CytRx asserting the invalidity of any of the Patents. 
 
6.6.    Patent Term Restoration. The ability in this Agreement to obtain patent term restoration or
supplemental protection certificates is (a) first subject to the Merck License and Merck’s election, (b) second subject to the Vical License and Vical’s election, and (3) availability or eligibility for the patent in question for patent
term restoration or supplemental protection certificates for the Licensed Product in question. The parties hereto shall cooperate with each other in obtaining patent term restoration or supplemental protection certificates or their equivalents in
any country in the Territory where applicable to Patent Rights. PDC shall have the opportunity to make any election with respect to obtaining such patent term restoration to the extent possible and shall bear the cost thereof which shall be fully
creditable toward any future royalty payments owed by PDC pursuant to Section 4.4 hereof. 
 
6.7.    PDC agrees to mark the Licensed Products and Tranzfect sold in the United States with all applicable United States patent numbers. All Licensed Products and Tranzfect
shipped to or sold in other countries shall be marked in such a manner as to conform with the patent laws and practice of the country of manufacture or sale. 
 
ARTICLE VII. TERM AND TERMINATION 
 
7.1.    Term and Expiration. This Agreement shall be effective as of the Effective Date and unless terminated
earlier pursuant to Sections 7.2 or 7.3 below, the term of this Agreement shall continue in effect until expiration of all royalty obligations hereunder. Upon expiration of all royalty obligations hereunder, PDC’s licenses pursuant to Section
2.1 shall become fully paid-up, perpetual licenses. 
 
7.2.    Termination by PDC. Notwithstanding anything contained herein to the contrary, PDC shall have the right to terminate this Agreement at any time in its sole discretion by giving ninety (90) days
advance written notice to CytRx. In the event of such termination under this Section 7.2, the rights and obligations hereunder, including any licenses and any payment obligations not due and owing as of the termination date shall terminate.

 
7.3.    Termination.

 
7.3.1    Termination for
Non-Payment. The parties agree that in the event that PDC fails to make any non-disputed payment due by virtue of Article IV and such failure to make such non-disputed payment continues for thirty (30) days after written notice of such breach is
provided to PDC by CytRx, then this Agreement shall automatically terminate at the 
 

18 

 
conclusion of the such thirty
(30) day period, unless otherwise mutually agreed to by the Parties. 
 
7.3.2    Termination for Cause. This Agreement may be terminated by notice by either party at any time during the term of this Agreement: (a) if the other party is in breach of its material
obligations hereunder by causes and reasons within its control and has not cured such breach within ninety (90) days after notice requesting cure of the breach provided, however, in the event of a good faith dispute with respect to the existence of
a material breach, the ninety (90) day cure period shall be followed until such time as the dispute is resolved pursuant to Section 8.6 hereof; or (b) upon the filing or institution of bankruptcy, reorganization, liquidation or receivership
proceedings, or upon a general assignment of a substantial portion of all of its assets for the benefit of creditors by the other party; provided, however, in the case of any involuntary bankruptcy proceeding such right to terminate shall only
become effective if the party consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety (90) days after the filing thereof. 
 
7.3.3    Effect of Termination for Cause on License. 
 
(a)    In the event that CytRx terminates
this Agreement under Section 7.3.1 or 7.3.2(a), or if PDC terminates this Agreement under Section 7.3.2, PDC’s licenses pursuant to Sections 2.1 and 2.2 shall terminate as of such termination date. 
 
(b)    In the event this Agreement is
terminated due to the rejection of this Agreement by or on behalf of CytRx under Section 365 of the United States Bankruptcy Code (the “Code”), all licenses and rights to licenses granted under or pursuant to this Agreement by CytRx to PDC
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Code. In such a case, the rights of the parties shall be
determined by the Code. 
 
7.4.    Effect of Termination. Expiration or termination of the Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination, and the provisions of Article III
shall survive the expiration of the Agreement and shall continue in effect for ten (10) years. Any expiration or early termination of this Agreement shall be without prejudice to the rights of either party against the other accrued or accruing under
this Agreement prior to termination, including the obligation to pay royalties for Licensed Products sold prior to such termination. Notwithstanding the foregoing, any termination by CytRx pursuant to Section 7.3.1 or Section 7.3.2(a) shall not
limit any other remedies that CytRx may have against PDC arising out of or related to such breach, including claims for damages. To the extent PDC’s license in CytRx Know-How is terminated, PDC shall promptly transfer to CytRx all copies and
materials containing CytRx Know-How in its possession and control and in the possession and control of its Affiliates, sublicensees and distributors. And delete all CytRx Know-How, or any portion thereof, from its and their computer data bases.

 
7.5.    Effect of
Termination on Sublicenses. Sublicenses shall survive the termination of this Agreement, provided such sublicensees are in compliance with the terms of their respective sublicenses. Upon termination of this Agreement for any reason, CytRx shall
recognize and be bound by the terms and conditions of any sublicenses granted by PDC under 
 

19 

 
the rights in accordance with
Section 2 of this Agreement; provided that that CytRx shall have the right to receive any payments or other consideration payable to PDC thereunder, and shall have the right to terminate the sublicense under the same termination provisions
applicable to PDC in this Agreement; provided, further, that CytRx shall not assume, and shall not be responsible to any sublicensee for any representations, warranties or obligations of PDC to any sublicensee other than the licenses and rights as
authorized herein. 
 
ARTICLE
VIII.    MISCELLANEOUS 
 
8.1.    Force Majeure. Neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached the Agreement for failure or delay in fulfilling or performing
any term of the Agreement when such failure or delay is caused by or results from causes beyond the reasonable control of the affected party including, but not limited to, fire, floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other party. The affected party shall notify the other party of such force
majeure circumstances as soon as reasonably practical. 
 
8.2.    Assignment. This Agreement may be assigned by PDC with notice to CytRx no less than thirty (30) days prior to the effective date for such assignment. CytRx shall not assign this Agreement without
the prior written consent of the PDC, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, either party hereto may assign this Agreement without the other party’s consent in connection with a merger into,
a consolidation with, or a transfer of all or substantially all of its corporate assets or the transfer of all or substantially all of the assets related to the product line to which this Agreement pertains as an entirety or to any corporation,
partnership or other person or entity, so long as the successor surviving person or entity in any such merger, consolidation, partnership or other person or entity transfer or reorganization assumes in writing the obligations of this Agreement. Such
merger, consolidation, transfer or reorganization shall not in any way be a breach of this Section 8.2, nor be a default under this Agreement. Any permitted assignee shall assume all obligations of its assignor under the Agreement. An assignment by
PDC permitted by this Section 8.2 shall not relieve PDC of any of its obligations set forth in this Agreement. 
 
8.3.    Severability. In the event any one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s)
adversely affect the substantive rights of the Parties. The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as
practical, implement the purposes of this Agreement. 
 
8.4.    Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by telecopier (and promptly confirmed by
personal delivery, registered or certified mail or overnight courier), sent by internationally-recognized overnight or second day courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

 

20 

 

	 if to CytRx, to:
	  	 CytRx Corporation
 11726 San Vicente Boulevard, Suite 650
 Los Angeles, California 90049
 Attention:
 President & CEO
 Facsimile No. (310) 826-5529

	
	 if to PDC, to:
	  	 PSMA Development Company, LLC
 c/o Progenics Pharmaceuticals, Inc.
 777 Old Saw Mill River Road
 Tarrytown, NY 10591
 Attention:
President
 Facsimile No.: 914.789.2817

 
or to such other address
as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication shall be deemed to have been given when delivered if personally delivered or sent by telecopier on a business
day, on the business day after dispatch if sent by nationally-recognized overnight courier and on the third business day following the date of mailing if sent by mail. 
 
8.5.    Applicable Law. The Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the United States without reference to any rules of conflict of laws. 
 
8.6.    Dispute Resolution. The parties shall negotiate in good faith and use reasonable efforts to settle any
dispute, controversy or claim arising from or related to this Agreement or the breach thereof. If the parties do not fully settle, and a party wishes to pursue the matter, each such dispute, controversy or claim that is not an “Excluded
Claim” shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”), and judgment on the
arbitration award may be entered in any court having jurisdiction thereof. The arbitration shall be conducted by a panel of three persons experienced in the pharmaceutical business. Within 30 days after initiation of arbitration, each party shall
select one person to act as arbitrator and the two party-selected arbitrators shall select a third arbitrator within 30 days of their appointment. If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator, the
third arbitrator shall be appointed by the AAA. The place of arbitration shall be Wilmington, Delaware Either party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise
resolved. Either party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that party pending the arbitration award.
The arbitrators shall have no authority to award punitive or any other type of damages not measured by a party’s compensatory damages. Each party shall bear its own costs and expenses and attorneys’ fees and an equal share of the
arbitrators’ and any administrative fees of arbitration. Except to the extent necessary to confirm an award or as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both parties. In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding 
 

21 

 
based on the dispute,
controversy or claim would be barred by the applicable Georgia statute of limitations. As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns (a) the validity or infringement of a
patent, trademark or copyright; or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory. 
 
8.7.    Entire Agreement. The Agreement, together with the Option Agreement, dated December
        , 2002 between PDC and CytRx, contains the entire understanding of the parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or
written, heretofore made are expressly merged in and made a part of the Agreement. The Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both parties hereto. 
 
8.8.    Headings. The captions to
the several Articles and Sections hereof are not a part of the Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof. 
 
8.9.    Independent Contractors. It is expressly agreed that CytRx and PDC shall
be independent contractors and that the relationship between the two parties shall not constitute a partnership, joint venture or agency. Neither CytRx nor PDC shall have the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other, without the prior consent of the other party. 
 
8.10.    Waiver. The waiver by either party hereto of any right hereunder or the failure to perform or of a
breach by the other party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other party whether of a similar nature or otherwise. 
 
8.11.    Counterparts. The Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 
8.12.    Waiver of Rule of Construction. Each party has had the opportunity to consult with counsel in
connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting party shall not apply. 
 
8.13.    Exportation of Technical
Information. PDC agrees to comply with the laws and rules of the United States Government regarding prohibition of exportation of CytRx Know-How furnished to PDC either directly or indirectly by CytRx. 
 

22 

 
IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first set forth above. 
 

	 PSMA DEVELOPMENT COMPANY, LLC 
	 	 	 	 CYTRX
CORPORATION

	
	 By:
	 	
	 	 	 	 By:
	 	 /s/    STEVEN A.
KRIEGSMAN        

	 Title:
	 	
	 	 	 	 Title:
	 	 CEO

	 Date:
	 	
	 	 	 	 Date:
	 	 12-26-02

 
 

23 

 
SCHEDULE
A 
 
PATENTS 
 
U.S. Patents including foreign counterparts 
 
5,554,372 
 
6,086,899 
 
5,824,322 
 
U.S. Patent Applications: 
 
09/457,771 
 

24Supply Agreement

 
EXHIBIT
10.25 
 
SUPPLY AGREEMENT

 
This Supply Agreement
(“Agreement”) is entered into as of August 30, 1999, (“Effective Date”) by and between CytRx Corporation, a Delaware corporation (“CytRx”) and Nycomed Inc., a Delaware corporation, doing business as Nycomed Arnersham
Imaging. (“NA”). 
 
RECITALS

 
A.    NA is in the business
of providing pharmaceutical contract manufacturing services in its manufacturing facility at 33 Riverside Avenue, Rensselaer. NY (“Facility”). 
 
B.    CytRx is in the business of developing human therapeutic products. 
 
C.    CytRx wishes to purchase from NA
pharmaceutical contract manufacturing services in the Facility for the production of the specific CytRx Product defined below. 
 
NOW THEREFORE, in consideration of the above premises and the mutual covenants contained herein, the Parties hereto agree as follows:

 
AGREEMENT 
 

	1.	 	DEFINITIONS. When used in this Agreement, each of the following terms shall have the meaning provided below: 

 
a.    “Equipment” means
equipment, instruments, supplies, and materials owned or leased by CytRx, and located within the Facility, as identified in Exhibit A. 
 
b.    “GMP” means Good Manufacturing Practice as defined in the Code of Federal Regulations Chapter 21,
parts 210 and 211 pertaining to API manufacturing, and as currently practiced in the pharmaceutical industry. 
 
c.    “Parties” means NA and CytRx and when used in the singular means either of them. 
 
d.    “Product” means the
Active Pharmaceutical Ingredient (“API”) known as Purified Poloxamer 188 (CRL 5861), which is a component of FLOCORTM. 
 
e.    “Proposal” means the NA proposal “CytRx Flocor Proposal” dated June 25, 1999, and the modified proposal “CytRx Proposal” dated July 28, 1999. 
 
f.    “Services” means the
specific manufacturing and operational services set forth in Exhibit B, including but not limited to, the manufacture of Product. 
 
g.    “Specifications” means the manufacturing instructions, test methods, raw materiel specifications,
In-process specifications, and Product specifications as provided by CytRx to NA from time to time. 
 

1 

 
h.    “Technology” means all foreign and domestic patents, patent applications, patent rights, know-how, trade secrets, copyrights, technical data, inventions (whether patentable or not), discoveries,
designs, specifications, standard operating procedures, plans, works of authorship, techniques, methods, processes, test procedures, manufacturing instructions, cleaning procedures, and all other scientific or technical information or materials, in
whatever form pertaining to the specific Product and/or services. 
 
i.    “Contract Year” means the twelve (12) month period beginning with January 1, 2000 through December 31, 2000, and subsequent twelve (12) month periods during the term of this Agreement.

 
2.    NA’S REPRESENTATIONS AND RESPONSIBILITIES. 
 

	 	a.	 	NA’s Representations. NA, based on its reasonable knowledge, represents that: 

 
i.    NA’s Facility will remain in compliance with GMP; 
 
ii.    NA will remain in compliance with
the Federal Food, Drug and Cosmetic Act; and 
 
iii.    NA will perform the Services and deliver Product in conformance with GMP and the Specifications, and in accordance with the terms and conditions of this Agreement. 
 
iv.    NA has tested, or will test, the
computers, software, and all devices (including, without limitation, telephones, PBX’s, facsimile machines, office building systems, and machinery) reasonably necessary to the performance of NA’s Services and ongoing business operations
(collectively, “Computing Devices”) to determine whether such Computing Devices will fail or will produce erroneous results as a result of the inability to receive, store, process, or output date information (including, but not limited to,
date data related to the year 2000) properly or in a compatible or correct format (each, a “Failure”). 
 
b.     NA’s Responsibilities. 
 
i.    NA will maintain a current Drug Master File (“DMF”) with the FDA. CytRx
will assist in the preparation and review of this DMF and will retain rights to access the DMF and its contents during the life of the contract. This DMF will describe operating procedures, and Product specific procedures. 
 
ii.    NA and the Facility will maintain
all required registrations and listings with FDA and any state or local agencies: 
 
iii.    NA will comply with all applicable laws and regulations, and requirements of all applicable federal, state, and local agencies including, but not limited to, FDA, OSHA, EPA,
Police Department, and Fire Department. 
 
iv.    NA will be responsible for all items designated as its responsibility on the Quality Agreement attached hereto as Exhibit C. 
 

2 

 
v.    NA at its expense will be obligated to reasonably maintain the Equipment. NA will be responsible for any and all damage to the Equipment due to negligence, apart from normal wear and tear, NA will maintain
the Equipment free of any liens and security interests arising through NA. Nothing contained in this Agreement or any other document shall give or convey to NA any right, title, or interest in or to the Equipment, except for the right to use the
Equipment as set forth herein, and NA represents and agrees that NA shall hold the Equipment subject and subordinate to the rights of CytRx, and any other secured party having rights through CytRx. NA hereby grants to CytRx a security interest in
all the Equipment provided hereunder by CytRx and the proceeds thereof until all such Equipment is returned to CytRx by NA. NA shall execute any instruments or documents CytRx deems appropriate to protect the security interest, and, in any event, a
copy of this Agreement may be filed at any time after signature by NA as a financing statement for that purpose. In the event of default or other breach by NA, CytRx shall have all the rights and remedies of a secured creditor upon default as
provided by applicable law. 
 
vi.    During the term of this Agreement, NA may use the Equipment only to produce Product for CytRx. 
 
vii.    During the term of this Agreement, NA shall maintain insurance as follows: (a) Commercial General Liability
covering claims for bodily injury, death. personal injury or property damage with minimum limits of $5,000,000 each occurrence with a General Aggregate limit of $10,000,000; (b) Employers’ Liability or ‘Stop Gap” coverage with limits
of $100,000 each accident. CytRx shall be given thirty (30) days advance written notification of any cancellation or material change of the policy. Upon CytRx’s request, NA shall forward certificate(s) of insurance to CytRx. 
 
viii.    NA agrees that the Specifications
may only be changed by CytRx, and that CytRx, and that NA will strictly follow the Specifications until advised of a change by CytRx in writing unless NA is required to do so by a government agency. In such a case NA will immediately advise CytRx.

 
ix.    NA will maintain the
Building, as defined in section 4, free of any liens and security interests arising through NA. 
 
3.    CYTRX’S REPRESENTATIONS AND RESPONSIBILITIES. 
 
a.    CytRx’s
Representations. CytRx, based on its reasonable knowledge, represents that: 
 
i.    CytRx is in compliance with all international, federal, state, and local laws and regulations applicable to the development, design, manufacture, marketing, and sale of the
Product, including but not limited to the requirements of the Federal Food, Drug and Cosmetic Act. 
 
b.    CytRx’s Responsibilities. 
 
i.    CytRx will provide the Specifications and Technology in order to manufacture and
analyze Product and/or components of Product. 
 

3 

 
ii.    CytRx will be responsible for all items designated as its responsibility on the Quality Agreement attached hereto as Exhibit C. 
 
4.    MANUFACTURING SPACE. 
 
a.    NA agrees to provide space within
the Facility for the manufacture of Product. Part of this space will include a new building 4a (“Building”), as described in the Proposal that will be paid for by CytRx. 
 
b.    CytRx may use the Building for development and production of other products,
subject to mutual agreement by both Parties. 
 
c.    NA will commence construction of the Building within 10 days of the execution of this Agreement and diligently continue such construction thereafter. NA shall complete such construction in conformity with
the Proposal and with all applicable laws and regulations and provide to CytRx a certificate of occupancy from the applicable governmental authorities on or before December 31, 1999. CytRx agrees to reimburse NA $743,000 for the capital expenses for
the construction of the Building and installation of the Equipment, as described in the Proposal, pursuant to this Paragraph 4.c. On or before the execution this Agreement, CytRx has advanced and NA acknowledges receipt of, an initial disbursement
hereunder of $150,000.00 for the final capital expenditures per the estimated cash flow schedule attached hereto as Exhibit D, such amount representing approximately 20% of the total estimated capital costs. Disbursements shall be made no more
frequently than monthly and on or about the first of each month for the previous month’s work within seven (7) days of written request from NA accompanied by invoices in the amount requested for disbursement. CytRx and NA agree that, at any
point in time, there shall be on deposit with NA an amount equal to 20% of the remaining estimated costs of the project (such amount initially being $150,000). Monthly disbursements to NA shall therefore be reduced by an amount so as to adjust the
deposit on hand to an amount equal to 20% of the remaining estimated costs. If, during the course of construction, NA is required to enter into firm purchase commitments exceeding the deposit on hand, NA may request additional funding to raise the
deposit on hand to an amount equal to such purchase commitments. The final request for disbursement shall be conditioned upon completion of the Building, evidence that the general contractor has been paid in full and a copy of the certificate of
occupancy for the Building. CytRx or its designee shall have the right to inspect the progress of construction upon advance notice to NA. CytRx shall not be obligated to make disbursements hereunder in the event of: (i) any cessation of
construction; (ii) any default by the contractor under the construction contract; (iii) the filing of any liens by any subcontractors or materiel suppliers in connection with the construction of the Building; (iv) any bankruptcy filing by the
construction contractor; or (v) any termination of this Agreement by CytRx. Only NA shall be entitled to disbursement under this Paragraph 4.c; NA and CytRx intend no third party beneficiary rights hereunder for the general contractor or any other
parties entitled to payment from NA for construction of the Building. NA hereby indemnifies and holds CytRx harmless against any and all claims from the general contractor or other parties entitled to payment from NA for construction of the
Building. In the event of any termination of this Agreement by CytRx for the reasons set forth in Paragraph 9.c herein below, then, in addition to any other damages to which CytRx may be entitled, NA shall reimburse CytRx for all disbursements made
by CytRx pursuant to this Paragraph 4.c. From and after the date of the first commercial manufacturing 
 

4 

 
order for Product hereunder,
the amount that would be due from NA under the preceding sentence in the event of a subsequent termination shall be reduced pro rata on a straight line basis over the remaining term of this Agreement. 
 
d.    During the term of this Agreement,
NA may not use the Building or the Equipment other than to perform the Services for CytRx. 
 
e.    CytRx or its designee may visit the Facility to review the Product operations at any time upon three (3) days advance notice to NA. CytRx may visit the Facility with third
parties upon seven (7) days advance notice to NA. 
 
f.    NA has included in the agreed purchase price, the utility services required to manufacture Product, including, but not limited to, electricity, water, compressed air, chilled water, and hot water.

 
5.    TECHNOLOGY LICENSE 
 
a.    CytRx hereby grants to NA a license to use the Technology solely to manufacture Product for CytRx for the term of this Agreement. 
 
b.    For the purposes of this Agreement, ‘Inventions’ means any novel
discovery conceived, completed or reduced to practice by NA, either solely or jointly, through the use of the Technology and/or Product, whether or not patentable, including, but not limited to, any useful process, method, formula, technique,
machine, manufacture or composition of matter, as well as improvements thereto. NA hereby assigns, agrees to assign and upon creation automatically assigns, to CytRx in perpetuity all right, title and interest that NA may have in such inventions,
including without limitation all copyrights and the rights to apply for, and legal title to, any form of patent, utility model, industrial design or similar property right recognized by any country or jurisdiction. NA represents and warrants that it
is not and will not become a party to any agreement that would require it to assign to any other person or entity the copyrights, patent rights or other such rights to such Inventions. Should CytRx elect to file any applications for patent
protection or to register claims of copyright to any such Inventions, NA will, at the request of CytRx, do all things end sign all documents or instruments reasonably necessary to register such claims, file such applications and obtain, defend and
enforce such copyrights and patent rights. Such cooperation and execution shall be at no additional compensation to NA; however, CytRx shall reimburse NA for reasonable out-of-pocket expenses incurred at the specific request of CytRx. 
 
6.    DEVELOPMENT

 
a.    NA agrees to perform
a laboratory investigation as described in the Proposal section 3, which will include, but not be limited to, analytical testing of a sample of Product, development of dryer cycle, hazard testing, and analytical technology transfer. 
 
b.    NA agrees to allow the installation
of the Equipment within the Facility, and to assist in said installation as required and as requested at no additional charge. 
 

5 

 
c.    NA agrees to perform Equipment validation and to manufacture at least five (5) demonstration batches as described in the Proposal section 3, followed by preparation and submission of a DMF. 
 
d.    NA agrees to perform process
validation on four (4) batches, each comprised of several sub-lots, as described in the Proposal section 3. 
 
e.    CytRx agrees to pay $240,300 for the development work described in this section 6a, 6b, and 6c after its
satisfactory completion and within 30 days of receipt of an invoice from NA for such work. 
 
f.    CytRx agrees to pay for the process validation work described in this section 6d, by purchasing Product produced and delivered to CytRx that meets the Specifications and by
purchasing Product in accordance with Section 7. Purchase price shall be the dollar amount per kilogram stated in Exhibit E as amended per section 7c herein. 
 
g.    NA agrees to produce product consistent with the Specifications and Purchase Orders based on the Forecast as
described in Section 7a and b. 
 
7.    FORECASTING, PURCHASING, PRICING and PAYMENTS. 
 
a.    CytRx will provide to NA, six (6) months prior to the first commercial manufacturing order for Product, a non-binding forecast of anticipated orders of Product for each
calendar quarter during the following twelve (12) month period. Thereafter, CytRx will provide to NA within ten (10) days prior to the beginning of each calendar quarter, a non-binding forecast of anticipated orders of product for each calendar
quarter during the following twelve (12) month period. Based on the foregoing forecasts, NA shall order raw materials to meet such forecasts. The first forecast for the year 2000, however, will be provided to NA by 3/31/00 after CytRx has thoroughly
reviewed the pivotal clinical trial data in sickle cell disease. 
 
b.    CytRx will provide NA with purchase orders for Product at least ninety (90) days prior to a requested delivery date. NA will provide CytRx, within five (5) days after receipt of an order, an order
acknowledgement with a firm delivery schedule. NA will use reasonable commercial efforts to ship and deliver ordered Product on the date requested. 
 
c.    As of the Effective Date, pricing for Product is estimated per the schedule attached hereto as Exhibit E. Within
eighteen (18) months of the Effective Date the Parties will agree upon a set price based upon the work performed in the demonstration batches described in section 6c, and the first year of manufacture and Exhibit E will be amended. The Price
per kilogram of Product meeting Specifications equals the Material Cost plus Added Value Cost. All material cost variances will pass to CytRx. CytRx will receive an Added Value yield variance calculated as follows: 
 
i.    For Year 1: During Year I yield
improvements above 19 kg will be credited 50% to CytRx by the following formula: 
 
Base yield = 19 kilograms. Yield variance adjustment ((base yield – actual yield)/base yield)* 0.5(Added Value) 
 

6 

 
ii.    For Year 2: 
 
At the
end of Contract Year I (starting January 2000) the Parties will agree on a new base yield, material cost and Added Value. From that point forward the Parties will share the benefit of the materiel cost and Added Value yield variances 50/50 unless
the coat improvement was the result of CytRx only design or process changes in which case the Added Value yield variances will be shared 75/25 to CytRx. 
 
iii.    For Year 3 and Onward: 
 
The new base yield and variance sharing calculation will remain in effect throughout the term of the contract. There will be
art annual adjustment of material cost to reflect actual purchase values and an Index based inflationary adjustment of the Value Added. The adjustment will be calculated no later than January 15th of the new Contract Year, and will be equal to the percent change in the Index over the previous twelve (12) month period. The index used will be the Producer
Price Index as published by the Bureau of Labor Statistics, Series ID WPU00000000 (PPI-Commodities, All commodities, All commodities, Base Date 8200, Not Seasonally Adjusted). 
 
d.    Cost saving measures other than those resulting in yield or material cost variance
will be shared between NA and CytRx. If the cost savings is developed by CytRx, the price of the Product will be reduced by 100% of the cost savings, and NA shall be entitled to a one time fee acceptable to both Parties for the cost of implementing
the change. If the cost savings is developed by NA, the price of the Product will be reduced by 50% of the cost savings. Any cost savings that are found during the setting of the initial price, as described in 7c, will be allocated 100% to CytRx.
This type of cost savings includes, but is not limited to, actual versus projected raw material costs, and actual versus expected yield. Any cost savings as a result of reduction in overhead due to other products being produced by CytRx within the
Facility, will be allocated 100% to CytRx. 
 
e.    Payment terms will be net thirty (30) days from date of invoice provided the Product is not rejected by CytRx for failure to meet Specifications. 
 
f.    CytRx may, at any time during the term of this Agreement, designate a third party
or parties who may provide forecasts and purchase orders under the terms of this Agreement. 
 
8.    QUALITY ASSURANCE. 
 
a.    Product supplied by NA shall be in conformance with the current Specifications. 
 
b.    NA will provide a Certificate of
Analysis (“CoA”) with each lot of Product. The CoA will include the Product lot number, each analytical test performed on the Product, and the actual result of each test. 
 
c.    CytRx may, at its own expense, perform any or all of the analytical tests on
Product supplied by NA. 
 

7 

 
d.    CytRx will have thirty (30) days after receipt of Product from NA to inspect the Product. If CytRx believes that Product does not meet the Specifications, CytRx will have an additional ten (10) days to
notify NA, in writing, of a description of the discrepancy. NA will have ten (10) days after receipt of notification to respond to CytRx, in writing, with one of the following actions: 
 
i.    NA may replace the Product with conforming Product as soon as reasonably possible,
but in no case later than 90 days from receipt of notice of discrepancy, at no additional cost to CytRx; or 
 
ii.    NA may retest the product and inform CytRx, within thirty (30) days, of its findings. 
 
If both Parties agree that the Product does not meet the Specifications, then
NA shall replace the Product with conforming Product as soon as reasonably possible, but in no case later than 90 days. If the parties do not agree on the disposition of the product, then a mutually acceptable third party will be contracted to test
the Product. The results of that third party’s test will be acceptable to the Parties in a final disposition of the Product. The costs incurred for the third party’s services will be paid by the Party at fault. 
 
9.    TERM and TERMINATION. 
 
a.    This Agreement will commence as of
the Effective Date and, unless terminated as provided in 9 (c), shall continue in effect for a period of four contract years ending December 2003. Thereafter, this Agreement shall automatically renew for successive one (1) year terms, unless
terminated as provided below. 
 
b.    Beginning January 1, 2003, either Party may terminate this Agreement at any time for any reason by providing the other Party with twelve (12) months written notice. 
 
c.    This Agreement may be terminated in
its entirety by a Party upon the occurrence of any of the following events: 
 
i.    By a Party upon thirty (30) days written notice if there has been a material breach of any representation, warranty, covenant, or obligation contained in this Agreement on the
part of the other Party which is not cured by the breaching Party within thirty (30) days after receiving written notice of such breach; 
 
ii.    If the other Party shall fail to promptly secure or renew any license, registration, permit, authorization, or
approval necessary for the conduct of its business in the manner contemplated by this Agreement, or if any such license, registration, permit, authorization, or approval is revoked or suspended and not reinstated within sixty (60) days or if
reinstatement is not possible within sixty (60) days, diligent efforts are not being made to effect such reinstatement; or 
 
iii.    If the other party shall seek protection under any bankruptcy or comparable proceeding, or if any such
proceeding is instituted against a Party and not dismissed within one hundred and twenty (120) days. 
 

8 

 
d.    Upon any termination or expiration of this Agreement, NA shall provide CytRx with reasonable access to the Facility, as CytRx requires. to remove Equipment from the Facility. CytRx shall be responsible for
all costs associated with dismantling and removal of the equipment. 
 
e.    Upon any termination or expiration of this Agreement, NA agrees to reasonably assist CytRx, at no expense to NA, with any Technology transfer to CytRx or to a third party, as requested by CytRx.

 
f.    Should CytRx terminate
this Agreement NA shall take reasonable measures to cease any ongoing production and limit further expenses associated with such ongoing production. CytRx shall pay NA for the amount of any lot produced pursuant to a Purchase Order, for reasonable
expenses incurred by NA with respect to the remainder of said Purchase Order and for the value of the raw materials purchased in reasonable expectation of the forecast prior to the effective date of the termination. These reasonable expenses shall
not exceed the cost of the Product as stated in the Purchase Order. Further, any unused raw material which CytRx pays NA for will become the property of CytRx if they notify NA in writing of their decision to assume ownership for such raw materials.
NA will ship the raw materials to a site designated by CytRx at CytRx’s expense. 
 
10.    CONFIDENTIALITY. 
 
a.    All Technology that NA obtains from CytRx, including any derivative works or improvements of such Technology, is the exclusive confidential property of CytRx. 
 
b.    Any Product specific Technology that
CytRx obtains from NA may be used by CytRx in the manufacture of Product or in the manufacture of other products. 
 
c.    CytRx has the right to apply for a patent on any part of the Technology, at CytRx’s expense. NA agrees to
cooperate with CytRx on the preparation of such applications. 
 
d.    Except as expressly allowed in this Agreement, NA will hold in confidence and not use or disclose any confidential property of CytRx during the term of this Agreement and for a period of five (5) years after
the life of CytRx’s US patents on Product, or nine (9) years after termination of the Agreement, whichever is longer, and NA employees and agents shall be similarly bound by a written agreement. 
 
e.    Either Party shall not be obligated
under this Section 8 with respect to any Technology the receiving party can document; 
 
i.  is or has become readily publicly available through no fault of the receiving Party or its employees; or 
 
ii. is received from a third party lawfully in possession of such information and lawfully empowered to
disclose such information: or 
 
iii. was
rightfully in the possession of the receiving Party prior to its disclosure by the other Party; or 
 

9 

 
iv.    was independently developed by employees or consultants of the receiving Party without use of or access to Technology of the disclosing Party. 
 
f.    Notwithstanding the foregoing, the receiving Party may disclose Technology to the
extent it is required to be disclosed to a governmental agency in connection with seeking any governmental or regulatory registration, approval, or license, or pursuant to the lawful requirement or request of a governmental agency, provided that
reasonable measures are taken to obtain confidential treatment thereof and to guard against further disclosure, provided that reasonable written notice is provided to the Disclosing Party. 
 
g.    For a period of five (5) years after the life of CytRx’s US patents on
Product, or nine (9) years after termination or expiration of this Agreement for any reason, whichever is longer, NA agrees not to directly or indirectly manufacture or otherwise produce the Product or any other products substantially similar
thereto and especially such similar products that may be covered by CytRx’s patents. 
 
h.    Except as expressly provided in this Agreement, no express or implied licenses or other rights are provided to NA under any patents, patent applications, trade secrets or
other proprietary rights of CytRx, including any altered forms of the Product and/or Technology made by CytRx. It is understood by NA that CytRx may grant exclusive or non-exclusive licenses to others. 
 
11.    INDEMNIFICATION. 
 
a.    Indemnification by CytRx.
Except for matters that are included within NA’s indemnity obligations under Section 9.b below, CytRx agrees to defend, indemnify and hold harmless NA, its directors, officers, shareholders, subsidiaries, affiliates and agents from and against
any and all indebtedness, obligations, liabilities, actions, damages, penalties, costs, expenses, claims and demands (whether fixed, contingent or otherwise, whether arising in law or equity, whether upon contract or from course of dealing or
express or implied warranty or tort or under state or federal law or laws or under common law, or otherwise, including but not limited to attorney’s fees and expenses) that are imposed upon or incurred or asserted against any of them or the
Equipment that arise from: 
 
i.    any accident, injury to or death of persons (including but not limited to employees of CytRx) or loss of or damage to property that occurred prior to the Effective Date from ownership, use, operation or
condition of the Equipment or from CytRx’s act or omission prior to the date hereof except if end to the extent caused by NA’S willful act or omission or by NA’s negligence; 
 
ii.    any violation of applicable law, rule, regulation or control prior to the
Effective Date caused by ownership, use, operation, or condition, of the Equipment (for example, but without limitation, OSHA violations); 
 
iii.    taxes and assessments of any kind or nature assessed in respect of the Equipment with respect to periods prior
to the Effective Date; 
 

10 

 
iv.    any failure on the part of CytRx to perform or comply with any of the terms of this Agreement or any breath of any of CytRx’s representations or warranties in this Agreement: 
 
v.    any obligation, liability or
indebtedness to any broker or agent in connection with this Agreement that is caused by act or omission of CytRx. 
 
The foregoing indemnity obligations are enforceable whether the discovery or claim with respect thereto is now known or hereafter discovered or made. Any
amounts which become payable by CytRx under this Section 9 and which are not paid within ten (10) days after liability therefor on the part of CytRx is determined by arbitration or otherwise will bear a late charge (to the extent permitted by law)
computed at the rate of 10% per annum (or the maximum rate permitted by law, whichever is the lower) from the date of such determination. CytRx, at its expense, will contest, resist and defend any such claim, action or proceeding asserted or
instituted against NA, and may compromise or otherwise dispose of the same as it sees fit. If a claim is brought or an action filed with respect to the subject of the foregoing indemnity, NA agrees that CytRx will employ attorneys of its own
selection to appear and defend on behalf of NA at the expense of CytRx, the claim or action against NA NA may employ attorneys of its own selection to participate fully in such appearances and defense on behalf of NA; however, CytRx shall control
the defense and settlement of any indemnified claim. Any attorneys employed by NA will be employed at NA’s expense except to the extent (if any) that CytRx does not provide any pay for attorneys of CytRx’s selection to appear and defend on
behalf of NA. 
 
b.    Indemnification by NA. EXCEPT for matters that are included within CytRx’s indemnity obligations under Section 9.a, above, NA AGREES to defend, indemnify and hold harmless CytRx, its directors,
officers, shareholders, subsidiaries, affiliates and agents from and against any and all indebtedness, obligations, liabilities, actions, damages, penalties, costs, expenses, claims and demands (whether fixed, contingent or otherwise, whether
arising in law or equity, whether upon contract or from course of dealing or express or implied warranty or tort or under state or federal law or laws or under common law, or otherwise, including but not limited to attorneys’ fees and expenses)
that are imposed upon or incurred or asserted against any of them or the Equipment that arises from: 
 
i.    any accident, injury or death of persons (including but not limited to employees of NA) or loss of or damage to
property that occurs after the Effective Date from ownership, use, operation or condition of the Equipment or from NA’s act or omission except if and to the extent caused by CytRx’s willful act or omission or by CytRx’s negligence
(excluding any negligence or willful act or omission of CytRx that occurred prior to the Effective Date to the extent such negligence or willful act or omission caused any condition of the Equipment, but not excluding negligence or other act or
omission of CytRx that caused any accident, injury or death prior to the Effective Date or any environmental liability or violation such as dumping of hazardous waste or toxic materials prior to the Effective Date): 
 
ii.    any violation of applicable law,
rule, regulation or control after the Effective Date caused by ownership, use, operation, or change in condition, of the Equipment (for example, but without limitation, OSFIA violations), 
 

11 

 
iii.    taxes and assessments of any kind or nature assessed in respect of the Equipment with respect to periods after the Effective Date; 
 
iv.    any failure on the part of the NA to perform or comply with any of the terms of
this Agreement or any breach of any of NA’s representations or warranties in this Agreement; and 
 
v.    any obligation, liability or indebtedness to any broker or agent in connection with this Agreement that is
caused by act or omission of NA. 
 
The foregoing indemnity
obligations are enforceable whether the discovery or claim with respect thereto is now known or hereafter discovered or made. Any amounts which become payable by NA under this Section 9 and which are not paid within ten (10) days after liability
therefor on the part of NA is determined by arbitration or otherwise will bear a late charge (to the extent permitted by law) computed at the rate of 10% per annum (or the maximum rate permitted by law, whichever is the lower) from the date of such
determination. NA, at its expense, will contest, resist and defend any such claim, action or proceeding asserted or instituted against CytRx, and may compromise or otherwise dispose of the same as it sees fit. If a claim is brought or an action
filed with respect to the subject of the foregoing indemnity, CytRx agrees that NA will employ attorneys of its own selection to appear and defend on behalf of CytRx at the expense of NA, the claim or action against CytRx. CytRx may employ attorneys
of its own selection to participate fully in such appearance and defense on behalf of CytRx; however, NA shall control the defense and settlement of any indemnified claim, but NA shall not be entitled to enter into any settlement affecting
CytRx’s proprietary rights in the Technology or the Equipment without the prior written consent of CytRx, which shall not be unreasonably withheld. Any attorneys employed by CytRx will be employed at CytRx’s expense except to the extent
(if any) that NA does not provide and pay for attorneys of NA’s selection to appear and defend on behalf of CytRx. This Section 9 shall survive any termination or expiration of this Agreement. 
 
12.    MISCELLANEOUS. 
 
a.    Assignment or Transfer. The
rights of the Parties hereunder are not personal to any particular officers, employees or owners. However, the rights and obligations of the Parties under this Agreement are assignable or transferable only with the prior written consent of the other
Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing CytRx will have the right to assign the contract to any FLOCORTM purified poloxamer 188 licensing partner it has for the product without prior consent by NA. Also, CytRx will be able to assign the contract to another affiliate where ‘Affiliate’ means a
company in which CytRx has a 50% or more ownership stake. Notwithstanding the foregoing, either Party may assign this Agreement without consent to a successor or surviving entity pursuant to a merger, corporate reorganization or sale of
substantially all of the assets of the assignor. Any assignments or transfers in violation of this Section 10.a shall be void. This Agreement shall be binding on any successors or assignees authorized by this Section 10.a. 
 
b.    Force Majeure. If a Party is
delayed in fulfilling any of the terms and conditions hereunder due to acts of God, war, prohibitions on exports or imports, fires, floods, strikes, 
 

12 

 
sabotage, civil commotion or
riots, earthquakes, or any other cause beyond such Party’s reasonable control, time for such performance by such Party shall be extended by the period of time equal to the period of duration of the force majeure event. The delayed Party shall
incur no liability to the other Party, by reason of such delay in performance. Once the force majeure cause ceases to exist, all terms and conditions of this Agreement will again prevail. Notwithstanding the foregoing, if a Party fails, for a period
of at least thirty (30) days. to fulfill any of its obligations under this Agreement due to a force majeure event, the other Party CytRx may terminate this Agreement upon written notice. 
 
c.    Nature of Relationship. Nothing in this Agreement shall be deemed or
construed to constitute or create between the parties hereto a partnership, joint venture, or agency. Neither NA nor CytRx shall engage in any conduct which might create the impression or inference that CytRx or NA, as applicable is a partner. joint
venturer, or officer of the other. NA certifies that it is engaged in an independent business and will perform its obligations under this Agreement as an independent contractor and not as the agent or employee of CytRx that it has no authority to
act for or bind CytRx: that any persons provided by NA shall be solely the employees of NA under its sole and exclusive direction and control. NA is solely responsible for the payment of its employees. NA is solely responsible for providing
worker’s compensation, unemployment, disability insurance and social security withholding for its employees, and shall comply with all other federal, state and local, rules and regulations. 
 
d.    Separability of Clauses. Any
provision or provisions of this Agreement which in any way contravene the law of any state or country in which this Agreement is effective shall, in such state or country, to the extent of such contravention of law, be deemed separable and shall not
affect any other provisions hereof or the validity hereof. 
 
e.    Local Law Requirements. Except as otherwise specifically provided herein, NA and CytRx, shall each, at their own expense, take such steps as may be required to satisfy any laws or requirements with
respect to declaring, filing, recording, or otherwise rendering this Agreement valid. 
 
f.    Notices. Any notice required or permitted to be given hereunder by either of the parties hereto, unless otherwise specifically provided, shall be given by sending such
notice properly addressed to the other party’s address as set forth below, by prepaid registered air mail via a reliable overnight courier service, or by cable, e-mail or facsimile if followed up by air mail. All such notices shall be deemed
given ten (10) days after the date of mailing, or, if earlier, at the time of actual receipt of a mailing, cable, e-mail or facsimile. 
 
CytRx Address:     CytRx Corporation 
154 Technology Parkway 
Norcross, GA 30092 
Attn: President 
 

13 

 
NA Address:
    Nycomed Amersham 
33 Riverside Avenue 
Rensselaer, NY 12144 
Attn: Vice President, Manufacturing 
Copy: General Counsel 
 
g.    Entire Agreement. This
Agreement sets forth the entire agreement and understanding between the parties on the subject matter thereof, and merges all prior discussions and negotiations between them (except as otherwise specified in Section 8.f) and specifically supersedes
and replaces that certain Letter of Intent previously executed by the parties dated otherwise specified in Section 8.f) and specifically supersedes and replaces that certain Letter of Intent previously executed by the parties dated [x]. Neither of
the parties shall be bound by any conditions, definitions, representations, or warranties with respect to the subject matter of this Agreement other than as expressly provided herein or as duly set forth on or subsequent to the date hereof in a
writing signed by a duly authorized representative of the part to be bound thereby. 
 
h.    Governing Law. This Agreement shall be deemed to have been executed and entered into in the State of Delaware, and this Agreement, end its formation, operation, and
performance, shall be governed, construed, performed, and enforced in accordance with the substantive laws of the State of Delaware. 
 
i.    Arbitration. 
 
i.    Any controversy or claim between the parties including but not limited to those arising out of or relating to
this Agreement, including any claims based on or arising from an alleged tort, shall be determined by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) as modified below. All
statutes of limitation which would otherwise be applicable shall apply to any arbitration proceedings hereunder. 
 
ii.    There shall be one arbitrator agreed upon by the parties, or if the parties do not agree, then the arbitrator
shall be selected by the administrator of the AAA office in the area where the arbitration is to be held. The Arbitrator shall be an attorney with at least 15 years of experience in commercial law and biotechnology. The venue of the arbitration
shall be Renssalaer, NY if CytRx initiates the arbitration, and Atlanta, Georgia, if NA initiates the arbitration. 
 
iii.    There shall be no discovery or dispositive motion practice (such as motions for summary judgment or to dismiss
or the like) except as may be permitted by the arbitrator, who shall authorize only such discovery which may be shown to be necessary to ensure a fair hearing. 
 
iv.    The arbitrator shall not be bound by the rules of evidence or civil procedure, but rather may consider such
writings and oral presentations as reasonably business men would use in the conduct of their day-to-day affairs, and may require the parties to submit some or all of their case by written declaration or such other manner of presentation as the

 

14 

 
arbitrators may determine to
be appropriate. It is the intention of the parties to limit live testimony and cross-examination to the extent necessary to ensure a fair hearing of the parties on significant and material issues. 
 
v.    The arbitrator shall take such steps
as may be necessary to hold a hearing within ninety (90) clays of initial request for arbitration and to conclude the hearing within two (2) days; and the arbitrator’s written decision shall be made not later than fourteen (14) calendar days
after the hearing. The parties have included these time limits in order to expedite the proceeding, but they are riot jurisdictional, and the arbitrator may for good cause afford or permit reasonable extensions or delays, which shall not affect the
validity of the award. The written decision shall contain a full statement of the claim(s) determined and the award made on each claim. Absent fraud, collusion or willfulness conduct by the arbitrator, the award shall be final and judgment may be
entered in any court having jurisdiction hereof. The arbitrator may award attorneys fees and costs to the prevailing party, but shall not have the power to award punitive damages. 
 
vi.    The parties have included the foregoing provisions limiting the scope and extent
of the arbitration with the intention of providing for prompt, economic and fair resolution of any dispute. 
 
j.    Pronouns. As required by the context, all pronouns shall be deemed to refer to and include masculine, feminine,
neuter, singular, and plural. 
 
k.    Paragraph Headings. Paragraph headings have been inserted solely for the convenience of the parties and shall not be considered a part of this Agreement for interpretation or construction. 
 
l.    Counterpart Execution. This
Agreement may be executed in one or more counterparts, all of which when taken together shall constitute one original Agreement. 
 
m.    Publicity. Neither Party shall use the other Party’s names or trademarks, including Product names, in any
advertising, promotional efforts or publicity of any kind without the prior written permission of the other party. 
 
n.    Waiver. No waiver of any provision of this Agreement or any right or obligation of a Party shall be effective
unless in writing and signed by the Parties. The failure of either Party to enforce a right shall not constitute a waiver. 
 
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date. 
 

	 NYCOMED AMERSHAM
	 	 	 	 CYTRX CORPORATION

	
	 By:
	 	 /s/    JOHN
FALLONE        

	 	 	 	 By:
	 	 /s/    JACK J.
LUCHESE        

	 Name:
	 	 John Fallone

	 	 	 	 Name
	 	 Jack J. Luchese

	 Title:
	 	 Vice President, Manufacturing

	 	 	 	 Title:
	 	 CEO & President

 
 

15 

 
EXHIBIT A

 
EQUIPMENT 
 

	 V-IA
	  	 Extraction Vessel

	 V-lB
	  	 Extraction Vessel

	 V-2
	  	 Collection Vessel

	 V-3
	  	 Cyclone Separator

	 V-4
	  	 Pressure Reduction Vessel

	 V-5
	  	 CO2 Receiver

	
	 C-1
	  	 Product Collector

	
	 XIA
	  	 CO2 Reheating Exchanger

	 Xl
	  	 CO2 Reheating Exchanger

	 X2
	  	 Vaporizer

	 X3
	  	 Condenser

	 X4
	  	 Subcooler

	
	 P-IA
	  	 High Pressure CO2 Pump

	 P-IB
	  	 High Pressure CO2 Pump

	 P-2A
	  	 High Pressure Cosolvent Pump

	 P-2B
	  	 High Pressure Cosolvent Pump

	 P-3
	  	 Feed Pump

	
	 F-I
	  	 Filter, CO2 Pump Inlet

	 F-2A
	  	 Fifter, MeOH Pump Inlet

	 F-2B
	  	 Filter, MeOH Pump Inlet

	 F-3
	  	 Filter, Polymer Feed Pump Inlet

	
	 FIC-1A
	  	 Coriolis Mass Flow Meter, CO2

	 FIC-1B
	  	 Coriolis Mass Flow Meter, CO2

	 FIC-2A
	  	 Coriolis Mass Flow Meter, MeOH

	 FlC-2B
	  	 Coriolis Mass Flow Meter. MeOH

	
	 PIC-1A
	  	 Back Pressure Regulator, Extractor

	 PIC-1B
	  	 Back Pressure Regulator, Extractor

	 HC-2
	  	 Back Pressure Regulator. Pressure Reduction Vessel

	
	 TIC-1A
	  	 Temperature Controller, Reheater

	 TIC-1B
	  	 Temperature Controller, Reheater

	 TIC-2A
	  	 Temperature Controller, Extractor Jacket

 

Page 1 of 2 

 
EXHIBIT A
(continued) 
 

	 TIC-2B
	  	 Temperature Controller, Extractor Jacket

	 TIC-3
	  	 Temperature Controller, Condenser Outlet

	 TIC-4
	  	 Temperature Controller, Subcooler Outlet

	 TAH-TAL-5
	  	 Temperature Controller, Collector Vaporizer

	
	 PT-IA
	  	 Pressure Transmitter, CO2 Pump Discharge

	 PT-IB
	  	 Pressure Transmitter, CO2 Pump Discharge

	 PT-5
	  	 Pressure Transmitter, Collector

	 PT-7
	  	 Pressure Transmitter, CO2 Receiver

	
	 PI-1A
	  	 Pressure Gauge, CO2 Pump Discharge

	 PI-1B
	  	 Pressure Gauge, CO2 Pump Discharge

	 PI-2
	  	 Pressure Gauge, Feed Pump Discharge

	 PI-4A
	  	 Pressure Gauge Extractor

	 PI-4B
	  	 Pressure Gauge, Extractor

	 PI-5
	  	 Pressure Gauge Collector

	 PI-6
	  	 Pressure Gauge, Cyclone Separator

	 PI-7
	  	 Pressure Gauge, CO2 Receiver

	 PI-8
	  	 Pressure Gauge, Pressure Reduction Vessel

	
	 PSE-1A
	  	 Rupture Disk, CO2 Pump Discharge

	 PSE-1B
	  	 Rupture Disk, CO2 Pump Discharge

	 PSE-4A
	  	 Rupture Disk, Extractor

	 PSE-4B
	  	 Rupture Disk, Extractor

	 PSE-6
	  	 Rupture Disk, Collector

	 PSE-8
	  	 Rupture Disk, Pressure Reduction Vessel

	 PSE-9
	  	 Rupture Disk, CO2 Receiver

	
	 PSV-3
	  	 Pressure Safety Valve, Feed Pump Discharge

 

	 	 	 	 	 
	
	 Accepted:
	 	 /s/    JOHN FALLONE

	 	 	 	 /s/    JACK J. LUCHESE

	 	 	 	 	 	 	 

 
 
 

Page 2 of 2 

 
EXHIBIT
B 
 
SERVICES 
 

	
	 1.
	  	 Purchase of raw materials

	
	 2.
	  	 Manufacture of Product

	
	 3.
	  	 Analytical testing

	
	 4.
	  	 Product release

	
	 5.
	  	 Shipment of Product

	
	 6.
	  	 Disposal of waste

	
	 7.
	  	 Process validation

	
	 8.
	  	 Cleaning validation

 

	 	 	 	 	 
	
	 Accepted:
	 	 /s/    JOHN FALLONE

	 	 	 	 /s/    JACK J. LUCHESE

	 	 	 	 	 	 	 

 
 

Page 1 of 1 

 
EXHIBIT C

 
QUALITY AGREEMENT 
 

	 FACILITY
	  	 
	
	 1.
	  	 GMP compliance
	  	 NA

	 2.
	  	 GMP Training
	  	 NA

	
	 DOCUMENTATION
	  	 
	
	 1
	  	 Document control
	  	 NA

	 2.
	  	 Change control
	  	 NA

	 3.
	  	 Preparation of master batch record
	  	 NA

	 4.
	  	 Review & approval master batch record within 5 working days
	  	 NA & CytRx

	 5.
	  	 Preparation of SOPs
	  	 NA

	 6.
	  	 Review of SOPs
	  	 
	 	  	 General
	  	 NA

	 	  	 Product specific within 5 working days
	  	 NA & CytRx

	 7.
	  	 Notification of changes
	  	 NA & CytRx

	 8.
	  	 Issuance of lot numbers
	  	 NA

	
	 OPERATIONS
	  	 
	
	 1.
	  	 Technology transfer
	  	 CytRx

	 2.
	  	 Development of processes & methods
	  	 CytRx

	 3.
	  	 Supplier qualification & audit
	  	 NA

	 4.
	  	 RM Purchasing
	  	 NA

	 5.
	  	 RM Inspection & release
	  	 NA

	 6.
	  	 IP Testing
	  	 NA

	 7.
	  	 FG Testing
	  	 NA

	 8.
	  	 FG Release
	  	 NA

	 9.
	  	 Planned deviations—approval
	  	 NA & CytRx

	 10.
	  	 Unplanned deviations—  approval
	  	 NA

	 11.
	  	 OOS Investigations
	  	 NA

	 12.
	  	 Corrective Actions
	  	 NA

	 13.
	  	 Batch record review
	  	 NA

	 14.
	  	 Process Improvements
	  	 NA & CytRx

	
	 ENGINEERING
	  	 
	
	 1.
	  	 Equipment preventive maintenance
	  	 NA

	 2.
	  	 Equipment maintenance
	  	 NA

	 3.
	  	 Equipment calibration program
	  	 NA

 

Page 1 of 2 

 
EXHIBIT C
(continued) 
 

	 REGULATORY
	  	 
	 1.
	  	 Preparation of DMF
	  	 NA

	 2.
	  	 Response to FDA-483
	  	 NA

	 3.
	  	 Preparation of IND&NDA
	  	 CytRx

	 4.
	  	 Response to FDA deficiency letter
	  	 CytRx

	 5.
	  	 Filing of annual report
	  	 CytRx

	 6
	  	 Retained samples (RM & FO)
	  	 NA

	 7.
	  	 Stability program
	  	 TBD

	 8.
	  	 Process Validation:
	  	 
	 	  	 Review of protocols & reports within 5 working days
	  	 NA & CytRx

	 	  	 Execution of protocols
	  	 NA

	 	  	 Writing of reports
	  	 NA

	 9.
	  	 Complaint file
	  	 CytRx

	 10.
	  	 Complaint investigations
	  	 NA

 

	 	 	 	 	 
	
	 Accepted:
	 	 /s/    JOHN FALLONE

	 	 	 	 /s/    JACK J. LUCHESE

	 	 	 	 	 	 	 

 
 

Page 2 of 2 

 
EXHIBIT
D 
 
CASH FLOW 
 
Cash flow schedule for estimated capital expenditure commitments:

 

	 Month
	    	 $(000s)

	
	 August
	    	   74

	
	 September
	    	 408

	
	 October
	    	 187

	
	 November
	    	   74

 
 

	 	 	 	 	 
	
	 Accepted:
	 	 /s/    JOHN FALLONE

	 	 	 	 /s/    JACK J. LUCHESE

	 	 	 	 	 	 	 

 
 

Page 1 of 1 

 
EXHIBIT
E 
 
PRICING 
 
All Costs Will Be Adjusted as Per Section 7c.

 
Incremental Price = Material Cost = Added Value Cost

Material Cost = $63.23 per Kilogram (19 Kg base yield) 
 

	 Material

	 	 Cost/Kg

	  	 Amount/Kg

	 	 Total

	 Caustic
	 	 $.24
	  	 15.789
	 	 $3.79

	 Poloxamer
	 	 7.00
	  	 1.474
	 	 10.32

	 Carbon Dioxide
	 	 .22
	  	 65.785
	 	 14.47

	 Methanol
	 	 .26
	  	 23.684
	 	 6.16

	 Disposal
	 	 125.00
	  	 .211
	 	 26.32

	 Tank rental
	 	 1.88
	  	 1.158
	 	 2.18

	 	 	 	  	 	 	

	 	 	 	  	 	 	 $63.23

 
1st year: Added Value Cost Yield Variable Element=0.5(Added Value Cost) 
 

	 Annual
 (Kg)
	 	 Volume
	 	 Total
 KG
	  	 Incremental
 Price/KG
	 	 Total $
 Purchased
	 	 Average
 Cost/KG

	 1st
	 	 500
	 	 500
	  	 $700
	 	 $350,000
	 	 $700.00

	 next
	 	 500
	 	 1,000
	  	 $500
	 	 $600,000
	 	 $600.00

	 next
	 	 1,000
	 	 2,000
	  	 $350
	 	 $950,000
	 	 $475.00

	 next
	 	 1,000
	 	 3,000
	  	 $350
	 	 $1,300,000
	 	 $433.33

	 next
	 	 1,000
	 	 4,000
	  	 $275
	 	 $1,575,000
	 	 $393.75

	 next
	 	 1,000
	 	 5,000
	  	 $275
	 	 $1,850,000
	 	 $370.00

	 next
	 	 1,000
	 	 6,000
	  	 $275
	 	 $2,125,000
	 	 $354.17

	 next
	 	 1,000
	 	 7,000
	  	 $275
	 	 $2,400,000
	 	 $342.86

	 next
	 	 1,000
	 	 8,000
	  	 $275
	 	 $2,675,000
	 	 $334.38

	 next
	 	 1,000
	 	 9,000
	  	 $275
	 	 $2,950,000
	 	 $327.78

	 next
	 	 1,000
	 	 10,000
	  	 $275
	 	 $3,225,000
	 	 $322.50

 
Prices
FOB Rensselaer, NY 
 

	 	 	 	 	 
	
	 Accepted:
	 	 /s/    JOHN FALLONE

	 	 	 	 /s/    JACK J. LUCHESE

	 	 	 	 	 	 	 

 

Page 1 of 1

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