Document:

Exhibit 10.22

 

[*]
Indicates that a portion of this exhibit has been omitted based on a request
for confidential treatment submitted to the Securities and Exchange
Commission.  The omitted portion has
been filed separately with the Commission.

 

SUPPLY
AGREEMENT

 

This agreement (the “Agreement”) is entered into effective as of
March 1, 2004 by and between The Curators of The University of Missouri, a
public corporation of the State of Missouri, contracting on behalf of its
Research Reactor Center, University of Missouri-Columbia (hereafter
“University”), and NeoRx Corporation, a Washington corporation (“NeoRx”).  University and NeoRx may hereafter from time
to time be referred to collectively as the “Parties” and individually as a
“Party.”

 

WITNESSETH

 

WHEREAS, NeoRx has obtained the rights to use certain technology and
processes to make, use, sell and distribute certain radiopharmaceutical
products for clinical and commercial purposes; and

 

WHEREAS, University owns facilities and has technical expertise to produce
radioisotopes, which are necessary for NeoRx to produce its radiopharmaceutical
products; and

 

WHEREAS, NeoRx desires that University manufacture and supply to and on
behalf of NeoRx certain quantities of reactor-produced radioisotopes in
radiochemical form from University, and University is willing and able to
provide such radioisotopes to and on behalf of NeoRx, all in accordance with
the terms and conditions set forth in this Agreement;

 

NOW THEREFORE, in consideration of the foregoing promises and
agreements set forth herein, the Parties agree as follows:

 

ARTICLE I - DEFINITIONS

 

1.1           “Affiliate” of a
Party means any corporation or other business entity controlled by, controlling
or under common control with such Party. 
For this purpose, “control” means direct or indirect beneficial
ownership of [*] more of the voting and income interest in such corporation or
other business entity.

 

1.2           “Batch” means a
specific quantity of the product intended to have uniform character and quality
and produced according to a single manufacturing order during the same cycle of
manufacture.

 

1.3           “Batch Record” means
a QA approved copy of the Master Batch Record used for the execution of the
processing of a specific Batch.

 

1.4           “Calibration Time”
means 12 Noon Central Time the day of manufacture of the Product.  For purposes of this agreement, Calibration
Time will be either 12 Noon

 

 

 

Central
Standard Time (CST) or 12 Noon Central Daylight Time (CDT), whichever is
officially in effect in Columbia, Missouri.

 

1.5           “Certificate of
Analysis” for the purposes of this agreement, shall be interpreted the same as
a Certificate of Conformance.  This is a
written certificate produced by the University verifying and certifying that
the Batch of the product was processed in accordance with the
Master Batch Record and meets the Release Specifications.

 

1.6           “cGMP” means the
current Good Manufacturing Practices as required by FDA under 21 CFR Parts 210,
211, and 820.  This includes FDA
regulations, policies, or guidelines in effect at a particular time for the
manufacture, testing and quality control of radiochemicals to be further
processed into a radiopharmaceutical drug product.

 

1.7           “Curie” or “Ci” is a
radioactivity measure as defined in general scientific literature.  All references to Curies or Ci amounts are
stated in terms of Calibration Time unless otherwise specified.  The total Curie content in the Product will
be determined as described in the Standard Operating Procedure for total
activity level.

 

1.8           “Effective Date” means
the date this Agreement is entered into, as indicated in the first paragraph of
this Agreement.

 

1.9           “Facility” means
University’s manufacturing facility located at Research Reactor Center,
University of Missouri-Columbia.

 

1.10         “FDA” means the
United States Federal Food and Drug Administration and any successor agency.

 

1.11         “Investigational New
Drug” or “IND” means an application document filed with the FDA defining an
investigational new drug product for human use.

 

1.12         [Intentionally left
blank]

 

1.13         “Lot File” means the
written record of the Process methodology and testing results related thereto
of a specific Batch of Product ordered pursuant to a Purchase Order.  The Lot File serves as the official
documentation of the Process and tests performed by University for the specific
Batch of Product.

 

1.14         [*].

 

1.15         “Master Batch Record”
means the document, to be created by University, which sets forth the
methodology and formulae for processing the Product.

 

1.16         “Minimum Supply
Capacity” has the meaning as set forth in Section 2.5.

 

1.17         “MURR” means the
Missouri University Research Reactor, which is a research center within
University.

 

1.18         “New Drug
Application” or “NDA” means the application for marketing a new drug product
filed with the FDA.

 

2

 

1.19         “Process,”
“Processing,” and “Processed” shall have comparable meanings and mean the act
of manufacturing, handling, testing, storing, analyzing, packaging, inspecting,
labeling and shipping Product in accordance with the Master Batch Record,
Release Specifications and Standard Operating Procedures.

 

1.20         “Product” means
Holmium (166) Chloride Processed in accordance with this Agreement.

 

1.21         “Proprietary
Information” means all information concerning a Party (the “Disclosing Party”)
which is furnished to or created by (such as notes, analysis, compilations,
studies, interpretations or other documents) the other Party or its directors,
officers, employees, agents, advisors or Affiliates (collectively, the
“Receiving Party”) as a result of entering into this Agreement and in
furtherance hereof.  The term
Proprietary Information, however, shall not include information which:

 

(a)           is in the public domain or becomes generally available to
the public through no fault of either Party; or

 

(b)           the Receiving Party can show by documentary evidence was
within its possession or control prior to its being furnished to the Receiving
Party by or on behalf of the Disclosing Party pursuant hereto, free of any
obligation of confidentiality; or

 

(c)           the Receiving Party can show by documentary evidence that
came into its possession or control subsequent to the date of this Agreement
from a third party free of any obligation of confidentiality; or

 

(d)           was independently developed by the Receiving Party without
the aid, application or use of the Proprietary Information; or

 

(e)           is required to be disclosed by law or order of any
governmental authority of competent jurisdiction (provided, that in such event,
the Receiving Party shall provide the Disclosing Party with notice of such law
or order and provide reasonable cooperation in connection with any attempt to
challenge or limit the scope of such disclosure).

 

1.22         “Purchase Order”
means the definitive ordering document originated by NeoRx that sets forth the
quantity of Product ordered and the delivery information.

 

1.23         “Release
Specifications” means the set of analytical tests, methods, and acceptance
criteria for Product attributes which must be met in order to prove the Product
meets the standards of quality, purity, identity and strength for this
substance.  Release Specifications are a
critical part of the Process and are filed with the FDA as part of an IND, MF
or an NDA.  All Release Specifications
are set forth on Exhibit A attached hereto, which were established initially by
NeoRx in consultation with University and which may be amended from time to
time by written agreement of the Parties and which are to conform with all
requirements of the FDA and applicable laws and regulations.  Upon such amendment, University will
implement any modified documents and/or procedures pertinent to the revised
Release Specifications.  Both parties
have the right to propose process and

 

3

 

specification
improvements that are mutually beneficial, provided that no such improvements shall be implemented
without the written approval of the other party.

 

1.24         “Standard Operating
Procedures” or “SOPs” means University’s internal written standard operating
procedures, designed by University, governing all aspects of Processing the
Product, conducting analytical tests of Product, and maintaining records
related thereto.

 

1.25         “Term” has the
meaning as set forth in Section 10.1 (b).

 

1.26         “Waste” means all (a)
rejected or unusable Product, (b) Product not accepted for delivery by NeoRx,
for whatever reason, and (c) waste relating to University’s Processing of
Product.

 

1.27         “Type B Package” is
as defined by the Department of Transportation and the Nuclear Regulatory
Commission.

 

ARTICLE II- MANUFACTURE & SALE OF PRODUCT

 

2.1                               Equipment

 

2.1.1                     Installation

 

The Parties acknowledge that University must maintain in the Facility
sufficient dedicated equipment and associated components (the “Dedicated Equipment”)
to produce product.

 

2.1.2                     Exclusivity

 

(a)           During the Term, University may not use the Dedicated
Equipment for any purpose other than cGMP compatible processing of Holmium-166.

 

(b)           During the Term, University grants to NeoRx the first
right to the Holmium-166 production capacity at the University.

 

2.2                               Purchase and Sale of Product

 

University shall Process and sell to NeoRx, and NeoRx shall purchase
from University, during the Term, such quantities of the Product as NeoRx may
from time to time order from University. 
University shall Process the Product in strict conformity with this
Agreement, including without limitation the Master Batch Record, Standard
Operating Procedures, Release Specifications and all applicable laws and
regulations.

 

2.3                               Orders and Fulfillment

 

(a)           Purchase Orders.  NeoRx shall deliver to University a written
or electronic Purchase Order for the number of Curies that NeoRx desires to
purchase no later than [*] prior to the date of shipment from University.  Each Curie shall be shipped in such manner,
and to such location, as requested by NeoRx in each Purchase Order, provided
University is legally able to do so. 
Shipment time shall be [*], unless mutually agreed otherwise, for [*]

 

4

 

Type B
Package, as defined in Section 1.27, to Denton, Texas each Monday, or to such
location as requested by NeoRx.

 

(b)           Additional
Provisions in Purchase Orders.  To the extent any Purchase
Order, invoice or acknowledgement form contains any provisions additional or
contrary to the provisions of this Agreement, such additional or contrary
provision shall have no force or effect and the terms of this Agreement shall
control unless otherwise agreed in writing by the Parties.

 

(c)           Output and Requirements.  During
the Term, NeoRx agrees to purchase from the University, and the University
agrees to supply to NeoRx, at least [*] of NeoRx’s U.S.  Product requirements.

 

(d)           Notice of
Inability to Fulfill.  University
shall notify NeoRx by telephone and in writing immediately if University
acquires any information that it will not be able to either (i) fulfill the
then most recent Purchase Orders or (ii) maintain Minimum Production
Capacity.  University shall promptly
notify NeoRx by telephone and in writing of any other production issues
(including any proposed or potential shutdown of the Facility for any reason)
or other information of which University becomes aware that may affect the
regulatory status of the Product or the ability of University to supply Product
in accordance with this Agreement or any Purchase Orders.  For planned, extended reactor shutdowns of
greater than one week, the University shall notify NeoRx as soon as the
shutdown is scheduled but in no case less than [*] prior to the scheduled shutdown.  For shutdowns of [*] duration or less, University shall notify NeoRx
as soon as possible.  The parties
acknowledge that scheduled shutdowns of [*] duration or less, provided the University gives at least [*] notice, are not to be considered in breach of
this Agreement.  Otherwise, the
foregoing notice requirements in no way prevent the University from being in
breach of this Agreement for its failure to Process and supply Product to NeoRx
pursuant to the terms of this Agreement (including, without limitation, the
requirements under Section 2.3 c).

 

2.4                               NeoRx’s Minimum and Maximum Purchases

 

(a)           Subject to Section
2.5(a), during the Term, NeoRx shall purchase and/or pay for a minimum of [*]
of Product per [*], except for [*] Thanksgiving and Christmas, and may purchase
up to a maximum of [*] of Product [*].

 

(b)           Notwithstanding the
above provisions, NeoRx will not be obligated to make payment for any Curies of
Product for which NeoRx does not accept delivery as a result of the
University’s inability to make the Product available to NeoRx.

 

2.5                               University’s Supply Capacity

 

(a)           Minimum Supply
Capacity.  Subject to the terms and conditions of this
Agreement, University will be capable of Processing, and NeoRx will have the
right to purchase, up to [*] of Product per [*], in [*] increments, on an
ongoing basis throughout the Term (the “Minimum Supply Capacity”).  Throughout the Term, the University shall be
capable of Processing a [*] Batch on any single day for delivery on Monday (or
as otherwise mutually agreed upon each week) in time to meet NeoRx’s shipping
requirements (as set forth in Section 2.3 (a)).

 

5

 

(b)           Basis for Minimum
Supply.  The Parties agree that the Minimum Supply
Capacity will be based on the calculated activity level at Calibration
Time.  The Parties acknowledge that
although NeoRx will be obligated to make applicable minimum payments to
University as described in Section 2.4, NeoRx is not obligated to accept
delivery of the Curies available within the University’s production capacity
and that the actual number of Curies University will Process and ship per
calendar week will be dependent on the Purchase Orders University receives from
NeoRx.

 

(c)           Shipping Capacity.  University
shall be obligated to ship a maximum of [*] Type B Package per week, provided
by NeoRx, per Monday to Denton, Texas, or to such location as requested by
NeoRx.  University agrees to place
NeoRx’s Type B Packages on University’s maintenance program at a cost set forth
in Section 4.4 below.  University agrees
to place the NeoRx owned Type B Packages into the MURR Type B Quality Assurance
Program and shall provide routine maintenance on said Packages at a cost set
forth in Section 4.4 below.  The
maintenance items to be addressed under the terms of this agreement will be
limited to those items that are customarily performed by the user of a Type B
Package.  The scope of all maintenance
items to be performed by MURR is designated under the Nuclear Regulatory
Commission (NRC) approved MURR Quality Assurance Program and is limited to
those hardware items that can be replaced or maintained using commonly
available techniques and equipment. 
Examples of these typical hardware items include o-rings, retainer
bolts, and gaskets.  MURR shall not be
responsible for repairs that are outside of the scope of the MURR Quality
Assurance Program, such repairs must be performed by a qualified outside vendor
under the conditions set forth in the vendor’s NRC approved MURR Quality Assurance
Program at NeoRx’s expense.  The
University shall notify NeoRx of the necessity of third party maintenance and
shall receive prior approval from NeoRx before the performance of third party
maintenance.  MURR assumes no
responsibility to provide replacement Type B Packages in the event of
catastrophic failure or regulatory obsolescence, unless such catastrophic
failure is due to MURR’s negligence or willful misconduct.

 

2.6                               Responsible Personnel

 

During the Term of this Agreement, University will staff the Processing
of the Product with personnel who are reasonably qualified consistent with
industry standards.  University will
name a person responsible for production and a person responsible for quality
assurance.  The person responsible for
quality assurance and the person responsible for production will in no event be
the same person.  If any person named by
University terminates his or her employment with University during the Term of
this Agreement, University shall replace that individual as soon as possible
with someone of a comparable level of experience.

 

2.7                               Waste Disposal

 

University shall be responsible for the disposition, in accordance with
all established regulations, of all waste generated at University.

 

6

 

ARTICLE III - DELIVERY & TITLE

 

3.1                               Delivery

 

All Product purchased by NeoRx hereunder shall be delivered F.O.B.  Facility. 
Risk of loss and title to the Products shall pass to NeoRx upon delivery
to and receipt by NeoRx’s designated carrier.

 

3.2                               Shipping Charges

 

NeoRx, in consultation with University, shall arrange for the shipment
of the Product from the University’s dock. 
NeoRx shall be responsible for the payment of all shipping charges
associated with such shipments.  NeoRx
shall make all third-party payments directly.

 

3.3                               Inspection and Acceptance

 

(a)           Product
Conformance:  All Product shall
comply with the Release Specifications. 
In accordance therewith, each Batch of Product delivered to NeoRx shall
be accompanied by or promptly followed by a Certificate of Analysis relating to
such Batch.  NeoRx may reject any Batch
if University fails to comply with Release Specifications or fails to deliver a
Certificate of Analysis along with such Batch, or if such Batch contains less
than [*] of the activity ordered by NeoRx in the applicable Purchase
Order.  If NeoRx rejects a Batch for
such reasons, NeoRx may return such Batch to University (at University’s
cost).  NeoRx shall not be obligated to
pay for such rejected Batch (and shall not be obligated to pay for any
shortfall below the Minimum Quantity resulting from such rejected Batches).

 

(b)           Disputes
Regarding Conformance of a Batch of Product:  The parties agree to select a mutually agreeable independent
laboratory as soon as possible after the effective date of this agreement to
assist in resolving disputes regarding product conformance.  A sample of the Batch of Product in dispute
will be submitted from University to the independent lab for analysis.  If the laboratory concludes that the Product
is not in conformance as set forth in subsection (a) above, the University
shall pay for the analysis and reimburse NeoRx in accordance with subsection
(a) above.  Otherwise, NeoRx shall pay
for the analysis and accept the Batch.

 

3.4                               Shipping Containers

 

NeoRx has developed a design for a shipping container (“Container
Design”) to be used for the shipment of radiopharmaceutical products.  University owns a number of depleted uranium
containers (the “DU Containers”), which are necessary to ship radiopharmaceutical
products.  NeoRx agrees to license the
use of the Container Design to University [*], during the Term for all orders of the
Product.  The DU Containers loaned to
NeoRx under this Agreement are to be used solely for transport of radioactivity
within MURR or shipment of radioactivity as mutually agreed by NeoRx and the
University.  NeoRx shall remain the sole
owner of the Container Design and University shall remain the sole owner of all
DU Containers; provided, however, that upon termination of this Agreement NeoRx
will have the option to lease the [*] DU Containers for [*] after termination
of the Agreement at a commercially reasonable rental rate.

 

7

 

ARTICLE IV- PURCHASE PRICE AND PAYMENT

 

4.1          Curie Fee

 

In consideration for University Processing the Product in compliance
with the terms of this Agreement, NeoRx shall pay an amount equal to [*] per
Curie for the number of Curies ordered by NeoRx in the applicable Purchase
Order.  The Parties acknowledge that the
foregoing per Curie price is based upon NeoRx’s commitment to purchase and/or
pay for a minimum of [*] Curies per [*], except [*] Thanksgiving and Christmas,
for the duration of the Term.  Shipments
of [*] shall be accepted by NeoRx, but shall qualify for a credit of [*].  Shipments of [*], may be accepted by NeoRx
at its discretion and, if accepted, will qualify for a credit of [*] for each
Curie or partial Curie below [*].

 

4.2                               Basis of Curie Fee and Costs

 

The Parties agree that the price set forth in Section 4.1 is based on
the total Curie content ordered, and that the Curie fee includes the cost of
labor, materials, cost of Dedicated Equipment, and overhead to Process,
including testing the finished Product and is exclusive of the cost of
shipping, and packaging and handling expenses.

 

4.3                               Annual Adjustment of Curie Fees

 

On the anniversary date of the Agreement the Curie price may be
increased by an amount not to exceed the change from January to January of the
previous twelve (12) months in the U.S. 
Producer Price Index, all Commodities, as published by the U.S.  Department of Labor Bureau of Labor
Statistics or zero percent (0%), whichever is greater.  In any event, however, the annual price
adjustment shall be limited to no more than [*].

 

4.4                               Handling and Maintenance Charges

 

NeoRx agrees to pay MURR’s standard handling and standard container
maintenance charges, currently [*] per shipment and [*] per shipment,
respectively, but subject to minor standard change during the Term.  The foregoing described changes in such
charges shall not occur more than [*], and for any year shall be no greater
[*], respectively.

 

ARTICLE V - REGULATORY MATTERS

 

5.1          General

 

University understands that it will be primarily responsible for
ensuring that the Facility and the Process will be cGMP compliant as required
by the FDA.  University will
(a) create the Master Batch Record and Standard Operating Procedures,
which University will comply with in Processing the Product (in addition to
complying with the Release Specifications), (b) maintain all required
regulatory documents covering the Process and the Facility, and (c) make all
such required documents available to NeoRx for its review upon NeoRx’s request.

 

8

 

5.2                               New Drug Applications

 

University shall cooperate with NeoRx with respect to any NDA
obligations relating to the Product that are imposed by the FDA or foreign
regulations.  NeoRx shall be responsible
for obtaining FDA or other regulatory approval for the NDA for any drug
products utilizing the Product, and shall own the NDA.  University agrees to comply with all
commitments made in the NDA regarding University’s Processing responsibilities,
but NeoRx agrees not to make commitments to the FDA on behalf of the University
without the University’s prior written approval.

 

5.3                               Notice of Safety Related Information

 

MURR and NeoRx shall provide to each other prompt notice of any
information it receives relating to the safety of the Product, including any
confirmed or unconfirmed information on adverse, serious, or unexpected events
associated with the manufacture of the Product.  For serious (based on a good faith evaluation), unexpected
events, MURR and NeoRx shall give each other notice by telephone within [*]
after receipt of the information and
followed by written notice not less than [*] thereafter.  The Parties shall
cooperate in responding to all applicable governmental agencies and filing any
reports with such agencies concerning any reactions (including drug experience
reports) caused by the Product.  The
Parties shall cooperate in providing timely assistance in responding to any
complaints relating to commercial goods produced and sold by NeoRx that contain
Product.  The costs associated with
responding to such complaints shall be borne by NeoRx; provided, however, if
the complaint was directly or indirectly caused by University’s failure to
Process the Product in strict accordance with the Master Batch Record or
Release Specifications, University shall reimburse NeoRx for all reasonable
internal and external costs and expenses incurred by NeoRx to appropriately
respond to such complaints (up to a maximum of [*] per batch).

 

ARTICLE VI - RECORDS AND AUDITS

 

6.1          Batch Records

 

The University shall retain all records of orders received, raw
materials purchased and stored, Batch Records for Product manufactured, work in
progress, Processing analyses and release control tests and the like for [*] or until NDA full approval.  Should the University be unable to store the
above-mentioned records, for any reason, the records will be shipped to NeoRx
Corporation for archival.

 

6.2                               Agency Records and Audits

 

University shall make available to NeoRx and all applicable government
agencies all documents and updates that they have prepared with regard to
Processing the Products that are required by law to be filed with any
governmental agency.  University shall
submit to all inquiries and inspections by any governmental agency with
authority to conduct such inquiries and inspections (hereinafter collectively
referred to as “Agency”).  University
shall promptly notify NeoRx of any Agency interactions and/or correspondence
relating to University’s operations that could relate, directly or indirectly,
to the Product.  University shall make
available for inspection by NeoRx all documents and correspondence received

 

9

 

from any
Agency that relate in any way to the Process or the Product.  University shall immediately inform NeoRx of
all Agency audits that relate in any way to the Process or the Product.  Similarly, NeoRx shall inform University in
advance of any Agency planned audits of NeoRx if such audits relate directly to
the Products.  University shall
immediately provide NeoRx with copies of any regulatory letters or other
documents issued by any Agency and received by University in connection with
the audit or any inspection relating to the Product.

 

6.3                               FDA

 

NeoRx shall obtain and maintain all FDA and other regulatory approvals
necessary to enable NeoRx to use the Products as intended under this
Agreement.  University shall cooperate
with NeoRx as required in order to secure and maintain such governmental and
other approvals.

 

6.4                               Inspections

 

University shall permit indoctrinated employees and/or appropriately
trained representatives of NeoRx to enter, consistent with MURR access
protocols in effect at the time, and conduct a reasonable inspection and/or
audit of the Facility and/or the documents associated with the Processing of
Product during normal business hours and with at least seventy-two (72) hours
advanced notice in order to determine whether the Products are being Processed
in conformity with the terms of this Agreement.  In addition, and in conformity with all applicable laws, rules
and regulations, University shall permit employees or representatives of NeoRx
to inspect Products designated for delivery to NeoRx and otherwise provide
NeoRx with such information as it may reasonably be required to determine
whether the Products are being Processed in accordance with this Agreement,
including without limitation in accordance with the Master Batch Record,
Standard Operating Procedures, and all applicable laws, rules and regulations.

 

ARTICLE VII - REPRESENTATIONS AND WARRANTIES

 

7.1          Labor and Equipment

 

University represents that it shall furnish all labor, equipment and
facilities necessary to Process Product in the amounts, and in the timely
manner, as set forth in each Purchase Order. 
University has obtained, and will maintain throughout the Term, all
licenses necessary to Process the Product. 
University will abide by all applicable rules, regulations, laws and
mandates issued by all applicable regulatory bodies.

 

7.2                               Processing Requirements

 

University represents, warrants and agrees that it will Process all of
the Product in strict accordance with this Agreement, including without
limitation (i) the Master Batch Record, (ii) the Standard Operating Procedures,
(iii) the Release Specifications, (iv) all federal, state and local laws,
statutes, regulations or other requirements relating thereto and applicable to
the intended use of such Product, and (v) [*]. 
University further represents that it is not a party to any other
agreement that could hinder its ability to fulfill its obligations under this
Agreement.

 

10

 

7.3                               Records Relating to Waste Disposal

 

University represents that it shall obtain and maintain all waste
generator licenses, disposal manifests and other records in accordance with
Federal statutes, laws and regulations and the statutes, laws and regulations
of the State of Missouri.

 

7.4                               Changes

 

University agrees that it will not implement any material revisions or
changes to the Product, Process, Master Batch Record or Standard Operating
Procedures associated with University’s Processing of the Product for and on
behalf of NeoRx without prior written notification to NeoRx in order to give
NeoRx an opportunity to validate that such changes would have no negative
impact on the Product.  A “material
revisions or changes” means any revision or change that would impact (a) the
raw materials supplier, (b) materials specifications, (c) formulation process,
(d) formulation equipment, or (e) testing procedures.  Furthermore, University will not make any changes, material or
otherwise, to the Release Specifications without prior written approval of
NeoRx.

 

7.5                               Safety Procedures

 

University represents that it shall have primary responsibility for
adopting and enforcing safety procedures for the handling and production of the
Products that comply in all material respects with all federal, state and local
environmental and occupational safety and health requirements to which
University is subject.

 

ARTICLE VIII - CONFIDENTIAL INFORMATION

 

8.1          Limitations on Disclosures

 

Except to the extent expressly authorized by this Agreement, during the
Term of this Agreement and five (5) years thereafter, neither Party shall:

 

(a)           disclose,
publish, or make available any Proprietary Information disclosed to it by the
other to any third party, including employees who do not need to know or have
access to such Proprietary Information; or

 

(b)           sell,
transfer, or otherwise use or exploit any such Proprietary Information
disclosed to it by the other Party; or

 

(c)           knowingly
permit the sale, transfer, use or exploitation by a third party of any such
Proprietary Information which may have been disclosed to such third party,
including employees who do not need to know or have access to such Proprietary
Information.

 

During the Term of this Agreement, neither Party shall make any press
release or other disclosure of the terms of this Agreement without the prior
written consent of the other Party, except as required by law or by a court of
competent jurisdiction and pursuant to the disclosure requirements of federal
or state regulatory agencies, including the United States Securities and
Exchange Commission.

 

11

 

8.2                               Use of Parties’ Names

 

Neither Party shall advertise any connection with the other Party nor
make use of the other Party’s name or other identifying marks or property, nor
make representations, either express or implied, without the other Party’s
prior written approval.  The prior
sentence shall not, however, be construed so as to prevent mention of the
contribution of either Party in any scientific publication.

 

8.3                               Scholarly Publications

 

Notwithstanding paragraph 8.1(b) University shall have the right to
publish in scholarly journals and make scholarly presentations concerning any
information it may develop as a result of this Agreement.  University shall provide NeoRx with a copy
of any proposed scholarly publication or presentation 45 days before submission
for publication or presentation to allow NeoRx to review and comment on the
publication or presentation and delete any confidential Proprietary Information
of NeoRx.  NeoRx may request a 60-day
delay of the publication or presentation to allow the preparation of patent
applications should the materials disclose an invention.

 

ARTICLE IX - INDEMNIFICATION

 

9.1          Indemnification

 

(a)           Subject to Section
9.2, NeoRx shall defend, indemnify, and hold harmless University, its officers,
agents, employees and Affiliates from any third-party loss, claim, action,
damage, expense or liability (including defense costs and reasonable attorneys’
fees) arising out of NeoRx’s (a) breach, violation or nonfulfillment of any of
its covenant, agreements, representations or warranties under this Agreement,
(b) handling, possession, or use of the Products after University’s delivery of
the same to NeoRx, (c) negligence or willful misconduct, or (d) breach of any
third party’s trade secret rights, except to the extent that such loss, claim,
action, damage, expense or liability is based on, arises out of, or is due to
the negligence or willful misconduct of, or breach of this Agreement by,
University.

 

(b)           Subject to Section
9.2, to the extent permitted by Missouri law and without waiving sovereign
immunity, University shall defend, indemnify, and hold harmless NeoRx, its
officers, agents, employees and Affiliates from any third-party loss, claim,
action, damage, expense or liability (including defense costs and reasonable
attorneys’ fees) arising out of University’s (a) breach, violation or
nonfulfillment of any of its covenant, agreements, representations or
warranties under this Agreement, (b) handling, possession, or use of the
Products prior to University’s delivery of the same to NeoRx, (c) negligence or
willful misconduct, (d) disposal of any Waste, or (e) breach of any third
party’s trade secret rights, except to the extent that such loss, claim,
action, damage, expense or liability is based on, arises out of, or is due to
the negligence or willful misconduct of, or breach of this Agreement by, NeoRx.

 

9.2          No Personal Liability

 

No shareholder, member, officer, employee or board member (the
“Individuals”), individual or collectively, of either University or NeoRx
incurs or assumes any individual or

 

12

 

personal
liability by the execution of this Agreement or by reason of the default of
either Party in the performance of any of the terms herein.  All such liability of the Individuals of
each Party is hereby released by the other Party as a condition of and in
partial consideration for the execution of this Agreement.

 

9.3                               Procedure

 

Each Party agrees to give to the indemnifying Party (a) prompt notice
of any claim or suit coming within the purview of the indemnities contained in
this Article IX, (b) all relevant facts in its possession or control, subject
to the treatment of such information pursuant to Article VIII, (c) the right to
exclusive control of the defense of any action (at its sole expense), and (d)
its cooperation in the defense of any such action.

 

ARTICLE X - TERM AND TERMINATION

 

10.1        Term

 

(a)           Subject to the
Parties’ ability to terminate this Agreement as set forth in this Article X,
the “Initial Term” of this Agreement shall commence on the Effective Date and
shall continue through [*] (the “Initial Term”).

 

(b)           NeoRx shall have the
option to renew this Agreement, with the consent of the University which will
not be unreasonably withheld, under the same terms and conditions, for up to
[*] additional [*] terms (the “Extension Term(s)”) beyond the Initial Term;
provided, that NeoRx shall exercise its option, if at all, in writing with no
less than [*] remaining in the then-current Term.  The Initial Term and Extension Terms, if any, unless terminated
earlier pursuant to the terms of this Agreement, are referred to herein as the
“Term.”

 

(c)           Notwithstanding
clauses (a) and (b) above, the Parties acknowledge that at any time they may
agree to replace this Agreement in its entirety with a long-term commercial
supply agreement.

 

10.2                        Termination by Either Party

 

Either Party may terminate this Agreement at any time after the
happening of any of the following events; provided, however, that the Party
terminating this Agreement shall provide the other with written notice of such
termination prior to the date thereof:

 

(a)           either
Party breaches any of its agreements, covenants, representations or warranties
as set forth in this Agreement and the breaching Party fails to cure such
breach within fifteen (15) days of written notice thereof from the
non-breaching Party; or

 

(b)           University
fails to timely fulfill [*] Purchase Orders in any rolling six (6) month
period; or

 

(c)           the
FDA (or other governmental agency with authority), Missouri Department of
Health or other regulatory agency orders University to cease Processing the
Product or orders NeoRx to permanently cease utilizing the Product.

 

13

 

Notwithstanding any provision in this Agreement to the contrary,
University shall continue to Process the Product, and deliver Product in
response to any Purchase Order, through the date of termination, unless such
Process and delivery requirements are waived in writing by NeoRx.

 

10.3                        Disputes

 

In the event of a dispute regarding the interpretation of this
Agreement, the Parties agree they will endeavor to resolve such dispute
amicably.  In the event a dispute cannot
be resolved by the Parties, then upon the written request of any Party that
includes a summary of the dispute, a senior executive officer of NeoRx and a
senior official of MURR shall promptly meet and endeavor to resolve the dispute
through good-faith negotiations within thirty (30) days of their receipt of the
dispute.

 

10.4                        Return of Information

 

Upon expiration or termination of this Agreement, each Party shall
return all originals and copies of the other Party s Proprietary Information it
may have received or created.

 

10.5                        Rights on Termination

 

(a)           Continuing
Obligations.  Upon termination of this Agreement, each of the
Parties shall continue to be bound by its obligations under Articles VII, VIII
and IX of this Agreement.

 

(b)           NeoRx’s
Additional Remedies. 
If NeoRx terminates this Agreement
pursuant to Section 10.2(a) (for University’s breach of this Agreement) or
Section 10.2(b) (for University’s failure to timely fulfill Purchase Orders),
then, in addition to any other remedy available to NeoRx at law:

 

(i)            during
the six (6) months following termination, if requested by NeoRx University
shall provide not more than [*] person-hours of the time of University
employees, at no additional cost to NeoRx, to facilitate a transition to a
third party facility for Processing the Product

 

(ii)           within
thirty (30) days of such termination, University shall transfer to NeoRx
certified copies of the Lot Files and all records relating to batches of the
Product delivered to NeoRx; and

 

(iii)          University
will, at NeoRx’s request, continue to Process Product pursuant to the terms and
conditions of this Agreement and sell the same to NeoRx at the prices in effect
at time of termination for the remainder of the Term.

 

ARTICLE XI - FORCE MAJEURE

 

Neither Party hereto shall be liable to the other in damages for, nor
shall this Agreement be terminable by reason of, any delay or default in such
Party s performance hereunder if such delay or default is caused by conditions
beyond such Party’s control including, but not limited to, acts of God, war,
insurrection, civil commotion, destruction of

 

14

 

production
facilities or materials by earthquake, fire, flood or storm, labor disturbances
including strikes or lockouts or epidemic (“Force Majeure”).  Each Party hereto agrees to promptly notify
the other Party of any event of Force Majeure and to employ all reasonable
efforts toward prompt resumption of its performance hereunder when possible if
such performance is delayed or interrupted by reason of such event.

 

ARTICLE XII -
MISCELLANEOUS

 

12.1                        Assignment

 

This Agreement shall be binding upon and inure to the benefit of the
Parties, their successors and permitted assigns.  Notwithstanding the foregoing, NeoRx may assign its rights and/or
delegate its obligations under this Agreement to any third party.  NeoRx will give University immediate notice
of any such assignment.  University may
not assign its rights and/or delegate its obligations under this Agreement to
any third party without NeoRx’s prior written consent.

 

12.2                        Entire Agreement; Amendments; Counterparts

 

This Agreement, along with each Purchase Order and the attached
Exhibits, contains the entire understanding of the Parties hereto relating to
the subject matter contained herein, supersedes all prior agreements, promises
and understandings of the Parties.  This
Agreement may not be modified, amended or any provision waived except by
written agreement of the Parties.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same agreement.

 

12.3                        Notices

 

All notices, demands, requests and other communications shall be in
writing or by written telecommunication, and shall be given when delivered
personally to the addressee or, if mailed, by certified mail, return receipt
requested, postage prepaid, or sent by written telecommunication, when
delivered to the addresses specified below. 
Either Party may from time to time change its address, facsimile number
or designated individual by notice to the other Party.

 

	
  If to NeoRx:

  	
   

  	
  NeoRx Corporation

  
	
   

  	
   

  	
  300 Elliott Avenue West, Suite 500

  
	
   

  	
   

  	
  Seattle, Washington 98119

  
	
   

  	
   

  	
  Attention:  Anna Wight, Legal
  Department

  
	
   

  	
   

  	
   

  
	
  If to University:

  	
   

  	
  MU Research Reactor

  
	
   

  	
   

  	
  1513 Research Park Dr.

  
	
   

  	
   

  	
  Columbia, MO 65211

  
	
   

  	
   

  	
  Attention:  Ken Brooks

  

 

Such notice, demand, request, and other communications shall be deemed
to have been given as of the date so delivered or transmitted by facsimile (as
long as the transmitting machine confirms successful transmission) or, if
mailed, three (3) business days after the date so mailed, or, if sent by
overnight courier service, one (1) business day after the date so sent.

 

15

 

12.4                        Relationship of Parties

 

The Parties are acting herein as independent contractors and
independent employers.  Nothing herein
contained shall create or be construed as creating a partnership, joint
venture, joint employer or agency relationship between the Parties and no Party
shall have the authority to bind the other in any respect.

 

12.5                        No Waiver; Severability

 

Any provision of this Agreement may be waived at any time in writing
executed by the Party for whose benefit such provision exists; provided,
however, that the failure to enforce any provision of this Agreement shall not
constitute a waiver thereof.  In the
event that any provision of this Agreement shall be held invalid or
unenforceable under applicable law, the remainder of this Agreement shall
remain valid and enforceable, unless such invalidity or unenforceability
substantially diminishes the rights and obligations, taken as a whole, of any
Party.

 

12.6                        Agreement Approval; Further Assurances

 

Each Party hereby represents and warrants that all necessary corporate
approvals for this Agreement have been obtained, and the person whose signature
appears below has the authority necessary to execute this Agreement on behalf
of the Party indicated.  Each Party
agrees that it shall execute such further documents and perform such further
acts as may be necessary to comply with the terms of this Agreement.

 

12.7                        Captions

 

The captions in this Agreement are solely for convenience of reference
and shall not be used for purposes of interpreting or construing the provisions
hereof.

 

12.8                        Intellectual Property

 

No trademark, trade name, logo, trade dress, copyright or license
therein, or other intellectual property rights (collectively, “Intellectual
Property”) are conveyed by this Agreement, and neither Party shall have the
right to use the other Party’s Intellectual Property for any purpose whatsoever
without prior written consent.

 

12.9                        Survival

 

The provisions in Article V, VII, VIII, IX and XII, and Sections 2.7,
3.4, 6.1, 6.2, 10.3, 10.4 and 10.5, shall survive the termination of this
Agreement.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by duly their authorized representatives, effective on this date first
set forth above.

 

16

 

	
  THE CURATORS OF THE

  UNIVERSITY OF MISSOURI

  	
  NEORX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Lisa J. Wimmenauer

  	
   

  	
  By:

  	
   

  	
  /s/ Anna Wight

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   Lisa J. Wimmenauer

  	
   

  	
  Name:

  	
   Anna Wight

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
  Associate Director of Business Services

  	
   

  	
  Its:  

  	
   Vice President Legal

  	
   

  
																

 

17

 

Exhibit A

 

[*]Exhibit 10.23

 

[*] Indicates that a portion of
this exhibit has been omitted based on a request for confidential treatment
submitted to the Securities and Exchange Commission.  The omitted portion has been filed separately with the
Commission.

 

 

ANORMED INC.

 

AND

 

NEORX
CORPORATION

 

 

 

LICENSE

 

AGREEMENT

 

 

 

LICENSE AGREEMENT

 

TABLE OF CONTENTS

 

	
  Article 1 DEFINITIONS.

  	
   

  
	
   

  	
  1.1

  	
  Definitions.

  	
   

  
	
   

  	
  1.2

  	
  Other Definitions.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 2
  DEVELOPMENT PROGRAM.

  	
   

  
	
   

  	
  2.1

  	
  Development Program.

  	
   

  
	
   

  	
  2.2

  	
  AnorMED Assistance.

  	
   

  
	
   

  	
  2.3

  	
  Progress Reports.

  	
   

  
	
   

  	
  2.4

  	
  Committee; Committee
  Meetings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3 GRANT
  OF LICENSE.

  	
   

  
	
   

  	
  3.1

  	
  Grant of License.

  	
   

  
	
   

  	
  3.2

  	
  Right to Grant
  Sublicenses.

  	
   

  
	
   

  	
  3.3

  	
  Reservation of Rights.

  	
   

  
	
   

  	
  3.4

  	
  Transfer of Information.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4
  COMMERCIALIZATION

  	
   

  
	
   

  	
  4.1

  	
  Diligence in
  Commercialization.

  	
   

  
	
   

  	
  4.2

  	
  Decision Not to
  Commercialize.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 5
  SUPPLY OF LICENSED COMPOUNDS AND LICENSED PRODUCTS.

  	
   

  
	
   

  	
  5.1

  	
  Supply of AMD473.

  	
   

  
	
   

  	
  5.2

  	
  Supply of Licensed
  Product.

  	
   

  
	
   

  	
  5.3

  	
  Delivery.

  	
   

  
	
   

  	
  5.4

  	
  Permits and Licenses.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 6 LICENSE
  FEES.

  	
   

  
	
   

  	
  6.1

  	
  Additional Definitions.

  	
   

  
	
   

  	
  6.2

  	
  Initial License Fee.

  	
   

  
	
   

  	
  6.3

  	
  Milestone Payments.

  	
   

  
	
   

  	
  6.4

  	
  Form of Milestone
  Payments.

  	
   

  
	
   

  	
  6.5

  	
  Notice of
  Milestone and Payment.

  	
   

  
	
   

  	
  6.6

  	
  Nature of Payments.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 7 ROYALTY
  PAYMENTS.

  	
   

  
	
   

  	
  7.1

  	
  ICR Agreement.

  	
   

  
	
   

  	
  7.2

  	
  Basic Royalty.

  	
   

  
	
   

  	
  7.3

  	
  Sublicensing Royalty.

  	
   

  
	
   

  	
  7.4

  	
  Third Party
  License Fees and Royalties.

  	
   

  
	
   

  	
  7.5

  	
  Royalty Payments
  Upon Termination.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 8 PAYMENT
  TERMS.

  	
   

  
	
   

  	
  8.1

  	
  Invoices and Payments.

  	
   

  
	
   

  	
  8.2

  	
  Payment of Royalties.

  	
   

  
	
   

  	
  8.3

  	
  Currency of Payment.

  	
   

  
	
   

  	
  8.4

  	
  Currency Transfer
  Restrictions.

  	
   

  
	
   

  	
  8.5

  	
  Taxes.

  	
   

  
	
   

  	
  8.6

  	
  Net Sales Reports.

  	
   

  
	
   

  	
  8.7

  	
  Accounts and Audit.

  	
   

  
	
   

  	
  8.8

  	
  Confidentiality of
  Reports.

  	
   

  

 

 

	
   

  	
  8.9

  	
  Interest.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 9
  INTELLECTUAL PROPERTY.

  	
   

  
	
   

  	
  9.1

  	
  Existing
  Intellectual Property.

  	
   

  
	
   

  	
  9.2

  	
  Ownership of New
  Inventions.

  	
   

  
	
   

  	
  9.3

  	
  Improvements

  	
   

  
	
   

  	
  9.4

  	
  Trademarks.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 10
  PATENTS; PROSECUTION AND LITIGATION.

  	
   

  
	
   

  	
  10.1

  	
  Prosecution of Patents.

  	
   

  
	
   

  	
  10.2

  	
  Patent Review
  and Recommendations.

  	
   

  
	
   

  	
  10.3

  	
  Patent Costs.

  	
   

  
	
   

  	
  10.4

  	
  Right to Assume
  Prosecution.

  	
   

  
	
   

  	
  10.5

  	
  Third Party
  Claims of Infringement

  	
   

  
	
   

  	
  10.6

  	
  Infringement by
  Third Parties.

  	
   

  
	
   

  	
  10.7

  	
  Cooperation; Costs
  and Awards.

  	
   

  
	
   

  	
  10.8

  	
  Cooperation with
  Other Licensees

  	
   

  
	
   

  	
  10.9

  	
  Interference
  Proceedings.

  	
   

  
	
   

  	
  10.10

  	
  Status of Proceedings.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 11
  CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.

  	
   

  
	
   

  	
  11.1

  	
  Obligation of
  Confidentiality.

  	
   

  
	
   

  	
  11.2

  	
  Permitted Disclosures.

  	
   

  
	
   

  	
  11.3

  	
  Disclosure with Consent

  	
   

  
	
   

  	
  11.4

  	
  Ownership
  of Confidential Information.

  	
   

  
	
   

  	
  11.5

  	
  Press Releases.

  	
   

  
	
   

  	
  11.6

  	
  Publication.

  	
   

  
	
   

  	
  11.7

  	
  Duration of Obligation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 12
  LEGAL AND REGULATORY.

  	
   

  
	
   

  	
  12.1

  	
  Compliance with Laws.

  	
   

  
	
   

  	
  12.2

  	
  AMD473 Regulatory
  Activities.

  	
   

  
	
   

  	
  12.3

  	
  Regulatory
  Program Progress Reports.

  	
   

  
	
   

  	
  12.4

  	
  Safety.

  	
   

  
	
   

  	
  12.5

  	
  Recalls.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 13
  REPRESENTATIONS, WARRANTIES AND COVENANTS.

  	
   

  
	
   

  	
  13.1

  	
  AnorMED’s
  Representations, Warranties and Covenants.

  	
   

  
	
   

  	
  13.2

  	
  NeoRx’
  Representations, Warranties and Covenants.

  	
   

  
	
   

  	
  13.3

  	
  No Warranty.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 14
  TERM AND TERMINATION.

  	
   

  
	
   

  	
  14.1

  	
  Expiration.

  	
   

  
	
   

  	
  14.2

  	
  Termination.

  	
   

  
	
   

  	
  14.3

  	
  Termination by NeoRx.

  	
   

  
	
   

  	
  14.4

  	
  Termination for Breach.

  	
   

  
	
   

  	
  14.5

  	
  Termination on
  Bankruptcy.

  	
   

  
	
   

  	
  14.6

  	
  Payments on Termination.

  	
   

  
	
   

  	
  14.7

  	
  Inventory.

  	
   

  
	
   

  	
  14.8

  	
  Survival.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 15
  INDEMNIFICATION.

  	
   

  
	
   

  	
  15.1

  	
  Indemnification of
  AnorMED.

  	
   

  
	
   

  	
  15.2

  	
  Indemnification of
  NeoRx.

  	
   

  
	
   

  	
  15.3

  	
  Clinical Trials.

  	
   

  
	
   

  	
  15.4

  	
  Unauthorized
  Commerce Indemnity.

  	
   

  

 

ii

 

	
   

  	
  15.5

  	
  Indemnification
  Procedure.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 16
  REPRESENTATIONS AND WARRANTIES OF NEORX.

  	
   

  
	
   

  	
  16.1

  	
  Representations and
  Warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 17
  REPRESENTATIONS AND WARRANTIES OF ANORMED.

  	
   

  
	
   

  	
  17.1

  	
  Representations and
  Warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 18
  REGISTRATION RIGHTS.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 19
  MISCELLANEOUS.

  	
   

  
	
   

  	
  19.1

  	
  Assignment; Inurement.

  	
   

  
	
   

  	
  19.2

  	
  Dispute Resolution.

  	
   

  
	
   

  	
  19.3

  	
  Entire Agreement.

  	
   

  
	
   

  	
  19.4

  	
  Force Majeure.

  	
   

  
	
   

  	
  19.5

  	
  Further Assurances.

  	
   

  
	
   

  	
  19.6

  	
  Governing Law.

  	
   

  
	
   

  	
  19.7

  	
  Insurance.

  	
   

  
	
   

  	
  19.8

  	
  Notices.

  	
   

  
	
   

  	
  19.9

  	
  Change of Address.

  	
   

  
	
   

  	
  19.10

  	
  Rights and Remedies.

  	
   

  
	
   

  	
  19.11

  	
  Severability.

  	
   

  
	
   

  	
  19.12

  	
  Counterparts; Facsimile.

  	
   

  

 

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  AnorMED Patents

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Development Program

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Evaluation Process

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Press Release

  

 

iii

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT
(this “Agreement”)
is entered into as of
                   ,
2004 (the “Effective Date”) by and among ANORMED INC. (“AnorMED”),
a corporation organized and existing under the laws of Canada
and having an office at #200 - 20353 64th Ave, Langley, BC Canada V2Y 1N5 and NEORX
CORPORATION (“NeoRx”), a corporation organized and
existing under the laws of the State of Washington, United States of America,
and having an office at 300 Elliott Avenue West, Suite 500, Seattle,
Washington, USA 98119-4114.

 

RECITALS

 

WHEREAS:

 

A.                                   Effective November 15, 1989, The Institute of Cancer Research:
Royal Cancer Hospital and Johnson-Matthey PLC entered into a Collaboration
Agreement, as amended effective as of February 25, 1998 and March 24,
1998 (collectively, the “ICR Agreement”);

 

B.                                     Effective June 28, 1996, all rights and obligations of Johnson
Matthey PLC under the ICR Agreement with respect to a drug compound known as
AMD473, including, without limitation, the exclusive right to develop and
commercialize AMD473, were assigned to AnorMED;

 

C.                                     From its own independent research program and the research conducted
under the ICR Agreement, AnorMED has valuable patent rights, technical data and
information relating to AMD473 and analogs or derivatives or backup compounds
of AMD473; and

 

D.                                    NeoRx desires to acquire from AnorMED a license to develop,
manufacture and commercialize products incorporating AMD473 and/or its analogs,
derivatives and backup compounds, upon the terms and conditions set forth
herein.

 

NOW, THEREFORE, for and in consideration of the mutual covenants, rights and obligations contained in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

Article 1 DEFINITIONS.

 

1.1                               Definitions.

 

In this Agreement, the following words will
have the meanings set out below:

 

(a)                                  “Affiliate” shall mean, with respect to any
Person, any Person directly or indirectly controlled by, controlling or under
common control with such Person.  For
the purposes of this definition, except as otherwise expressly set out in this
Agreement, “control” shall mean direct or indirect beneficial ownership of
[*] interest in the income of such Person or such
other relationship as, in fact, constitutes actual control;

 

(b)                                 “AMD473” shall mean the compound having the
chemical name [SP-4-3]-amminedichloro(2-methylpyridine)platinum(II);

 

(c)                                  “AnorMED Know-How” shall mean all Know-How
that is or becomes owned and/or controlled by AnorMED as at the Effective Date
and/or during the Term that relates to a Licensed Compound or a Licensed
Product and that is necessary to make, have made, use,
sell, offer for sale or import the Licensed Compound or the Licensed Product in the Territory in the Field;

 

 

(d)                                 “AnorMED Patents” shall mean:

 

(i)                                     the Patents identified in Exhibit A attached to this
Agreement,

 

(ii)                                  any Patents that claim any patentable
improvements to the Patents identified in Exhibit A attached to this Agreement made
by the parties during the Term, whether jointly or solely by a party, and

 

(iii)                               any Patents that AnorMED owns or otherwise
controls during the Term that relates to a Licensed Compound or a Licensed
Product and that is necessary to make, have made, use,
sell, offer for sale or import the Licensed Compound or the Licensed Product in the Territory in the Field, to the extent that AnorMED possesses the ability to grant access, a
license or a sublicense (as applicable) without violating the terms of any
written agreement with a Third Party;

 

(e)                                  “Business Day” shall mean any day other than
a day which is a Saturday, Sunday or a statutory holiday in the Province of
British Columbia, Canada or the State of Washington, USA;

 

(f)                                    “Competition” shall mean, in respect of a
particular country in the Territory, sales of any finished drug product (other
than a Licensed Product) containing AMD473 or any analogues or derivatives or
backup compounds of AMD473, the making, having made,
using, selling, offering for sale or importing of which would infringe a Valid
Claim of one or more of the AnorMED Patents in such country, where such sales
are [*] of the unit sales volume of a Licensed Product in such country;

 

(g)                                 “Confidential Information” shall mean all
information, data and records, whether written or oral, which is obtained by a
receiving party (AnorMED or NeoRx, as the case may be) from a disclosing party
(AnorMED or NeoRx, as the case may be). 
Information shall not be considered “Confidential Information” to
the extent that when considered as a whole and in the context disclosed, the
information:

 

(i)                                     is in the public domain at the time of
disclosure,

 

(ii)                                  subsequently becomes part of the public domain
through no act or fault of the receiving party or its agents or employees,

 

(iii)                               can be demonstrated by the receiving party’s
written records to have been known or otherwise available to the receiving
party prior to the disclosure by the disclosing party,

 

(iv)                              can be demonstrated by the receiving party’s
written records to have been subsequently provided to the receiving party,
without restriction, by a Third Party who has the right to make such
disclosure,

 

(v)                                 is subsequently and independently developed by
employees of the receiving party or Affiliates (for this purpose, “control” in
the definition of Affiliate shall mean direct or indirect beneficial ownership
of [*] interest in the income of a Person or such
other relationship as, in fact, constitutes actual control) of the receiving
party who had no knowledge of the information disclosed, as demonstrated by the
receiving party’s written records, or

 

(vi)                              is required to be disclosed by law or
government regulation(s), provided that the receiving party gives the disclosing
party prompt notice of the required disclosure in order to allow the disclosing
party to seek protective treatment.

 

A combination of features will not be deemed
within the foregoing exceptions merely because individual features are in the
public domain or in the possession of the receiving party unless the
combination itself is in the public domain or in the possession of the
receiving party;

 

(h)                                 “Current Market Price” shall have the
meaning set out in Subsection 6.1(b);

 

(i)                                     “Development Program” shall have the meaning
set out in Section 2.1;

 

(j)                                     “FDA” shall mean the United States Food and
Drug Administration or any successor agency thereof;

 

(k)                                  “Field” shall mean the use of a Licensed
Compound or a Licensed Product for the diagnosis,
prevention and/or treatment of any
human disease;

 

(l)                                     “First Commercial Sale” shall mean the first sale of a Licensed
Product by NeoRx or an Affiliate or a sublicensee of NeoRx in a country in the
Territory following the receipt or issuance of Regulatory

 

2

 

Approval
for the Licensed Product in that country or, if no such Regulatory Approval or
similar marketing approval is required, the date upon which the Licensed
Product is first commercially launched in such country.  For the purposes of the definition of “First
Commercial Sale”, “control” in the definition of Affiliate shall mean direct or
indirect beneficial ownership of [*]
interest in the income of a Person or such other relationship as, in fact,
constitutes actual control;

 

(m)                               “GAAP” or “generally accepted accounting principles”
shall mean the conventions, rules and procedures that define accounting
practices as established, and revised or amended, by the Financial Accounting
Standards Board;

 

(n)                                 “ICR” shall mean The Institute of Cancer
Research: Royal Cancer Hospital, London, United Kingdom;

 

(o)                                 “ICR Agreement” means the [*];

 

(p)                                 “IND” shall mean an Investigational New Drug
Exemption under 21 C.F.R. 355(i) pursuant to the rules and policies of the FDA and such equivalent regulations or standards of countries outside
the United States as may be applicable to the activities conducted hereunder;

 

(q)                                 “Intellectual Property” shall mean any
discoveries, improvements, patents, patent applications, copyrights, copyright
applications, industrial designs, industrial design applications, mask works,
trademarks, trademark applications and trade secrets;

 

(r)                                    “Know-How” shall mean any and all data,
results, instructions, processes, formulae, trade secrets, expert opinions, regulatory
submissions and other information (in written or other tangible form)
including, without limitation, any chemical, pharmacological, toxicological,
pre-clinical, clinical, assay, control and manufacturing data, biological
materials, manufacturing or related technology, analytical methodology,
chemical and quality control procedures, protocols, techniques, improvements,
results and reports of experimentation and testing;

 

(s)                                  “Licensed Compound” shall mean AMD473, and
any analogues or derivatives or backup compounds of AMD473, the making, having made, using, selling, offering for sale or
importing of which would, but for the license granted herein, infringe a Valid
Claim of one or more of the AnorMED Patents;

 

(t)                                    “Licensed Product”  shall mean any pharmaceutical compositions approved as
a drug in the Territory in dosage form in any formulation that contains a
Licensed Compound as an active ingredient and that are packaged and labelled
for sale to the ultimate customer for use in the Field;

 

(u)                                 “NDA” means a complete New Drug Application and all supplements
thereto filed with the FDA including all documents, data, and other information
concerning a Licensed Product which are necessary for, or included in, FDA
approval to market such Licensed Product as more fully defined in 21 C.F.R.
§ 314.5 et seq and such equivalent regulations or standards of
countries outside the United States as may be applicable to activities
anticipated hereunder;

 

(v)                                 “Net Sales” shall mean the [*] price for
Licensed Product sold or otherwise transferred to end
users of the Licensed Product,
less:

 

(i)                                     credits or allowances, if any, given or made
for [*] on account of or in relation to the invoiced sales price of Licensed
Products

 

(ii)                                  if actually allowed or given [*] on account of
or in relation to the invoiced sales price of Licensed Products,

 

(iii)                               [*] related to or based upon sales of Licensed
Products [*], and

 

(iv)                              [*], if any, incurred on account of or in
relation to the invoiced sales price of Licensed Products.

 

Any Licensed Product sold or otherwise transferred [*] shall be deemed invoiced
at its fair market price in such country of sale or transfer.

 

“Net Sales” shall not include any amount for:

 

(v)                                 [*],
and

 

(vi)                              [*].

 

3

 

For the purposes of the definition of “Net Sales”, “control”
in the definition of Affiliate shall mean direct or indirect beneficial
ownership of [*] interest in the
income of a Person or such other relationship as, in fact, constitutes actual
control;

 

(w)                               “Patent” shall mean:

 

(i)                                     any issued patent or patent application,

 

(ii)                                  all continuations and continuations-in-part
applications to the issued patent or patent application set out in Paragraph
(i) (solely to the extent such continuations-in-part applications contain
subject matter on which claims issuing obtain the benefit of a priority date of
any patent or patent application set out in Paragraph (i)),

 

(iii)                               all divisions, patents of addition, reissues,
renewals and extensions of any of the patent, patent application, continuations
and continuations-in-part applications set out in Paragraphs (i) and (ii), and

 

(iv)                              all foreign counterparts of any of the
foregoing (including, without limitation, European Supplementary Protection
Certificates or its equivalent);

 

(x)                                   “Person” shall mean and include any
individual, corporation, partnership, firm, joint venture, syndicate,
association, trust, government body and any other form of entity or
organization;

 

(y)                                 “Phase II”  shall
mean that portion of the FDA submission and approval process which provides for
the initial trials of a Licensed Compound and/or Licensed Product on a limited
number of patients for the purposes of determining dose and evaluating safety
and efficacy in the proposed therapeutic indication as more fully defined in 21
C.F.R. § 312.21(b), and such equivalent regulations or standards of
countries outside the United States as may be applicable to activities
conducted hereunder;

 

(z)                                   “Phase III”  shall
mean that portion of the FDA submission and approval process which provides for
continued trials of a Licensed Compound and/or Licensed Product on sufficient
numbers of patients to establish the safety and efficacy of a Licensed Compound
and/or Licensed Product and generate, if required, pharmacoeconomics data to
support regulatory approval in the proposed therapeutic indication as more
fully defined in 21 C.F.R. § 312.21(c), and such equivalent regulations or
standards of countries outside the United States as may be applicable to activities
conducted hereunder;

 

(aa)                            “Prime Rate” shall mean the
rate of interest that the Royal Bank of Canada has announced as the prime rate as the reference rate to determine interest payable on commercial
loans to its most creditworthy customers on the last Business Day of the calendar quarter
immediately preceding the date of the amount due under the Agreement;

 

(bb)                          “Recall” shall mean:

 

(i)                                     any action to recover possession of any
Licensed Product shipped to Third Parties (for this purpose, the definition of
Third Parties shall not include any Affiliate, where “control” in the
definition of Affiliate shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship as, in
fact, constitutes actual control); or

 

(ii)                                  any action by the FDA or any other applicable
governmental or regulatory agency in any jurisdiction, to detain or destroy
quantities of any Licensed Product intended for commercial sale or distribution
of such Licensed Product or to prevent release of such Licensed Product for
commercial sale or distribution.

 

“Recalled” and “Recalling” shall have
comparable meanings;

 

(cc)                            “Regulatory Approval” shall mean any and all
approvals (including pricing and reimbursement approvals), licenses,
registrations or authorizations of any federal, state, provincial or local
regulatory agency, department, bureau or other governmental entity, necessary
for the commercial manufacture, use, storage, import, transport, marketing, and
sale or distribution of a Licensed Product in a country or regulatory
jurisdiction in the Territory in the Field;

 

(dd)                          “Sublicensing
Milestone Revenue” shall
mean all revenues (including profits on the commercial
manufacture by NeoRx or its Affiliates of Licensed Compounds and Licensed
Products), receipts, monies,

 

4

 

milestone
payments and research fees (in respect of research fees, only to the extent
that same are in excess of reimbursement for the direct costs and indirect
costs of research and development or pursuit of Regulatory Approval undertaken
by NeoRx or its Affiliates pursuant to a written research or development plan),
payments (including amounts received from the sale of shares in the capital
stock of NeoRx in excess of the Current Market Value for such shares), license
fees and the fair market value of all other consideration collected or received
by NeoRx or its Affiliates whether by way of cash, or credit or any barter,
benefit, advantage, or concession relating to any sublicense agreements
relating to any Valid Claims which form a part of the AnorMED Patents licensed
to NeoRx under Section 3.1, the AnorMED Know-how licensed to NeoRx under
Section 3.1, or otherwise to any Licensed Products.  For the purposes of the definition of “Sublicensing
Milestone Revenue”, the term “indirect costs” shall mean costs incurred for the
benefit of the Development Program or the commercialization of a Licensed
Product, excluding directly identified costs (direct costs), and including
facility rental costs; utilities costs; laboratory and manufacturing equipment
depreciation; and salaries, vacation pay, sick leave pay, health insurance
premiums, FICA taxes (or their equivalent) and pension costs for employees, but
only to the extent that such employees’ work benefits the Development Program
or the commercialization of a Licensed Product.  For the
avoidance of doubt:

 

(i)                                     milestone payments collected
or received by NeoRx or its Affiliates for reaching an annual, cumulative or otherwise measured sales-related
milestone criteria shall be included in the calculation of Sublicensing
Milestones Revenue and not Sublicensing Sales Revenue,
and

 

(ii)                                  Sublicensing
Milestone Revenue shall exclude all Sublicensing Sales Revenue.

 

For the purposes of the definition of “Sublicensing Milestone Revenue”, “control” in the definition of Affiliate shall mean direct or
indirect beneficial ownership of [*]
interest in the income of a Person or such other relationship as, in fact,
constitutes actual control.  In the event of any dispute regarding whether
any cash, or credit or any barter, benefit, advantage, or concession should be
included in Sublicensing Milestone Revenue, or the fair market value of any
consideration collected or received by NeoRx or its Affiliates by way of credit
or any barter, benefit, advantage, or concession, such dispute shall be
resolved pursuant to Section 19.2;

 

(ee)                            “Sublicensing
Sales Revenue” shall
mean all revenues, receipts, monies, payments and
royalties collected or received by NeoRx or its Affiliates whether by way of
cash, or credit or any barter, benefit, advantage, or concession calculated as
a percentage of Net Sales of Licensed Products by sublicensees of NeoRx or
NeoRx’ Affiliates.  For the purposes of
the definition of “Sublicensing Sales
Revenue”, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship
as, in fact, constitutes actual control. 
In the event of any dispute
regarding whether any cash, or credit or any barter, benefit, advantage, or
concession should be included in Sublicensing Sales Revenue, or the fair market
value of any consideration collected or received by NeoRx or its Affiliates by
way of credit or any barter, benefit, advantage, or concession, such dispute
shall be resolved pursuant to Section 19.2;

 

(ff)                                “Term” shall have the meaning set forth in
Section 14.1;

 

(gg)                          “Territory” shall mean world-wide, except
Japan;

 

(hh)                          “Third Party” shall mean any Person other than
NeoRx, AnorMED or their respective Affiliates; and

 

(ii)                                  “Valid Claim” shall mean, with respect to
each country in the Territory:

 

(i)                                     a claim of a pending patent application,
provided that the patent application has not been pending for longer than [*]
after the date from which such application claims priority, and

 

(ii)                                  a claim of an issued, unexpired patent or a
claim of an issued, unexpired patent term extended by the European
Supplementary Protection Certificate(s) or its equivalent,

 

that has not been:

 

(iii)                               permanently revoked, held invalid, unpatentable
or unenforceable by a final decision of a court or governmental agency of
competent jurisdiction, which decision is unappealable or was not appealed
within the time allowed therefor, or

 

5

 

(iv)                              admitted in writing to be invalid or
unenforceable by the holder(s) by reissue, disclaimer or otherwise.

 

1.2                               Other
Definitions.

 

Any words defined elsewhere in this Agreement shall have the particular
meaning assigned to the words thereto.

 

Article 2 DEVELOPMENT
PROGRAM.

 

2.1                               Development
Program.

 

NeoRx, at its cost and expense, in its commercially reasonable
discretion, shall conduct research and development to evaluate the use of the
Licensed Compound and/or the Licensed Product (the “Development Program”),
including but not limited to human clinical studies through to NDA approval for
the Licensed Compound and/or the Licensed Product, including the clinical
studies set out in Exhibit B.

 

2.2                               AnorMED
Assistance.

 

(a)                                  AnorMED, at NeoRx’ written request, shall
provide to NeoRx, for a period of [*] commencing on the Effective Date,
reasonable technical assistance of up to [*] located at AnorMED’s Langley
facilities to assist NeoRx in the transfer to NeoRx of
technical information relating to the AnorMED Patents and AnorMED Know-How licensed to NeoRx under this
Agreement.

 

(b)                                 Following the expiration of [*] after the
Effective Date or if NeoRx’ requirements for additional reasonable technical
assistance during the first six (6) months exceed one half of one FTE, AnorMED
will provide, upon written request from NeoRx, additional reasonable technical
assistance of up to [*] located at AnorMED’s Langley facilities, which AnorMED
will charge to NeoRx at the rate of [*] per FTE, to:

 

(i)                                     participate with and, at NeoRx’ written
request, advise NeoRx in carrying out the Development Program; and

 

(ii)                                  assist NeoRx, at NeoRx’ written request, in
determining its requirements of Licensed Compound and other materials for the Development
Program.

 

2.3                               Progress
Reports.

 

(a)                                  NeoRx shall keep AnorMED informed of the
progress of the development and commercialization of
the Licensed Compounds and/or the Licensed Products, and NeoRx shall provide to AnorMED, on a
calendar quarterly basis, a written report updating AnorMED on NeoRx’ progress
thereon during the past calendar quarter.

 

(b)                                 In
the event that AnorMED grants licenses to Third Parties under the AnorMED
Patents outside the Territory, AnorMED shall provide to NeoRx, on a calendar quarterly basis or as soon as
practicable after receipt from such Third Parties, written reports setting out
the information provided by such Third Party licensees on their progress in the
development and commercialization of the Licensed
Compounds and/or the Licensed Products during the past calendar quarter.

 

(c)                                  The written reports provided under this
section shall include [*].

 

(d)                                 Notwithstanding
the reporting requirements set out herein, each party agrees to use reasonable
efforts to provide to the other party during the Term prompt written notice of
material events in the development and commercialization of the Licensed
Compounds and Licensed Products.

 

2.4                               Committee; Committee Meetings

 

The
parties shall establish a committee composed of an equal number of
representatives, [*] for the purpose
of communication between the parties regarding the progress of development and
commercialization activities with respect to Licensed Products.  Such committee shall meet [*], either in person or by teleconference,
at such time and location as may be mutually agreed by the parties and provide
the parties with a forum to update each other regarding:

 

6

 

(a)                                  [*]

 

(b)                                 [*] and

 

(c)                                  [*].

 

Neither
party will be obligated under this Section 2.4 to disclose its
Confidential Information if such Confidential Information is not directly
relevant to the license granted to NeoRx under Article 3 of this
Agreement.  In no event are the
communications between the parties intended to abrogate the parties’ discretion
and independence in conducting their business activities.

 

Article 3 GRANT OF
LICENSE.

 

3.1                               Grant
of License.

 

Subject to the terms and conditions in this Agreement, AnorMED hereby
grants to NeoRx an exclusive, royalty-bearing license, with the right to grant
sublicenses, under the AnorMED Patents and the AnorMED Know-How to research,
develop, make, have made, use, have used, sell, have sold, offer for sale,
import and export the Licensed Compound and/or the Licensed Product in the
Field in the Territory for the Term.

 

3.2                               Right to Grant Sublicenses.

 

(a)                                  NeoRx shall have the right to grant sublicenses
of the license under Section 3.1 to any Person, without the consent of
AnorMED, provided that where NeoRx grants a sublicense to its Affiliates, the obligations and liabilities of such Affiliates and NeoRx under
this Agreement shall be joint and several and AnorMED shall not be obliged to
seek recourse against an Affiliate before enforcing its rights against
NeoRx.  For greater certainty it is
hereby confirmed that any default or breach by an Affiliate of NeoRx of any
term of this Agreement will also constitute a default by NeoRx under this
Agreement.

 

(b)                                 NeoRx
shall furnish to AnorMED a copy of each sublicense agreement entered into
hereunder within 30 days after execution thereof, provided that such copy may
be redacted to exclude provisions relating to any drugs or products that are
not Licensed Compounds or Licensed Products, but which shall include all
provisions required to confirm compliance with this Agreement, including the
calculation of royalties and the conduct of audits hereunder.  All sublicense agreements furnished to
AnorMED hereunder shall be deemed to be the Confidential Information of NeoRx
and shall be subject to AnorMED’s obligation of confidentiality under
Article 11, and for the purpose of such obligation, [*].

 

(c)                                  NeoRx
shall include in each sublicense agreement (including any sublicense granted to
an Affiliate) covenants by the sublicensee that are consistent with the terms
and conditions set out in this Agreement and that upon termination of this
Agreement, such sublicense agreement shall be automatically converted to a
direct license from AnorMED.

 

3.3                               Reservation of Rights.

 

AnorMED
hereby reserves the right to use and license the AnorMED Patents and AnorMED
Know-How:

 

(a)                                  for
non-commercial research and testing in the Territory;

 

(b)                                 to
make or have made Licensed Compound or Licensed Product in the Territory for
use outside of the Territory; and

 

(c)                                  for
any and all uses outside of the Territory.

 

In connection
with Subsection 3.3(b) above, where AnorMED or any of its Affiliates
desire to contract with a Third Party (other than AnorMED’s licensees outside
the Territory) for the manufacture of Licensed Compound and/or Licensed Product
for use outside the Territory, NeoRx shall have a right of first negotiation to
manufacture Licensed Compound and/or Licensed Product for AnorMED for use
outside the Territory in which case the transfer price to be charged by NeoRx
for the supply of Licensed Compound and/or Licensed Product will be [*].

 

7

 

3.4                               Transfer of Information.

 

After
the Effective Date, AnorMED shall promptly deliver to NeoRx copies of the AnorMED Know-How, in written or other tangible
form, together with assistance in connection therewith in accordance with
Section 2.2.

 

Article 4 COMMERCIALIZATION

 

4.1                               Diligence in Commercialization.

 

(a)                                  In the event that the clinical studies
conducted by NeoRx under this Agreement demonstrate the requisite safety and
efficacy reasonably required for commercialization of a Licensed Product, NeoRx
shall, at its sole cost and expense, utilize commercially reasonable efforts
and sound and reasonable business practice and judgment in developing and promoting, marketing, selling and otherwise commercializing the Licensed Product in the
Field in the Territory, including obtaining the appropriate Regulatory
Approvals therefor, to meet or cause to be met the
market demand for the Licensed Products.

 

(b)                                 NeoRx agrees that it will utilize sound and
reasonable business practice and judgment in determining the countries in the
Territory in which it desires to sell the Licensed Product and it will use
commercially reasonable efforts to achieve the First Commercial Sale of the
Licensed Product in such countries [*] after obtaining Regulatory Approval for
the sale of the Licensed Product in such countries, in accordance with the
normal practices and standards established by NeoRx or its marketing partner or
sublicensee for such country, as the case may be.

 

(c)                                  For the purposes of Subsection 4.1(b),
NeoRx or its marketing partner or sublicensee, as the case may be, shall not be
in breach of its obligations under Subsection 4.1(b) during any particular
period during the Term where it determines utilizing sound and reasonable
business practice and judgment that a decision of a relevant governmental
authority in a country relating to the price or reimbursement for a Licensed
Product renders the commercial sale of the Licensed Product commercially
unviable in the country during such period.

 

4.2                               Decision Not to Commercialize.

 

(a)                                  If NeoRx, in its sole discretion, at any time
during the Term determines for any reason not to proceed with the
commercialization of a Licensed Product in a particular country in the
Territory, NeoRx agrees to promptly disclose any such determination to AnorMED.

 

(b)                                 In the event that NeoRx determines that it will
not commercialize a Licensed Product in one or more of the following major
countries or jurisdictions in the Territory: 
[*]

 

NeoRx shall provide written notice of the
determination to AnorMED, and such notice shall be deemed to be notice under
Section 14.3 that NeoRx desires to terminate the license granted to NeoRx
under Section 3.1 in respect of the Licensed Compound and the Licensed
Product in those countries or jurisdictions. 
In such event, the Territory shall be deemed to be reduced in scope to
exclude from the Territory the country specified in the notice.  Upon the expiration of the notice period set
out in Section 14.3, the specified country or jurisdiction shall be
excluded from the Territory and NeoRx’ rights and obligations in respect of the
excluded country or jurisdiction shall be governed by Subsection 14.3(d).

 

Article 5 SUPPLY OF
LICENSED COMPOUNDS AND LICENSED PRODUCTS.

 

5.1                               Supply
of AMD473.

 

In consideration of the initial license fees paid by NeoRx to AnorMED
under Section 6.2 prior to commercialization of a Licensed Product,
AnorMED agrees to supply to NeoRx [*] such quantities of AMD473 as AnorMED has
on hand in its inventories as of the Effective Date.  NeoRx shall be responsible for paying all [*] that may apply to
the supply of AMD473 hereunder, and if any such amounts are paid by AnorMED,
NeoRx shall promptly reimburse AnorMED for any such amounts upon request.  The foregoing shall be AnorMED’s sole
obligation to NeoRx with respect to the supply of any quantity of AMD473 or any
other Licensed Compound.

 

8

 

5.2                               Supply of Licensed Product.

 

Except for the manufacture of [*], NeoRx shall be responsible for the
manufacture and processing of all developmental and commercial supplies of all
Licensed Products in the Field in the Territory, at its cost and expense.

 

5.3                               Delivery.

 

(a)                                  AnorMED shall deliver any AMD473 to be supplied
hereunder to NeoRx-designated facilities, at NeoRx’ sole cost and expense,
F.C.A. in accordance with the shipping specifications therefor.  In the absence of written and timely
transport carrier and/or delivery instructions from NeoRx, AnorMED shall have
the right to make commercially reasonable arrangements therefor.

 

(b)                                 Title to and risk of loss for all AMD473
delivered hereunder shall pass to NeoRx upon transfer to a common carrier under
Subsection 5.3(a).

 

5.4                               Permits
and Licenses.

 

(a)                                  AnorMED shall be responsible for obtaining all
necessary import and/or export licenses or permits (if applicable) for the
supply of AMD473 under Section 5.1. 
NeoRx shall be responsible for the payment of [*], etc., in connection
with such supply and delivery to NeoRx of AMD473.

 

(b)                                 Except as otherwise provided in
Subsection 5.4(a), NeoRx shall be responsible for obtaining all necessary
import and/or export licenses or permits (if applicable) and for the payment of
[*] in connection with the supply and delivery to NeoRx of all developmental
and commercial supplies of all Licensed Compounds and/or Licensed Products.

 

Article 6 LICENSE FEES.

 

6.1                               Additional Definitions.

 

For the purposes of this Agreement:

 

(a)                                  “Common Shares” means common shares in the
capital stock of NeoRx;

 

(b)                                 “Current Market Price” of the Common Shares
on any date means [*], provided that if the Common Shares are not listed on any
stock exchange, the “Current Market Price” shall be determined by agreement
between the board of directors of AnorMED and the board of directors of NeoRx,
acting in good faith;

 

(c)                                  “Daily Closing Price” for each Trading Day
shall mean the last reported sales price for sales of Common Shares on NASDAQ
on which such shares are listed and posted for trading; and

 

(d)                                 “Trading Day” shall mean any day on which
NASDAQ is open for business and on which Common Shares have been traded.

 

6.2                               Initial
License Fee.

 

NeoRx shall pay to AnorMED, an initial license fee of US$2,000,000,
payable as follows:

 

(a)                                  upon execution of this Agreement, US$1,000,000 in cash by bank transfer to the co-ordinates given by
AnorMED to NeoRx; and

 

(b)                                 within five (5) Business Days after execution
of this Agreement, US$1,000,000 in unregistered Common Shares, where the number
of Common Shares payable is determined by dividing US$1,000,000 by the
Current Market Price of a Common Share as of the Effective Date and
disregarding any remaining fractional Common Share.

 

6.3                               Milestone
Payments.

 

In
consideration of the license granted under Article 3, NeoRx shall pay to AnorMED the following milestone payments upon the first occurrence of each
of the development and commercialization milestones set forth below:

 

(a)                                  [*] upon [*];

 

9

 

(b)                                 [*] upon [*];

 

(c)                                  [*] upon [*];

 

(d)                                 [*] upon [*]; and

 

(e)                                  [*] upon [*].

 

For the
purposes of this Section 6.3, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship
as, in fact, constitutes actual control.

 

6.4                               Form of Milestone Payments.

 

(a)                                  Each
milestone payment to be made by NeoRx under Subsections 6.3(a) and 6.3(b) shall
be made, in NeoRx’ sole discretion, either:

 

(i)                                     in
cash, by bank transfer to the co-ordinates given by AnorMED to NeoRx; or

 

(ii)                                  in a
combination of:

 

(A)                              cash,
payable as set out above, and

 

(B)                                the
issuance of the number of Common Shares having a value equivalent to the amount
to be paid in Common Shares determined by dividing such amount by the Current
Market Price of a Common Share as of the date of achievement of the applicable
milestone and disregarding any remaining fractional Common Share,

 

provided that a minimum of [*] set out in Subsections
6.3(a) and 6.3(b), as applicable, shall be paid in cash.

 

(b)                                 Each
milestone payment to be made by NeoRx under Subsections 6.3(c), 6.3(d) and
6.3(e) shall be made in cash, by certified cheque payable to the order of
AnorMED or by bank transfer to the co-ordinates given by AnorMED to NeoRx.

 

6.5                               Notice of Milestone and Payment.

 

For
each milestone payment to be made by NeoRx under Section 6.3:

 

(a)                                  NeoRx
shall provide prompt written notice to AnorMED of the achievement of the
milestone setting out the milestone achieved and whether the milestone payment
will be made in cash or in Common Shares;

 

(b)                                 if
required by the parties, AnorMED will provide a written invoice to NeoRx for
the applicable milestone payment; and

 

(c)                                  notwithstanding
the terms of any invoice provided under Subsection 6.5(b), NeoRx shall
provide to AnorMED the full amount of the milestone payment, whether in cash
and/or Common Shares, [*] after the achievement of the milestone.

 

6.6                               Nature
of Payments.

 

The payments set forth in Sections 6.2 and 6.3 shall be non-refundable
and shall not be creditable against royalties payable by NeoRx to AnorMED
pursuant to Article 7.

 

Article 7 ROYALTY
PAYMENTS.

 

7.1                               ICR
Agreement.

 

AnorMED
agrees that it shall pay all royalties arising from NeoRx’ activities under
this Agreement that are or will be due and payable to Third Parties arising
from any and all agreements entered into by AnorMED prior to the Effective
Date, including, without limitation, the ICR Agreement.

 

10

 

7.2                               Basic
Royalty.

 

In
consideration of the license granted under Article 3, NeoRx shall pay to
AnorMED, without
duplication, in respect of each Licensed Product:

 

(a)                                  in each country in the Territory where the Licensed Product sold is
covered by one or more Valid Claims [*];
and

 

(b)                                 in each country in the Territory where the
Licensed Product sold is covered by one or more Valid Claims [*]; and

 

(c)                                  in each country in the Territory where the
Licensed Product sold is covered by one or more Valid Claims [*]; and

 

(d)                                 in each country in the Territory where there is
no Valid Claim [*];

 

in each of Subsections 7.2(a), 7.2(b), 7.2(c)
and 7.2(d), until the later of either:

 

(e)                                  the date of expiration of the last Valid Claim
within the AnorMED Patents covering the Licensed Product in the country of
manufacture or sale, as applicable; or

 

(f)                                    the expiration of [*] after First Commercial
Sale of such Licensed Product in the country of sale.

 

For the
purposes of this Section 7.2, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] in the income of a Person or such other relationship as, in
fact, constitutes actual control.   For
purposes of clarification, no multiple royalties shall be due or payable under
this Section 7.2 because the sale or manufacture of any Licensed Product
is or shall be covered by more than one Valid Claim within the AnorMED Patents in the country of
manufacture and/or the country of sale.

 

7.3                               Sublicensing Royalty.

 

In
consideration of the license granted under Article 3, NeoRx shall pay to
AnorMED, without
duplication, in respect of any Licensed Compound and/or
Licensed Product:

 

(a)                                  a royalty of [*] of Sublicensing Milestone
Revenue collected or received; and

 

(b)                                 a royalty of [*] of Sublicensing Sales Revenue
collected or received, provided that the payment set out in this
Subsection 7.3(b) shall be subject to an minimum calendar quarterly
payment equal to the cumulative sum of:

 

(i)                                     in each country in the Territory where a Licensed Product sold is
covered by one or more Valid Claims [*];
and

 

(ii)                                  in each country in the Territory where the
Licensed Product sold is covered by one or more Valid Claims [*]; and

 

(iii)                               in each country in the Territory where the
Licensed Product sold is covered by one or more Valid Claims [*]; and

 

(iv)                              in each country in the Territory where there is
no Valid Claim [*];

 

in
each of Subsections 7.3(a) and 7.3(b), until the later of either:

 

(c)                                  the date of expiration of the last Valid Claim
within the AnorMED Patents covering the Licensed Product in the country of
manufacture or sale, as applicable; or

 

(d)                                 the expiration of [*] after First Commercial
Sale of such Licensed Product in the country of sale.

 

For the
purposes of this Section 7.3, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship
as, in fact, constitutes actual control. 
For purposes of clarification, no multiple royalties shall be due or
payable under this Section 7.3 because the sale or manufacture of any
Licensed Product is or shall be covered by more than one Valid Claim within the AnorMED Patents in the country of
manufacture and/or the country of sale.

 

11

 

7.4                               Third Party License Fees and Royalties.

 

AnorMED
and NeoRx agree that where Patent rights of a Third Party, excluding Patent
rights of a Third Party under sublicenses held as of the Effective Date by NeoRx
or its Affiliates (for this purpose, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship
as, in fact, constitutes actual control), covering either the composition of
matter of a Licensed Compound or the use of the Licensed Compound should exist
in any country in the Territory, and if in NeoRx’ reasonable judgement it would
be impractical or impossible for NeoRx to commercialize a Licensed Product
incorporating the Licensed Compound without obtaining a license under such
Patent rights, then for each such Licensed Product on a calendar quarterly
basis, NeoRx shall be entitled to a credit against royalties payable to AnorMED
under either Sections 7.2 or 7.3 on account of such Licensed Product in such
country, equal to [*] of the royalties paid
by NeoRx under such license in respect of such Licensed Product in such
country in the calendar quarter for which such royalties are paid, provided
that, for any calendar quarter, the aggregate credit hereunder for a Licensed Product in any country
shall not exceed [*] of the royalty determined under Sections 7.2 and 7.3 for
that country.

 

7.5                               Royalty Payments Upon Termination.

 

If this Agreement is terminated in accordance with Article 14 with
respect to all or some of the Licensed Products, NeoRx shall continue to pay
AnorMED all amounts earned pursuant to this Article 7 prior to the date of
termination and any amounts earned thereafter as a result of sales of residual
inventory of such terminated Licensed Products.  In addition, NeoRx shall continue to pay to AnorMED all amounts
payable hereunder with respect to Licensed Products, if any, with respect to
which this Agreement is not terminated.

 

Article 8 PAYMENT TERMS.

 

8.1                               Invoices and Payments.

 

AnorMED shall provide to NeoRx invoices setting out any amounts owed by
NeoRx to AnorMED under this Agreement, including, without limitation, payments
in respect of assistance provided under Section 2.2 and patent prosecution
and maintenance under Article 10. 
All such amounts shall be due and payable 30 days after receipt of the
date of the invoice.  Invoices for FTE
reimbursement and patent prosecution and maintenance will be invoiced quarterly
and be accompanied by a statement detailing the actual hours incurred during
the quarter.

 

8.2                               Payment
of Royalties.

 

All royalties payable under Sections 7.2 and 7.3 shall be payable within
60 days after the last day of the calendar quarter during the royalty periods
set out therefor.  NeoRx will provide to
AnorMED within 30 days after the last day of each calendar quarter, an estimate
of the royalties payable by NeoRx under this Agreement for such calendar
quarter.

 

8.3                               Currency
of Payment.

 

All amounts payable to AnorMED under this Agreement shall be payable in
United States Dollars, by bank transfer of immediately available funds to a
bank account designated by AnorMED, at AnorMED’s option.  Calendar quarterly sales amounts shall be
translated from other currencies to U.S. Dollars by using an average rate of
exchange computed using the rate of exchange quoted under Foreign Exchange in
the Wall Street Journal as of the end of the current quarter plus the rate of
exchange as of the end of the immediately preceding quarter and dividing by 2.

 

8.4                               Currency Transfer Restrictions.

 

If in any country payment or transfer of funds out of such country is
prohibited by law or regulation, the parties hereto shall confer regarding the
terms and conditions on which Licensed Products shall be sold in such
countries, including the possibility of payment of royalties to AnorMED in
local currency to a bank account in such country or the renegotiation of
royalties for such sales, and in the absence of any other agreement by the
parties, such funds payable to AnorMED shall be deposited by NeoRx in whatever
currency is allowable in a bank designated in that country as acceptable to
AnorMED.

 

12

 

8.5                               Taxes.

 

(a)                                  For the purposes of this Section 8.5, “Taxes”
shall include costs, expenses, taxes, tariffs, customs duties, brokerage fees,
insurance premiums and other charges, including, without limitation, social
services taxes, goods and services tax, value added, excise and other sales
taxes.

 

(b)                                 AnorMED shall be responsible for and shall pay
all Taxes assessed or levied in connection with any activities performed by
AnorMED or payments made to AnorMED under this Agreement.

 

(c)                                  NeoRx shall be responsible for and shall pay
all Taxes assessed or levied in connection with any activities performed by
NeoRx under this Agreement.

 

(d)                               If any law or regulation in any country
requires the withholding by NeoRx of any Taxes due on payments to be remitted
to AnorMED under this Agreement, such Taxes shall be deducted from the amounts
paid to AnorMED, provided that NeoRx shall take all reasonable measures to
reduce the amount of such Taxes.  If the
Taxes are deducted from the amounts paid to AnorMED, NeoRx shall furnish
AnorMED the originals of all official receipts for such Taxes and such other
evidence of such Taxes and payment thereof as may be reasonably requested by
AnorMED and shall provide any reasonable assistance or co-operation which may
be requested by AnorMED in connection with any efforts by AnorMED to obtain a
credit for such Taxes, including the characterization of payments made
hereunder so that it may take advantage of any and all benefits under any tax
treaty between Canada and any foreign countries.

 

8.6                               Net
Sales Reports.

 

(a)                                  NeoRx agrees to submit to AnorMED, concurrently
with the quarterly royalty payments made pursuant to Section 8.2, written
reports (consistent with GAAP) setting out for the calendar quarter, for each
type of Licensed Product:

 

(i)                                     all amounts received by NeoRx and/or its
Affiliates from the sale of the Licensed Product to end-users of the Licensed
Product;

 

(ii)                                  details of the quantities of the Licensed
Product sold in each country in the Territory, whether sold by NeoRx or its
Affiliates or any sublicensees;

 

(iii)                               the amount of any deductions taken from the
amounts received by NeoRx and/or its Affiliates, as applicable, from the sale
of the Licensed Product to end users of the Licensed Product in calculating Net
Sales of the Licensed Product;

 

(iv)                              the amount of any deductions taken from the
amounts received by any sublicensees from the sale of the Licensed Product to
end users of the Licensed Product in calculating Net Sales of the Licensed
Product by such sublicensees;

 

(v)                                 the amount of Net Sales for the Licensed
Product by NeoRx and its Affiliates;

 

(vi)                              the amount of Net Sales for the Licensed
Product by any sublicensees;

 

(vii)                           the amount of Sublicensing Milestone Revenue
received;

 

(viii)                        the amount of Sublicensing Sales Revenue
received;

 

(ix)                                the amount of any Third Party royalties payable
for the Licensed Product; and

 

(x)                                   the royalties due and payable to AnorMED
pursuant to Sections 7.2 and 7.3.

 

For the purposes of this Subsection 8.6(a), “control”
in the definition of Affiliate shall mean direct or indirect beneficial ownership
of [*] interest in the income of a
Person or such other relationship as, in fact, constitutes actual control.

 

(b)                                 AnorMED shall submit to NeoRx a detailed
statement of account within 60 days after the close of each calendar quarter
during the Term for:

 

(i)                                     any costs or expenses incurred related to the
prosecution and maintenance of the AnorMED Patents; and

 

(ii)                                  any charges for AnorMED assistance under
Section 2.2.

 

13

 

NeoRx’ obligation to reimburse AnorMED’s costs
and expenses for the prosecution and maintenance of the AnorMED Patents shall
be as set forth in Article 10.

 

8.7                               Accounts
and Audit.

 

(a)                                  Each party shall maintain, during the Term and
for a period of at least three (3) years thereafter, accurate and complete
records in accordance with GAAP of all transactions relating to the subject
matter of this Agreement, including:

 

(i)                                     in the case of NeoRx, records of all sales of
Licensed Products in the Territory and the collection or receipt of Sublicensing
Milestone Revenue and Sublicensing Sales Revenue, which shall show the
manufacturing, sales, use and other disposition of Licensed Products in
sufficient detail to determine the royalties payable to AnorMED pursuant to  Sections 7.2 and 7.3, if any; and

 

(ii)                                  in the case of AnorMED, records of all costs
and expenses relating to the prosecution and maintenance of the AnorMED
Patents.

 

(b)                                 During the Term of this Agreement [*], each
party (in this section, the “Audited Party”) shall permit the other
party (in this section, the “Requesting Party”), on reasonable advance
written notice, but in no event less than ten (10) Business Days, and at the
Requesting Party’s cost and expense, to arrange for the books and records
maintained by the Audited Party pursuant to Subsection 8.7(a) relating to
the subject matter of this Agreement to be examined from time to time during
the Audited Party’s regular business hours, but not more than once a year, by
an independent accounting firm selected by the Requesting Party and reasonably
acceptable to the Audited Party, provided that such independent accounting firm
and its accountants are bound by an obligation of confidentiality to disclose
to the Requesting Party only whether the royalty statements and payments made by
the Audited Party under this Agreement are accurate and, if not accurate, any
evidence of non-compliance with the terms and conditions of this
Agreement.  Any such examination shall
be restricted to records relating to the subject matter of this Agreement
covering [*] period.  The Requesting
Party shall provide to the Audited Party a copy of any audit reports prepared
under this subsection.

 

(c)                                  In the event the report demonstrates that NeoRx
has underpaid AnorMED, NeoRx shall pay the amount of such underpayment
immediately and where AnorMED is the Requesting Party, to the extent such
underpayment is more than [*] for the audited period, NeoRx shall reimburse
AnorMED for the expense of the audit.

 

(d)                                 In the event the report demonstrates that NeoRx
has overpaid AnorMED, NeoRx may deduct from future amounts owed to AnorMED such
overpayments and where NeoRx is the Requesting Party, to the extent such
overpayment is more than [*] for the audited period, AnorMED shall reimburse
NeoRx for the expense of the audit.

 

8.8                               Confidentiality of Reports.

 

Each party agrees that:

 

(a)                                  the information set forth in the reports
required by Sections 8.6 and 8.7; and

 

(b)                                 the records subject to examination under
Section 8.7;

 

shall be subject to the obligations of confidentiality set out in
Article 11 and shall be maintained in confidence by the receiving party
and by any independent accounting firm selected by such party, shall not be
used by such party or such accounting firm for any purpose other than
verification of the performance by the other party of its obligations
hereunder, and shall not be disclosed by the receiving party or such accounting
firm to any other person except for purposes of enforcing this Agreement.

 

8.9                               Interest.

 

NeoRx shall pay interest at a fixed rate per annum
equal to [*] in excess of the Prime Rate in effect on the date such amounts not
paid were due under this Agreement, or the maximum permissible rate allowed by
law (which under the state of Washington shall be deemed to be the laws
relating to the permissible rate of interest on commercial loans),

 

14

 

whichever is less, computed on the basis of the
actual number of days elapsed and a year of 365 days and continuing until such
amounts have been paid.

 

Article 9 INTELLECTUAL
PROPERTY.

 

9.1                               Existing Intellectual Property.

 

As between NeoRx and AnorMED:

 

(a)                                  title to, and ownership or control of all
rights in and to all Intellectual Property owned or licensed by NeoRx (other
than rights licensed to NeoRx by AnorMED) shall at all times remain with NeoRx
and no rights in or to any such Intellectual Property shall vest in AnorMED;
and

 

(b)                                 title to and ownership or control of all rights
in and to all Intellectual Property owned or licensed by AnorMED (other than
rights licensed to AnorMED by NeoRx) shall at all times remain with AnorMED
and, except as expressly granted under this Agreement, no rights in or to any
such Intellectual Property shall vest in NeoRx.

 

9.2                               Ownership of New Inventions.

 

(a)                                  During the Term, each of the parties shall
promptly disclose to the other in a timely fashion all inventions and
discoveries arising from the performance of the Development Program or other
development activities relating to Licensed Compounds and Licensed Products.

 

(b)                                 The parties agree that, except as otherwise
specifically set out in this Agreement, as between NeoRx and AnorMED, all
right, title and interest in and to all Know-How created or developed by a
party during the Term shall be owned by the creating or developing party and
shall be treated as such party’s Confidential Information under this
Agreement.  For greater certainty,
without limiting the generality of the foregoing, all data, results, regulatory
submissions and reports arising from the performance of the Development Program
and NeoRx’ other development activities under this Agreement shall be the
property of NeoRx.

 

(c)                                  NeoRx and AnorMED acknowledge and agree that:

 

(i)                                     AnorMED and its licensees outside of the
Territory will require access to NeoRx’ Know-How and Patents (including Patents
for Improvements under Section 9.3) arising from the performance of the
Development Program and NeoRx’ other development activities under this
Agreement and NeoRx hereby [*]

 

(ii)                                  NeoRx and its sublicensees in the Territory
desire access to any Know-How and Patents (including Patents for Improvements
under Section 9.3) created by AnorMED’s licensees outside the Territory in
the development of the Licensed Compounds and Licensed Products and AnorMED [*].

 

9.3                               Improvements

 

(a)                                  For
the purposes of this Section 9.3, “Improvements” means, in respect of any
Patents, any and all patents and any and all patent applications that claim
priority to such Patents (whether complete or incomplete or whether filed or
unfiled) including, but not limited to, provisional, non-provisional,
continuations and continuations-in-part applications, and divisional patent applications
and registrations in any jurisdiction world-wide.

 

(b)                                 To
the extent possible and unless precluded by any present or future agreement of
NeoRx or its sublicensees, [*].

 

(c)                                  The parties acknowledge and agree that the
ownership of [*].

 

9.4                               Trademarks.

 

(a)                                  NeoRx, as it deems appropriate, may originate,
select, apply to register and maintain one or more trademarks or tradenames
under which the Licensed Products will be marketed and sold or otherwise
distributed in the Territory.  NeoRx
will own and/or control any such trademarks and tradenames and will

 

15

 

be solely responsible for all decisions relating to the prosecution,
defense, maintenance and costs of such trademarks and tradenames, at its cost
and expense.

 

(b)                                 Except in the event of termination as provided
in Article 14, neither party shall have any right to use any trademark or
tradename of the other party.

 

Article 10 PATENTS;
PROSECUTION AND LITIGATION.

 

10.1                        Prosecution of Patents.

 

(a)                                  AnorMED shall have the right to prosecute and
maintain each Patent within the AnorMED Patents and except as otherwise provided
in this Article 10 shall do so in a timely manner.

 

(b)                                 At any time during the Term, NeoRx, in NeoRx’
sole discretion, may determine that any particular Patent within the AnorMED
Patents in any particular country in the Territory should not be prosecuted or
maintained for legal or commercial reasons and, in such event, shall so notify
AnorMED.  Upon receipt of such notice,
any Patents identified in such notice shall remain or be deemed to remain
within the AnorMED Patents for the purposes of the grant of rights by AnorMED
to NeoRx pursuant to Article 3 of this Agreement and NeoRx’ obligations
pursuant to Subsections 7.2(a), 7.2(b) and 7.2(c) for the payment of royalties
for any such Patents shall remain unchanged and continue at the royalty rate
for such Patent as of the date of NeoRx’ notice to AnorMED, provided that where
the discontinuance of the prosecution or maintenance of the Patent is due to
reasons of lack of patentability, invalidity or unenforceability of the Patent,
NeoRx’ obligations pursuant to Subsection 7.2(d) for the payment of
royalties for AnorMED Know-How shall apply. 
AnorMED, at AnorMED’s cost and expense and in AnorMED’s sole discretion,
may continue prosecution and/or maintenance of any particular Patent identified
in such notice

 

(c)                                  At any time during the Term, NeoRx, in NeoRx’
sole discretion, may request, by written notice delivered to AnorMED, that
AnorMED seek patent protection in one or more countries in the Territory not
then covered by the Patents within the AnorMED Patents.  Upon receipt of such notice, AnorMED shall
take reasonable steps to apply for patent protection in such countries.

 

10.2                        Patent Review and Recommendations.

 

(a)                                  Except for AnorMED Patents for which NeoRx has
discontinued prosecution or maintenance under Subsection 10.1(b), NeoRx
shall have the right to review all Patents and other proceedings,
communications, reports and observations relating to the AnorMED Patents in the
Territory and to provide comments and recommendations to AnorMED with respect
thereto, which comments and recommendations shall be adopted, incorporated
and/or acted upon by AnorMED, provided that such comments and recommendations
are reasonable.

 

(b)                                 Except for AnorMED Patents for which NeoRx has
discontinued prosecution or maintenance under Subsection 10.1(b), AnorMED
shall promptly disclose to NeoRx, keep NeoRx fully informed of, and supply to
NeoRx in a timely fashion:

 

(i)                                     the complete texts of each Patent within the
AnorMED Patents; and

 

(ii)                                  all information received concerning:

 

(A)                              the institution or possible institution of any
interference, opposition, re-examination, reissue, revocation, nullification or
any official proceeding involving any Patent within the AnorMED Patents, and

 

(B)                                the course of substantive patent prosecution or
other substantive proceedings related to any Patent within the AnorMED Patents,

 

including by providing NeoRx with copies of substantive communications,
search reports and Third-Party observations submitted to or received from
patent offices in the Territory, but excluding any such information that is
subject to attorney-client privilege.

 

(c)                                  Except for AnorMED Patents for which NeoRx has
discontinued prosecution or maintenance under Subsection 10.1(b), AnorMED
shall cooperate with NeoRx and use reasonable efforts to obtain any

 

16

 

applicable term extension for any Patent within the AnorMED Patents
covering a Licensed Product in the Territory. 
In connection with such efforts, NeoRx, within one (1) calendar month
after obtaining Regulatory Approval for a Licensed Product any country in the
Territory, shall provide to AnorMED information reasonably required by AnorMED
or otherwise requested by AnorMED to apply for the European Supplementary
Protection Certificate or its equivalent in respect of such Licensed Product
marketed in such country in the Territory.

 

(d)                                 Each party shall hold all information disclosed
to it by the other party under this section as Confidential Information
under Article 11.

 

10.3                        Patent
Costs.

 

NeoRx [*].  Notwithstanding the
previous sentence, in the event that NeoRx provides written notice to AnorMED
identifying any particular Patent in accordance with Section 10.1(b),
NeoRx shall [*].

 

10.4                        Right to
Assume Prosecution.

 

(a)                                  The
parties acknowledge and agree that AnorMED may, in the ordinary course of
prosecuting AnorMED’s patent portfolio and after the Effective Date of this
Agreement and in the reasonable opinion of AnorMED’s patent counsel or patent
agent, take such actions in the ordinary course (including discontinuance of a
Patent application) that do not materially impair the scope of Patent
coverage provided to NeoRx in the Field and the AnorMED Patents
remain adequate for the uses of the AnorMED
Patents
contemplated by NeoRx, pursuant to the license granted under Section 3.1.

 

(b)                                 In the event that
AnorMED intends to finally abandon any Patent within the AnorMED Patents in any
country in the Territory, AnorMED shall promptly notify NeoRx, and thereafter
NeoRx shall have a right to assume any and all prosecution and/or maintenance
activities with respect to such Patents in such country.  All rights granted to NeoRx with respect to
such Patent within the AnorMED Patents in such country shall continue in force
provided that NeoRx assumes, at its own expense, responsibility for the
prosecution and maintenance of such Patents in such country, and provided that
if there are Third Parties with legal interests in any such Patents outside the
Territory, the costs of the prosecution and maintenance of such Patents shall
be shared by NeoRx and AnorMED on a basis to be mutually agreed to by the
parties taking into account the rights in such AnorMED Patent granted to NeoRx
and the Third Parties respectively.  If
the parties cannot agree on an allocation of the costs of the prosecution and
maintenance of such AnorMED Patent, the dispute shall be resolved in accordance
with Section 19.2.

 

10.5                        Third Party Claims of
Infringement

 

In the event that any Third Party brings a
claim against AnorMED or
NeoRx or
any of their respective Affiliates (for this purpose, “control” in the
definition of Affiliate shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or
such other relationship as, in fact, constitutes actual control) that the manufacture, use, sale, distribution,
marketing or importation of a Licensed Compound or a Licensed Product infringes rights in
Intellectual Property owned or otherwise controlled by such Third Party (an “Infringement Suit”), the following shall apply:

 

(a)                                  the party receiving a
claim, or learns of the threat of such a claim, shall give the other party
prompt written notice detailing as many facts as possible concerning the claim;

 

(b)                                 NeoRx,
in its sole discretion, shall have the first right, but not an obligation, to defend against the
Infringement Suit;

 

(c)                                  if NeoRx
does not take steps to defend against the
Infringement Suit within 90 days after the date that notice thereof was
received from or delivered to AnorMED, AnorMED may take such legally
permissible action as it deems necessary or appropriate to defend against the Infringement Suit, but shall
not be obligated to do so;

 

(d)                                 the party defending
against the Infringement Suit (in this section, the “Litigating Party”) shall have
the right to control such litigation and shall bear all legal expenses
(including court costs and legal fees), but it shall have no right to settle
any dispute in any manner which would abridge the rights of the other party
under this Agreement.  By way of example
and not by way of limitation, neither party may stipulate or

 

17

 

admit to the invalidity or unenforceability of
any right in Intellectual Property. 
Before any action is taken by either party which could abridge the
rights of the other party hereunder, the parties agree to, in good faith,
consult with each other with a goal of adopting a mutually satisfactory
position;

 

(e)                                  the
Litigating
Party shall keep the other party fully informed of the actions and positions taken or proposed to be
taken by the Litigating
Party and the actions and positions taken by all other
parties to such litigation; and

 

(f)                                    in the event that NeoRx defends against the Infringement Suit, AnorMED may elect to participate formally in the Infringement Suit to the extent that the court may permit, provided that any
additional expenses generated by AnorMED’s formal participation shall be paid
by AnorMED.

 

10.6                        Infringement
by Third Parties.

 

In the event that either party reasonably
believes that a Third Party is or may be infringing, encroaching or violating
any Patent within the AnorMED Patents, then such party shall promptly notify
the other party in writing of such infringement, encroachment or violation, and
the following shall apply:

 

(a)                                  subject to
Subsection 10.6(b), in the event of any infringement, encroachment or
violation of any Patent within the AnorMED Patents in the Territory:

 

(i)                                     NeoRx, in its sole
discretion, shall have the first right, but not an obligation, to take or not
take whatever action it believes appropriate, and

 

(ii)                                  if NeoRx does not
commence action directed toward restraining or enjoining such infringement
within 90 days after the date that notice thereof was received from or
delivered to AnorMED, AnorMED may take such legally permissible action as it
deems necessary or appropriate to enforce such Patent within the AnorMED
Patents and restrain such infringement;

 

(b)                                 in the event of any
infringement, encroachment or violation of any Patent within the AnorMED
Patents in a country for which
NeoRx has discontinued prosecution or maintenance of such Patent under
Subsection 10.1(b):

 

(i)                                     AnorMED, in its sole
discretion, shall have the first right, but not an obligation, to take or not
take whatever action it believes appropriate, and

 

(ii)                                  if AnorMED does not
commence action directed toward restraining or enjoining such infringement
within 90 days after the date that notice thereof was received from or
delivered to NeoRx, NeoRx may take such legally permissible action as it deems
necessary or appropriate to enforce such Patent within the AnorMED Patents and
restrain such infringement;

 

(c)                                  the party taking
action against an alleged infringer shall have the right to control such action
and shall bear all legal expenses (including court costs and legal fees), but
it shall have no right to settle any dispute in any manner which would abridge
the reserved rights of the other party under this Agreement.  By way of example and not by way of
limitation, neither party may stipulate or admit to the invalidity or
unenforceability of any patent.  Before
any action is taken by either party which could abridge the rights of the other
party hereunder, the parties agree to consult, in good faith, with a goal of
adopting a mutually satisfactory position; and

 

(d)                                 the party taking
action shall keep the other party fully informed of the actions and positions taken or proposed to be
taken by it and the actions and positions taken by all other parties to such
litigation.

 

10.7                        Cooperation; Costs and Awards.

 

(a)                                  Each party agrees to
co-operate reasonably with the other party in any action the other party
defends or prosecutes pursuant to Sections 10.5 and 10.6, including, without
limitation, supplying essential documentary evidence and making essential
witnesses then in its employment available.

 

(b)                                 The Parties agree that
all amounts awarded by way of judgement, settlement or compromise in respect of
any action conducted hereunder, after payment or reimbursement of the parties’
respective costs and expenses arising from such action, shall be allocated [*].

 

18

 

10.8                        Cooperation with Other Licensees

 

NeoRx
acknowledges that AnorMED may grant licenses to Third Parties under the AnorMED
Patents outside the Territory, and that such licenses may include rights to
permit such Third Parties to defend or enforce Patents within the AnorMED
Patents.  To the extend that AnorMED
grants to a Third Party any license including rights to defend or enforce
Patents within AnorMED Patents, NeoRx will use commercially reasonable efforts
to cooperate with AnorMED and such Third Party in the defense or enforcement of
such Patents and, in connection with such efforts, will use good faith efforts
to determine, jointly with AnorMED and such Third Party, the course of action,
if any, necessary or appropriate to defend or enforce such Patents, as
applicable; provided that AnorMED includes provisions in its license with such
Third Party no less restrictive and comparable to this Section 10.8.

 

10.9                        Interference
Proceedings.

 

In the event that a party becomes aware of the declaration of any
interference proceeding by any patent authority in the Territory with respect
to any Patent within the AnorMED Patents, such party shall promptly notify the
other party in writing.  AnorMED shall
have the right to represent and manage AnorMED’s and NeoRx’ interests in such
proceeding.  AnorMED and NeoRx shall
assist one another and co-operate in any such proceeding.

 

10.10                 Status of Proceedings.

 

The parties shall keep one another informed of the status of all of
their respective activities regarding any litigation or settlement thereof
concerning any Licensed Compound and/or Licensed Product.

 

Article 11
CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.

 

11.1                        Obligation of Confidentiality.

 

It is
contemplated that in the course of the performance of this Agreement each party
may, from time to time, disclose Confidential Information to the other.  Each party agrees:

 

(a)                                  to
keep and use in strict confidence all Confidential Information of the other
party and to not, without the prior written consent of the other party,
disclose any such Confidential Information to any person or entity other than
its Affiliates (for this purpose, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship
as, in fact, constitutes actual control), corporate counsel, employees and
contractors who are under an obligation of confidentiality on terms
substantially similar to those set out in this Agreement, who have been
informed of the confidential nature of the Confidential Information and who
require such information in the performance of their duties;

 

(b)                                 not
to use, copy, duplicate, reproduce, translate or adapt, either directly or
indirectly, any of the Confidential Information of the other party for any
purpose other than the development and commercialization of the Licensed
Compounds and the Licensed Products under this Agreement, without the other
party’s prior written approval;

 

(c)                                  that
all copies, duplicates, reproductions, translations or adaptations of any
Confidential Information of the other party permitted to be made hereunder
shall be clearly labelled as confidential; and

 

(d)                                 to
use commercially reasonable efforts consistent with such party’s ordinary
business practices to prevent material in its possession that contains or
refers to Confidential Information of the other party from being discovered,
used or copied by Third Parties and that it shall use reasonable steps to
protect and safeguard all Confidential Information of the other party in its
possession from all loss, theft or destruction.

 

Upon
the termination of this Agreement, each party shall promptly return all
Confidential Information to the disclosing party; provided that each party may
retain one (1) archival copy thereof to permit such party to monitor compliance
with its obligations under this Article 11, or as may be required by applicable
law.

 

11.2                        Permitted Disclosures.

 

Nothing herein shall be construed as preventing NeoRx from disclosing
any Confidential Information received from AnorMED to any of its Affiliates,
sub-licensees or distributors, provided each Affiliate, sub-licensee and distributor

 

19

 

has undertaken in writing a similar obligation of confidentiality and
non-use with respect to the Confidential Information, with AnorMED stated as a
third-party beneficiary thereof.  For
the purpose of this Section 11.2, “control” in the definition of Affiliate
shall mean direct or indirect beneficial ownership of [*] interest in the income of a Person or such other relationship as, in
fact, constitutes actual control.

 

11.3                        Disclosure with Consent

 

A party
receiving Confidential Information may, with the written consent of the
disclosing party, disclose such Confidential Information to entities or persons
other than its corporate counsel, employees and contractors, on such terms and
conditions as the disclosing party may specify.

 

11.4                        Ownership of Confidential Information.

 

All Confidential Information disclosed by one party to the other shall
remain the Intellectual Property of the disclosing party.

 

11.5                        Press
Releases.

 

(a)                                  The
parties intend to issue a press release on the Effective Date regarding this
Agreement and the relationship of the parties in the form set out in Exhibit D.  Thereafter, during the Term, the parties
agree that no press release, public announcement or publication regarding this
Agreement or the relationship of the parties not previously made public shall
be made unless mutually agreed to, in writing, prior to the release or
dissemination of any such press release, public announcement or publication,
such agreement not to be unreasonably withheld or delayed .

 

(b)                                 Notwithstanding Subsection 11.5(a), each party shall have a right to issue press releases, public
announcements or publications regarding this Agreement or the relationship of
the parties without a requirement of consent of the other party to the extent
that information in any such press release, public announcement or publication
has been previously made public or released or to the extent as may be legally
required by, for example, the
rules and regulations of the Securities and Exchange Commission or similar
federal, state or foreign authorities, as determined in good faith by the
disclosing party.

 

(c)                                  Notwithstanding Subsection 11.5(a), each
party agrees to use reasonable good faith efforts to notify the other party
when it releases any information relating to this Agreement, including any
previously approved information and any information required to be disclosed by
the rules and regulations of the Securities and Exchange Commission or similar
federal, state or foreign authorities, and will promptly provide a copy of any
such disclosure to the other party.

 

11.6                        Publication.

 

Neither party shall publish or provide public disclosure of any
invention related to any Licensed Compound or any Licensed Product that is not
the subject of a filed patent application without at least 60 days prior
written notice of such planned publication or disclosure sent to the other
party.  In the event any such
dissemination is determined by the other party to be detrimental to its
Intellectual Property position, the disseminating party shall delay such
publication for a period sufficient, but in no event greater than an additional
60 days, to allow the other party to take the steps necessary to protect such
Intellectual Property, including the filing of any Patent applications and/or
deletion of the other party’s Confidential Information.

 

11.7                        Duration of Obligation

 

Unless
otherwise agreed by the parties in writing, the obligations of the parties
relating to Confidential Information set out in this Article 11 shall
survive the expiration or termination of this Agreement for a period of ten
(10) years.

 

Article 12 LEGAL AND
REGULATORY.

 

12.1                        Compliance with Laws.

 

NeoRx shall at all times in manufacturing, handling, loading, labeling,
shipping and delivering Licensed Products under this Agreement and in otherwise
carrying out its obligations under this Agreement:

 

20

 

(a)                                  comply with all applicable laws, rules,
regulations or other requirements applicable to NeoRx’ business and to the
manufacturing, handling, loading, labeling, shipping and delivering of Licensed
Compounds and/or Licensed Products to be supplied under this Agreement; and

 

(b)                                 obtain and maintain in full force and effect
all applicable licenses, permits, certificates, authorizations or approvals
from all governmental authorities necessary to conduct its business and
manufacture, handle, load, label, ship and deliver Licensed Compounds and/or
Licensed Products to be supplied under this Agreement.

 

In particular, but without limiting the generality of the foregoing,
NeoRx shall at all times comply with all environmental laws and obtain and
maintain in full force and effect all licenses, permits, certificates,
authorizations or approvals required by environmental laws, including those
relating to the handling, generation, transportation, treatment, storage and
disposal or other management of waste and regulated substances, including,
without limitation, hazardous and toxic substances.

 

12.2                        AMD473
Regulatory Activities.

 

(a)                                  In connection with the Development Program and
the commercialization of Licensed Products, in order to support NeoRx’
regulatory filings, NeoRx shall have copies of and access to originals of the
following information, as exists on the Effective Date:

 

(i)                                     all regulatory dossiers submitted to regulatory
authorities in respect of AMD473, provided:

 

(A)                              all such regulatory dossiers may be redacted to
remove information that is:

 

(1)                                  proprietary to AnorMED’s Third Party partner(s)
and not applicable to AMD473, or

 

(2)                                  proprietary to AnorMED and not applicable to
AMD473, and

 

(B)                                such dossiers not controlled by AnorMED will be
provided only in the event that AnorMED’s partners that control such dossiers
provide prior written approval, which approval AnorMED will use reasonable
commercial efforts to obtain;

 

(ii)                                  all AMD473 drug safety filings by AnorMED;

 

(iii)                               all AMD473 drug safety data produced by or on
behalf of AnorMED in order to support AnorMED’s or its Third Party partners’
filings on AMD473 or improvements thereto;

 

(iv)                              all correspondence directly related to AMD473
to and from all regulatory agencies in the Territory;

 

(v)                                 summaries of all substantive verbal or oral
comments and commitments to regulatory authorities, if any; and

 

(vi)                              copies of any manufacturing records for the
Licensed Product in AnorMED’s possession.

 

(b)                                 In order to support AnorMED’s or its licensees’
filings on Licensed Compounds and Licensed Products outside the Territory,
AnorMED shall have access to:

 

(i)                                     all regulatory dossiers, including clinical
reports and submission data, submitted to regulatory authorities in respect of
Licensed Compounds and Licensed Products, provided:

 

(A)                              all such regulatory dossiers may be redacted to
remove information that is:

 

(1)                                  proprietary to NeoRx’ Third Party partner(s)
and not applicable to  Licensed
Compounds or Licensed Products, or

 

(2)                                  proprietary to NeoRx and not applicable to
Licensed Compounds or Licensed Products, and

 

(B)                                such dossiers not controlled by NeoRx will be
provided only in the event that NeoRx’ partners that control such dossiers
provide prior written approval, which approval NeoRx will use reasonable
commercial efforts to obtain;

 

21

 

(ii)                                  any necessary drug safety data produced by or
on behalf of NeoRx during the Development Program or other development
activities under this Agreement in respect of Licensed Compounds and Licensed
Products; and

 

(iii)                               any correspondence to and from all regulatory
agencies in the Territory related to Licensed Compounds and Licensed Products;

 

for the purpose of fulfilling regulatory
requirements for the Licensed Compounds and Licensed Products outside of the
Territory.

 

(c)                                  AnorMED will use commercially reasonable
efforts to include in any license agreement with AnorMED’s licensees outside of
the Territory for the development of the Licensed Compounds and Licensed
Products provisions no less restrictive and comparable
to this Subsection 12.2(b) for access to information of AnorMED’s licensee of
the type described in Subsection 12.2(b) for use by NeoRx for the purpose of fulfilling regulatory
requirements for the Licensed Compounds and Licensed Products in the Territory.

 

12.3                        Regulatory Program Progress Reports.

 

NeoRx shall keep AnorMED informed of the progress of its efforts to
obtain Regulatory Approval for Licensed Products, and NeoRx shall provide
AnorMED with a written report summarizing NeoRx’ progress thereon on an annual
basis, unless such progress has been previously summarized in the quarterly
reports provided pursuant to Section 2.3.

 

12.4                        Safety.

 

During the Term, each party shall within a reasonable time inform the
other party of any information that it obtains or develops regarding the safety
of any Licensed Compound or Licensed Product and shall promptly report to the
other party any confirmed information of serious or unexpected reactions or
serious or unexpected adverse events related to the utilization or medical
administration of such Licensed Compound or Licensed Product.  Each party will provide the other with
annual reports and any required interim reports describing any other side
effects related to the utilization or medical administration of such Licensed
Compound or Licensed Product, which would allow appropriate reporting in their
respective territories in accordance with ICH guidelines or other relevant
guidelines.

 

12.5                        Recalls.

 

(a)                                  If either party has grounds to believe that a
Recall should be conducted, the party with such belief shall immediately notify
the other party in writing of such grounds.

 

(b)                                 In the event of any Recall or other similar
governmental action with respect to any Licensed Product in the Territory,
AnorMED shall provide NeoRx with reasonable co-operation and take such other
actions in connection therewith as NeoRx may reasonably request.  NeoRx shall have the sole responsibility to
implement any Recall in respect of Licensed Products.

 

(c)                                  In the event of any Recall or other similar
governmental action outside the Territory with respect to any Licensed
Products, NeoRx shall provide AnorMED with reasonable co-operation in
connection therewith.

 

Article 13
REPRESENTATIONS, WARRANTIES AND COVENANTS.

 

13.1                        AnorMED’s Representations, Warranties and
Covenants.

 

AnorMED hereby represents, warrants and covenants to NeoRx as follows:

 

(a)                                  AnorMED has been duly organized and is validly
subsisting and in good standing in its jurisdiction of organization and has the
power to carry on the business as now being conducted by it;

 

(b)                                 AnorMED has obtained all necessary consents,
approvals and authorizations required to be obtained by AnorMED in connection
with the execution and delivery of this Agreement and has the right to enter
into this Agreement, and this Agreement is a legal and valid obligation binding
upon AnorMED and enforceable in accordance with its terms;

 

22

 

(c)                                  AnorMED is the owner of, or otherwise has a
right to grant licenses under, the AnorMED Know-How and the AnorMED Patents;

 

(d)                                 AnorMED does not own or otherwise control any
Patent relating to the Licensed Compound or the Licensed Product except for the
Patents within the AnorMED Patents;

 

(e)                                  AnorMED is not aware of any grounds to support
any argument for finding any patent within the AnorMED Patents invalid or
unenforceable;

 

(f)                                    AnorMED has not entered into and is not subject
to any agreement under which it has licensed in the Field in the Territory any
rights to a Third Party under the AnorMED Know-How or the AnorMED Patents to
make, use, offer for sale, sell or import any Licensed Compound or any Licensed
Product;

 

(g)                                 AnorMED has not received any written notice,
and is not aware, of any infringement with respect to any of the AnorMED
Patents;

 

(h)                                 AnorMED has not made as of the Effective Date
and will not make during the Term any commitment to any Third Party that is
inconsistent with or in derogation of the rights granted by AnorMED to NeoRx or
AnorMED’s obligations under this Agreement; and

 

(i)                                     AnorMED is not subject to any obligation that
would prevent it from entering into or carrying out its obligations under this
Agreement, and this Agreement does not conflict with, violate, or breach or
constitute a default or require any consent under, any contractual obligation
or court or administrative order by which such Party is bound.

 

13.2                        NeoRx’ Representations, Warranties and Covenants.

 

NeoRx hereby represents, warrants and covenants to AnorMED as follows:

 

(a)                                  NeoRx has been duly organized and is validly subsisting
and in good standing in its jurisdiction of organization and has the power to
carry on the business as now being conducted by it;

 

(b)                                 NeoRx has the right to enter into this
Agreement and this Agreement is a legal and valid obligation binding upon NeoRx
and enforceable in accordance with its terms;

 

(c)                                  NeoRx has not made and will not make any
commitments to Third Parties inconsistent with or in derogation of NeoRx’
obligations under this Agreement and NeoRx is not subject to any obligations
that would prevent it from entering into or carrying out its obligations under
this Agreement; and

 

(d)                                 NeoRx shall utilize sound and reasonable
business practice and judgment in the performance of the Development Program,
including the conduct of clinical studies thereunder, and in the
commercialization of the Licensed Compounds and/or the Licensed Products.

 

13.3                        No
Warranty.

 

ANORMED AND NEORX EACH MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, AND DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, OTHER THAN THOSE
EXPRESSLY SET FORTH IN THIS AGREEMENT, WITH RESPECT TO THE LICENSED COMPOUNDS,
THE LICENSED PRODUCTS, THE ANORMED PATENTS, THE ANORMED KNOW-HOW OR THE
LIKELIHOOD OF SUCCESS IN THE DEVELOPMENT AND COMMERCIALIZATION OF ANY LICENSED
PRODUCT, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.

 

Article 14 TERM AND
TERMINATION.

 

14.1                        Expiration.

 

This
Agreement shall commence on the Effective Date and shall continue in full force
and effect until expiration of NeoRx’ obligation to pay to AnorMED royalties
pursuant to Sections 7.2 and 7.3 (the “Term”). 
Upon expiration of the Term, NeoRx shall have a fully paid, royalty-free
right to make, have made, use, have used, sell, have sold, offer for sale and import
Licensed Compounds and Licensed Products without further obligation to AnorMED.

 

23

 

14.2                        Termination.

 

This Agreement may be terminated by either party only in accordance with
the terms and conditions set out in this Article 14.

 

14.3                        Termination by NeoRx.

 

NeoRx may terminate this Agreement:

 

(a)                                  in its entirety, at any time upon 120 days
prior written notice of such termination to AnorMED; or

 

(b)                                 in respect of the development and/or
commercialization of any or all Licensed Compounds and/or Licensed Products in
any country or countries in the Territory, at NeoRx’ option, at any time after
both the receipt of NDA approval of the Licensed Product in the United States
and the receipt of the equivalent health regulatory approval in the European
Union, upon 180 days prior written notice of such termination to AnorMED;

 

in which case:

 

(c)                                  in the event NeoRx terminates this Agreement in
its entirety, then without further action on the part of either party:

 

(i)                                     all rights and licenses granted by AnorMED to
NeoRx pursuant to this Agreement shall revert to AnorMED and NeoRx shall retain
no rights therein,

 

(ii)                                  to the extent permitted by applicable law and
regulation, all regulatory licenses and filings related to any Licensed
Compounds and/or Licensed Products shall be transferred in good faith from
NeoRx to AnorMED [*],

 

(iii)                               all rights in and to any trademarks and
tradenames used in the development and commercialization of the Licensed
Compounds and/or Licensed Products in the Territory, shall be assigned from
NeoRx (or its Affiliates) to AnorMED [*],

 

(iv)                              the license granted by NeoRx to AnorMED under
Subsection 9.2(c) shall be automatically converted to a [*], and

 

(v)                                 in the event that AnorMED or its licensees
outside the Territory utilize any patented inventions developed by NeoRx under
this Agreement, AnorMED and NeoRx shall in good faith negotiate a reasonable
royalty recognizing the relative contributions of each party to such
inventions;

 

(d)                                 in the event NeoRx terminates this Agreement in
respect of the development and/or commercialization of any particular Licensed
Compounds and/or Licensed Products in a country or countries, then without
further action on the part of either party:

 

(i)                                     the Territory shall be deemed to be reduced in
scope, in respect of the terminated Licensed Compound and/or Licensed Product
only, to exclude those countries where NeoRx determines that it will not
develop or commercialize such Licensed Compound and/or Licensed Product that is
the subject of the termination,

 

(ii)                                  the rights and licenses granted by AnorMED to
NeoRx pursuant to this Agreement that are the subject of the termination shall
revert to AnorMED and NeoRx shall retain no rights therein in those countries
that are excluded from the Territory,

 

(iii)                               to the extent permitted under applicable law
and regulation, all regulatory licenses and filings related to such Licensed
Compounds and/or Licensed Products that are the subject of the termination in
countries that are excluded from the Territory shall be transferred in good
faith from NeoRx (or its Affiliates) to AnorMED [*],

 

(iv)                              all rights in and to any trademarks and
tradenames used in the development and commercialization of the Licensed
Compounds and/or Licensed Products that are the subject of the termination in
countries that are excluded from the Territory shall be assigned from NeoRx (or
its Affiliates) to AnorMED [*], and

 

24

 

(v)                                 the license granted by NeoRx to AnorMED under
Subsection 9.2(c) shall be automatically expanded to include those
countries that are newly excluded from the Territory [*];
and

 

(e)                                  in respect of the area terminated, NeoRx will,
at its sole cost and expense, promptly wind down any pre-clinical and clinical
studies and programs then in effect and will safely withdraw and follow-up
subjects from any such clinical studies to the effective date of termination
or, if such withdrawal cannot be made as of the effective date of termination,
the subjects will be withdrawn over a period of time mutually agreed by the
parties, based upon an evaluation of risks to subjects and the timelines
required in the applicable clinical study protocol.

 

14.4                        Termination for Breach.

 

(a)                                  If either party materially breaches this
Agreement (which shall exclude bankruptcy of a party) and if the breach is not
cured within 60 days after receiving written notice from the other party with
respect to the breach, except as otherwise set out in this Agreement, this
Agreement shall automatically terminate at the end of the 60 day period.

 

(b)                                 Notwithstanding Subsection 14.4(a), if either party disputes
the breach and so notifies the other party in writing within the 60 day cure
period, this Agreement shall not be automatically terminated pending
adjudication and resolution of the disputed breach pursuant to
Section 19.2 or a court of competent jurisdiction, as the case may be.

 

(c)                                  If AnorMED terminates this Agreement for breach
by NeoRx under this Section 14.4, then without further action on the part
of either party:

 

(i)                                     all rights and licenses granted by AnorMED to
NeoRx pursuant to this Agreement shall revert to AnorMED and NeoRx shall retain
no rights therein;

 

(ii)                                  to the extent permitted under applicable law
and regulation, all regulatory licenses and filings related to any Licensed
Compounds and/or Licensed Products shall be transferred in good faith from
NeoRx (or its Affiliates) to AnorMED [*];

 

(iii)                               all rights in and to any trademarks and
tradenames used in the development and commercialization of the Licensed
Compounds and/or Licensed Products in the Territory, shall be assigned from
NeoRx (or its Affiliates) to AnorMED [*];

 

(iv)                              the license granted by NeoRx to AnorMED under
Subsection 9.2(c) shall be automatically converted to a worldwide license [*]; and

 

(v)                                 NeoRx will, at its sole cost and expense,
promptly wind down any pre-clinical and clinical studies and programs then in
effect and will safely withdraw and follow-up subjects from any such clinical
studies to the effective date of termination or, if such withdrawal cannot be
made as of the effective date of termination, the subjects will be withdrawn
over a period of time mutually agreed by the parties, based upon an evaluation
of risks to subjects and the timelines required in the applicable clinical
study protocol.

 

(d)                                 If NeoRx terminates this Agreement for breach
by AnorMED under this Section 14.4, NeoRx may elect, in NeoRx’ sole
discretion, without further action on the part of either party, that all rights
and licenses granted by AnorMED to NeoRx pursuant to this Agreement, including,
without limitation, any and all regulatory licenses and filings shall continue
as exclusive royalty-bearing licenses from AnorMED to NeoRx on the terms and
conditions set out in this Agreement, except that AnorMED and NeoRx shall in
good faith attempt to negotiate a reasonable reduction in the royalty rates set
out under Sections 7.2 and 7.3.

 

14.5                        Termination
on Bankruptcy.

 

To the extent permitted under applicable law, either party may terminate
this Agreement if at any time during the Term the other party files in any
court or agency pursuant to any statute or regulation of the United States or
of any individual state or foreign country:

 

(a)                                  a petition in bankruptcy or insolvency;

 

(b)                                 a petition for reorganization in connection
with a bankruptcy or insolvency;

 

25

 

(c)                                  a petition for an arrangement in connection
with a bankruptcy or insolvency;

 

(d)                                 a petition for the appointment of a receiver or
trustee of the party or of its assets;

 

(e)                                  if the other party proposes a written agreement
of composition or extension of its debts;

 

(f)                                    if the other party is served with an
involuntary petition against it, filed in any insolvency proceeding, and the
petition is not dismissed within 60 days after the filing thereof;

 

(g)                                 if the other party proposes or is a party to
any dissolution or liquidation; or

 

(h)                                 if the other party makes an assignment for the
benefit of creditors.

 

To the extent consistent with applicable law, termination by a party
under this Section 14.5 will be considered termination for breach under
Section 14.4 and the consequences of termination and parties’ respective
rights and remedies will be as set out in Section 14.4, except that no
notice and cure time for the breach shall be required and, in the event of
termination for AnorMED’s bankruptcy, there shall be [*] under Sections 7.2 and
7.3.

 

14.6                        Payments on
Termination.

 

Upon termination of this Agreement, AnorMED shall have the right to
retain any sums already paid by NeoRx under this Agreement, and NeoRx shall pay
all sums accrued hereunder as of the effective date of such termination or
accrued under this Agreement after the effective date of such termination as a result
of such termination, such as the cost of winding down any preclinical and
clinical studies and programs then in effect and any other wind down costs, but
shall have no obligation to make any payments that would have accrued if
termination of this Agreement had not occurred.

 

14.7                        Inventory.

 

(a)                                  Subject to Subsection 14.7(b),
notwithstanding the expiration or earlier termination of this Agreement, NeoRx
may continue to use any Licensed Products held in inventory by it in accordance
with the terms and conditions of the licenses granted under Sections 3.1,
including the use of Licensed Products in the winding down of clinical studies
and programs under Paragraphs 14.3(e) and 14.4(c)(v), or as otherwise required
to comply with regulatory requirements.

 

(b)                                 In the event of the termination of this
Agreement by AnorMED for material breach by NeoRx, NeoRx shall, at AnorMED’s
option:

 

(i)                                     destroy any Licensed
Products held in inventory by NeoRx, or

 

(ii)                                  provide
such Licensed Products to AnorMED at a price to be negotiated in good faith
between the parties,

 

provided that NeoRx may retain a reasonable quantity of such Licensed Products for use in accordance
with the terms and conditions of the licenses granted under Sections 3.1 for
humanitarian and compassionate reasons for supply to physicians and other
health service providers who, at the time of termination of this Agreement, are
treating patients using a Licensed Product, to continue and complete the
treatment of those existing patients. 
All sales of such Licensed Product shall be subject to royalty payments
in accordance with Article 7.

 

14.8                        Survival.

 

Expiration or early termination of this Agreement shall not relieve
either party of its obligations incurred prior to such expiration or early
termination.  In addition, the following
provisions shall survive any expiration or early termination of this Agreement:

 

(a)                                  Section 1.1 (Definitions);

 

(b)                                 Section 7.5 (Royalty Payments Upon Termination);

 

(c)                                  Section 8.7 (Accounts and Audit) and 8.8
(Confidentiality
of Reports);

 

(d)                                 Article 9 (Intellectual Property);

 

26

 

(e)                                  Section 10.9 (Interference Proceedings) to
the extent any interference proceedings are called prior to the effective date
of termination;

 

(f)                                    Article 11 (Confidentiality; Publicity;
Publications);

 

(g)                                 Sections 12.5 (Recalls) to the extent any
Recall is instituted on Licensed Product sold or otherwise distributed by NeoRx
prior to the effective date of termination;

 

(h)                                 Sections 14.6 (Payments on Termination)
14.7 (Inventory)
and 14.8 (Survival);

 

(i)                                     Article 15 (Indemnification); and

 

(j)                                     Sections 19.2 (Dispute Resolution), 19.3 (Entire
Agreement), 19.6 (Governing Law), 19.8 (Notices), 19.9 (Change of
Address), 19.10 (Rights and Remedies) and 19.11 (Severability).

 

Further,
Section 10.3 (Patent Costs) shall survive any expiration
or termination of this Agreement solely with respect to the payment and
reimbursement of any Patent-related costs and expenses that were incurred prior
to the effective date of termination or expiration.  Sections 3.1 (Grant of License) shall survive any
termination by NeoRx for breach by AnorMED under Section 14.4 or, subject
to applicable law, for insolvency or bankruptcy by AnorMED under
Section 14.5.

 

Article 15 INDEMNIFICATION.

 

15.1                        Indemnification
of AnorMED.

 

NeoRx
shall indemnify and hold AnorMED, its Affiliates, and each of their officers,
directors, employees, agents, consultants and contractors (the “AnorMED
Indemnified Parties”) harmless from and against any claim, action,
liability, damage, loss, cost or expense (including reasonable attorneys’ fees)
(“Loss”)
arising from or related to:

 

(a)                                  the
exercise of the license granted to NeoRx under this Agreement, including the
development, testing, manufacturing, sale and/or recall of the Licensed
Compounds and/or the Licensed Products by NeoRx, its Affiliates and its
sublicensees as of or after the Effective Date;

 

(b)                                 any breach or violation by NeoRx of, or failure to
properly perform, any covenant or agreement made in this Agreement; or

 

(c)                                  any breach by NeoRx of any of its representations or warranties
made in this Agreement;

 

unless
and to the extent such Loss arises from or is related to the gross negligence,
wilful misconduct or fraud of the AnorMED Indemnified Parties.

 

15.2                        Indemnification
of NeoRx.

 

AnorMED
shall indemnify and hold NeoRx, its Affiliates, and each of their officers,
directors, employees, consultants and contractors (the “NeoRx  Indemnified Parties”)
harmless from and against any Loss arising from or related to:

 

(a)                                  the
development, testing, manufacturing, sale and/or recall of the Licensed
Compounds and/or the Licensed Products by AnorMED, its Affiliates and its
licensees prior to the Effective Date;

 

(b)                                 any breach or violation by AnorMED of, or failure
to properly perform, any covenant or agreement made in this Agreement; or

 

(c)                                  any breach by AnorMED of any of its representations or warranties
made in this Agreement;

 

unless
and to the extent such Loss arises from or is related to the gross negligence,
wilful misconduct or fraud of the NeoRx Indemnified Parties.

 

15.3                        Clinical
Trials.

 

NeoRx acknowledges and agrees that AnorMED shall have no liability for,
no responsibility for and no control over the conduct of in vivo, animal or human
clinical studies conducted by or on behalf of NeoRx and/or its Affiliates or
their respective sublicensees utilizing the Licensed Compounds and the Licensed
Products in the Field.  The

 

27

 

performance of any human clinical studies in respect to the use of the
Licensed Compounds and the Licensed Products in the Field shall be the sole
responsibility of NeoRx.

 

15.4                        Unauthorized Commerce Indemnity.

 

In addition, NeoRx agrees to indemnify and hold harmless the AnorMED
Indemnified Parties and will defend them from and against any and all Losses
arising out of or relating to the alleged or actual unapproved or unauthorized
use by NeoRx or its Affiliates or their respective sublicensees of Licensed
Product prior to Regulatory Approval.

 

15.5                        Indemnification
Procedure.

 

If a party eligible for indemnification under this Article 15 (in
this section, an “Indemnified Party”), receives any written
claim which it believes gives rise to indemnification under this
Article 15, the Indemnified Party shall give notice of the claim to the
other party (the “Indemnifying Party”), including full
particulars of the claim to the extent known to the Indemnified Party,
provided, however, that the failure to give timely notice as contemplated
hereby shall not release the Indemnifying Party from any liability to indemnify
any persons indemnified under this Article 15 to the extent such failure
does not compromise the Indemnifying Party’s ability to prosecute such claim,
and, subject to Article 10 in respect of infringement claims and
infringement actions, the following shall apply:

 

(a)                                  the Indemnifying Party shall have the right, by
prompt notice to the Indemnified Party, to assume the defense of the claim with
counsel reasonably satisfactory to the Indemnified Party, and at the
Indemnifying Party’s cost and expense;

 

(b)                                 if the Indemnifying Party does not so assume
the defense of the claim, the Indemnified Party may assume the defense with
counsel of its choice at the Indemnifying Party’s cost and expense;

 

(c)                                  if the Indemnifying Party assumes the defense
of the claim, the Indemnified Party may participate therein through counsel of
its choice, but the cost of such counsel shall be borne solely by the
Indemnified Party;

 

(d)                                 the Indemnified Party shall render all
reasonable assistance to the Indemnifying Party and all out-of-pocket costs of
this assistance shall be borne solely by the Indemnifying Party; and

 

(e)                                  no claim shall be settled other than by the
party defending the claim, and then only with the consent of the other party,
which shall not be unreasonably withheld, provided that the Indemnified Party
shall have no obligation to consent to any settlement of any claim which
imposes on the Indemnified Party any liability or obligation which cannot be
assumed and performed in full by the Indemnifying Party, and provided further
that refusal of the Indemnified Party to consent to any settlement agreed to by
the Indemnifying Party shall limit the Indemnifying Party’s obligation under
this Article 15 to the terms refused by the Indemnified Party.

 

Article 16 REPRESENTATIONS AND
WARRANTIES OF NEORX.

 

16.1                        Representations and Warranties

 

NeoRx
hereby represents and warrants the following as of the date hereof and as of
the date that each milestone payment is made in shares of NeoRx Common Shares
pursuant to Sections 6.3(a) and 6.3(b) (each a “Share Payment Date”):

 

(a)                                  Corporate
Organization and Authority. NeoRx:

 

(i)                                     is
a corporation duly organized, validly existing, authorized to exercise all its
corporate powers, rights and privileges, and in good standing in the State of
Washington; and

 

(ii)                                  has
corporate power and authority to enter into this Agreement and to carry out the
transactions contemplated herein.

 

(b)                                 Authorization.  All necessary corporate action on the part
of NeoRx for the execution and delivery of this Agreement has been taken and
all necessary corporate action on the part of NeoRx for the issuance and
delivery of the Common Shares being issued on each Share Payment Date shall have
been taken prior to such Share Payment Date. This Agreement constitutes a valid
and legally binding obligation of NeoRx enforceable in accordance with its
terms, except as may be limited by bankruptcy, reorganization,

 

28

 

insolvency,
moratorium and similar laws of general application relating to or affecting the
enforcement of rights of creditors, and except as enforceability may be limited
by principles of public policy, and to rules of law governing specific
performance, injunctive relief and other equitable remedies.

 

(c)                                  No
Conflicts; Required Filings.

 

(i)                                     The
performance by NeoRx of this Agreement and the transactions contemplated herein
do not violate, or constitute a default under, and will not result in any
violation of or constitute a default under, with or without the passage of time
or the giving of notice of (1) any provision of NeoRx’s charter or bylaws as in
effect on the relevant Share Payment Date; (2) any provision of any judgment,
decree or order to which NeoRx is a party or by which it or any of its
properties is bound; (3) any contract, obligation or commitment to which NeoRx
is a party or by which it or any of its properties is bound, which violation or
default would, individually or in the aggregate, (A) prevent or materially
delay consummation of the transactions contemplated under this Agreement, (B)
otherwise have a material adverse effect on the ability of NeoRx to perform its
obligations under this Agreement and (C) individually or in the aggregate,
result in any change, event, development, effect or condition that is or is
reasonably likely to be materially adverse to the assets, liabilities,
business, financial condition or results of operations of NeoRx (each of the
foregoing items in (A), (B) or (C) being referred to herein as “Material
Adverse Effect”); or (4) any statute, rule or governmental
regulation applicable to NeoRx, which violation or default would, individually
or in the aggregate, have a Material Adverse Effect.

 

(ii)                                  The
execution, delivery and performance by NeoRx of this Agreement and the
transactions contemplated herein do not and will not require any consent,
approval, authorization or permit of, or filing with or without notification
to, any governmental or regulatory authority, United States or foreign, except
(1) as may be required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, together with the rules and regulations thereunder, and any
similar foreign antitrust law or regulation (“Antitrust Laws”); (2) for
applicable requirements, if any, of the Securities Act of 1933, as amended,
including the rules and regulations promulgated thereunder (the “Securities
Act”), or securities laws of the various states of the United States
(the “Blue
Sky Laws”); and (3) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not have a Material Adverse Effect.

 

(d)                                 Capital
Stock. NeoRx has reserved a sufficient number of shares of Common Shares for
issuance to AnorMED in accordance with NeoRx’s obligations under this Agreement
on or prior to each of the Share Payment Dates.

 

(e)                                  Validity
of Common Shares. The Common Shares issued on each Share Payment Date, when
issued, sold and delivered in accordance with the terms and for the
consideration set forth in this Agreement, shall be duly and validly issued and
outstanding, fully paid, nonassessable and free and clear of all security
interests, pledges, mortgages, liens, taxes, proxies, charges, adverse claims
of ownership or use, and restrictions, including pre-emptive rights, rights of
first refusal and other similar rights, restrictions on the resale, use,
voting, receipt of income or other exercise of any attributes of ownership and
restrictions on transfer, defects of title or other encumbrance of any kind or
character entitling any person to purchase or acquire an ownership interest in
any of such Common Shares, other than restrictions on transfer set forth in
this Agreement and under federal and state securities laws.

 

(f)                                    SEC
Filings; Financial Statements.

 

(i)                                     NeoRx
has timely filed all forms, reports and documents required to be filed by it
with the Securities and Exchange Commission (the “SEC”) since December 31,
2002 (the “SEC Reports”) including, its (1) most recent Annual Report on
Form 10-K; (2) each Quarterly Report on Form 10-Q filed with the SEC since the
date of its most recent Annual Report on Form 10-K; (3) most recent proxy
statement for the annual meeting of stockholders; and (4) all Current Reports
on Form 8-K filed with the SEC since the date of NeoRx’s most recent report on
Form 10-Q. NeoRx has filed additional reports and documents with the SEC that
may be accessed at www.sec.gov. As of their respective dates, the SEC Reports:
(A) were prepared in accordance with the requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”); and (B) did not at the time
they were filed contain any untrue statement of a material fact or omit

 

29

 

to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that information contained in
any SEC Report has been updated, revised, supplemented or amended by a
later-filed SEC Report, none of the SEC Reports contains an untrue statement of
material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of the date of
this Agreement, no subsidiary of NeoRx is subject to the reporting requirements
of the Exchange Act.

 

(ii)                                  Each
of the financial statements (including, in each case, any notes thereto)
contained in the SEC Reports (collectively, the “Financial Statements”) (1)
complied as to form in all material respects with the published rules and
regulations of the SEC applicable thereto; (2) were prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC, and except that the unaudited financial statements may
not contain footnotes and are subject to normal and recurring year-end
adjustments that did not and will not, individually or in the aggregate, be
material in amount); and (3) fairly present in all material respects the
consolidated financial position of NeoRx as of the respective dates thereof and
the consolidated results of operations and cash flows of NeoRx for the periods
covered thereby. The auditors who have certified the financial statements of
NeoRx contained in the SEC Reports are independent public accountants as
required by the Securities Act and the rules and regulations thereunder. Except
as disclosed in the SEC Reports and except for matters which are not, individually
or in the aggregate, reasonably expected to have a Material Adverse Effect,
NeoRx has no obligations or liabilities, whether or not accrued, contingent or
otherwise and whether or not required to be disclosed.

 

(g)                                 Sarbanes-Oxley.
NeoRx’s principal executive officer and principal financial officer have
evaluated the effectiveness of NeoRx’s 
disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) described in the SEC Reports, and the conclusions
regarding the effectiveness of the disclosure controls and procedures set forth
in the SEC Reports are true and correct in all material respects. The Chairman
and Chief Executive Officer and the Vice President, Finance of NeoRx have
signed, and NeoRx has furnished to the SEC, all certifications required by
Section 906 of the Sarbanes-Oxley Act of 2002; such certifications contain
no qualifications or exceptions to the matters certified therein, except as to
knowledge, and have not been modified or withdrawn; and neither NeoRx nor any
of its officers has received notice from any governmental entity questioning or
challenging the accuracy, completeness, content, form or manner of filing or
submission of such certifications.

 

(h)                                 Private
Offering. Subject to the accuracy of AnorMED’s representations set forth in
Section 17.1(c), Section 17.1(f) and Section 17.1(h), the offer,
sale and issuance of the Shares in accordance with the terms of this Agreement
is in compliance with all applicable laws, exempt from the registration requirements
of Section 5 of the Securities Act and exempt from applicable state
registration or qualification requirements, other than those with which NeoRx
has complied or will comply.

 

(i)                                     NASDAQ
Compliance. NeoRx’s Common Shares are registered pursuant to Section 12(g)
of the Exchange Act and is listed on the NASDAQ SmallCap Market, and NeoRx has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Shares under the Exchange Act or delisting the Common
Shares from the NASDAQ SmallCap Market.

 

(j)                                     Investment
Company. NeoRx is not an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for an investment company, within the
meaning of the Investment Company Act of 1940, as amended.

 

(k)                                  Litigation.
Except as disclosed in the SEC Reports, there is no legal action, suit,
arbitration or other legal, administrative or governmental proceeding pending
or, to NeoRx’s knowledge, threatened against NeoRx that could reasonably be expected
to have a Material Adverse Effect.

 

30

 

Article 17 REPRESENTATIONS AND
WARRANTIES OF ANORMED.

 

17.1                        Representations and Warranties

 

AnorMED
hereby represents and warrants to NeoRx the following:

 

(a)                                  Authorization.
All necessary corporate action on the part of AnorMED for the execution,
delivery and performance of its obligations under this Agreement and for the
consummation of the transactions contemplated hereby has been taken. This
Agreement constitutes a valid and legally binding obligation of AnorMED
enforceable in accordance with its terms.

 

(b)                                 Corporate
Organization and Authority. AnorMED is a corporation duly organized, validly
existing, and in good standing under the laws of Canada. AnorMED has the
corporate power, authority and capacity to execute and deliver this Agreement
and to perform its obligations under this Agreement and any document
contemplated to be delivered hereby.

 

(c)                                  Purchase
Entirely for Own Account. This Agreement is made with AnorMED in reliance upon
AnorMED’s representation to NeoRx, which by AnorMED’s execution of this
Agreement AnorMED hereby confirms, that the Common Shares to be purchased by
AnorMED will be acquired for investment for AnorMED’s own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part
thereof. AnorMED has no present intention of selling, granting any
participation in or otherwise distributing the same. By executing this
Agreement, AnorMED further represents that AnorMED does not presently have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Common Shares and AnorMED has not been formed for the
specific purpose of acquiring the Common Shares.

 

(d)                                 Restricted
Securities. AnorMED understands that the Common Shares have not been, and will
not be, registered under the Securities Act, by reason of a specific exemption
from the registration provisions of the Securities Act, which depends upon,
among other things, the bona fide nature of the investment intent and the
accuracy of AnorMED’s representations as expressed in Section 17.1(c).
AnorMED understands that the Common Shares are “restricted securities” under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, AnorMED must hold the Common Shares indefinitely unless they are
registered with the SEC and qualified by state authorities, or an exemption
from such registration and qualification requirements is available.

 

(e)                                  Legends.
AnorMED understands that the Common Shares shall bear the following legend:

 

(i)                                     “THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS NEORX HAS
RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO NEORX AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

(f)                                    Accredited
Investor. AnorMED is an “accredited investor” in:

 

(i)                                     the
United States pursuant to Rule 501(a) of Regulation D promulgated under the
Securities Act; and

 

(ii)                                  Canada
pursuant to subsection 1.1(m) of the definition of “accredited investor”
set forth in Multilateral Instrument 45-103 – Capital Raising Exemptions.

 

(g)                                 Reliance.
AnorMED has, in connection with its decision to purchase the number of Common
Shares set forth herein, relied solely upon the SEC Reports and the
representations and warranties of NeoRx contained in this Agreement.

 

(h)                                 Investment
Experience. AnorMED has such knowledge and experience in financial and business
matters that AnorMED is capable of evaluating the merits and risks of the
investment in the Common Shares.

 

31

 

Article 18 REGISTRATION
RIGHTS.

 

NeoRx shall use all commercially reasonable efforts to file a
registration statement with the Securities and Exchange Commission covering
resale of those shares of unregistered Common Stock issued pursuant to
Section 6.2(b) within [*] after the date of this Agreement and use all
commercially reasonable efforts to cause such registration statement to become
effective within [*] after such filing date (or [*] after the filing date if
the registration statement is reviewed by the SEC).  NeoRx shall use all commercially reasonable efforts to file a
registration statement with the Securities and Exchange Commission covering
resale of those shares of unregistered Common Stock issued pursuant to
Section 6.3(a) within [*] after the achievement of the milestone set forth
in Section 6.3(a) and use all commercially reasonable efforts to cause
such registration statement to become effective within [*] after such filing
date (or [*] after the filing date if the registration statement is reviewed by
the SEC).  NeoRx, shall use all
commercially reasonable efforts to file a registration statement,
post-effective amendment or prospectus supplement, as applicable, with the
Securities and Exchange Commission covering resale of those shares of
unregistered Common Stock issued pursuant to Section 6.3(b) within [*] of
achievement of the milestone set forth in Section 6.3(b) and use all
commercially reasonable efforts to cause such registration statement to become
effective within [*] after such filing date (or [*] after the filing date if
the registration statement is reviewed by the SEC).  If a requested registration statement is not filed within the
applicable [*] period set forth above or if such registration statement is not
declared effective by the SEC within [*] (or [*], as applicable) thereafter,
then AnorMED shall, at AnorMED’s sole option and election, have the right at
any time within the subsequent [*] after the expiration of such [*] period to
tender the previously-issued shares of NeoRx Common Stock received pursuant to
Sections 6.2(b), 6.3(a) and 6.3(b), as applicable, by written notice to NeoRx
and in lieu shares of NeoRx Common Stock receive the amount specified in
Sections 6.2(b), 6.3(a) or 6.3(b), as applicable, in cash.  Notwithstanding the foregoing, AnorMED shall
not be entitled to registration rights under this Agreement and shall not be
entitled to the right to tender shares to NeoRx if all of the shares of NeoRx
Common Stock held by AnorMED may be sold by AnorMED pursuant to Rule 144 of the
Securities Act during any [*] period as determined by counsel to NeoRx pursuant
to a written opinion letter, reasonably satisfactory in form and substance to
AnorMED, addressed to NeoRx’s transfer agent to such effect; provided, further,
that if any of the shares of NeoRx Common Stock held by AnorMED may be sold by
AnorMED pursuant to Rule 144(k) of the Securities Act, then the opinion of
NeoRx’s counsel shall also state that the restrictive legends on the stock
certificates representing such shares be removed pursuant to Rule 144(k).

 

Article 19 MISCELLANEOUS.

 

19.1                        Assignment; Inurement.

 

Neither this Agreement nor any interest under this Agreement shall be
assignable by either party without the prior written consent of the other
party.  Assignment in contravention of
this Section 19.1 shall be considered a material breach of this Agreement
pursuant to Section 14.4.  Subject
to other provisions of this Section 19.1, all rights and obligations under
this Agreement and the licenses granted in this Agreement shall be binding upon
and inure to the benefit of the successors in interest of the respective
parties.  Any assignment in violation of
the foregoing shall be null and void. 
In the event that NeoRx assigns its rights and obligations under this
Agreement to a Third Party in accordance with the terms of this
Section 19.1, all payments due and payable to AnorMED under this Agreement
by such Third Party after the effective date of assignment shall be made in
cash including, in particular, payments due and payable to AnorMED pursuant to
Article 6.

 

19.2                        Dispute
Resolution.

 

(a)                                  Prior to engaging in any formal dispute
resolution with respect to any dispute, controversy or claim arising out of or
in relation to this Agreement or the breach, termination or invalidity of this
Agreement (each, a “Dispute”), the Chief Executive Officers of
the parties shall attempt for a period not less than 60 days to resolve the
Dispute.

 

(b)                                 Except as otherwise set out in this
Section 19.2, any Dispute that cannot be settled amicably by agreement of
the parties pursuant to Subsection 19.2(a) shall be finally settled by
arbitration in accordance with the arbitration rules (the “Rules”) of the American
Arbitration Association then in force, by three arbitrators.  Each party shall select one arbitrator and
the selected party arbitrators shall select the third arbitrator.  Each such arbitrator shall have appropriate
experience in the biopharmaceutical industry. 
Arbitration proceedings may not be instituted until the party alleging
breach of this Agreement by the other party has

 

32

 

given the other party the 60 days notice to remedy any alleged breach
(as more specifically set out in other parts of this Agreement) and the other
party has failed to do so.

 

(c)                                  The place of arbitration shall be Seattle,
Washington if initiated by AnorMED and Vancouver, British Columbia if initiated
by NeoRx.

 

(d)                                 The award rendered in any arbitration shall be
final and binding upon both parties. 
The judgment rendered by the arbitrators shall include costs of
arbitration, reasonable attorneys’ fees and reasonable costs for any expert and
other witnesses.

 

(e)                                  Nothing in this Agreement shall be deemed as
preventing either party from seeking injunctive relief (or any other
provisional remedy) from any court having jurisdiction over the parties and the
subject matter of the Dispute as necessary to protect either party’s name,
Confidential Information or Intellectual Property.

 

(f)                                    Judgment upon the award may be entered in any
court having jurisdiction, or application may be made to such court for
judicial acceptance of the award and/or an order of enforcement as the case may
be.

 

(g)                                 Notwithstanding the provisions of Subsections
19.2(b) through 19.2(f), inclusive, in the event of a Dispute relating to the
compliance by NeoRx (or its marketing partner or sublicensee, as the case may
be) with the development requirements under Section 2.1 or the commercialization
requirements under Section 4.1, the evaluation
process set out in Exhibit C shall apply.

 

(h)                                 Notwithstanding the provisions of Subsections
19.2(b) through 19.2(f), inclusive, either party shall be free to submit any
Dispute relating to Intellectual Property to any court having jurisdiction over
the parties and the subject matter of the Dispute and to seek such relief and
remedies as are available in that court.

 

19.3                        Entire
Agreement.

 

This Agreement and all Exhibits attached to this Agreement (which shall
form an integral part of this Agreement), entered into as of the date first
written above, constitute the entire agreement between the parties relating to
the subject matter hereof and supersede all previous writings and
understandings.  No terms or provisions
of this Agreement shall be varied or modified by any prior or subsequent
statement, conduct or act of either of the parties, except that the parties may
mutually amend this Agreement by written instruments specifically referring to
and executed in the same manner as this Agreement.  In the event of conflict between the terms and conditions of this
Agreement and those of any Exhibit attached to this Agreement or any other
agreement executed by the parties, the terms and conditions of this Agreement
shall govern, unless the parties expressly provide that the conflicting term or
condition of such Exhibit or agreement shall supersede the corresponding term
or condition of this Agreement.

 

19.4                        Force
Majeure.

 

If the performance of any part of this Agreement by either party, or of
any obligation under this Agreement, is prevented, restricted, interfered with
or delayed by reason of any cause beyond the reasonable control of the party
liable to perform, unless conclusive evidence to the contrary is provided, the
party so affected shall, upon giving written notice to the other party, be
excused from such performance to the extent of such prevention, restriction,
interference or delay, provided that the affected party shall use its
reasonable commercial efforts to avoid or remove such causes of non-performance
and shall continue performance with the utmost dispatch whenever the causes are
removed.  When such circumstances arise,
the parties shall discuss what, if any, modification of the terms of this Agreement
may be required in order to arrive at an equitable solution.

 

19.5                        Further
Assurances.

 

The parties shall both execute and deliver such further instruments and
do such further acts as may be required to implement the intent of this
Agreement.

 

19.6                        Governing
Law.

 

This Agreement shall be governed by the laws of the State of Washington
and the United States of America applicable without
regard to conflict of law provisions contained therein.

 

33

 

19.7                        Insurance.

 

Commencing at the time of NeoRx’ initial clinical testing of a Licensed
Product, NeoRx shall maintain liability insurance with respect to its
activities under the Development Program and any other development activities
at commercially reasonable and appropriate levels.  NeoRx currently maintains, with respect to clinical
development-related activities, insurance coverage in an amount equal to [*]
per occurrence.  NeoRx shall maintain
such insurance for so long as it conducts activities under the Development
Program or any other development activities. 
NeoRx’ general liability insurance shall name AnorMED as an additional
insured.  Upon
request, NeoRx shall provide AnorMED with evidence of such insurance coverage.

 

19.8                        Notices.

 

All notices in connection with this Agreement shall be in writing and
shall be:

 

(a)                                  delivered personally; or

 

(b)                                 mailed by registered or certified mail (return
receipt requested and postage prepaid); or

 

(c)                                  sent by express courier service (receipt
verified); or

 

(d)                                 sent by facsimile transmission (with
confirmation notice sent as described above);

 

to the following addresses of the parties:

 

	
  If to AnorMED:

  	
   

  	
  If to NeoRx:

  
	
   

  	
   

  	
   

  
	
   

  	
  AnorMED
  Inc.

  	
   

  	
   

  	
  NeoRx Corporation.

  
	
   

  	
  #200
  - 20353 64th Ave

  	
   

  	
   

  	
  300
  Elliott Avenue West, Suite 500

  
	
   

  	
  Langley,
  British Columbia

  	
   

  	
   

  	
  Seattle, Washington

  
	
   

  	
  Canada
  V2Y 1N5

  	
   

  	
   

  	
  USA  98119-4114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  President and

  Chief Executive Officer  

  	
   

  	
   

  	
  Attention:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  (206) 286-2537

  
	
   

  	
  Facsimile:

  	
  (604)
  530-0976

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  With a copy to the NeoRx Legal Department.

  

 

Any notice shall be deemed to have been received:

 

(e)                                  on the date of delivery, if delivered
personally or by express courier; or

 

(f)                                    on the fifth Business Day following the date of
mailing if sent by registered or certified mail; or

 

(g)                                 on the next Business Day following the date of
transmission if sent by facsimile transmission.

 

19.9                        Change
of Address.

 

Either party may, at any time, give notice of any change of address to
the other and the address specified in the notice shall be that party’s address
for the purpose of receiving notices.

 

19.10                 Rights and Remedies.

 

The rights and remedies available under this Agreement shall be
cumulative and not alternative and shall be in addition to and not a limitation
of any rights and remedies otherwise available to the parties at law or in
equity.

 

19.11                 Severability.

 

In the event any portion of this Agreement shall be held illegal, void
or ineffective, the remaining portions of this Agreement shall remain in full
force and effect.  If any of the terms
or provisions of this Agreement are in conflict with any applicable statute or
rule of law, then such terms or provisions shall be deemed inoperative to the
extent that they may conflict therewith and shall be deemed to be modified to
conform with such statute or rule of law.

 

34

 

19.12                 Counterparts; Facsimile.

 

This Agreement may be executed in any number of counterparts (either
originally or by facsimile), each of which shall be deemed to be an original
and all of which taken together shall be deemed to constitute one and the same
instrument.

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer as of the date first written
above.

 

	
  ANORMED
  INC.

  	
   

  	
  NEORX
  CORPORATION

  
	
  by its authorized signatory:

  	
   

  	
  by its authorized signatory:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael J. Abrams

  	
   

  	
  /s/ Jack L. Bowman

  
	
  Name:  Michael J. Abrams

  	
   

  	
  Name:  Jack L. Bowman

  
	
  Title:  President and CEO

  	
   

  	
  Title:  Chairman and CEO

  

 

35

 

EXHIBIT A

ANORMED PATENTS

 

The Patents set out on the following tables comprise the AnorMED
Patents:  [*]

 

 

EXHIBIT B

DEVELOPMENT PROGRAM

 

The
Development Program shall include the following clinical studies:

 

1.                                       A [*] study [*] AMD473; and

 

2.                                       A Phase II study to confirm and/or demonstrate
activity in a cancer indication [*] of AMD473.

 

 

EXHIBIT C

EVALUATION PROCESS

 

Evaluation of Commercialization Activities.

 

1.                                       Each party shall select a mutually acceptable person as an
independent evaluator (each an “Evaluator”) and the two selected Evaluators
shall select a mutually acceptable third Evaluator, to conduct the evaluation
set forth in Section 2 of this Exhibit C. 
If the parties cannot agree on the choice of Evaluators, the selecting
authority shall be the British Columbia International Commercial Arbitration
Centre.

 

2.                                       Unless the parties mutually agree otherwise, the following rules and procedures shall
govern the conduct of the parties and the Evaluators before and during the
investigation by the Evaluators:

 

(a)                                  within [*] after the selection of the Evaluators, NeoRx shall
provide to the Evaluators and AnorMED a written summary of its position.  Upon receipt of NeoRx’ summary, AnorMED shall
have [*] to prepare and submit to NeoRx and the Evaluators its own summary in
reply to the summary submitted by NeoRx; and

 

(b)                                 on receipt of the summaries and any other documents, statements or
records submitted by the parties, the Evaluators shall have [*] within which to
conduct such further inquiries as the Evaluators may deem necessary for the
purpose of reviewing the efforts made by NeoRx with respect to:

 

(i)                                     the development of the Licensed Products in compliance with the
requirements of Section 2.1; or

 

(ii)                                  the promotion, marketing, sale or other commercialization of the
Licensed Products in compliance with the requirements of Section 4.1.

 

For the purpose of conducting such an inquiry, the
Evaluators shall have the right to:

 

(iii)                               require either party to disclose any further documents or records
which the Evaluators consider to be relevant;

 

(iv)                              interview or question either orally (or by way of written questions)
one or more representatives of either party on issues deemed to be relevant by
the Evaluators;

 

(v)                                 make an “on site” inspection of NeoRx’ facilities;
and

 

(vi)                              obtain if necessary, the assistance of an independent expert to
provide technical information with respect to any area in which the Evaluators
do not have a specific expertise.

 

3.                                       The Evaluators shall within [*] after starting the inquiry, prepare a report
setting out the Evaluators’ findings and conclusions as to whether or not NeoRx is in breach of
Section 2.1 or Section 4.1, as the case may be.  If the Evaluators determine that NeoRx is in
breach, then the Evaluators shall specify in the report the Evaluators’
conclusions as to what additional
measures may be required to achieve compliance with Section 2.1
or Section 4.1, as the case may be, and NeoRx shall
thereafter make the efforts so specified. 
If NeoRx fails to make such efforts, after notice of termination for
breach provided in accordance with the terms of Section 14.4, then
AnorMED’s sole remedy for NeoRx’ failure to make the efforts specified in
Section 2.1 or Section 4.1, as the case may be, shall be that this
Agreement may be terminated in accordance with Section 14.4.

 

4.                                       The report and conclusions of the Evaluators shall be delivered to NeoRx and
AnorMED, and shall be accepted by both parties as final and binding.

 

 

5.                                       AnorMED may not call
for more than one evaluation pursuant hereto in any [*] period.  The cost of an evaluation hereunder shall be
borne [*].

 

2

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