Document:

Exhibit 10.29

                                95 SOUTH JACKSON
                            Seattle, Washington 98104

                               __________________

                                 LEASE AGREEMENT

                                     BETWEEN

                               MERRILL PLACE, LLC,
                                    Landlord

                                       and

                                 APTIMUS, INC.,
                                     Tenant

<PAGE>

                                 LEASE AGREEMENT

                                Table of Contents

                                                                           Page
                                                                           ----

1.   LEASE DATA AND EXHIBITS.................................................1
     a.    Building..........................................................1
     b.    Premises..........................................................1
     c.    Tenant's Percentage of the Building...............................1
     d.    Commencement Date.................................................1
     e.    Expiration Date...................................................1
     f.    Rent..............................................................1
     g.    Security Deposit..................................................1
     h.    Parking...........................................................1
     i.    Notice Addresses..................................................1
     j.    Exhibits..........................................................2

2.   PREMISES................................................................2

3.   COMMENCEMENT AND EXPIRATION DATES.......................................2
     a.    Commencement Date.................................................2
     b.    Tenant Obligations................................................2
     c.    Tenant Termination Right..........................................2
     d.    Confirmation of Commencement Date.................................2
     e.    Expiration Date...................................................2

4.   RENT....................................................................2

5.   SECURITY DEPOSIT........................................................2

6.   USES....................................................................3

7.   SERVICES AND UTILITIES..................................................3
     a.    Standard Services.................................................3
     b.    Interruption of Services..........................................4
     c.    Additional Services...............................................4
     d.    Security Services.................................................4

8.   COSTS OF OPERATIONS AND REAL ESTATE TAXES...............................4
     a.    Definitions.......................................................5
     b.    Base Amounts......................................................6
     c.    Additional Rent for Service and Utility Costs.....................6
     d.    Additional Rent for Real Property Taxes...........................7
     e.    Calculations......................................................8
     f.    Further Adjustment................................................8

                                      -i-
<PAGE>

                                                                           Page
                                                                           ----

     g.    Base Rent.........................................................8
     h.    Personal Property Taxes...........................................8

9.   TENANT IMPROVEMENTS AND ALTERATIONS.....................................8
     a.    Tenant Improvements...............................................8
     b.    Alterations.......................................................8

10.  CARE OF PREMISES........................................................9
     a.    Tenant's Maintenance..............................................9
     b.    Landlord's Maintenance............................................9

11.  ACCEPTANCE OF PREMISES..................................................9

12.  ACCESS.................................................................10

13.  DAMAGE OR DESTRUCTION..................................................10
     a.    Damage and Repair................................................10
     b.    Destruction During Last Year of Term.............................10
     c.    Business Interruption............................................10
     d.    Tenant Improvements..............................................10
     e.    Express Agreement................................................11

14.  WAIVER OF SUBROGATION..................................................11

15.  INDEMNIFICATION........................................................11

16.  INSURANCE..............................................................11
     a.    Liability Insurance..............................................11
     b.    Property Insurance...............................................11
     c.    Insurance Policy Requirements....................................11

17.  ASSIGNMENT AND SUBLETTING..............................................12
     a.    Assignment or Sublease...........................................12
     b.    Assignee Obligations.............................................13
     c.    Sublessee Obligations............................................13

18.  SIGNS..................................................................13

19.  LIENS AND INSOLVENCY...................................................13
     a.    Liens............................................................13
     b.    Insolvency.......................................................14

20.  DEFAULT................................................................14
     a.    Cumulative Remedies..............................................14
     b.    Tenant's Right to Cure...........................................14
     c.    Vacation and Abandonment.........................................14
     d.    Landlords Re-entry...............................................14

                                      -ii-
<PAGE>

                                                                           Page
                                                                           ----

     e.    Reletting the Premises...........................................15
     f.    Waiver of Redemption Rights......................................15
     g.    Nonpayment of Additional Rent....................................15

21.  PRIORITY...............................................................15

22.  SURRENDER OF POSSESSION................................................16

23.  REMOVAL OF PROPERTY....................................................16
     a.    Signs and Personal Property......................................16
     b.    Alterations......................................................16

24.  NON-WAIVER.............................................................16

25.  HOLDOVER...............................................................16

26.  CONDEMNATION...........................................................17
     a.    Entire Taking....................................................17
     b.    Constructive Taking of Entire Premises...........................17
     c.    Partial Taking...................................................17
     d.    Awards and Damages...............................................17

27.  NOTICES................................................................17

28.  COSTS AND ATTORNEYS' FEES..............................................17

29.  LANDLORD'S LIABILITY...................................................18

30.  LANDLORD'S CONSENT.....................................................18

31.  ESTOPPEL CERTIFICATES..................................................18

32.  TRANSFER OF LANDLORD'S INTEREST........................................18

33.  RIGHT TO PERFORM.......................................................18

34.  AUTHORITY..............................................................19
     a.    Corporate Authority..............................................19
     b.    Partnership Authority............................................19

35.  OPTION TO RENEW........................................................19

36.  RIGHT OF FIRST OPPORTUNITY.............................................19

37.  GENERAL................................................................19
     a.    Headings.........................................................19
     b.    Heirs and Assigns................................................19
     c.    No Brokers.......................................................19
     d.    Entire Agreement.................................................19
     e.    Severability.....................................................20

                                     -iii-
<PAGE>

                                                                           Page
                                                                           ----

     f.    Overdue Payments.................................................20
     g.    Force Majeure....................................................20
     h.    Right to Change Public Spaces....................................20
     i.    Governing Law....................................................20
     j.    Building Directory...............................................20
     k.    Building Name....................................................20

                                      -iv-
<PAGE>

                                 LEASE AGREEMENT

      THIS LEASE made effective this 1st day of October, 2002, between MERRILL
PLACE LLC, a Washington limited liability company ("Landlord"), and APTIMUS,
INC., a Washington corporation ("Tenant").

      As parties hereto, Landlord and Tenant agree:

      1. LEASE DATA AND EXHIBITS. The following terms as used herein shall have
the meanings provided in this Section 1, unless otherwise specifically modified
by provisions of this Lease.

            a. Building. The improvements situated on a portion of the real
property (the "Property") more particularly described on Exhibit A attached
hereto and incorporated herein by reference, with a postal address of 95 South
Jackson Street, Seattle, Washington 98104. All of the structures on the property
are referred to herein as the "Building".

            b. Premises. Consisting of the 8,466 square feet of floor area in
the basement of the Building, as outlined on the floor plan(s) attached hereto
as Exhibit B and incorporated herein by reference, including tenant
improvements, if any, as described in Exhibit C, attached hereto and
incorporated herein by reference.

            c. Tenant's Percentage of the Building. 5 % calculated by dividing
the area of the Premises (8,466 net rentable square feet) by the area of the
Building utilized for office space (173,393 net rentable square feet). In the
event the rentable area of the Premises or the rentable area of the Building is
altered, Landlord shall adjust "Tenant's Percentage of the Building" to properly
reflect such event.

            d. Commencement Date. October 1, 2002.

            e. Expiration Date. March 31, 2004.

            f. Rent. Rent for the Premises shall be $10.00/rsf/year (i.e.,
$84,660.00), payable in equal monthly installments of $7,055.00, payable on or
before the first day of each month. Additional Rent shall be adjusted from time
to time as provided in Section 7 and Section 8 hereof.

            g. Security Deposit. $17,728.00.

            h. Parking. Tenant shall have the right to lease eight (8) parking
stalls in the parking garage portion of the Building on an unassigned basis at
the prevailing monthly rates as established by Landlord from time to time. The
leasing of parking stalls by Tenant shall be subject to such rules and
regulations as Landlord or its parking operator may adopt from time to time. In
addition to the above-referenced eight (8) parking stalls, Landlord will provide
up to ten (10) parking stalls on a month-to-month basis at market rates; until
such time that Landlord, at Landlord's sole discretion, needs up to said ten
(10) parking stalls for other building purposes. Notice Addresses.

                                     - 1 -
<PAGE>

                Landlord: 95 South Jackson, Suite 100
                          Seattle, WA 98104

                Tenant:   Aptimus, Inc.
                          95 South Jackson, Suite 300
                          Seattle, WA 98104

            i. Exhibits. The following exhibits or riders are made a part of
this Lease:

               Exhibit A - Legal Description of the Property
               Exhibit B - Floor Plan of Premises
               Exhibit C - Tenant Improvements
               Exhibit D - Memorandum of Lease
               Exhibit E - Additional Terms of Lease

      2. PREMISES. Landlord does hereby lease to Tenant, and Tenant does hereby
lease from Landlord, upon the terms and conditions herein set forth, the
Premises described in Section 1.b hereof, as shown on Exhibit B, together with
the appurtenances, including without limitation the right to use, in common with
others, the lobbies, elevators and other common areas in the Building located on
the Property.

      3. COMMENCEMENT AND EXPIRATION DATES.

            a. Commencement Date. The Commencement Date shall be the date
specified in Section 1.d hereof.

            b. Tenant Obligations. INTENTIONALLY DELETED.

            c. Tenant Termination Right. INTENTIONALLY DELETED.

            d. Confirmation of Commencement Date. At Landlord's request the
parties will execute a Memorandum of Lease in the form attached hereto as
Exhibit D.

            e. Expiration Date. The Lease shall expire on the date specified in
Section l.e.

      4. RENT. Tenant shall pay Landlord without notice the Rent stated in
Section l.f hereof and Additional Rent as provided in Section 7 and Section 8
and any other additional payments due under this Lease without deduction or
offset in lawful money of the United States in advance on or before the first
day of each month at Landlord's Notice Address set forth in Section 1.i hereof,
or to such other party at such other place as Landlord may hereafter from time
to time designate in writing. Rent and Addition Rent for any partial month at
the beginning or end of the Lease term shall be adjusted for the proportionate
fraction of the month.

      5. SECURITY DEPOSIT. As security for the full and faithful performance of
every covenant and condition of this Lease to be performed by Tenant, Tenant has
paid to Landlord the Security Deposit as specified in Section 1.g hereof under a
prior Lease between the parties dated September 23, 1997, receipt of which is
hereby acknowledged, which security deposit shall be applied as the Security
Deposit required hereunder. If Tenant shall default with respect to any material
covenant or condition of this Lease, including but not limited to the payment of
Rent, Additional Rent or any other payment due under this Lease, Landlord may
apply all or any part of the Security Deposit to the payment of any sum in
default or any other

                                     - 2 -
<PAGE>

sum which Landlord may be required or may in its reasonable discretion deem
necessary to spend or incur by reason of Tenant's default. In such event, Tenant
shall, within five (5) days of written demand therefor by Landlord, deposit with
Landlord the amount so applied. If Tenant shall have fully complied with all of
the covenants and conditions of this Lease, but not otherwise, the amount of the
Security Deposit then held by Landlord shall be repaid to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest hereunder) within
thirty (30) days after the expiration or sooner termination of this Lease. In
the event of Tenant's default under this Lease, Landlord's right to retain the
Security Deposit shall be deemed to be in addition to any and all other rights
and remedies at law or in equity available to Landlord. Landlord shall not be
required to keep any Security Deposit separate from its general funds and Tenant
shall not be entitled to any interest thereon.

      6. USES. The Premises are to be used only for general office purposes, and
for no other business or purpose without the prior written consent of Landlord,
which consent may be reasonably withheld if Landlord, in its sole discretion,
determines that any proposed use is inconsistent with or detrimental to the
maintenance and operation of the Building as a first-class office building in
Seattle, Washington or is inconsistent with any restriction on use of the
Premises, the Building or the Property contained in any lease, mortgage or other
agreement or instrument by which Landlord is bound or to which any of such
property is subject. Tenant shall not commit any act that will increase the then
existing rate of insurance on the Building without Landlord's consent. Tenant
shall promptly pay upon demand the amount of any increase in insurance rates
caused by any act or acts of Tenant. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or nuisance or other act
which disturbs the quiet enjoyment of any other tenant in the Building or which
is unlawful. Tenant shall not, without the written consent of Landlord, use any
apparatus, machinery or device in or about the Premises which will cause any
substantial noise, vibration or fumes. If any of Tenant's office machines or
equipment should disturb the quiet enjoyment of any other tenant in the
Building, then Tenant shall provide adequate insulation or take other action as
may be necessary to eliminate the disturbance. Tenant shall comply with all laws
relating to its use or occupancy of the Premises and shall observe such
reasonable rules and regulations (not inconsistent with the terms of this Lease)
as may be adopted and made available to Tenant by Landlord from time to time for
the safety, care and cleanliness of the Premises or the Building, and for the
preservation of good order therein.

      7. SERVICES AND UTILITIES.

            a. Standard Services. Landlord shall cause to be maintained the
Premises and the public and common areas of the Building, such as lobbies,
elevators, stairs, corridors and restrooms, in reasonably good order and
condition consistent with the operation and maintenance of the Building as a
first-class office building in Seattle, Washington, except for damage occasioned
by any act or omission of Tenant or Tenant's officers, contractors, agents,
invitees, licensees or employees, the repair of which damage shall be paid by
Tenant. Landlord shall furnish the Premises with electricity for normal office
use, including lighting and operation of personal computers, low power usage
office machines, water and elevator service at all times during the term of the
Lease. Landlord shall also provide lamp replacement service for building
standard light fixtures, toilet room supplies, window washing at reasonable
intervals and customary building janitorial service five (5) days each week. No
janitorial service shall be provided Saturdays, Sundays or legal holidays. The
Rent stated in Section l.f hereof does not include the costs of any janitorial
or other services provided or caused to be provided by Landlord to Tenant which
are in addition to the services ordinarily provided Building tenants and

                                     - 3 -
<PAGE>

such costs for additional services, if any, shall be paid by Tenant as
Additional Rent on the first day of the month following the month in which such
additional services are provided.

      From 7:00 a.m. to 6:00 p.m. on weekdays and from 8:00 a.m. to 1:00 p.m. on
Saturdays, excluding legal holidays ("Normal Business Hours"), Landlord shall
furnish to the Premises heat and air conditioning. If requested by Tenant,
Landlord shall furnish heat and air conditioning at times other than Normal
Business Hours and the cost of such services as established by Landlord shall be
paid by Tenant as Additional Rent. During other than Normal Business Hours,
Landlord may restrict access to the Building in accordance with the Building's
security system, provided that Tenant shall have at all times during the term of
this Lease (24 hours of all days) reasonable access to the Premises.

            b. Interruption of Services. Landlord shall not be liable for any
loss, injury or damage to person or property caused by or resulting from any
variation, interruption, or failure of such service due to any cause whatsoever,
unless such loss, injury or damage is caused by Landlord's negligence. No
temporary interruption or failure of such services incident to the making of
repair, alterations or improvements for a reasonable duration, or due to
accident, strike or conditions or events beyond Landlord's reasonable control
shall be deemed an eviction of Tenant or relieve Tenant from any of Tenant's
obligations hereunder.

            c. Additional Services. The Building Standard mechanical system is
designed to accommodate heating loads generated by lights and equipment using up
to 3.0 watts per square foot. Before installing lights and equipment in the
Premises which in the aggregate exceed such amount, Tenant shall obtain the
written permission of Landlord. Landlord may refuse to grant such permission
unless Tenant shall agree to pay the costs of Landlord for installation of
supplementary air conditioning capacity or electrical systems as necessitated by
such equipment or lights. In addition, Tenant shall in advance, on the first day
of each month during the Lease term, pay Landlord the reasonable amount
estimated by Landlord as the cost of furnishing electricity for the operation of
such equipment or lights and the reasonable amount estimated by Landlord as the
cost of operation and maintenance of supplementary air conditioning units
necessitated by Tenant's use of such equipment or lights. The Rent stated in
Section 1.f hereof does not include any amount to cover the cost of furnishing
electricity or such additional air conditioning for such purposes and such costs
shall be paid by Tenant as Additional Rent. Landlord shall be entitled to
install and operate at Tenant's cost a monitoring/metering system in the
Premises to measure the added demands on electrical, heating, ventilation and
air conditioning systems resulting from such equipment and lights and from
Tenant's after-hours heating, ventilation and air conditioning service
requirements. Landlord and Tenant shall mutually agree upon the cost of a
monitoring/metering system in the Premises prior to installation. Tenant shall
comply with Landlord's instructions for the use of thermostats in the Building.

            d. Security Services. Landlord will provide security guards to
patrol the Building and parking garage 24 hours per day. In addition, such
security guards will be available to escort personnel to and from the Building
upon request at any time of day or night. Entrance to the Building after hours
will be controlled by a computerized cardkey entry/exit system which
electronically records who enters and exits the Building, and also the date and
time of entry. Landlord will provide CATV cameras to monitor the access points
of the Building.

      8. COSTS OF OPERATIONS AND REAL ESTATE TAXES.

                                     - 4 -
<PAGE>

            a. Definitions. In addition to the Rent provided in Section 1.f of
this Lease, Tenant shall pay to Landlord increases under this Section 8 as
"Additional Rent," utilizing the following definitions:

                  i. "Operating Costs" shall include Real Property Taxes,
Services and Utility Costs.

                        (1) "Real Property Taxes" shall mean taxes on real
property and personal property; charges and assessments (or any installments
thereof due during the Lease Year) levied with respect to the Property, the
Building, any improvements, fixtures and equipment, and all other property of
Landlord, real or personal, used directly in the operation of the Building and
located in or on the Building; and any taxes levied or assessed (or any
installment thereof due during the Lease Year) in addition to or in lieu of, in
whole or in part, such real property or personal property taxes, or any other
tax upon leasing of the Building or rents collected, but not including any
federal or state income, estate, inheritance or franchise tax.

                        (2) "Service and Utility Costs" shall mean all other
expenses paid or incurred by Landlord for obtaining services and products for
maintaining, operating and repairing the Building and the personal property used
in conjunction therewith, including, without limitation, the costs of refuse
collection, water, sewer and other utilities services, electricity, gas and
other similar energy sources, supplies, janitorial and cleaning services, window
washing, landscape maintenance, services of independent contractors,
compensation (including employment taxes and fringe benefits) of all persons who
perform duties in connection with the operation, maintenance and repair of the
Building, its equipment and the Property upon which it is situated, insurance
premiums, licenses, permits, and inspection fees, customary management fees,
legal and accounting expenses and any other reasonable expenses or charges
whether or not hereinabove described, which in accordance with generally
accepted accounting and management practices would be considered an expense of
maintaining, operating or repairing the Building, excluding or deducting, as
appropriate:

                        (A) Costs of any special services rendered to individual
tenants (including Tenant);

                        (B) Depreciation or amortization of costs required to be
capitalized in accordance with generally accepted accounting practices (except
other Operating Costs shall include amortization of capital improvements made
subsequent to the initial development of the Building which are designed with a
reasonable probability of improving the operating efficiency of the Premises or
the Building, provided that such amortization expense shall not exceed
reasonably expected savings in operating costs resulting from such capital
improvements).

                        (C) Expenses incurred in leasing to or procuring new
tenants;

                        (D) Interest or amortization payments on any mortgage on
the Premises or the Building;

                        (E) Expenses for repairs or other work occasioned by
fire, windstorm or other insured casualty; and

                        (F) Legal expenses incurred in enforcing the terms of
any lease.

                                     - 5 -
<PAGE>

                  ii. "Lease Year" shall mean the twelve month period commencing
January 1 and ending December 31.

                  iii. Actual Operating Costs.

                        (1) "Actual Service and Utility Costs" shall mean the
actual expenses paid or incurred by Landlord for Service and Utility Costs
during any Lease Year of the term hereof.

                        (2) "Actual Real Property Taxes" shall mean the amount
of Real Property Tax paid or incurred by Landlord during any Lease Year of the
term hereof.

                  iv. Actual Operating Costs Allocable to the Premises.

                        (1) "Actual Service and Utility Costs Allocable to the
Premises" shall mean the Tenant's share of the Actual Service and Utility Costs
determined by multiplying Tenant's Percentage of the Building described in
Section 1.c by the Actual Service and Utility Costs except that, to the extent
such costs vary depending upon occupancy of the areas served, the variable
portion shall be allocated in accordance with Tenant's share of the weighted
average leased area of the Building during the Lease Year.

                        (2) "Actual Real Property Taxes Allocable to the
Premises" shall mean the Tenant's share of the Actual Real Property Taxes
determined by multiplying Tenant's Percentage of the Building described in
Section 1.c by the Actual Real Property Taxes.

                  v. Estimated Operating Costs Allocable to the Premises.

                        (1) "Estimated Service and Utility Costs Allocable to
the Premises" shall mean Landlords estimate of Actual Service and Utility Costs
Allocable to the Premises for the following Lease Year to be given by Landlord
to Tenant pursuant to Section 8.c.i below.

                        (2) "Estimated Real Property Taxes Allocable to the
Premises" shall mean Landlord's estimate of Real Property Taxes Allocable to the
Premises for the following Lease Year to be given by Landlord to Tenant pursuant
to Section 8.c.ii below.

                  vi. "Base Service Year" shall mean 2002.

            b. Base Amounts.

                  i. Real Property Taxes Base Amount. For purposes of this
Section 8, the Real Property Taxes Base Amount for the initial lease term shall
be the Actual Real Property Taxes Allocable to the Premises for the Base Service
Year.

                  ii. Service and Utility Costs Base Amount. For purposes of
this Section 8, the Service and Utility Costs Base Amount for the initial lease
term shall be an annualized amount equal to the Actual Service and Utility Costs
Allocable to the Premises for the Base Service Year.

            c. Additional Rent for Service and Utility Costs.

                                     - 6 -
<PAGE>

                  i. Additional Rent for Estimated Increases in Service and
Utility Costs. At the beginning of each Lease Year after the Base Service Year,
during the term hereof, Landlord shall furnish Tenant a written statement of the
Estimated Service and Utility Costs Allocable to the Premises, for such Lease
Year, and a calculation of the Additional Rent as follows: One-twelfth (1/12) of
the amount, if any, by which such amount exceeds the Service and Utility Costs
Base Amount shall be Additional Rent payable by Tenant as provided in Section 4
for each month during such Lease Year. If at any time or times during such Lease
Year, it appears to Landlord that the Actual Service and Utility Costs Allocable
to the Premises will vary from the Estimated Service and Utility Costs Allocable
to the Premises by more than five percent (5%) on an annual basis, Landlord may,
by written notice to Tenant, revise its estimate for such Lease Year and
Additional Rent payments by Tenant for the remainder of such Lease Year shall be
based on such revised estimate.

                  ii. Actual Service and Utility Costs. Within ninety (90) days
after the close of each Lease Year during the term hereof for which an estimated
statement was delivered to Tenant pursuant to subsection c.i, or as soon
thereafter as practicable, Landlord shall deliver to Tenant a written statement
setting forth the Actual Service and Utility Costs Allocable to the Premises
during the preceding Lease Year or such prorated portion thereof if this Lease
commences or terminates on a day other than the first or last day of a Lease
Year (based on a 365 day Lease Year). If such costs for any Lease Year exceed
Estimated Service and Utility Costs Allocable to the Premises paid by Tenant to
Landlord pursuant to subsection c.i, Tenant shall pay the amount of such excess
to Landlord as Additional Rent within thirty (30) days after receipt of such
statement by Tenant. If such statement shows such costs to be less than the
amount paid by Tenant to Landlord pursuant to subsection c.i, then the amount of
such overpayment by Tenant shall be credited by Landlord to the next Rent
payable by Tenant or, if the Lease has terminated, will be paid to Tenant.

            d. Additional Rent for Real Property Taxes.

                  i. Additional Rent for Estimated Increases in Real Property
Taxes. At the beginning of each Lease Year during the term hereof, Landlord
shall furnish Tenant a written statement of the Estimated Real Property Taxes
Allocable to the Premises, for such Lease Year, and a calculation of the
Additional Rent as follows: One-twelfth (1/12) of the amount, if any, by which
such amount exceeds the Real Property Taxes Base Amount shall be Additional Rent
payable by Tenant as provided in Section 4 for each month during such Lease
Year. If at any time or times during such Lease Year it appears to Landlord that
the Actual Real Property Taxes Allocable to the Premises will vary from the
Estimated Real Property Taxes Allocable to the Premises by more than five
percent (5%) on an annual basis, Landlord shall, by written notice to Tenant,
revise its estimate for such Lease Year and Additional Rent payments by Tenant
for the remainder of such Lease Year shall be based on such revised estimate.

                  ii. Actual Real Property Taxes. Within ninety (90) days after
the close of each Lease Year during the term hereof for which an estimated
statement was delivered to Tenant pursuant to subsection d.i, or as soon
thereafter as practicable, Landlord shall deliver to Tenant a written statement
setting forth the Actual Real Property Taxes

                                     - 7 -
<PAGE>

Allocable to the Premises during the preceding Lease Year or such prorated
portion thereof if this Lease commences or terminates on a day other than the
first or last day of a Lease Year (based on a 365 day Lease Year). If such taxes
for any Lease Year exceed Estimated Real Property Taxes Allocable to the
Premises paid by Tenant to Landlord pursuant to subsection d.i, Tenant shall pay
the amount of such excess to Landlord as Additional Rent within thirty (30) days
after receipt of such statement by Tenant. If such statement shows such cost to
be less than the amount paid by Tenant to Landlord pursuant to subsection d.i,
then the amount of such overpayment by Tenant shall be credited by Landlord to
the next Rent payable by Tenant or, if the Lease has terminated, will be paid to
Tenant.

            e. Calculations. The calculation of Actual Costs and Taxes and
Estimated Costs and Taxes Allocable to the Premises shall be made by Landlord.
Landlord or its agent shall keep records in reasonable detail showing and
supporting all expenditures made for the items enumerated above, which records
and receipts shall be available for inspection by Tenant at any reasonable time.

            f. Further Adjustment. In the event the Building for any Lease Year
is not fully occupied then the Estimated Costs and Actual Costs for such year
shall be proportionately adjusted by Landlord to reflect those costs which would
have occurred had the Building been fully occupied during such year.

            g. Base Rent. Notwithstanding anything to the contrary in this
Section 8, the Rent payable by Tenant shall in no event be less than the Rent
specified in Section l.f of this Lease.

            h. Personal Property Taxes. Tenant shall pay, prior to delinquency,
all Personal Property Taxes payable with respect to all personal property of
Tenant located on the Premises or the Building and promptly, upon request of
Landlord, shall provide written proof of such payment. As used herein, "personal
property of Tenant" shall include all improvements which are paid for by Tenant.
"Personal Property Taxes" shall include all property taxes assessed against the
property of Tenant, whether assessed as real or personal property.

      9. TENANT IMPROVEMENTS AND ALTERATIONS.

            a. Tenant Improvements. Landlord shall deliver the Premises to
Tenant with the improvements shown and/or described in Exhibit C.

            b. Alterations. Tenant shall not make any structural alterations or
improvements in or additions ("Alterations") to the Premises or make any changes
to locks on doors or add to, disturb or in any way change any of the wiring or
plumbing in the Premises or the Building, without first obtaining the written
consent of Landlord, and, when appropriate, in accordance with plans and
specifications approved by Landlord, which consent shall not be unreasonably
withheld. All such Alterations shall be at the sole cost and expense of Tenant
and shall be performed by contractors or mechanics approved by Landlord, which
consent shall not be unreasonably withheld. All work with respect to any such
Alterations shall be done in a good and workmanlike manner, shall be of a
quality equal to or exceeding the then existing construction standards for the
Building and must be of a type, and the floors and ceilings must be finished in
a manner, customary for general office use and other uses common to similar
office buildings in the vicinity. Such Alterations shall be diligently
prosecuted to completion. All such Alterations shall be made strictly in
accordance with all laws, regulations and ordinances relating thereto, and no
interior improvements installed by Landlord in the Premises (including Tenant's
Work) may be removed unless the same are promptly restored to a condition
similar or better. Landlord hereby reserves the right to require any contractor
or mechanic working the Premises to

                                     - 8 -
<PAGE>

provide lien waivers and liability insurance covering such Alterations to the
Premises. Tenant shall give Landlord ten (10) days' written notice of the
commencement of any Alterations and agrees to allow Landlord and its Lender to
enter the Premises at reasonable times and post appropriate notices to avoid
liability to contractors or material suppliers for payment for such Alterations.
Notwithstanding anything contained herein to the contrary, Tenant may make any
nonstructural interior Alterations that do not adversely affect the value of the
Premises, the structural integrity of the Building or any Building system
without Landlord's consent.

      No Alterations shall adversely affect either the strength or exterior
appearance, or the mechanical, electric or plumbing services of the Building.
Tenant shall reimburse Landlord for any reasonable sums expended by Landlord for
examination and approval of architectural or mechanical plans and specifications
of the Alterations. Tenant shall also reimburse Landlord for reasonable direct
costs incurred during any inspection of the Alterations. All damages or injury
done to the Premises or Building by Tenant or by any persons who may be in or
upon the Premises or Building with the express or implied consent of Tenant,
including but not limited to the cracking or breaking of any glass of windows
and doors, shall be paid for by Tenant and Tenant shall pay for all damage to
the Building caused by negligent acts or omissions of Tenant or Tenant's
officers, contractors, agents, invitees, licensees, or employees.

      10. CARE OF PREMISES.

            a. Tenant's Maintenance. Tenant shall take good care of the Premises
throughout the term of the Lease.

            b. Landlord's Maintenance. Landlord shall make, at its sole cost and
expense, all repairs and replacements and perform all maintenance necessary to
keep the Premises, the Building and the common areas in good working order and
repair and to maintain the Building and Premises in a clean, safe and tenantable
condition comparable to other first class office buildings in Seattle,
Washington. This maintenance and repair shall include without limitation the
roof, foundation, exterior walls, interior structural walls, all structural
components, utility lines, all systems, equipment and facilities serving the
Premises and the Building, such as mechanical, electrical, HVAC, plumbing and
sewer, replacement of lighting tubes, lamp ballasts and bulbs, and extermination
and pest control when necessary, and snow and ice removal, unless such repair is
Tenant's responsibility pursuant to Section 10.a. Landlord's work under this
Section 10 shall be accomplished with the least possible amount of interference
with the conduct of Tenant's business and, to the extent practicable, shall be
done after normal business hours.

      11. ACCEPTANCE OF PREMISES. If this Lease shall be entered into prior to
the completion of tenant improvements in the Premises, the acceptance of the
Premises by Tenant shall be deferred until Landlord informs Tenant of the
completion of such construction. Within ten (10) days ("Inspection Period")
after Landlord informs Tenant of such completion, Tenant shall make such
inspection of the Premises as Tenant deems appropriate. Except as otherwise
specified by Tenant in writing to Landlord within the Inspection Period, Tenant
shall be deemed to have accepted the Premises in their then condition. If, as a
result of such inspection, Tenant discovers minor deviations or variations from
the plans and specifications for Tenant's improvements of a nature commonly
found on a "punch list" (as the term is used in the construction industry),
Tenant shall, during the Inspection Period, notify Landlord of such deviations.
Landlord shall promptly repair all punch list items. The existence of such punch
list items, provided the correction thereof does not unreasonably interfere with
Tenant's use of the Premises, shall not postpone the Commencement Date of this
Lease or the obligation of Tenant to pay Rent.

                                     - 9 -
<PAGE>

      12. ACCESS. Tenant shall permit Landlord and its agents to enter into and
upon the Premises at all reasonable times upon timely notice to Tenant, except
in emergencies, for the purpose of inspecting the same or for the purpose of
cleaning, repairing, altering or improving the Premises or the Building. Nothing
contained in this Section 12 shall be deemed to impose any obligation upon
Landlord not expressly stated elsewhere in this Lease. When reasonably necessary
Landlord may temporarily close entrances, doors, corridors, elevators or other
facilities for a reasonable duration, without liability to Tenant by reason of
such closure and without such action by Landlord being construed as an eviction
of Tenant or release of Tenant from the duty of observing and performing any of
the provisions of this Lease. Landlord shall have the right to enter the
Premises upon timely notice to Tenant, except in emergencies, for the purpose of
showing the Premises to prospective tenants within the period of one hundred
eighty (180) days prior to the expiration or sooner termination of the Lease
term. Landlord will use its best efforts to minimize the impact on Tenant's
business of any entry by Landlord on the Premises.

      13. DAMAGE OR DESTRUCTION.

            a. Damage and Repair. If the Building or the Premises are damaged by
fire or any other cause to such extent that the cost of restoration, as
reasonably estimated by Landlord, will equal or exceed thirty percent (30%) of
the replacement value of the Building (exclusive of foundations) just prior to
the occurrence of the damage, or if insurance proceeds sufficient for
restoration are for any reason unavailable, then Landlord may no later than the
sixtieth (60th) day following the damage, give Tenant a notice of Landlord's
election to terminate this Lease. In the event of such election this Lease shall
be deemed to terminate on the third day after the giving of such notice, and
Tenant shall surrender possession of the Premises within a reasonable time
thereafter, and the Rent and Additional Rent shall be apportioned as of the date
of Tenant's surrender and any Rent paid for any period beyond such date shall be
repaid to Tenant. If the cost of restoration as estimated by Landlord shall
amount to less than thirty percent (30%) of said replacement value of the
Building and insurance proceeds sufficient for restoration are available, or if
Landlord does not elect to terminate this Lease, Landlord shall restore the
Building and the Premises (to a functional unit similar to the Premises prior to
such damages) with reasonable promptness, subject to delays beyond Landlord's
control and delays in the making of insurance adjustments by Landlord, and
Tenant shall have no right to terminate this Lease except as provided in this
Section 13. If the Premises are to be restored, the Rent shall be reduced, based
on the proportion of the square footage of the Premises rendered untenantable,
except in the event such damage resulted from or was contributed to, directly or
indirectly, by the act, fault or neglect of Tenant, Tenant's officers,
contractors, agents, employees, invitees or licensees, in which event Rent shall
abate only to the extent Landlord receives proceeds from any rental income
insurance policy to compensate Landlord for loss of Rent hereunder.

            b. Destruction During Last Year of Term. In case the Building shall
be substantially destroyed by fire or other cause at any time during the last
Lease Year of this Lease, either Landlord or Tenant may terminate this Lease by
written notice to the other party.

            c. Business Interruption. No damages, compensation or claim shall be
payable by Landlord for inconvenience, loss of business or annoyance arising
from any repair or restoration of any portion of the Premises or the Building.
Landlord shall use its best efforts to effect such repairs promptly.

            d. Tenant Improvements. Landlord will not be required to carry
insurance of any kind for any improvement paid for by Tenant as provided in
Exhibit C or for Tenant's

                                     - 10 -
<PAGE>

furniture, furnishings, fixtures, equipment or appurtenances of Tenant under
this Lease and Landlord shall not be obligated to repair any damage thereto or
replace the same, unless such damage is caused by Landlord's negligence.

            e. Express Agreement. The provisions of this Section 13 shall be
considered an express agreement governing any case of damage or destruction of
the Building or Premises by fire or other casualty.

      14. WAIVER OF SUBROGATION. Whether any loss or damage to the Premises, the
Building, or any property therein, is due to the negligence of either Landlord
or Tenant, their agents or employees, or any other cause, Landlord and Tenant do
each hereby waive any rights each may have against the other on account of any
loss or damage arising from any risk actually covered by insurance policies held
by the damaged party. Each party shall use best efforts to cause its insurance
carriers to consent to the foregoing waiver of rights of subrogation against the
other party. This clause shall be effective if, and only to the extent, that it
does not impair any insurance carried by either party, only if the required
waiver of subrogation endorsements can be obtained at a commercially reasonable
cost, and only to the extent of proceeds actually received.

      15. INDEMNIFICATION. Each party shall indemnify and hold the other
harmless from and against all common law or statutory liabilities, damages,
injuries, obligations, losses, claims, civil actions, costs, or expenses,
including attorneys fees, arising with respect to Tenant, from any act,
omission, or negligence of Tenant or its officers, contractors, licensees,
agents, servants, employees, guests, or invitees, in or about the Building or
the Premises, with respect to Landlord, from any act, omission or negligence of
Landlord or its officers, agents and employees, occurring in or about the
Building or the Premises or with respect to either party arising from any breach
or default under this Lease. As part of such indemnity, each party waives its
immunity from suit under the provisions of RCW 51, et seq.

      Neither party shall be liable for any loss or damage to persons or
property sustained by the other party or other persons, which may be caused by
theft, or by any act or neglect of any tenant or occupant of the Building or any
other third parties unless such loss or damage is due to the other party's
negligence.

      16. INSURANCE.

            a. Liability Insurance. Tenant shall, throughout the term of this
Lease and any renewal hereof, at its own expense, keep and maintain in full
force and effect, a policy of comprehensive general liability insurance
including a contractual liability endorsement covering Tenant obligations under
Section 15, insuring Tenant's activities upon, in or about the Premise, the
Building, or the Property, against claims of bodily injury or death or property
damage or loss with a limit of not less than One Million Dollars ($1,000,000)
combined single limit.

            b. Property Insurance. Tenant shall throughout the term of this
Lease and any renewal hereof at its own expense, keep and maintain in full force
and effect, what is commonly referrer to as "all risk" coverage insurance (but
excluding earthquake and flood) on the leasehold improvements constructed by
Tenant in the Premises and on the personal property of Tenant in the Premises in
an amount not less than the current one hundred percent (100%) replacement value
thereof.

            c. Insurance Policy Requirements. All insurance required under this
Section 16 shall be with companies reasonably approved by Landlord (need to add
specific

                                     - 11 -
<PAGE>

language on minimum of Best X). No insurance policy required under this Section
16 shall be cancelled or reduced in coverage and each insurance policy shall
provide that it is not subject to cancellation or a reduction in coverage except
after thirty (30) days prior written notice to Landlord.

      Tenant shall deliver to Landlord on or before the Commencement Date and
from time to time thereafter, copies of policies of such insurance or
certificates evidencing the existence and amounts of same and naming Landlord as
additional insured thereunder. In no event shall the Limits of any insurance
policy required under Section 16 be considered as limiting the liability of
Tenant under this Lease.

      17. ASSIGNMENT AND SUBLETTING.

            a. Assignment or Sublease. Tenant shall not assign, mortgage,
encumber or otherwise transfer this Lease or sublet the whole or any part of the
Premises without in each case first obtaining Landlord's prior written consent.
Such consent shall not be withheld except, (1) Landlord may withhold its consent
if in Landlord's judgment occupancy by any proposed assignee, subtenant or other
transferee: (i) is not consistent with the maintenance and operation of a first
class office building due to the proposed occupant's nature or manner of
conducting business, (ii) is likely to cause disturbance to the customary use
and occupancy of the Building by other tenants, their employees, customers,
clients or other guests or visitors, or (iii) is not reasonably deemed by
Landlord to be financially responsible; (2) Landlord may withhold, in its
absolute and sole discretion, consent to any mortgage, hypothecation, pledge or
other encumbrance of any interest in this Lease by Tenant or any subtenant,
whereby this Lease or any interest therein becomes collateral for any obligation
of Tenant or any other person; and (3) Landlord may withhold its consent to the
extent Landlord determines necessary to comply with a restriction on use of the
Premises, the Building or the Property contained in any lease, mortgage, or
other agreement or instrument by which the Landlord is bound or to which any of
such property is subject. No such assignment, subletting or other transfer shall
relieve Tenant of any liability under this Lease. Consent to any such
assignment, subletting or transfer shall not operate as a waiver of the
necessity for consent to any subsequent assignment, subletting or transfer.
Landlord reserves the right to terminate this Lease in the event of a requested
assignment, subletting or transfer of this Lease by Tenant. In the event less
than the entire Premises are to be subleased, Landlord retains the right to
terminate this Lease with respect to the portion of the Premises for which such
consent is requested, at the proposed effective date of such subletting, in
which event Landlord shall enter into the relationship of Landlord and Tenant
with any such subtenant or assignee as to the subleased portion, based on the
rent (and/or other compensation) and the term agreed to by such subtenant or
assignee and otherwise upon the terms and conditions of this Lease. In
connection with an assignment or subletting, Tenant shall pay the reasonable
cost of processing such assignment or subletting, including attorneys fees, upon
demand of Landlord. Tenant shall provide Landlord with copies of all
assignments, subleases and assumption instruments.

      If Tenant is a corporation, any transfer of this Lease by merger,
consolidation or liquidation, or any change in the ownership of, a majority of
its outstanding voting stock shall constitute an assignment for the purpose of
this Section 17.

      Notwithstanding anything herein to the contrary, Landlord shall not
reasonably withhold its consent to the following transfers:

                                     - 12 -
<PAGE>

                  i. the issuance and private placement of additional shares of
Tenant's corporate stock for the sole purpose of infusing venture capital monies
into the Tenant; or

                  ii. any transfer of shares of stock of Tenant which are
publicly traded or listed or which constitute an initial public offering; or

                  iii. any sale to or merger by Tenant with a corporation which
is publicly traded; or

                  iv. any sale or transfer of shares of Tenant's stock which
does not result in a change in the present control of Tenant by the person(s)
now owning a majority of the Tenant's shares.

      If Tenant is a partnership, any transfer of this Lease by merger,
consolidation liquidation, dissolution, or any change in the ownership of a
majority of the partnership interests shall constitute an assignment for the
purpose of this Section 17.

            b. Assignee Obligations. As a condition to Landlord's approval of
any assignment, any potential assignee otherwise approved by Landlord shall
assume in writing all obligations of Tenant under this Lease and shall be
jointly and severally liable with Tenant for the payment of Rent and performance
of all terms, covenants and conditions of this Lease.

            c. Sublessee Obligations. Any sublessee shall assume all obligations
of Tenant as to the portion of the Premises which is subleased to such sublessee
and shall be jointly and severally liable with Tenant for rental and other
payments and performance of all terms, covenants and conditions of such approved
sublease.

      18. SIGNS. Tenant shall not inscribe any inscription, or post, place, or
in any manner display any sign, graphics, notice, picture, placard or poster, or
any advertising matter whatsoever upon the glass panes or supports of the
windows and doors, or upon the exterior walls of the Premises or the Building,
or at any places visible (either directly or indirectly as an outline or shadow
on a glass pane) from anywhere outside the Premises without first obtaining
Landlord's written consent thereto, such consent to be at Landlord's sole
discretion. Any such consent by Landlord shall be upon the understanding and
condition that Tenant shall remove the same at the expiration or sooner
termination of this Lease and Tenant shall repair any damage to the Premises or
the Building caused thereby.

      19. LIENS AND INSOLVENCY.

            a. Liens. Tenant shall keep its interest in this Lease and any
property of Tenant in the Premises (other than unattached personal property),
the Premises, the Property and the Building free from all liens arising out of
any work performed or materials ordered or obligations incurred or on behalf of
Tenant and Tenant hereby indemnifies and holds Landlord harmless from any
liability from any such lien. In the event any lien is filed against the
Building, the Property or the Premises by any person claiming by, through or
under Tenant, Tenant shall, upon request of Landlord, at Tenant's expense,
immediately either cause such lien to be released of record or furnish to
Landlord a bond in form and amount and issued by a surety satisfactory to
Landlord, indemnifying Landlord, the Property and the Building against all
liability, costs and expenses, including attorneys fees, which Landlord may
incur as a result thereof. Provided that such bond has been furnished to
Landlord, Tenant, at its sole cost and expense and after written

                                     - 13 -
<PAGE>

notice to Landlord, may contest, by appropriate proceedings conducted in good
faith and with due diligence, any lien, encumbrance or charge against the
Premises, the Property or the Building arising from work done or materials
provided to and for Tenant, provided such proceedings suspend the collection
thereof against Landlord, and the Premises, Building and Property, and neither
the Premises, the Building, the Property nor any part thereof or interest
therein is or will be in any danger of being sold, forfeited or lost.

            b. Insolvency. If Tenant becomes insolvent or voluntarily or
involuntarily bankrupt, or if a receiver, assignee or other liquidating officer
is appointed for the business of Tenant, Landlord at its option may terminate
this Lease and Tenant's right of possession under this Lease and in no event
shall this Lease or any rights or privileges hereunder be an asset of Tenant in
any bankruptcy, insolvency or reorganization proceeding.

      20. DEFAULT.

            a. Cumulative Remedies. All rights of Landlord and Tenant herein
enumerated shall be cumulative, and none shall exclude any other right or remedy
allowed by law. In addition to the other remedies in this Lease provided, either
party shall be entitled to restrain by injunction the violation or attempted
violation by the other party of any of the covenants, agreements or conditions
of this Lease.

            b. Tenant's Right to Cure. Tenant shall have a period of ten (10)
business days from the day of written notice from Landlord to Tenant within
which to cure any default in the payment of Rent, Additional Rent or other sums
due hereunder. Each party shall have a period of ten (10) days from the date of
written notice from the other party within which to cure any other default
hereunder; provided, however, that with respect to any such default which cannot
be cured within ten (10) days, the default shall not be deemed to be uncured if
the defaulting party commences to cure within ten (10) days and for so long as
such party is diligently prosecuting the cure thereof.

            c. Vacation and Abandonment. Vacation shall be defined as a
prolonged absence from the Premises. Abandonment shall be defined as an absence
from the Premises of five (5) business days or more while Tenant is in default
after the expiration of all cure periods. Any vacation or abandonment by Tenant
shall be considered a default with no right to cure, allowing Landlord to re
enter the Premises under Section 20.d.

            d. Landlords Re-entry. Upon an uncured default of this Lease by
Tenant, Landlord, besides other rights or remedies it may have, at its option,
may enter the Premises or any part thereof, either with or without process of
law, and expel, remove or put out Tenant or any other persons who may be
thereon, together with all personal property found therein; and Landlord may
terminate this Lease, or it may from time to time, without terminating this
Lease and as agent of Tenant, rent the Premises or any part thereof for such
term or terms (which may be for a term less than or extending beyond the term
hereof), and at such rental or rentals and upon such other reasonable terms and
conditions as Landlord in its sole discretion may deem advisable, with the right
to repair, renovate, remodel, redecorate, alter and change the Premises, Tenant
remaining liable for any deficiency computed as hereinafter set forth. In the
case of any default, re-entry and/or dispossession, by summary proceedings or
otherwise, all Rent and Additional Rent shall become due thereupon and be paid
up to the time of such reentry or dispossession together with such expenses as
Landlord may reasonably incur for attorneys fees, advertising expenses,
brokerage fees and/or putting the Premises in good order or preparing the

                                     - 14 -
<PAGE>

same for re-rental together with interest thereon as provided in Section 35.f
hereof, accruing from the date of any such expenditure by Landlord.

            e. Reletting the Premises. At the option of Landlord, rents received
by Landlord from such reletting shall be applied first to the payment of any
indebtedness from Tenant to Landlord other than Rent and Additional Rent due
hereunder; second, to the payment of any costs and expenses of such reletting
and including, but not limited to, attorneys fees, advertising fees and
brokerage fees, and to the payment of any repairs, reasonable renovations,
reasonable remodeling, reasonable redecoration, reasonable alterations and
changes in the Premises; third, to the payment of Rent and Additional Rent due
and to become due hereunder, and if after so applying said rents there is any
deficiency in the Rent or Additional Rent to be part by Tenant under this Lease,
Tenant shall pay any deficiency to Landlord monthly on the dates specified
herein and any payment made or suits brought to collect the amount of the
deficiency for any month shall not prejudice in any way the right of Landlord to
collect the deficiency for any subsequent month. The failure of Landlord to
relet the Premises or any part or parts thereof shall not release or affect
Tenant's ability hereunder. In no event shall Tenant be entitled to receive any
excess of net rents collected over sums payable by Tenant to Landlord hereunder.
No such re-entry or taking possession of the Premises shall be construed as an
election on Landlord's part to terminate this Lease unless a written notice of
such intention be given to Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such previous breach and default. Should Landlord at any time terminate this
Lease by reason of any default, in addition to any other remedy it may have, it
may recover from Tenant any deficiency in the Rent and Additional Rent reserved
in this Lease for the balance of the Term, plus all court costs and attorneys
fees incurred by Landlord in the collection of the same.

            f. Waiver of Redemption Rights. Tenant, for itself, and on behalf of
any and all persons claiming through or under it, including creditors of all
kinds, does hereby waive and surrender all right and privilege which they or any
of them might have under or by reason of any present or future law, to redeem
the Premises or to have a continuance of this Lease for the term hereof, as it
may have been extended, after having been dispossessed or ejected therefrom by
process of law or under the terms of this Lease or after the termination of this
Lease as herein provided.

            g. Nonpayment of Additional Rent. All costs and expenses which
Tenant assumes or agrees to pay to Landlord pursuant to this Lease shall be
deemed Additional Rent and, in the event of nonpayment thereof, Landlord shall
have all the rights and remedies herein provided for in case of nonpayment of
Rent.

      21. PRIORITY. This Lease shall be subordinate to any first mortgage or
deed of trust (and any other mortgage or deed of trust upon the written election
of Landlord) now existing or hereafter placed upon the Property, the Building or
the Premises, created by or at the instance of Landlord, and to any and all
advances to be made thereunder and to interest thereon and all modifications,
renewals and replacements or extensions thereof ("Landlord's Mortgage"),
provided that, so long as Tenant is not in default under this Lease, Tenant's
peaceable possession of the Premises and its rights under this Lease will not be
disturbed on account thereof. In the event of any foreclosure or sale pursuant
to the Landlord's Mortgage, Tenant agrees to attorn to such beneficiary or
purchaser. Tenant shall properly execute, acknowledge and deliver documents
which the holder of any Landlord's Mortgage may require to effectuate the
provisions of this Section 21.

                                     - 15 -
<PAGE>

      22. SURRENDER OF POSSESSION. Subject to the terms of Section 13 relating
to damage and destruction, upon expiration of the term of this Lease, whether by
lapse of time or otherwise Tenant shall promptly and peacefully surrender the
Premises to Landlord in as good condition as when received by Tenant from
Landlord or as thereafter improved, reasonable use, wear and tear and damage by
casualty, described in Section 13 excepted.

      23. REMOVAL OF PROPERTY.

            a. Signs and Personal Property. Tenant shall remove (i) all
identifying insignia and design elements which are unique to Tenant's business
and installed by Tenant in or on the Premises, and (ii) all articles of personal
property and all business and trade fixtures, machinery and equipment, furniture
and movable partitions owned by Tenant or installed by Tenant at its expense in
the Premises which can be removed without damage to the Premises at the
expiration or sooner termination of this Lease. Tenant shall pay Landlord for
any damages for injury to the Premises or Building resulting from such removal.
If Tenant shall fail to remove any of its property of any nature whatsoever from
the Premises or the Building within five (5) business days after the expiration
or earlier termination of this Lease, Landlord may remove and store said
property without liability for loss thereof or damage thereto, such storage to
be for the account and at the expense of Tenant. If Tenant shall not pay the
cost of storing any such property after it has been stored for a period of
thirty (30) days or more, Landlord may, at its option, sell, or permit to be
sold, any or all such property at public or sale, in such manner and at such
times and places as Landlord in its sole discretion may deem proper, without
notice to Tenant, unless notice is required under applicable statutes, and shall
apply the proceeds of such sale: first, to the cost and expense of such sale,
including reasonable attorneys fees actually incurred; second, to the payment of
the costs or charges for storing any such property; third, to the payment of any
other sums of money which may then be or thereafter become due Landlord from
Tenant under any of the terms hereof; and, fourth, the balance, if any, to
Tenant.

            b. Alterations. All Alterations shall remain in and be surrendered
with the Premises as a part thereof at the expiration or earlier termination of
this Lease, without disturbance, molestation or injury, provided that Landlord
may, together with the written notice consenting to the construction of any such
Alterations notify Tenant that they be removed upon the expiration or earlier
termination of this Lease. In such event, all expense to remove such Alterations
and to restore the Premises to standards, prior to such Alterations, less normal
wear and tear, shall be borne by Tenant.

      24. NON-WAIVER. Waiver by either party of any term, covenant or condition
herein contained any breach thereof shall not be deemed to be a waiver of such
term, covenant, or condition or of any subsequent breach of the same or any
other term, covenant, or condition herein contained. In addition, the subsequent
acceptance of Rent or Additional Rent hereunder by Landlord shall not be deemed
to be a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
Rent or Additional Rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent or Additional Rent.

      25. HOLDOVER. If Tenant shall, with the written consent of Landlord, hold
over after the expiration of the term of this Lease, such tenancy shall be
deemed a month-to month tenancy which may be terminated as provided by
applicable state law. During such tenancy, Tenant shall be bound by all of the
terms, covenants and conditions herein so far as applicable, except rental which
shall be the greater of (a) the then quoted rates for similar space in the
Building, or (b) 150% of the the Rent and Additional Rent stated herein.

                                     - 16 -
<PAGE>

      26. CONDEMNATION.

            a. Entire Taking. If all of the Premises or such portions of the
Building as may be required for the reasonable use by Tenant of the Premises,
are taken by eminent domain, this Lease shall automatically terminate as of the
date title vests in the condemning authority and all Rent, Additional Rent and
other payments shall be paid to or reimbursed as of that date.

            b. Constructive Taking of Entire Premises. In the event of a taking
of a material part of but less than all of the Building, where Landlord shall
determine that the remaining portions of the Building cannot be economically and
effectively used by it (whether on account of physical, economic, aesthetic or
other reasons) or where Landlord determines the Building should be restored in
such a way as to materially alter the Premises, Landlord shall forward a written
notice to Tenant of such determination not more than sixty (60) days after the
date of taking. The term of this Lease shall expire upon such date as Landlord
shall specify in such notice but not earlier than sixty (60) days after the date
of such notice. In the event of a taking of a material part, but less than all,
of the Premises, Tenant shall have the right to terminate this Lease as of the
date of such taking.

            c. Partial Taking. Subject to the provisions of the preceding
Section 26.b, in case of taking of a thirty percent (30%) or less of the square
footage of the Premises, or a portion of the Building not required for the
reasonable use of the Premises, then this Lease shall continue in full force and
effect and the Rent shall be equitably reduced based on the proportion by which
the square footage of the Premises is reduced, such Rent reduction to be
effective as of the date title to such portion vests in the condemning
authority.

            d. Awards and Damages. Landlord reserves all rights to damages to
the Premises for any partial, constructive, or entire taking by eminent domain,
and Tenant hereby assigns to Landlord any right Tenant may have to such damages
or award, and Tenant shall make no claim against Landlord or the condemning
authority for damages for termination of the leasehold interest. Tenant shall
have the right, however, to claim and recover from the condemning authority
compensation for any loss to which Tenant may be put for Tenant's moving
expenses, business interruption or taking of Tenant's personal property (not
including Tenant's leasehold interest) provided that such damages may be claimed
only if they are awarded separately in the eminent domain proceedings and not
out of or as part of the damages recoverable by Landlord.

      27. NOTICES. All notices under this Lease shall be in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
Landlord and to Tenant at the Notice Addresses provided in Section l.j (provided
that after the Commencement Date any such notice shall be mailed or delivered by
hand to Tenant at the Premises) and to the holder of any Landlord's Mortgage at
such place as such holder shall specify to Tenant in writing; or such other
addresses as may from time to time be designated by any such party in writing.
Notices mailed as aforesaid shall be deemed given on the date of such mailing.

      28. COSTS AND ATTORNEYS' FEES. If Tenant or Landlord shall bring any
action for any relief against the other, declaratory or otherwise, arising out
of this Lease, including any suit by Landlord for the recovery of Rent,
Additional Rent or other payments hereunder or possession of the Premises, the
losing party shall pay the prevailing party a reasonable sum for attorney's and
paralegal's fees in such suit, at trial and on appeal, and such attorneys fees
shall be deemed to have accrued on the commencement of such action.

                                     - 17 -
<PAGE>

      29. LANDLORD'S LIABILITY. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the part
of Landlord are made and intended not as personal covenants, undertakings and
agreements for the purpose of binding Landlord personally or the assets of
Landlord but are made and intended for the purpose of binding only the
Landlord's interest in the Premises, the Building, and the Property, as the same
may from time to time be encumbered. No personal liability or personal
responsibility is assumed by, nor shall at any time be asserted or enforceable
against Landlord or its members or their respective heirs, legal
representatives, successors or assigns on account of the Lease or on account of
any covenant, undertaking or agreement of Landlord in this Lease contained.

      30. LANDLORD'S CONSENT. Except as specified in other provisions of this
Lease, whenever Landlord's consent is required under the terms hereof, such
consent shall not be unreasonably withheld, provided, the withholding of
Landlord's consent due to any mortgagee's refusal to grant its consent, shall
not be deemed unreasonable.

      31. ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon written
request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating: the date this Lease was executed and the
date it expires; the date the term commenced and the date Tenant accepted the
Premises; the amount of minimum monthly Rent and the date to which such Rent has
been paid; and certifying: that this Lease is in full force and effect and has
not been assigned, ratified, supplemented or amended in any way (or specifying
the date and terms of agreement so affecting this Lease); that this Lease
represents the entire agreement between the parties as to this leasing; that all
conditions under this Lease to be performed by the Landlord have been satisfied;
that all required contributions by Landlord to Tenant on account of Tenant's
improvements have been received; that on this date there are no existing claims,
defenses or offsets which the Tenant has against the enforcement of this Lease
by the Landlord; that no Rent has been paid more than one month in advance; and
that no security has been deposited with Landlord (or, if so, the amount
thereof). It is intended that any such statement delivered pursuant to this
paragraph may be relied upon by a prospective purchaser of Landlord's interest
or assignee of any mortgage upon Landlord's interest in the Building. If Tenant
shall fail to respond within ten (10) days of receipt by Tenant of a written
request by Landlord as herein provided, Tenant shall be deemed to have given
such certificate as above provided without modification and shall be deemed to
have admitted the accuracy of any information supplied by Landlord to a
prospective purchaser or mortgagee and to have certified that this Lease is in
full force and effect, that there are no uncured defaults in Landlord's
performance, that the security deposit is as stated in the Lease, and that not
more than one month's Rent has been paid in advance.

      32. TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer or
transfers of Landlord's interest in the Premises, the Building, or the Property
other than a transfer for security purposes only, the transferor shall be
automatically relieved of any and all obligations and liabilities on the part of
Landlord accruing from and after the date of such transfer, provided the
transferee accepts the obligations of Landlord under the Lease, and such
transferee shall have no obligation or liability with respect to any matter
occurring or arising prior to the date of such transfer. Tenant agrees to attorn
to the transferee.

      33. RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money
required to be paid by it hereunder; or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for ten (10)
days after notice thereof by Landlord,

                                     - 18 -
<PAGE>

Landlord may, but shall not be obligated so to do, and without waiving or
releasing Tenant from any obligations of Tenant, make such payment or perform
any such other act on Tenant's part to be made or performed as provided in this
Lease. Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the nonpayment of sums
due under this Section 33 as in the case of default by Tenant in the payment of
Rent.

      34. AUTHORITY.

            a. Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of Tenant represents and warrants that he or she
is duly authorized to execute and deliver this Lease on behalf of Tenant, in
accordance with a duly adopted resolution of the Board of Directors of Tenant
and in accordance with the bylaws of Tenant, and that this Lease is binding upon
Tenant in accordance with its terms. At Landlord's request, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of a resolution of the Board of Directors of Tenant authorizing or
ratifying the execution of this Lease.

            b. Partnership Authority. If Tenant is a partnership, each
individual executing this Lease on behalf of Tenant represents and warrants that
he or she is duly authorized to execute and deliver this Lease on behalf of
Tenant, in accordance with the partnership agreement of Tenant, ant that this
Lease is binding upon Tenant in accordance with its terms.

      35. OPTION TO RENEW. INTENTIONALLY DELETED.

      36. RIGHT OF FIRST OPPORTUNITY. INTENTIONALLY DELETED.

      37. GENERAL.

            a. Headings. Titles to Sections of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part hereof.

            b. Heirs and Assigns. All of the covenants, agreements, terms and
conditions contained in this Lease shall inure to and be binding upon the
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.

            c. No Brokers. Tenant represents and warrants to Landlord that it
has not engaged any broker, finder or other person who would be entitled to any
commission or fees in respect of the negotiation, execution or delivery of this
Lease, and shall indemnify and hold harmless Landlord against any loss, cost,
liability or expense incurred by Landlord as a result of any claim asserted by
any such broker, finder or other person on the basis of any arrangements or
agreement made or alleged to have been made by or on behalf of Tenant. The
provisions of this Section 37.c shall not apply to brokers with whom Landlord
has an express written broker agreement.

            d. Entire Agreement. This Lease contains all covenants and
agreements between Landlord and Tenant relating in any manner to the leasing,
use and occupancy of the Premises, and to Tenant's use of the Building and other
matters set forth in this Lease. No prior agreements or understanding pertaining
to the same shall be valid or of any force or effect. The covenants and
agreements of this Lease shall not be altered, modified or added to except in
writing signed by Landlord and Tenant.

                                     - 19 -
<PAGE>

            e. Severability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and the remaining provisions hereof shall nevertheless remain
in full force and effect.

            f. Overdue Payments. Any Rent, Additional Rent or other sums payable
by Tenant to Landlord under this Lease which shall not be paid upon the due date
thereof, shall bear interest at a rate equal to three percentage points above
the prime rate of interest stated from time to time by Bank of America or its
successor, or, in the absence of an established prime rate, five percentage
points over that bank's rate for one year certificates of deposit, but not in
excess of the highest lawful rate permitted under applicable laws, calculated
from the original due date thereof to the date of payment.

            g. Force Majeure. Except for the payment of Rent, Additional Rent or
other sums payable by Tenant to Landlord, time periods for Tenant's or
Landlord's performance under any provision, of this Lease shall be extended for
periods of time during which Tenant's or Landlord's performance is prevented due
to circumstances beyond Tenant's or Landlord's control, including without
limitation, strikes, embargoes, shortages of labor or materials, governmental
regulations, acts of God, war or other strife.

            h. Right to Change Public Spaces. Landlord shall have the right at
any time after the completion of the Building, without thereby creating an
actual or constructive eviction or incurring any liability to Tenant therefor,
to change the arrangement or location of such of the following as are not
contained within the Premises or any part thereof: entrances, passageways, doors
and doorways, corridors, stairs, toilets and other like public service portions
of the Building. Nevertheless, in no event shall Landlord diminish any service,
change the arrangement or location of the elevators serving the Premises, make
any change which shall diminish the area of the Premises, or make any change
which shall change the character of the Building from that of a first-class
office building.

            i. Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the state of Washington.

            j. Building Directory. Landlord shall maintain in the lobby of
Building a directory which shall include the name of Tenant and any other names
reasonably requested by Tenant in proportion to the number of listings given to
comparable tenants of the Building.

            k. Building Name. The Building will be known by such name as
Landlord may designate from time to time.

      IN WITNESS WHEREOF this Lease has been executed the day and year first
above set forth.

"LANDLORD"                         MERRILL PLACE, LLC,
                                   a Washington limited liability company

                                   By: NSD, LLC, a Washington limited liability
                                       company, its manager

                                       By
                                           ------------------------------------
                                           Kevin Daniels, Member

                                     - 20 -
<PAGE>

"TENANT"                           APTIMUS, INC.,
                                   a Washington corporation

                                   By
                                       ----------------------------------------

                                       Its
                                           ------------------------------------

STATE OF WASHINGTON  )
                     ) ss.
COUNTY OF KING       )

      I certify that I know or have satisfactory evidence that KEVIN DANIELS is
the person who appeared before me, and said person acknowledged that he signed
this instrument, on oath stated that he was authorized to execute the instrument
and acknowledged it as a Member of NSD, LLC, in its capacity as the Manager of
MERRILL PLACE LLC, to be the free and voluntary act and deed of each of said
limited liability companies, for the uses and purposes mentioned in the
instrument.

      WITNESS my hand and official seal hereto affixed this ______ day of
_________________________, 2002.

                                    --------------------------------------------
                                    (Signature of Notary)

                                    --------------------------------------------
                                    (Print or stamp name of Notary)
                                    NOTARY PUBLIC in and for the State
                                    of Washington
                                    My Appointment Expires:

STATE OF WASHINGTON  )
                     ) ss.
COUNTY OF KING       )

      I certify that I know or have satisfactory evidence that
_________________________________ is the person who appeared before me, and said
person acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument and acknowledged it as the
_______________________ of APTIMUS, INC., to be the free and voluntary act and
deed of said corporation, for the uses and purposes mentioned in the instrument.

      WITNESS my hand and official seal hereto affixed this _____ day of
________________________, 2002.

                                     - 21 -
<PAGE>

                                    --------------------------------------------
                                    (Signature of Notary)

                                    --------------------------------------------
                                    (Print or stamp name of Notary)
                                    NOTARY PUBLIC in and for the State
                                    of Washington
                                    My Appointment Expires:

                                     - 22 -
<PAGE>

                                    EXHIBIT A

                          Legal Description of Property

<PAGE>

                                    EXHIBIT B

                             Floor Plan of Premises

<PAGE>

                                    EXHIBIT C

                               Tenant Improvements
                         (to be attached if applicable)

<PAGE>

                                    EXHIBIT D

                               MEMORANDUM OF LEASE

      THIS MEMORANDUM OF LEASE, made effective as of the 1st day of October,
2002, by and between MERRILL PLACE, LLC, a Washington limited liability company
("Landlord") and APTIMUS, INC., a Washington corporation ("Tenant),

      WITNESSETH:

      IN CONSIDERATION of the rents reserved in that certain Lease Agreement
between the parties dated October 1, 2002, and of the terms, covenants,
conditions and agreements on the part of Tenant therein, Landlord leases to
Tenant certain real property located in the City of Seattle, County of King,
State of Washington, upon which Landlord owns a building to be used for Tenant's
offices, which property is designated in said Lease Agreement and located on a
portion of the real property described on Exhibit A attached hereto and made a
part hereof; together with all and singular the building or buildings,
privileges and advantages, with any and all appurtenances belonging or in any
way appertaining to the real property hereby leased, including the right in
Tenant, its successors, assigns, subtenants, employees, customers, licensees and
invitees or use the sidewalks, common areas and access areas to and from public
streets and highways.

      TO HAVE AND TO HOLD the premises for a term commencing on October 1, 2002,
and ending on March 31, 2004, upon the terms, covenants and conditions specified
in the Lease Agreement.

      IN WITNESS WHEREOF, the parties executed this instrument the date first
above written.

"LANDLORD"                        MERRILL PLACE, LLC,
                                  a Washington limited liability company

                                  By: NSD, LLC, a Washington limited liability
                                      company, its manager

                                      By
                                         -------------------------------------
                                         Kevin Daniels, Member

"TENANT"                          APTIMUS, INC.,
                                  a Washington corporation

                                  By
                                     -----------------------------------------
                                      Its
                                          ------------------------------------

                                      - 1 -
<PAGE>

STATE OF WASHINGTON  )
                     ) ss.
COUNTY OF KING       )

      I certify that I know or have satisfactory evidence that KEVIN DANIELS is
the person who appeared before me, and said person acknowledged that he signed
this instrument, on oath stated that he was authorized to execute the instrument
and acknowledged it as a Member of NSD, LLC, in its capacity as the Manager of
MERRILL PLACE LLC, to be the free and voluntary act and deed of each of said
limited liability companies, for the uses and purposes mentioned in the
instrument.

      WITNESS my hand and official seal hereto affixed this ______ day of
_________________________, 2002.

                                    --------------------------------------------
                                    (Signature of Notary)

                                    --------------------------------------------
                                    (Print or stamp name of Notary)
                                    NOTARY PUBLIC in and for the State
                                    of Washington
                                    My Appointment Expires:

STATE OF WASHINGTON  )
                     ) ss.
COUNTY OF KING       )

      I certify that I know or have satisfactory evidence that
_________________________________ is the person who appeared before me, and said
person acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument and acknowledged it as the
_______________________ of APTIMUS, INC., to be the free and voluntary act and
deed of said corporation, for the uses and purposes mentioned in the instrument.

      WITNESS my hand and official seal hereto affixed this _____ day of
________________________, 2002.

                                    --------------------------------------------
                                    (Signature of Notary)

                                    --------------------------------------------
                                    (Print or stamp name of Notary)
                                    NOTARY PUBLIC in and for the State
                                    of Washington
                                    My Appointment Expires:

                                     - 2 -
<PAGE>

                                    EXHIBIT E

                            Additional Terms of Lease
                                     (None)MANUFACTURE AND SUPPLY AGREEMENT

                             dated December 20, 2002

                                     between

                               GENTA INCORPORATED

                                       and

                            AVECIA BIOTECHNOLOGY INC.

 (*) Represents language that is redacted and subject to Confidential Treatment
<PAGE>

                        MANUFACTURE AND SUPPLY AGREEMENT

      This MANUFACTURE AND SUPPLY AGREEMENT (this "Agreement") is made and
entered into as of December 20, 2002 ("Effective Date"), by and between GENTA
INCORPORATED, a Delaware corporation ("Genta") and AVECIA BIOTECHNOLOGY INC., a
Delaware corporation ("Avecia").

      WHEREAS, the Parties intend that Avecia shall manufacture API (as defined
below) for Genta (for both world-wide commercial purposes and clinical
purposes).

      NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Parties hereto (and Avecia Limited, as Avecia's guarantor) agree as
follows:

                                    ARTICLE 1

                                   DEFINITIONS

Capitalized words and phrases used and not otherwise defined elsewhere in this
Agreement shall have the following meanings:

      1.1 "Affiliate" means, with reference to a specified Person, a Person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the specified Person. For
purposes of this paragraph, "control" shall be presumed to exist if one of the
following conditions is met: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares having
the right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities. The Parties acknowledge that in the
case of certain entities organized under the laws of certain countries outside
of the United States, the maximum percentage ownership permitted by law for a
foreign investor may be less than fifty percent (50%), and that in such case
such lower percentage shall be substituted in the preceding sentence, provided
that such foreign investor has the power to direct the management and policies
of such entity.

      1.2 "API" or "Active Pharmaceutical Ingredient" means G3139 (also known as
oblimersen sodium), that certain all-phosphorothioate oligonucleotide consisting
of 18 modified nucleic acid bases with the sequence and chemical structure set
forth in Schedule 1.2 attached hereto.

      1.3 "Batch" means that quantity of API that is manufactured by Avecia from
a single freeze-dryer cycle or run as further set forth in the master batch
record.

      1.4 "Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in the State of New York
are authorized by law, regulation or executive order to close.

                                       2
<PAGE>

      1.5 "cGMPs" means current good manufacturing practice and standards as
provided for (and as amended from time to time) in European Community Directive
91/356/EEC (Principles and guidelines of good manufacturing practice for
medicinal products) and in the Current Good Manufacturing Practice Regulations
of the U.S. Code of Federal Regulations Title 21 (21 C.F.R. ss.ss. 210 and 211)
in relation to the production of pharmaceutical intermediates and active
pharmaceutical ingredients, as interpreted by ICH Harmonised Tripartite
Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical
Ingredients, Q7a and subject to any arrangements, additions or clarifications,
and respective roles and responsibilities, agreed from time to time between the
Parties in the Quality Agreement.

      1.6 "Commercially Reasonable Efforts" means, with respect to a Party, the
efforts and resources which would be used (including without limitation the
promptness in which such efforts and resources would be applied) by such Party,
consistent with generally-accepted industry standards, with regard to the
diligent manufacture and supply of similar pharmaceutical drug substance.

      1.7 "Contract" means any oral or written agreement, contract, obligation,
promise, arrangement or undertaking that is legally binding.

      1.8 "DDP" means "Delivered Duty Paid" as that term is defined in INCOTERMS
2000, except to the extent of the division of costs as expressly provided in
Section 6.2.

      1.9 "DDU" means "Delivery Duty Unpaid" as that term is defined in
INCOTERMS 2000, except to the extent of the division of costs as expressly
provided in Section 6.2.

      1.10 "FDA" means the U.S. Food and Drug Administration, or any successor
entity thereto or foreign counterpart thereof.

      1.11 "Genta Partner" means any Person which, pursuant to any agreement,
collaboration or other arrangement with Genta, distributes, markets and/or sells
the Genta Product, together with such Person's Affiliates. The Parties agree
that as of the date hereof Aventis Pharmaceuticals Inc. and its Affiliates shall
together be the "Principal Genta Partner" for the purposes of this Agreement.

      1.12 "Genta Product" shall mean a pharmaceutical product including the API
as an active ingredient.

      1.13 "Governmental Authority" means any (1) nation, state, county, city,
town, village, district or other jurisdiction of any nature, (2) federal, state,
local, municipal, foreign or other government, (3) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal,
including an arbitral tribunal), (4) multi-national organization or body, or (5)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing power of any nature.

                                       3
<PAGE>

      1.14 "Indemnifiable Losses" means all losses, liabilities, taxes, damages,
deficiencies, obligations, fines, expenses, penalties, costs, fees, settlement
amounts and expenses (including without limitation court costs, interest and
reasonable fees for attorneys, accountants and other experts) awarded or
otherwise required to be paid to Third Parties with respect to any Third Party
Claim by reason of any judgment, order, decree, stipulation or injunction, or
any settlement entered into in accordance with the provisions of this Agreement,
together with all documented out-of-pocket costs and expenses paid to Third
Parties and incurred in connection with defending against or settling such Third
Party Claim (including without limitation reasonable fees of attorneys,
accountants and other experts and expenses incurred in asserting, preserving or
enforcing any of the Indemnified Party's rights to indemnification hereunder).

      1.15 "Judgment" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict of any court, arbitral tribunal, administrative
agency or other Governmental Authority having jurisdiction of a Party.

      1.16 "Key Raw Materials" shall mean (*), and such other raw materials
agreed upon by the Parties based on changes in the manufacturing process,
volumes or Specifications.

      1.17 "Law" means any applicable federal, state, local, municipal, foreign,
international, multinational or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute or treaty.

      1.18 "Lien" means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership.

      1.19 "M1 Facility" means the manufacturing module already built as at the
date hereof by Avecia at its Milford, Massachusetts premises designated as M1,
as further described in Schedule 1.19.

      1.20 "M2 Facility" means the manufacturing module to be built by Avecia at
its Milford, Massachusetts premises, as further described in Schedule 1.19.

      1.21 "Occurrence" means a cause of action or series of related causes of
action arising out of the same underlying facts.

      1.22 "Other Raw Materials" means all such ingredients, solvents and other
components as are necessary to be utilized to perform the manufacturing and
processing activities hereunder and to meet the Specifications, but excluding
the Key Raw Materials.

      1.23 "Party" or "Parties" means Genta and/or Avecia.

      1.24 "Patent Rights" means any patents, published patent applications,
certificates of invention, or applications for certificates of invention and any
supplemental protection certificates, together with any extensions,
registrations, confirmations, reissues, divisions, continuations or
continuations-in-part, reexaminations or renewals thereof, that may be sought
throughout the world.

                                       4
<PAGE>

      1.25 "Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Authority or other entity.

      1.26 "Raw Materials" means Key Raw Materials and Other Raw Materials,
collectively.

      1.27 "Reckless Disregard" means the intentional failure to perform a
manifest duty in reckless disregard of the consequences as affecting the life or
property (including, without limitation, any API delivered or to be delivered
under this Agreement) of another.

      1.28 "Regulatory Authority" means the FDA or any court, tribunal,
arbitrator, agency, commission, official or other instrumentality of any
federal, state, county, city or other political subdivision, domestic or
foreign, that performs a function for such political subdivision similar to the
function performed by the FDA for the United States with regard to the approval,
licensing, registration or authorization to test, manufacture, promote, market,
distribute, use, store, import, transport or sell a product in the defined
territory or political subdivisions.

      1.29 "Regulatory Filing" means the new drug application ("NDA") or
biologic license application ("BLA") or any foreign counterparts thereof and any
other filings required by Regulatory Authorities relating to the manufacture of
API under this Agreement.

      1.30 "Regulatory Requirements" means (i) any and all permits, licenses,
filings and certifications required by the FDA or other Regulatory Authorities,
and compliance with the cGMPs of the FDA or other Regulatory Authorities,
applicable to any manufacturing or processing activities hereunder or
Manufacturing Facilities or other facilities at which any of the manufacturing
or processing activities hereunder are performed, and (ii) any Laws, rules,
guidelines, regulations, and standards of any Governmental Authority, whether
within or outside the United States (including, without limitation, the
Environmental Protection Agency (EPA), the Occupational Safety and Health
Administration (OSHA), the Drug Enforcement Administration (DEA) and state and
local authorities), that apply to any manufacturing or processing activities
hereunder or Manufacturing Facilities or other facilities at which any of the
manufacturing or processing activities hereunder are performed.

      1.31 "Representative" means, with respect to a particular Person, any
director, officer, employee, agent, consultant, legal counsel, accountants and
financial advisors.

      1.32 "Shelf Life" means, with respect to particular quantities of API, the
total time from date of such API's manufacture until the latest point in time at
which such API's conformance with Specifications can, in consideration of the
passage of time, continue to be assured.

      1.33 "Specifications" means those API specifications attached hereto as
Schedule 1.33, as such specifications may be amended from time to time by Genta
in accordance with Article 4 of this Agreement.

      1.34 "(*)Gram" means that quantity of API containing (*).

                                       5
<PAGE>

      1.35 (*) Kilogram" means one thousand (*) Grams.

      1.36 "Third Party" means any Person other than (i) the Parties and their
respective Affiliates and (ii) any Genta Partner.

      1.37 "2000 Supply Agreement" means the Manufacturing and Supply Agreement
dated December 21, 2000 between Genta and Avecia as amended and supplemented by
Letter Agreement No.1 dated February 7, 2002, between them and any such other
amending or supplemental agreements or terms which may be agreed in writing
between them.

      1.38 "Waste" shall mean any "hazardous substance" and/or "hazardous
material" as provided under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), any "hazardous waste" as provided under
the Resource Conservation and Recovery Act (RCRA), and/or any other waste
material, pollutant and/or contaminant of any kind including, without
limitation, any routine process waste or any by-product arising from any
activities conducted pursuant to this Agreement.

      1.39 Volume and Quantity References. All references in this Agreement to
quantity or volume of API (including those in Article 5 (Foreasts), Article 6
(Orders and Shipment) and Article 9 ( (*))) shall be deemed to refer to such
quantity or volume of API expressed or calculated in (*) Grams or (*) Kilograms,
unless context otherwise requires.

      1.40 Other Defined Terms. Each of the following terms shall have the
meaning ascribed to such term in the respective section opposite it below:

         Term                                        Section
         ----                                        -------
         Actual Delay....................................6.8
         (*)
         Anticipated Delay...............................6.8
         (*)
         Confidential Information.....................14.3.1
         Conforming Product..............................8.2
         (*)
         Delay...........................................6.8
         Delivery Period...............................6.1.1
         Development Plan................................4.5
         (*)
         Discretionary Change............................4.5
         DMF............................................11.6
         Event of Force Majeure.......................18.1.1
         Excess Portion................................5.1.5
         Excess Surplus................................5.1.5
         (*)
         Firm Order....................................5.1.4
         Indemnified Party............................16.2.1
         Indemnifying Party...........................16.2.1
         (*)
         Initial Term...................................17.1

                                       6
<PAGE>

         Joint Team......................................3.8
         Joint Team Member...............................3.8
         (*)
         Lead Joint Team Member..........................3.8
         Long Range Forecast...........................5.1.2
         Manufacturing Facilities........................3.2
         Minimum Percentages...........................2.2.1
         New Manufacturing Modules.....................3.3.1
         Nominated Manufacturers......................13.6.1
         (*)
         PAI Ready......................................11.4
         (*)
         Primary Liaison.................................3.8
         Proposed Discretionary Changes..................4.4
         Purchase Order................................6.1.1
         Quality Agreement...............................3.1
         (*)
         Recall.........................................12.6
         (*)
         Registration...................................11.1
         Renewal Term...................................17.1
         Required Changes................................4.2
         (*)
         Required Testing..............................8.5.1
         Rolling Forecast..............................5.1.1
         Seizure........................................12.6
         Shipment Samples................................6.4
         Standby Events.................................13.5
         Standby Rights.................................13.6
         Supply Price ...................................7.1
         Term...........................................17.1
         Third Party Claim............................16.2.1
         (*)

                                   ARTICLE 2

                                SALE AND PURCHASE

      2.1 Supply of Product. Avecia shall manufacture and provide API to Genta,
and Genta shall purchase API provided by Avecia, in such quantities and in the
form as required pursuant to this Agreement. The provisions of this Agreement
shall be construed as referring to the supply of API by Avecia to Genta and any
Genta Partners.

      2.2 Minimum Commitments.

            2.2.1 Minimum Percentage Commitments. Subject to the terms and
conditions of this Agreement and the capacity of those manufacturing facilities
or modules which are agreed

                                       7
<PAGE>

to be Manufacturing Facilities pursuant to Sections 3.2 and 3.3 (and as the
parties may change such designations pursuant to Sections 3.2 and 3.3), Genta
shall be obligated to purchase from Avecia, and Avecia shall be obligated to
supply to Genta the following minimum percentages of aggregate requirements:
(i(*) of Genta's and the Genta Partners' combined aggregate worldwide
requirements of API over the Initial Term of this Agreement; and (ii) (*) of
Genta's and the Genta Partners' combined aggregate worldwide requirements of API
for each calendar year of the Initial Term; provided that (x) the (*)
requirement in clause (ii) shall not apply to the extent that it would require
Genta to purchase more than the minimum (*) requirement in clause (i); and (y)
(*) "Minimum Percentages". Nothing in this Agreement shall prevent Genta, in its
sole discretion, from purchasing greater than the Minimum Percentages pursuant
to the terms of this Agreement, and Avecia shall, subject to the foregoing
provisions of this Section, supply any such additional API to Genta pursuant to
the terms of this Agreement.

            2.2.2 Minimum Volume Commitments. Subject to the FDA's approval of
the Genta Product, (*), and successful process validation, Genta agrees to
purchase from Avecia, and Avecia agrees to supply to Genta, a minimum of (*)
Kilograms of API during the Initial Term, beginning on January 1, 2003. Subject
to Section 2.2.3 , Genta further agrees to purchase from Avecia, and Avecia
further agrees to supply to Genta, a minimum of (*) Kilograms of API during each
of the years 2003 and 2004, provided that (i) such amounts shall count as part
of the foregoing (*) Kilogram minimum volume commitment, and (ii) if all
clinical trials relating to the Genta Product are terminated or the Genta
Product is not approved by the FDA, then Avecia shall use commercially
reasonable efforts to mitigate costs related to such (*) Kilogram minimum volume
commitments, and Genta shall (*) (*). The foregoing requirements of this Section
2.2.2 shall apply regardless of whether or not (*).

            2.2.3 (*)/Process Validation. Notwithstanding the above, Genta's
obligations under Sections 2.2.1 and 2.2.2 shall not apply until Avecia (*) has
successfully completed process validation in accordance with Sections 11.4 and
11.5. Furthermore, if Avecia has not successfully completed process validation
by the dates set forth below,:

            (*)

      If Avecia has not successfully completed such process validation by (*).
Furthermore, notwithstanding the above, if Genta agrees to order API from Avecia
before Avecia is (*) process validated, then such orders shall be counted toward
any applicable Genta minimum volume and percentage commitments in Section 2.2.

            2.2.4 Compliance with Minimum Commitments. For purposes of
determining whether Genta has complied with this Section 2.2, Genta shall be
deemed to have purchased a quantity of API when such API is due for delivery in
accordance with a relevant Purchase Order issued in accordance with the
provisions of Section 6.1 irrespective of if or when such actual delivery takes
place.

      2.3 No Additional Restrictions. The Parties agree that nothing in this
Agreement shall be construed as preventing or otherwise inhibiting Genta from
(a) manufacturing its remaining requirements of API under any applicable
Regulatory Filings and (b) obtaining some or all of its remaining requirements
of API from a Genta Partner, Genta Partners, Third Party or Third Parties.
Nothing in this Agreement shall restrict Genta in any way with respect to any
products other than API. This Section 2.3 shall not be construed to grant Genta
any right to Avecia's intellectual property rights more broadly than Article 13.

                                       8
<PAGE>

      2.4 Exclusivity. (*) neither Avecia nor its Affiliates shall, either alone
or in collaboration with a Third Party, engage in any activity directed to (*).

      2.5 Approval of Subcontracting. Avecia shall not have the right to
subcontract, sublicense or otherwise delegate all or any portion of its
obligations under this Agreement without Genta's prior written approval. To the
extent such approval is granted, Avecia shall (i) fully qualify each such
subcontractor, and Genta (and, upon Genta's request, the Principal Genta
Partner) shall have the right to participate in and approve such qualification
process; (ii) ensure that all such approved subcontractors comply with the
provisions of this Agreement to the extent applicable thereto; and (iii) be
responsible for each such subcontractor's performance hereunder (including,
without limitation, any breach of this Agreement by such subcontractor), as if
Avecia were itself performing such activities.

                                   ARTICLE 3

                     MANUFACTURING AND PROCESSING ACTIVITIES

      3.1 Quality Agreement. Schedule 3.1 shall specify testing, storage,
release, cGMP, regulatory and other quality assurance requirements relating to
manufacture and shipment of API by Avecia under this Agreement (that agreement,
the "Quality Agreement"). The Quality Agreement is not intended and shall not be
construed to limit any of the rights (including, without limitation, approval
rights) and obligations of the Parties set forth in this Agreement. Subject to
the foregoing, to the extent possible, the Quality Agreement will be interpreted
to be consistent with the terms of this Agreement. If there is any conflict or
inconsistency between the terms of the Quality Agreement and the terms of this
Agreement, however, the terms of this Agreement shall control.

      3.2 Manufacturing Facilities. It is agreed that the initial manufacturing
facilities shall be the M1 Facility and, subject to the successful qualification
thereof, the M2 Facility (the "Manufacturing Facilities"). (*) Avecia shall be
responsible for all scheduling related to the Manufacturing Facilities and for
the operation of such facilities.

      3.3 Addition and Retirement of Manufacturing Modules; Capacity.

            3.3.1 Subject to the Parties' agreement (*) for a new Manufacturing
Facility by Genta as provided below), Avecia shall construct additional
manufacturing modules as are necessary to meet Genta's forecasts for API and to
timely fulfill Avecia's obligations hereunder. The Parties shall mutually agree
in advance on the addition of any such manufacturing module (other than the M2
Facility) that is proposed to be used for the manufacture of API. (*) All such
mutually agreed new manufacturing modules, including the M2 Facility, shall be
referred to collectively herein as "New Manufacturing Modules." With respect to
each New Manufacturing Module, Genta shall have the right to review and approve
the plans (including the detailed design) for the New Manufacturing Module,
including without limitation, capacity planning, regulatory approval, and design
issues, and the impact on plans for reducing the costs of manufacturing API.
Genta shall not unreasonably withhold such approval (and it is

                                       9
<PAGE>

understood that withholding approval for the sole purpose of circumventing its
volume commitments in Section 2.2.1 would be unreasonable). On completion of the
construction, qualification and successful process validation of any such New
Manufacturing Module, it shall also be deemed a Manufacturing Facility for the
purposes of this Agreement.

            3.3.2 (*)

            3.3.3 (*) This maximum rated capacity shall be reviewed from time to
time by the Parties in order to take account of the addition of New
Manufacturing Modules, the retirement of Manufacturing Facilities and
improvements in manufacturing efficiencies achieved.

      3.4 Sourcing of Materials.

            3.4.1 Procurement. Avecia shall be responsible for the procurement
of all Raw Materials necessary for the manufacture of the API. Within ninety
(90) days after the Effective Date, Avecia shall provide Genta with information
about its arrangements with its current Raw Materials suppliers (including
without limitation relevant contractual terms and pricing). Avecia, as soon as
reasonably practicable thereafter, shall enter into written agreements or long
term purchase orders in connection with the purchase from Third Parties of those
Raw Materials which, in consultation with and subject to the approval of Genta,
are determined appropriate to be the subject of such written agreements or long
term purchase orders. Genta shall only have the right to review and approve
those portions of the written agreements that are relevant to the manufacture
and supply of API hereunder. Genta shall have the right to participate in
qualifying any supplier of Raw Materials. Avecia shall obtain Genta's written
approval prior to using any Raw Materials which have been manufactured or which
are to be manufactured by Avecia itself (or any of its Affiliates) in the
manufacture of API hereunder, which approval shall not be unreasonably withheld
(with the understanding that material factors such as cost, quality and
regulatory impact shall, without limitation, constitute reasonable grounds), and
if Genta approves such use, the Parties shall promptly (*). Avecia shall procure
the supply of Raw Materials for Genta at the lowest prices reasonably available,
consistent with and having regard to such matters as security and sources of
supply, quality of product, volume requirements and terms and conditions of
supply.

            3.4.2 Compliance with Specifications and Regulations. All Raw
Materials hereunder shall (i) comply with the specifications applicable thereto
as mutually agreed upon by the Parties and as set forth in the current batch
records (provided that such specifications may only be amended upon Genta's
prior written approval), and (ii) be suitable (including by complying with all
applicable Regulatory Requirements and the Quality Agreement, and conformity to
all applicable Regulatory Filings) for use in the manufacture of API (including
having regard to the use date of such Raw Materials, if applicable, in
accordance with the recommendations of the manufacturers thereof), whether such
Raw Materials are manufactured by Avecia itself or by way of purchase from a
Third Party. Avecia shall comply with all Regulatory Requirements pertaining to
the procurement of Raw Materials, including any testing or documentation
required. (*). With each release of API, Avecia shall include BSE/TSE
certificates (in a form that Genta, the Principal Genta Partner and Avecia
mutually agree upon) beginning February 1, 2003, or, if later, once Genta, the
Principal Genta Partner and Avecia have completed their collective assessment as
to whether and how Avecia will have the ability to provide such certificates.

                                       10
<PAGE>

            3.4.3 Alternate Source(s) of Supply. Avecia, in consultation with
and subject to the approval of Genta, shall establish at least a second source
of supply for those Raw Materials which, in consultation with and subject to the
approval of Genta, are determined appropriate to be the subject of more than one
source of supply, so as to ensure Avecia's ability to fulfill its obligations to
supply (*) API to Genta hereunder in a timely manner. Genta shall have the right
to participate in qualifying any such secondary suppliers of Raw Materials.

      3.5 Inventory of Materials and Spare Parts. Avecia shall establish, update
as necessary and implement inventory management processes and procedures
designed to ensure that Avecia is able to obtain, on a timely basis, all Raw
Materials necessary to perform the manufacturing and processing activities as
contemplated hereunder. Avecia shall ensure that an inventory of spare parts for
all equipment it uses to manufacture API is maintained consistent with the
manufacturer's recommendations.

      3.6 Resources, Equipment and Capacity. Subject to the provisions of
Section 3.3, Avecia, in consultation with Genta, shall establish, update as
necessary and implement, processes and procedures designed to ensure that
sufficient manufacturing resources, equipment, production capacity and qualified
employees are available in order to fulfill Avecia's obligations hereunder in a
timely manner. In case of a shortage of supply of Raw Materials, the supply of
such materials shall first be allocated to fulfill Genta's Firm Orders for API
hereunder and (*)% of the API forecasted for months (*) through (*) in the
Rolling Forecast. For purposes of clarification, nothing in this Agreement
prevents Genta from issuing Firm Orders for deliveries more than three months in
advance.

      3.7 Storage and Use of Materials and Product. Avecia shall ensure that all
Raw Materials (which are controlled by Avecia and are to be used in the
manufacture of API) and API are stored in accordance with Regulatory
Requirements and any other requirements from Genta or Third Party suppliers.
Avecia shall use the first-in first-out (FIFO) method of material usage, subject
to the prudent and appropriate usage of the first-expiring, first-out (FEFO)
method. Avecia shall notify Genta immediately upon learning that any Third Party
has asserted any claim, right or title in any such Raw Materials or API in
Avecia's control.

      3.8 Liaison; Joint Team. Promptly following the execution of this
Agreement, Genta, the Principal Genta Partner and Avecia shall each appoint a
single Representative to function as primary liaison to coordinate day-to-day
communications relating to this Agreement (each, a "Primary Liaison"). In
addition, the Parties shall establish a joint team (the "Joint Team") to discuss
and allow for the communication of higher-level issues arising under this
Agreement, including, but not limited to, issues regarding (i) Raw Materials
suppliers; (ii) potential manufacturing process improvements; (iii) the status
of each party's regulatory filings related to the manufacture of API; (iv)
capacity expansion; and (v) quality control and assurance. The Joint Team shall
be comprised of Representatives from each of Genta and Avecia (each, a "Joint
Team Member"), selected by such Party, and shall meet at such times and places
as are deemed reasonably necessary by the Parties, but in no event less than
once each calendar quarter. In addition, Representatives from the Principal
Genta Partner shall be permitted to participate in the meetings of the Joint
Team (and receive reports and material correspondence regarding the Joint Team),
which Representatives shall, for purposes of this Agreement, be considered the
Principal Genta Partner's Joint Team Members. For purposes of clarification,
each of Avecia, Genta and the Principal Genta Partner shall be entitled to have
an equal number of Joint Team Members

                                       11
<PAGE>

on the Joint Team. For example, if Genta has one Joint Team Member on the Joint
Team, then each of Avecia and the Principal Genta Partner would also each be
entitled to have one Joint Team Member on the Joint Team, such that the total
number of Joint Team Members would be three. If any of Avecia, Genta or the
Principal Genta Partner has more than one Joint Team Member, such entity shall
designate one of its Joint Team Members as its "Lead Joint Team Member." To the
extent the terms of this Agreement require or permit the consent, approval or
agreement of Genta, Avecia and/or the Principal Genta Partner with respect to a
particular issue, such consent, approval or agreement shall be considered
provided by the applicable entity if the Lead Joint Team Member of the
applicable entity (or the sole Joint Team Member of the applicable entity, if
the applicable entity has only one Joint Team Member) provides such consent,
approval or agreement, and neither the other entities nor their Lead or other
Joint Team Members shall have the right or authority to override such consent,
approval or agreement.

      3.9 Handling of Materials; Wastes.

            3.9.1 Hazards. Avecia shall inform its employees, contractors and
other personnel of any known or reasonably ascertainable chemical hazards
associated with the Raw Materials, API, or any Wastes generated through
performance of the manufacturing and processing activities hereunder, and
provide such persons with required training in the proper methods of handling
and disposing of such items.

            3.9.2 Handling; Notification. Avecia shall handle, accumulate,
label, package, store, transport and dispose of all Wastes generated through
performance of the manufacturing and processing activities hereunder in
accordance with all Regulatory Requirements. Genta shall have the right to
review and approve any Third Party disposal agreements. Avecia shall promptly
notify Genta in writing of any unauthorized reportable release or emission of
any Wastes generated through performance of the manufacturing and processing
activities hereunder and any potential environmental violation or litigation
related thereto. Each Party shall promptly notify the other of any health
hazards or potential health hazards of which it or they are or become aware of
concerning exposure to or handling of the Raw Materials or Wastes. In any of the
foregoing instances, Avecia shall promptly inform Genta of its intended course
of action to address the situation, and shall promptly undertake such actions.

            3.9.3 Waste Disposal Sites. Upon the reasonable request of Genta,
Avecia shall identify, in list form, all haulers, brokers and disposal sites
utilized by Avecia or its subcontractors for disposal of Wastes generated in
connection with the manufacturing and processing activities hereunder.

      3.10 Compliance. Avecia shall perform all manufacturing and processing
activities hereunder and maintain all Manufacturing Facilities in accordance
with cGMPs, the Specifications, the Quality Agreement, all applicable Regulatory
Requirements and other applicable requirements of any Governmental Authority.

                                       12
<PAGE>

                                   ARTICLE 4

             CHANGES TO MANUFACTURING PROCESS AND/OR SPECIFICATIONS

      4.1 Changes. Avecia shall not make any changes to Raw Materials (or
suppliers thereof), formulations, processes, equipment, facilities,
Specifications, tests or any other item in any manner that would impact the
manufacturing or processing activities to be performed by Avecia hereunder, or
affect any Regulatory Filing, without the prior written consent of Genta.

      4.2 Required Changes. Avecia shall promptly make and implement such
changes to the Specifications or Avecia's manufacturing or processing activities
as are required (a) by any Regulatory Requirements that are (i) applicable to
the manufacture of API, (ii) the result of a specific guideline, law or
regulation and (iii) not discretionary; or (b) by any concerns of Genta or
Regulatory Authorities as to the toxicity, safety and/or efficacy of any API to
be manufactured by Avecia as provided herein ("Required Changes"). All such
Required Changes shall be approved in writing on a timely basis by Genta prior
to implementation, including without limitation the timelines, budgets and other
issues regarding such implementation. Avecia shall implement such Required
Changes in accordance with any applicable Regulatory Requirements and
instructions provided by Genta. (*)

      4.3 Process Improvements (*). Avecia shall identify and develop changes to
the API manufacturing process and other mechanisms for maintaining quality (*).
Avecia shall promptly notify Genta regarding any such potential changes that it
identifies.

      4.4 Discretionary Changes. (*) In addition, Genta may propose to Avecia
certain changes to the Specifications or the API manufacturing process which it
reasonably believes will improve the manufacturing process (*). Upon Genta's
request, Avecia shall review and analyze such changes (*). The Parties shall
mutually agree on which changes, if any, shall be further developed or
implemented ("Proposed Discretionary Changes").

      4.5 Development Plan. Within (*) of the identification by the Parties of a
Proposed Discretionary Change, Avecia shall prepare a detailed development plan,
timeline and budget and estimated impact on cost for such change (each a
"Development Plan"). Each Development Plan, as it may be amended, shall set
forth in sufficient detail (*). Prior to implementation of any Development Plan,
and any amendments thereto, Avecia shall first submit the Development Plan to
Genta for its approval. Upon both Parties' approval, such Proposed Discretionary
Change shall become a "Discretionary Change." Avecia shall implement each
Discretionary Change in accordance with such Development Plan, subject to
reasonable go/no-go decisions to be made by Genta and subject to Section 4.7.
All amendments to a Development Plan shall be submitted to Genta for approval.

      4.6 Reports. As long as a Development Plan is being implemented, Avecia
shall submit to Genta (*) reports (as well as such other interim reports
required in support of a Regulatory Filing) (*) setting forth in detail the
activities and progress under any Development Plan. In addition, such reports
should provide (*).

      4.7 Payment.

            4.7.1 (*).

            4.7.2 (*).

      4.8 (*)

                                       13
<PAGE>

      4.9 (*)

                                    ARTICLE 5

                                    FORECASTS

      5.1 Forecasts.

            5.1.1 Rolling Forecasts. By (*), and thereafter by the twentieth
(20th) day of each calendar month, Genta shall provide Avecia with a good-faith
written forecast of the quantities of API that Genta shall require from Avecia
for each of the following (*) ((*)) calendar months (each, a "Rolling
Forecast"). Thus, for example, the Rolling Forecast provided by (*) shall cover
the calendar months commencing with (*) and ending with (*). Other than as set
forth in Section 5.1.4, this Rolling Forecast shall be nonbinding.

            5.1.2 Long-Range Forecast. Commencing on (*), and on the twentieth
day of the last month of each calendar quarter thereafter, Genta shall submit to
Avecia a forecast of the quantity of API which Genta expects Avecia to supply
over the following (*)-month period ("Long Range Forecast"). The first (*) of
the Long Range Forecast shall be detailed by month and deemed to be the "Rolling
Forecast" pursuant to Section 5.1.1. The second (*) of the Long Range Forecast
shall be detailed by quarter. Other than as set forth in Section 5.1.4, this
Long Range Forecast shall be non-binding.

            5.1.3 Forecast for Overall Demand. Commencing on (*), and on (*) and
(*) of each year thereafter, Genta shall provide Avecia with a good-faith,
non-binding written forecast of the aggregate volume of all quantities of API
that Genta expects to purchase during the following (*) from Avecia and any
Third Party, detailed by quarter.

            5.1.4 Firm Order. Subject to the following provisions of Article 5
and Article 6, the first (*) months of each Rolling Forecast shall constitute a
non-cancelable commitment on the part of Avecia to supply and on the part of
Genta to order, the quantity of API as set forth in such Rolling Forecast (each
such rolling (*) commitment, a "Firm Order"). The remainder of any Rolling
Forecast shall be non-binding; provided, however, that Genta shall be required
to place Firm Orders with Avecia for at least (*) ((*)%) of its forecasted
requirements for API for the (*) through (*)calendar months of each Rolling
Forecast. Thus, the forecast first given for the month appearing as the (*)
month in each Rolling Forecast shall, when that month becomes the (*) month in
the Rolling Forecast (and thereby a Firm Order), be for not less than (*)% of
the quantity of API stipulated as the forecast when that month first appeared as
the (*) calendar month in the Rolling Forecast. If either Party, based on the
information known to it, believes that any Rolling Forecast specifies quantities
of API that would require Avecia exceed the rated manufacturing capacity of the
Manufacturing Facilities designated in Sections 3.2 and 3.3, such Party shall
promptly notify the other Party of such capacity constraint. In such case, the
Parties shall meet and discuss the situation as further set forth in Section
3.3.3.

            5.1.5 Maximum supply obligation and Excess Portions. Subject to the
following provisions of this Section 5.1.5 and Article 6, the maximum quantity
of API that Avecia shall be obligated to agree to supply in response to a Genta
Purchase Order shall be (*)%

                                       14
<PAGE>

of the quantity of API which Genta first forecasted as its anticipated
requirements for the relevant month when that month first appeared as the (*)
month in the Rolling Forecast. Thus, the forecast first given for the month
appearing as the (*) month in each Rolling Forecast need not, when that month
becomes the (*) month in the Rolling Forecast (and thereby a Firm Order), be
accepted by Avecia to the extent such Firm Order exceeds (*)% of the quantity of
API stipulated as the forecast when that month first appeared as the (*)
calendar month in the Rolling Forecast. If Genta wishes to order a greater
quantity of API for any month than allowed for by the foregoing provisions, it
shall consult with Avecia as to whether Avecia anticipates being able to supply
such higher quantity (any such amount in excess of (*)%, the "Excess Portion").
If Avecia anticipates being able to supply the Excess Portion (or any part
thereof), it shall accept the Genta Purchase Order that covers such Excess
Portion (or the part of such Excess Portion that Avecia anticipates being able
to supply). If Avecia reasonably anticipates that it will not be able to supply
the Excess Portion (or any part thereof) it shall promptly notify Genta of the
Excess Portion (or part thereof) that Avecia does not anticipate being able to
supply (the "Excess Surplus"). To the extent Genta requests delivery of any
Excess Surplus despite Avecia's constraints, Avecia's obligation shall be
limited to using such efforts as Avecia considers appropriate to satisfy Genta's
request for such Excess Surplus.

            5.1.6 Expiration of Term. Notwithstanding the provisions of this
Article 5, none of the Long Range Forecasts, Forecasts of Overall Demand,
Rolling Forecasts or Firm Orders to be provided by Genta hereunder shall be
required to extend, as applicable, beyond the Initial Term (or, if applicable,
any Renewal Term) if any Party has provided notice of termination in accordance
with Section 17.1.

                                    ARTICLE 6

                               ORDERS and SHIPMENT

      6.1 Monthly Purchase Orders.

            6.1.1 Provision of Purchase Order. With each Rolling Forecast, Genta
shall provide to Avecia a purchase order for API for each calendar month covered
by the Rolling Forecast constituting a Firm Order which has not been covered by
previously issued purchase orders (the "Purchase Order"). Each Purchase Order
shall specify the delivery date(s), delivery location(s) and amounts of API to
be delivered over the calendar month represented by the Purchase Order
("Delivery Period"). If the terms of the Purchase Order are inconsistent with
the terms of this Agreement, the terms of this Agreement shall control. Unless
otherwise agreed by the Parties in respect of any Delivery Period, delivery
dates for the amount of API specified in each Purchase Order shall be set forth
by Genta in each Firm Order, with Genta having the right to specify a minimum of
two (2) but no more than four (4) delivery dates within the Delivery Period that
are reasonably spread over the entirety of the relevant Delivery Period, and the
quantities of API shall similarly be reasonably spread throughout such dates.

            6.1.2 Acceptance. Avecia shall acknowledge and provide Genta with a
written acceptance of each Purchase Order within five (5) Business Days
following Avecia's receipt thereof, and if no such acceptance is provided to
Genta within such period, such Purchase Order shall be deemed accepted by
Avecia. Avecia shall be entitled to reject only that portion of any Purchase
Order which Avecia shall be unable to fill as set forth in - and subject to the
terms of -

                                       15
<PAGE>

Section 5.1.5, or which Avecia shall be unable to fill due to the occurrence of
an Event of Force Majeure. If the terms of Avecia's acceptance of any Purchase
Order are inconsistent with the terms of this Agreement, the terms of this
Agreement shall control. Notwithstanding anything contained herein to the
contrary, Avecia will not be liable for any delays in delivery with respect to
Excess Surplus under Section 5.1.5, provided Avecia performs as required under
Section 5.1.5.

      6.2 Delivery. Avecia shall arrange for the delivery of API to the location
as stated on the Purchase Order (including without limitation any Genta Partner
or Third Party location) and in a manner consistent with good commercial
practices, validated shipping procedures that comply with Regulatory
Requirements (including, without limitation, shipment in approved containers),
and any agreed-upon shipping specifications and the Quality Agreement. Subject
to the following provisions of this Article 6, each shipment of API to be
delivered to a location in the United States shall be delivered by Avecia, via a
carrier meeting the validated shipping requirements, DDP (Genta's designated
location). If such shipment is to be delivered to a location outside the United
States, such shipment shall be delivered by Avecia, via a carrier meeting the
validated shipping requirements, DDU (Genta's designated location). Unless
otherwise instructed by Genta, Avecia shall arrange for appropriate insurance
coverage for all shipments of API. Avecia shall invoice Genta for any actual
out-of-pocket shipping costs (including reasonable insurance costs) paid by
Avecia pursuant to the foregoing arrangement as a separate line item on the
invoice, to the extent such costs are not already incorporated into the Supply
Price. Avecia shall deliver the amounts ordered in each Purchase Order within
(*) (*) of the delivery dates mutually agreed upon or specified under Section
6.1.1. (*) (*)

      6.3 Documentation.

            6.3.1 Certificates. Each Batch shall be accompanied by a
"Certificate of Analysis" confirming that the API delivered is Conforming
Product (pursuant to Section 8.2).

            6.3.2 Shipping Documentation. Each shipment shall be accompanied by
commercially appropriate shipping documentation (including, without limitation,
bills of lading), which shall, at a minimum, (i) identify the shipment and Batch
numbers comprised in the shipment, (ii) state any order number for the shipment
that has been provided by Genta, and (iii) show the destination to which such
shipment is being sent. In addition, each shipment shall be accompanied by a
Material Safety Data Sheet and samples (for identification testing) and such
additional documentation that Genta may reasonably require from time to time.

            6.3.3 Supporting Data. At Genta's request, Avecia shall provide
Genta (and, at Genta's request, the Principal Genta Partner) with reasonable
access to any applicable supporting data relating to the documentation provided
under Sections 6.3.1 and 6.3.2 above (including without limitation Batch
records, laboratory notebooks and any applicable testing results).

      6.4 Sample Retention. Avecia shall properly store and retain appropriate
and adequate samples (identified by Batch number) of all API and all critical
Raw Materials in conditions and for times consistent with all applicable
Regulatory Requirements, the Quality Agreement and Section 10.2 and to permit
appropriate or required internal and regulatory checks and references
(collectively, the "Shipment Samples"). Avecia shall provide Genta (and, upon
Genta's request, the Genta Partner) with reasonable access to and portions of
the Shipment Samples for testing, trouble-shooting and other purposes upon its
request.

                                       16
<PAGE>

      6.5 No Other Disposition. Except as expressly permitted hereunder, no
disposition or disposal of any API shall be made by Avecia without the advance
written approval of Genta, and any such disposition or disposal of API shall
comply with all applicable Regulatory Requirements.

      6.6 Delay in Delivery. Except as set forth in Sections 6.1.2 (in respect
of any Excess Surplus) and 6.2, if, for any reason other than an Event of Force
Majeure, Avecia delivers any shipment or portion of shipment of API in
accordance with this Article 6 later than the date of delivery set out in the
relevant Purchase Order then:

            6.6.1 (*)

            6.6.2 (*)

            6.6.3 (*)

      6.7 Notice of Inability to Supply. Avecia shall promptly notify Genta of
any occurrence expected to inhibit Avecia's ability to provide on-time delivery
of API meeting the terms and conditions of this Agreement. In addition, Avecia
shall immediately inform Genta of any notice, written or oral, received from any
of its subcontractors regarding a possible shortage or inability to obtain or
supply Raw Materials or any components or materials used in the manufacture of
API.

      6.8 Consequences of Delay. In the case of any material failure (an "Actual
Delay") or reasonably anticipated material failure (an "Anticipated Delay") of
Avecia to supply API meeting the requirements of this Agreement in the
quantities and within the time periods specified in any of Genta's Purchase
Orders (each, a "Delay"), Avecia shall remedy the Delay and resume supplying API
meeting the requirements of this Agreement to Genta as soon as practicable, and,
upon Genta's reasonable request, without limiting the Parties' rights and
responsibilities under Article 13, fully cooperate with Genta to secure adequate
supplies of API from alternative sources for such time as Actual Delay or
Anticipated Delay is reasonably expected to exist. Moreover, upon an Actual
Delay or Anticipated Delay, Genta (*). Notwithstanding the foregoing, and
without limiting Genta's rights under Sections 13.5.4 and 17.2.3, neither any
Actual Delay nor Anticipated Delay in the supply API as aforesaid by reason of
an Event of Force Majeure nor delivery of amounts of API in compliance with the
terms of Section 6.2 (i.e., (*)% or more but less than (*)% of the quantity
ordered for delivery in a Delivery Period is supplied but by the end of the
calendar quarter Avecia has delivered (*)% of the quantity ordered pursuant to
the terms of Section 6.2) nor failure to deliver any Excess Surplus (provided
that Avecia has performed as required under Section 5.1.5) shall constitute a
Delay for the purposes of this Section 6.8 and the remaining provisions of
Article 6.

      6.9 Costs Attributable to a Delay. In addition to the provisions of
Section 6.6, (*). However, notwithstanding the above, for each Occurrence,
Avecia shall not be required to reimburse Genta for any such costs or expenses
pursuant to this Section 6.9 beyond an amount equal to:

                                       17
<PAGE>

            6.9.1 (*)

            6.9.2 (*)

      6.10 (*). Notwithstanding any other provision of this Agreement
(including, without limitation, Section 2.2), if Genta requires a quantity of
API that Avecia is required to provide under the terms and conditions of this
Agreement but that Avecia is unable to supply for whatever reason (including,
without limitation, an Event of Force Majeure or lack of capacity), Genta may
purchase such API (*).

      6.11 Reservation of Rights. The rights and remedies set forth in Sections
6.6, 6.8, 6.9 and 6.10 shall be, except as specified in Articles 8 (Quality of
API), 12 (Recalls), 13 (Intellectual Property and Standby Rights), 16
(Indemnification) and 17 (Term and Termination), Genta's sole and exclusive
rights and remedies on account of any Delay.

                                    ARTICLE 7

                                     PAYMENT

      7.1 Supply Price. The number of (*) Grams in each delivery of API, and the
supply price per (*) Gram of API, (*) set forth on Schedule 7.1 ("Supply
Price"). Except as otherwise permitted herein, Genta shall pay Avecia the
applicable Supply Price for each (*) Gram of API received in accordance with the
terms of this Agreement, within thirty (30) days after the date of Avecia's
invoice for such shipment; provided that Avecia's invoice for each shipment
shall be dated no earlier than the date of shipment of the particular Batch of
API to the delivery location designated under Section 6.2.

      7.2 No Other Costs. Except as otherwise expressly set forth in this
Agreement, Genta shall not be obligated to pay any amounts other than the Supply
Price for all API supplied by Avecia hereunder. Avecia shall be solely
responsible for all necessary working capital and for all other capital required
to fulfill its obligations under this Agreement (including capital for mutually
agreed upon New Manufacturing Modules), (*).

      7.3 Payment Terms. Payment of all amounts shall be in U.S. dollars, by
wire transfer of immediately available funds to the financial institution,
account number and account party's name designated in writing by Avecia or Genta
as the place of payment.

      7.4 Taxes. Except as set forth in this Agreement, the Supply Price shall
exclude any applicable sales, use, consumption, value added or excise taxes
duties, tariffs and other similar assessments which may be imposed by any
Governmental Authority as a result of the sale to Genta (other than with respect
to any corporate taxation on Avecia) ("Transfer Taxes"); provided, however, that
the parties shall cooperate and take any reasonable steps necessary to reduce or
eliminate any Transfer Taxes. Genta shall be entitled to deduct the amount of
any withholding taxes payable or required to be withheld by Genta, to the extent
Genta pays such taxes to the appropriate Governmental Authority on behalf of
Avecia. Genta shall promptly

                                       18
<PAGE>

deliver to Avecia proof of payment of all such taxes, levies and other charges,
together with copies of all communications from or with such Governmental
Authority with respect thereto. Notwithstanding the above, Genta shall not be
responsible for: (a) any duties or similar assessments incurred in shipments of
API to the extent they could have been avoided if the API was shipped from
Avecia's Manufacturing Facilities in Massachusetts; or (b) any Transfer Taxes to
the extent that Avecia could have avoided them making all efforts which are
proper and in the ordinary course of business provided that Genta shall also
cooperate in the avoidance of such Transfer Taxes by making all efforts which
are proper and in the ordinary course of business.

      7.5 (*)

      7.6 Raw Materials. Genta acknowledges that Avecia may need to enter into
obligations and commitments in relation to long term supply contracts or
purchase orders with Raw Material suppliers in order to secure such Raw
Materials at a reasonable price consistent with and having regard to such
matters as security and sources of supply and quality of product without having
Firm Orders to justify such long term arrangements. (*). Avecia will use
commercially reasonable efforts to mitigate the obligations of Genta under this
Section.

                                    ARTICLE 8

                                 QUALITY OF API

      8.1 Manufacture Using Validated Process. Unless Genta otherwise agrees
(for example, pursuant to the last sentence of Section 2.2.3 effective (*), all
API shipments under this Agreement shall, be manufactured in a validated
facility and using the validated process (as set forth in Section 11.5). For
clarification purposes, the foregoing includes the three successful consecutive
process validation Batches (as set forth in Section 11.5) if the process
validation has been successful.

      8.2 Conforming Product. Avecia shall ensure that all API provided to
Genta's designated location under Section 6.2 at the time of delivery (1)
conforms with the Specifications, (2) has been manufactured in accordance with
the approved Batch records, (3) is not adulterated within the meaning of the
Federal Food, Drug and Cosmetic Act, as amended (the "FFDCA"), or any foreign
counterpart thereof, and (4) has been manufactured, labeled, packaged, stored,
tested, documented, released and shipped in accordance with Avecia's
responsibilities under the Quality Agreement and this Agreement, and conforms
with Regulatory Requirements, cGMPs and all applicable Laws. Such API shall be
deemed "Conforming Product".

                                       19
<PAGE>

      8.3 Shelf Life. All API supplied to Genta shall at the time of shipment
have the longest remaining Shelf Life reasonably practicable, but in any event a
minimum of (i) (*) ((*)) months if the total Shelf Life from the date of
manufacture is equal to or greater than (*) ((*)) months and (ii) (*) ((*))
months if the total Shelf Life from the date of manufacture is equal to or
greater than (*) ((*)) months; provided, however, that Avecia shall be permitted
to supply API with lower Shelf Life on a case-by-case basis where Genta so
agrees in writing in advance of the shipment of such API.

      8.4 Batch. Each Batch of API manufactured by Avecia hereunder shall be
within the process parameters as validated and set forth in the master batch
record. Upon any deviation, Avecia shall prepare a deviation report for Genta
and shall resolve such situation in accordance with cGMPs.

      8.5 Non-Conforming Product.

            8.5.1 If, in the course of Genta Product release testing that Genta
or a Genta Partner actually conducts (or actually has conducted on its behalf)
in conformance with Regulatory Requirements (including any required procedures
set forth by Genta in Regulatory Filings) (the "Required Testing"), Genta or the
Genta Partner actually learns that any API delivered under this Agreement is not
Conforming Product by reason of non-compliance with Section 8.2 (1) or (3)
above, then Genta shall notify Avecia in writing of such discovered defect
promptly after such non-compliance with Section 8.2 (1) or (3) is confirmed. If
(*)

            8.5.2 (*).

            8.5.3 (*).

            8.5.4 Neither of the foregoing provisions shall be construed to
impose upon Genta any obligation to test the API or Genta Product (except to the
extent required by Regulatory Authorities prior to the release of Genta
Product).

            8.5.5 In any case where Genta gives notice to Avecia under the
foregoing provisions, Avecia shall be offered reasonable opportunity to examine
the evidence purporting to show why such API is or was not Conforming Product
and to inspect and/or test such API or Genta Product. In the event of any
dispute as to whether the API was or was not Conforming Product pursuant to
Section 8.2 (1) or (3) and rightfully rejected pursuant to the above provisions
relating thereto, the matter shall be referred to an independent testing
organization mutually acceptable to the Parties to determine. The fees and
expenses of such organization shall be paid by the Party in error.

      8.6 Rights and Remedies for Delivery of Non-Conforming Product.

            8.6.1 Except pursuant to Section 8.5.3 and subject to Section 8.8,
for any delivered API that is non-Conforming Product under this Agreement,
Avecia shall, at Genta's sole discretion, (*).

                                       20
<PAGE>

            8.6.2 In addition, except pursuant to Section 8.5.3 and subject to
Section 8.8 and the limitations of Article 16.3, to the extent Genta or the
Genta Partner incurs any out-of-pocket costs or expenses (including, without
limitation, payments to contractors) directly as a result of the replacement,
recall, destruction or other inability to use any API or Genta Product due to
the delivery of any API that is not Conforming Product, (*).

            8.6.3 The rights and remedies set forth in this Section 8.6 shall,
except as specified in Articles 6 (Orders and Shipment), 12 (Recalls), 13
(Intellectual Property and Standby Rights), 16 (Indemnification) and 17 (Term
and Termination), be Genta's sole and exclusive rights and remedies in relation
to the delivery of non-Conforming API.

      8.7 Relationship with Late Delivery Provisions. For clarification
purposes, API that Genta rejects as not Conforming Product shall not, by virtue
of such rejection, be considered delivered late under Sections 6.6 or 13.5.1;
provided that, for purposes of such Sections 6.6 and 13.5.1, the scheduled
delivery date for any required replacement quantities of API shall be considered
to be (*).

      8.8 (*).

                                    ARTICLE 9

                                       (*)

                                       21
<PAGE>

                                   ARTICLE 10

                              INSPECTIONS; RECORDS

      10.1 Inspections by Genta.

            10.1.1 Inspection. Genta (including, subject to agreement to be
bound by a confidentiality agreement with Avecia consistent with the terms of
this Article 10 or Article 14 (Confidentiality), its employee, Representative,
or, at Genta's request, the Principal Genta Partner) shall have the right, upon
reasonable advance notice and during regular business hours, to inspect and
audit (a) the Manufacturing Facility or other facility at which any of the
manufacturing or processing activities are performed, and (b) any of Avecia's
manufacturing and quality control records and all other documentation relating
to the manufacturing and processing activities (including, without limitation,
any internal quality control audits or reviews conducted by Avecia). Such right
to inspect and audit to extend to Avecia and its affiliates, and (except to the
extent Avecia cannot obtain the contractual right or cooperation) subcontractors
of Avecia. Such inspections and audits shall be for the purpose of ascertaining
compliance with Regulatory Requirements, cGMPs, the Quality Agreement and
environmental, health and safety regulations and other aspects of this
Agreement, reviewing correspondence, reports, filings and other documents from
or to Regulatory Authorities to the extent related to the manufacturing and
processing activities, approving, where appropriate, all variances from
applicable requirements

                                       22
<PAGE>

hereunder or under the Quality Agreement, and evaluating the implementation of
all manufacturing and process changes pursuant to this Agreement. Any
information obtained by Genta through such inspections and audits shall be
treated as Confidential Information of Avecia, provided that Genta shall be
permitted to disclose such information to the Principal Genta Partner under an
obligation of confidentiality. Such inspections and audits shall be conducted in
a manner so as to minimize disruption of business operations.

            10.1.2 Notice of Non-Compliance. To the extent Genta reasonably
determines during any inspection and audit of a Manufacturing Facility or other
facility at which any of the manufacturing or processing activities are
performed, or the records being maintained by Avecia in connection with such
manufacture (including Batch records), that Avecia is not in compliance with
Regulatory Requirements, cGMPs, the Quality Agreement or this Agreement, Genta
shall provide Avecia with written notice detailing such material non-compliance.

                  (a) Upon receipt of such notice from Genta, Avecia shall, as
soon as practicable, remedy or cause to be remedied such non-compliance in
accordance with a mutually agreed schedule. Genta shall, if requested by Avecia,
assist Avecia by providing reasonably detailed information about the
non-compliance. Avecia shall provide Genta with progress reports of its
corrective actions and reasonable documentary and other evidence that all
compliance items have been corrected.

                  (b) Thereupon, Genta (and, at Genta's request, the Principal
Genta Partner) shall have the right to re-inspect and re-audit such
Manufacturing Facility or other facility, or the records being maintained by
Avecia in connection with such manufacture, upon reasonable notice and during
regular business hours to determine whether Avecia has remedied or caused to be
remedied such non-compliance.

      10.2 Records. Avecia shall generate and maintain complete and accurate
records (including, without limitation, files, certificates and authorizations)
necessary to evidence compliance with all applicable Laws, Regulatory
Requirements and other requirements of applicable Governmental Authorities
relating to the manufacture of API, including, without limitation, all
validation data, stability testing data, development reports, Batch records,
quality control and laboratory testing, and any other data required under cGMPs
and other Regulatory Requirements. Avecia shall provide Genta with such records
promptly upon Genta's reasonable request. Avecia shall also maintain records
with respect to its obligations and performance under this Agreement. All such
records, and all samples required to be maintained under this Agreement, shall
be securely maintained for a period of not less than five (5) years from the
date of expiration of Genta Product produced from each Batch of API to which
those records and samples pertain (or, if longer, for a period of one (1) year
after the final resolution of any dispute to which such records or samples are
relevant), or such longer period as may be required by Regulatory Requirements.
Avecia shall not dispose of records or samples generated in conjunction with
this Agreement without first offering to transfer such records or samples to
Genta or its designee at Genta's expense.

                                       23
<PAGE>

                                   ARTICLE 11

                               REGULATORY MATTERS

      11.1 Permits. Avecia shall obtain and maintain in good order, at its sole
cost and expense, such governmental registrations, permits and licenses as are
required by Governmental Authorities and Regulatory Requirements in order for
Avecia to perform all of its obligations under this Agreement (including,
without limitation, Annual Registration of Drug Establishment registrations
(form FDA 2656e) granted by the FDA and any comparable registrations granted by
any other Regulatory Authority) (each, a "Registration"), for so long and
insofar as is necessary to permit Avecia to perform any manufacturing and
processing activities as contemplated hereunder. Avecia shall make copies of
such Registrations and all related documents available to Genta and its
designees for inspection, upon reasonable request from Genta.

      11.2 Compliance with cGMPs; Monitoring of Records. Throughout the term of
this Agreement, and for so long thereafter as is reasonably necessary, Avecia
shall monitor and maintain appropriate records respecting its compliance with
cGMPs, including through the establishment and implementation of such operating
procedures and the training of personnel as are required to assure such
compliance. Avecia shall notify Genta in writing of any significant trend
changes in the statistical process control data and/or quality testing results
for Batches of API manufactured for supply to Genta hereunder.

      11.3 Regulatory Communications and Correspondence. Each Party shall
promptly notify the other Party of all such Party's communications from and to
the FDA or other Regulatory Authorities which may affect, impact or change the
manufacturing or processing activities performed by Avecia, or affect the
ability of Avecia to comply with its obligations under this Agreement. Without
limiting the foregoing, each Party shall notify the other Party of any written
or oral inquiries, notifications or inspection activities by any Regulatory
Authority in regard to API, the Manufacturing Facilities or the New
Manufacturing Modules as soon as possible but within five (5) Business Days of
such Party obtaining knowledge of such inquiries, notifications or inspection
activities (or, if sooner, within any time period set by a Regulatory
Authority). Moreover, Avecia shall furnish to Genta copies of all inspection
reports and related correspondence of such Regulatory Authority related to or
which might reasonably affect performance of any manufacturing or processing
activities hereunder (including, without limitation, any FDA Form 483 or other
inspection reports, warning letters, citations, indictments, claims, lawsuits or
proceedings issued or instituted against Avecia, or of any revocation of any
license or permit issued to Avecia) and when such reports and correspondence
become available to Avecia, but in any event within five (5) days after
obtaining knowledge of such inquiries, notifications or inspection activities.
Avecia shall discuss with Genta any Regulatory Authority comments directly
related to and affecting Avecia's performance of any manufacturing or processing
activities hereunder, and before Avecia submits a final response to such
comments, Avecia shall give Genta no fewer than five (5) Business Days to
comment on its proposed response to such comments, and, upon Genta's
consultation with Avecia, any resultant Genta comments shall be incorporated to
the response, if reasonably possible. Avecia shall promptly rectify or resolve
any deficiencies noted by a Regulatory Authority in a report or correspondence
issued to Avecia that relate to performance of any of the manufacturing or
processing activities hereunder. Both Avecia and Genta acknowledge the
importance of properly handling such regulatory communications and
correspondence, and, although Genta shall have the ultimate decisions associated
with the handling thereof, Genta shall do so in consultation with Avecia to the
extent practicable.

                                       24
<PAGE>

      11.4 Pre-Approval Inspections. Avecia shall prepare for and be responsible
for completing all activities necessary to successfully pass all pre-approval
inspections as required by Regulatory Authorities pursuant to Regulatory
Requirements and as responsibilities may be further allocated between the
parties in the Quality Agreement. It shall be Avecia's responsibility to ensure
that its Manufacturing Facilities, processes, testing and reports are adequately
prepared to pass such pre-approval inspections, as determined in good faith by
Genta's (and the Genta Partners') quality assurance audit team(s) ("PAI Ready"
or "PAI Readiness"), (*). In turn, Avecia shall timely remedy all deficiencies,
whether or not such deficiencies are identified by a Genta inspection, and shall
comply with all necessary Regulatory Requirements. Notwithstanding anything to
the contrary in this Agreement, if Avecia fails any pre-approval inspection by
any Regulatory Authority with respect to API, without limiting Genta's other
rights and remedies hereunder, then, if so directed by Genta, Avecia shall stop
all manufacturing and processing activities hereunder (to the extent under such
Regulatory Authority's jurisdiction) unless and until all problems and issues
identified by such Regulatory Authority have been timely corrected to the
satisfaction of such Regulatory Authority.

      11.5 Process Validation. After Genta (and the Principal Genta Partner)
determine that Avecia is PAI Ready in accordance with Section 11.4, Avecia shall
complete validation of its manufacturing processes, cleaning processes and all
other processes as required by cGMPs and any other applicable Regulatory
Requirements, and shall be responsible for providing an approved process
validation report.

            11.5.1 Timetable for Completion. Avecia shall use all Commercially
Reasonable Efforts to successfully complete the initial process validation of
the M1 Facility as soon as possible but no later than (*). If such initial
process validation of the M1 Facility is not successfully completed by (*). Such
successful completion shall include, without limitation, approval by the Genta
quality assurance audit team of Avecia's technical reports submitted in
connection with such process validation and three successful consecutive
validation Batches of API. Avecia shall conduct validation activities as needed
anytime thereafter during the term of this Agreement, in consultation with
Genta. Avecia shall routinely prepare, assemble and retain any reports,
documents and validation summary reports pertaining to the Manufacturing
Facilities and manufacturing and processing activities hereunder in accordance
with Section 10.2 and that are required for the validation and qualification
process. Avecia shall provide copies of such required documents and reports to
Genta for approval thereof as part of the validation and qualification process.

            11.5.2 (*). For clarification purposes, if, as a result of Avecia's
failure to successfully complete initial process validation of the M1 Facility
by (*), there is any material failure or reasonably anticipated material failure
of Avecia to supply API under this Agreement in the quantities and within the
time periods specified in any of Genta's Purchase Orders for API that has been
manufactured pursuant to a successfully validated process, then (*)

                  (a) (*)

                                       25
<PAGE>

                  (b) (*)

                  (c) (*)

                  (d) (*)

      11.6 Document Preparation and Maintenance. Avecia shall prepare and
maintain all files, certificates, authorizations, data and other records
pertaining to the manufacture of API for Genta that are reasonably necessary to
support any Regulatory Filings. In addition, Avecia shall be responsible for
those regulatory filings and other regulatory responsibilities set forth in the
Quality Agreement (including, without limitation, technical reports, validation
reports, Batch records and Avecia's Drug Master File ("DMF") for API), provided
that it shall do so with Genta's prior review and approval pursuant to Section
11.8.

      11.7 Annual Product Review. In support of an annual product review process
(consistent with the provisions of 21 C.F.R. ss. 211.180(e)) and upon Genta's
reasonable request, Avecia shall provide Genta with the information required
under 21 C.F.R. ss. 211.180(e)(1) to permit a review of a representative number
of Batches of API, whether approved or rejected.

      11.8 Notification of Changes to the Manufacturing Process. Avecia shall
notify Genta in writing prior to submitting any documentation to any Regulatory
Authority regarding any manufacturing process changes approved by Genta pursuant
to Article 4. Upon reasonable notice, Genta (and, upon Genta's request, any
Genta Partner) shall be permitted to review all documentation proposed to be
filed with any Regulatory Authority regarding such changes. Within 15 Business
Days after receiving such documentation, through consultation between the
Parties, Genta shall provide Avecia with comments, which shall be incorporated
in the documentation prior to filing it with any Regulatory Authority. Avecia
shall obtain Genta's written approval prior to submitting any such
documentation.

      11.9 Cooperation in Obtaining Government Approvals. Avecia shall
reasonably assist Genta (and, upon Genta's request, the Genta Partners), at
Genta's request, to secure and maintain governmental approvals for the Genta
Product and shall participate as is reasonably necessary and as may be requested
in resolving the concerns of any Regulatory Authority arising with respect to
the manufacture of API for Genta. Without limiting the foregoing, Avecia shall
produce stability batches and validation batches and perform testing and prepare
all necessary documentation as is necessary for Genta and the Principal Genta
Partner to receive approvals for Genta Product from Regulatory Authorities.

      11.10 Ownership of Regulatory Filings. Genta and/or the Genta Partner(s)
shall be the sole owner of all Regulatory Filings (excluding Avecia's DMF for
API) and all governmental approvals obtained by Genta and/or the Genta
Partner(s) from any Regulatory Authority with respect to API or the Genta
Product.

      11.11 Genta Access to Manufacturing Data and Documentation. Subject to
Articles 13 and 14, Genta and any Genta Partner shall have full access to and
the right to use and reference any Regulatory Filings (including, without
limitation, Avecia's DMF for API), correspondence, validation documentation,
batch records, reports, analyses and any other data and documentation generated
in connection with the manufacturing and/or processing activities conducted by
Avecia hereunder.

                                       26
<PAGE>

      11.12 Health and Safety Information.

            11.12.1 API. Genta shall provide Avecia with all information in
Genta's possession or control concerning any health hazards or potential health
hazards associated with exposure to or the handling, storage, use or disposal of
API, including, without limitation, a Material Safety Data Sheet for API. In the
event that any such information is updated or corrected, Genta shall promptly
notify Avecia thereof and provide Avecia with the updated or corrected
information. Avecia shall prepare an updated Material Safety Data Sheet for API,
as appropriate.

            11.12.2 Safety and Efficacy Claims. Each Party shall promptly notify
the other of any information or notice it is or becomes aware of concerning the
safety or efficacy claims of any Genta Product, including, without limitation,
any threatened or pending action by any Regulatory Authority. Genta or the Genta
Partner(s) shall be responsible for handling all complaints and communications
from Regulatory Authorities with respect to the Genta Product. Avecia shall
cooperate in resolving such complaints and responding to such communications to
the extent they pertain to API and are reasonably requested by Genta in
connection therewith.

      11.13 Accident Reports. Each Party shall report to the other as soon as
possible all material accidents related to the manufacture, handling, use or
storage of any Raw Materials or API, including, without limitation: (i)
accidents resulting in significant personal injury requiring more than first aid
treatment, (ii) accidents resulting in chronic illness or loss of consciousness,
(iii) accidents resulting in material property damage, (iv) accidents resulting
in material environmental release, and (v) accidents that result in regulatory,
safety, health or environmental audits.

      11.14 Reporting Adverse Events. Genta or the Genta Partner(s) or their
respective Affiliates or subsidiaries shall be responsible for the reporting of
all adverse drug experiences of the Genta Product required by Regulatory
Authorities, unless Law would require another entity to be responsible for such
reporting. Genta shall inform Avecia on a timely basis of any such adverse drug
experiences to the extent related to Avecia's supply of API pursuant to this
Agreement.

      11.15 Responsibility for Handling Complaints. Avecia shall promptly
forward to the Primary Liaison of each of Genta and the Principal Genta Partner
(with information of such Primary Liaisons to be exchanged between Genta, the
Principal Genta Partner, and Avecia) all complaints associated with the API.
Genta or the Genta Partners or their respective Affiliates or subsidiaries shall
be responsible for handling or responding to all Genta Product complaints,
including, without limitation, those associated with manufacturing and
packaging. Avecia shall cooperate in the investigation of Genta Product and API
complaints involving the manufacture thereof. Representatives of Avecia and
Genta quality assurance shall agree to a procedure as to the handling of Genta
Product complaints. Both Parties shall comply with the agreed upon procedures
for handling of complaints.

                                       27
<PAGE>

                                   ARTICLE 12

                                     RECALLS

      12.1 Notification. Each Party shall keep the other Party fully informed of
any notification, or other information of which it has actual knowledge, which
might result in the Recall, Seizure or other enforcement action relating to the
Genta Product or API.

      12.2 Avecia's Recall or Withdrawal Suggestion. If Avecia independently
believes that a Genta Product Recall or Genta Product withdrawal or field
corrective action may be necessary or appropriate, Avecia shall so notify Genta
of Avecia's conclusion within twenty-four (24) hours and the Parties shall
cooperate with each other to ascertain the necessity and nature of such action.

      12.3 Recall Determination by Genta. Promptly after Genta notifies a
Regulatory Authority of a Genta Product withdrawal or Genta Product Recall,
Genta shall so notify Avecia as soon as possible and, to the extent related to
Avecia's supply of API pursuant to this Agreement, within twenty-four hours.
Avecia shall assist Genta (and, at Genta's request, the Genta Partner(s)), at
Genta's reasonable request, in its investigation to determine the cause and
extent of the problem.

      12.4 Genta Discretion. Notwithstanding anything to the contrary in the
foregoing, Genta shall make the final decision whether Genta Product is
withdrawn or Recalled.

      12.5 Responsibility for Expenses of Recall. If any Governmental Authority
withdraws its approval to sell the Genta Product or issues a directive or
request that all or specified quantities of the Genta Product be Recalled for
product safety reasons or Genta reasonably determines that all or specified
quantities of the Genta Product should be Recalled, (*).

      12.6 Definition of Recall and Seizure. For purposes of this Article 12,
"Recall" shall mean any action by Genta or any Genta Partner, or any Affiliate
or subsidiary of Genta or any Genta Partner, to recover title to or possession
of Genta Product sold or shipped to Third Parties. The term "Recall" also
includes the failure by Genta or any Genta Partner to sell or ship Genta Product
to Third Parties which would have been subject to recall if it had been sold or
shipped. For purposes of this Article 12, "Seizure" shall mean any action by any
Governmental Authority to detain or destroy Genta Product. For the purposes of
this Article 12, neither "Recall" nor "Seizure" shall mean any actions taken by
Genta that are solely related to nonpayment or contract issues and are not
related to any toxicity, safety, efficacy or Regulatory-related issues.

                                   ARTICLE 13

                     INTELLECTUAL PROPERTY & STANDBY RIGHTS

      13.1 Ownership. As between the Parties, each Party shall own all right,
title and interest in and to any inventions made by such Party in connection
with performance under this Agreement, to the extent that such Party's personnel
(including Representatives working on behalf of such Party) would be an inventor
thereof under applicable patent law. Patent rights to inventions that are made
jointly by employees of Avecia and Genta shall be owned jointly. For purposes of
this Section 13.1, whether an invention is made "jointly" shall be determined
under principles of inventorship in accordance with applicable patent law, and
"owned jointly" means

                                       28
<PAGE>

that, subject to the terms of the licenses granted hereunder and the other
provisions of this Agreement, each Party is free to exploit or enforce such
rights and authorize others to do so, with no obligation to account to the other
Party for profits or otherwise, and each Party hereby waives any right it may
have under the laws of any country to require such consent or accounting. To the
extent that the personnel of a Genta Partner are an inventor or joint inventor,
the above principles of ownership shall apply to such Genta Partner.

      13.2 Prosecution of Patents.

            13.2.1 Solely-Owned Inventions. Each Party is responsible for
filing, prosecuting and maintaining patent applications and resulting patents on
any invention owned solely by it pursuant to Section 13.1 at their own cost;
provided, however, that Avecia shall permit Genta to review and comment on any
such patent filings of Avecia (including, without limitation, applications and
responses to office actions) prior to submission to the relevant patent offices.

            13.2.2 Jointly-Owned Inventions.

                  (a) By Genta. Subject to Section 13.2.2(b) below, Genta shall
have the initial right, at its option, to control the filing for, prosecution
and maintenance of any patents and patent applications that claim or disclose
inventions that the Parties and/or any Genta Partner jointly own pursuant to
Section 13.1 ("Jointly-Owned Patents"), provided that Genta and/or any Genta
Partner shall consult with and keep Avecia reasonably informed on matters
regarding such filing, prosecution and maintenance. In such case, subject to
Section 13.2.2(c) below, Avecia shall reasonably assist Genta and/or any Genta
Partner, as Genta reasonably requests, in Genta's efforts to file for, prosecute
and/or maintain the Jointly-Owned Patents. For purposes of this Section 13.2,
"prosecution and maintenance" of patents and patent applications shall be deemed
to include, without limitation, the conduct of interferences or oppositions,
and/or requests for re-examinations, reissues or extensions of patent terms.

                  (b) By Avecia. To the extent that Genta and/or any Genta
Partner elects not to file, prosecute or maintain any patent application or
patent relating to the Jointly-Owned Patents, or pay any fee related thereto,
Avecia shall have the right, at its option, to control the filing, prosecution
and/or maintenance of any such patent applications or patents, provided that
Avecia shall consult with and keep Genta and/or any Genta Partner(s) reasonably
informed of matters regarding such filing, prosecution and maintenance. In such
case, subject to Section13.2.2(c) below, Genta and/or the Genta Partner(s) shall
reasonably assist Avecia, as Avecia reasonably requests, in Avecia's efforts to
file for, prosecute and/or maintain the Jointly-Owned Patents.

                  (c) Expenses. To the extent a Party and/or any Genta Partner
controls the foregoing filing, prosecution and maintenance activities of any
Jointly-Owned Patents, such entity shall be responsible for all costs and
expenses incurred in connection therewith.

      13.3 Third-Party Intellectual Property. Avecia shall obtain Genta's prior
written approval before using any intellectual property owned or controlled by
any Third Party in connection with the manufacturing and processing of API.

                                       29
<PAGE>

      13.4 Grant of Rights.

            13.4.1 Definitions for This Section

                  (a) (*)

                  (b) (*)

                  (c) (*)

                  (d) (*)

                  (e) "Avecia Patent Rights" means (*).

                  (f) "Non-Patented Proprietary Rights" means all trade secrets,
know-how, techniques, technical information, manufacturing instructions and
procedures, and any other Confidential Information (including unpublished patent
applications) that are used or applied by Avecia in the manufacturing process
for API pursuant to this Agreement (regardless of whether contributed by Avecia,
Genta or the Principal Genta Partner).

            13.4.2 Grant of Patent Rights to Genta. Avecia hereby grants to
Genta a non-exclusive, perpetual and irrevocable (*), worldwide right and
license to practice under the Avecia Patent Rights to make or have made any
oligonucleotide owned or controlled by Genta (including without limitation API)
(and thereafter use, sell, offer for sale and import such products). Genta may
sublicense such Avecia Patent Rights to: (*)

            13.4.3 (*).

            13.4.4 Certain Royalties for (*). In consideration for the rights
set forth in Section 13.4.2, Genta shall pay Avecia royalties as follows:

                  (a) Royalty Calculations. The royalty figures identified in
this Section 13.4.4 below apply only on compounds whose manufacture infringe one
or more valid and enforceable claims of issued patents within the Avecia Patent
Rights. Royalties referenced in Section 13.4.4(b)(i) shall be based on the
actual cost of manufacturing API, calculated in accordance with the
cost-accounting policy of Genta or the Principal Genta Partner (as applicable),
consistently applied across all of the products of Genta or the Principal Genta
Partner (as applicable) Royalties pursuant to Section 13.4.4(b)(ii) shall be
based on the price of API actually paid by Genta or the Principal Genta Partner
to the applicable Third Party for such API, less any taxes, duties, shipping
costs, or the like, and adjusted to take into account any subsequent refunds,
credits, returns or the like. Such royalty amounts shall be the flat percentage
per compound indicated below, regardless if one or more than one distinct
patents are used. Royalties shall be due within sixty (60) days after the end of
each calendar quarter. Other than as specifically provided in this Section 13.4,
neither Genta nor the Principal Genta Partner shall owe any royalties or other
compensation to Avecia for the exercise of its rights hereunder.

                  (b) Royalties.

                        (*)

                                       30
<PAGE>

                  (c) No Royalties for (*)

            13.4.5 Non-Patented Intellectual Property Rights Used by Genta and
Principal Genta Partner. Notwithstanding Section 14, Genta and the Principal
Genta Partner may use any Non-Patented Proprietary Rights in relation to their
manufacture of any oligonucleotide, including without limitation API, without
any royalty or compensation, both during and after the Term of this Agreement.

            (*)

            13.4.8 Contractual Restrictions & Third Party Royalties.
Notwithstanding anything to the contrary in Section 13.4, (*)

      13.5 Standby Events. Each of the following shall be deemed "Standby
Events":

            13.5.1 Egregious Delivery Delay. For any reason other than an Event
of Force Majeure or a Delay under Section 11.5.2, (a) during any (*), Avecia
delivers less than (*) percent ((*)%) of the quantity of API specified in
Genta's Firm Orders applicable to such period in accordance with the delivery
schedule, (b) during any (*), Avecia delivers less than (*) ((*)%) of the
quantity of API specified in Genta's Firm Orders applicable to each such
calendar quarter in accordance with the delivery schedule, or (c) during any (*)
((*)) (*), Avecia delivers less than (*) ((*)%) of the quantity of API specified
in Genta's Firm Orders applicable to each such calendar quarter in accordance
with the delivery schedule.

            13.5.2 Nonconforming Product. Any (*) ((*)) consecutive months in
which any shipments from Avecia contain API that is not Conforming Product, and
either:

                  (a) Within (*) ((*)) days after Genta first notifies Avecia of
the non-conformity, Avecia does not implement such changes as are necessary to
ensure that future deliveries of API will not be similarly non-conforming; or

                  (b) Within (*) ((*)) days after Genta first notifies Avecia of
the non-conformity, Avecia does not deliver replacement API to Genta (to the
extent Avecia is required to provide replacement API to Genta under Section
8.6); subject to the following:

                        (i) To the extent that Avecia does not reasonably expect
                  that it will be able to deliver replacement API to Genta
                  within the (*)-day period, Avecia shall promptly notify Genta;

                        (*)

            13.5.3 Avecia Ceasing Operations. Avecia dissolves or otherwise
ceases to do business, or if such dissolution or cessation of business is
reasonably likely.

            13.5.4 Force Majeure. An Event of Force Majeure as set forth in
Section 18.1.2.

                                       31
<PAGE>

            13.5.5 (*)

      13.6 Standby Rights. Within (*) after Genta learns of the occurrence of a
Standby Event, Genta may exercise some or all the following rights (collectively
referred to as "Standby Rights") upon written notice to Avecia

            13.6.1 Nominated Manufacturer Designation. Genta may designate (*)
Third Parties for the manufacture of API as "Nominated Manufacturers," provided
that (a) such Nominated Manufacturers agree in advance and in writing to be
bound by confidentiality obligations at least as restrictive as those set forth
in Section 14.3 (pursuant to which they agree to use any confidential
information received above only for the limited purpose of manufacturing API)
and (*).

            13.6.2 Transfer of Information. Avecia shall cooperate in
transitioning the manufacture and supply of API to Nominated Manufacturers in a
manner that minimizes the disruption of supply of API to Genta, including,
without limitation, transferring existing inventories of Raw Materials that
Genta requests; provided that where Avecia maintains inventories of particular
Raw Materials both for Genta and for other customers, Avecia need only provide
Genta with that portion of such Raw Materials that is reasonably attributable to
needs of Genta versus the needs of Avecia's other customers (based, for each
year, including the initial calendar year of the Term, on the proportionate
amount of such Raw Materials that Avecia used in supplying products to each of
Avecia and its other customers in the immediately preceding calendar year). In
addition, Avecia shall also provide any manufacturing know-how reasonably
necessary for the manufacture of API. In addition, Avecia shall make its
Representatives reasonably available to respond, free of charge, during business
hours, to oral or written inquiries of Genta or any Nominated Manufacturer
regarding technical aspects of the manufacture of API pursuant to the Standby
Rights. Without limiting the foregoing, Genta may disclose to the Nominated
Manufacturers the content of Avecia's DMF filings (and, if not already included
in the DMF, those batch records included in the latest Regulatory Filing) and
any other information or know-how reasonably necessary to enable such Nominated
Manufacturer to manufacture API (even if such information is deemed Avecia's
Confidential Information pursuant to this Agreement).

            13.6.3 No Liability. Avecia shall have no liability for the
Nominated Manufacturers' manufacture and supply of API.

            13.6.4 No Minimums. Genta's obligations regarding the Minimum
Percentages and minimum volume commitments set forth in Sections 2.2.1, 2.2.2
and 2.2.3 shall no longer apply or have any further effect.

      13.7 Reservation of Rights. Genta's exercise of its Standby Rights shall
be without prejudice to any other rights and remedies that may be available to
Genta under this Agreement.

                                       32
<PAGE>

                                   ARTICLE 14

                           PUBLICITY; CONFIDENTIALITY

      14.1 Publicity. Except as required by Law or the standards of any
securities regulatory authority, including, without limitation, the United
States Securities and Exchange Commission and NASDAQ, Avecia and Genta may not
make any official press release, announcement or other formal publicity relating
to the terms of this Agreement or transactions that are the subject of this
Agreement without first obtaining in each case the prior written consent of
Genta (and the Principal Genta Partner) or Avecia, respectively (which consent
may not be unreasonably withheld). If any Party is required to file this
Agreement with the United States Securities and Exchange Commission or another
applicable securities regulatory authority, that Party must seek confidential
treatment for any provisions of this Agreement that any Party believes would
disclose trade secrets or confidential commercial or financial information and
therefore, in such case, the Parties shall coordinate such filing efforts.
Except as required by Law or the standards of any securities regulatory
authority, Avecia and Genta may not use the name or trademarks of Genta (or any
Genta Partner) or Avecia, respectively, or any director, officer or employee
thereof or any adaptation thereof without the prior written approval of Genta or
Avecia, respectively.

      14.2 Publications. Avecia shall send to Genta for its approval (and
approval of the Principal Genta Partner), at least sixty (60) Business Days
before it is filed or submitted, any publication or abstract resulting from this
Agreement. The authorship on any publication or abstract shall be determined by
agreement of the Parties or as deemed scientifically appropriate. Any
publication resulting from this Agreement shall be delayed or prohibited if, in
Genta's reasonable opinion, delay or prohibition is required in order to file or
procure patent application or rights protection in respect of any invention or
discovery arising from this Agreement. This Section 14.2 shall not limit the
Parties' rights under Section 14.3.

      14.3 Confidentiality.

            14.3.1 Confidential Information. "Confidential Information" means
all data, specifications, training and any other know-how related to the design,
development, manufacture (including, without limitation, equipment and
processes), marketing, distribution or performance of Genta Products or API, as
well as all other information and data (y) provided by either Party to the other
Party pursuant to this Agreement or (z) disclosed at the facility of a Party
hereto to any Representative of the other Party (or, in the case of Genta, of
Genta and/or any Genta Partner), to the extent the disclosing party considers
such other information and data to be confidential. Notwithstanding the
foregoing, the term "Confidential Information" does not include any information
that: (i) is or becomes generally available to the public other than as a result
of a breach of this Agreement by the receiving Party, (ii) is known to the
receiving Party prior to receipt from the disclosing Party directly or
indirectly from a source other than one having an obligation of confidentiality
to the disclosing Party; (iii) becomes known to the receiving Party
(independently of disclosure by the disclosing Party) directly or indirectly
from a source other than one having an obligation of confidentiality to the
disclosing Party; or (iv) is independently developed by the receiving Party.

            14.3.2 Non-Disclosure and Non-Use. It is contemplated that a Party
may from time to time disclose its Confidential Information to the other Party.
Each Party shall not disclose to Third Parties any Confidential Information of
the disclosing Party and shall not use any Confidential Information of the
disclosing Party, except for the limited purposes of performing the receiving
Party's obligations or exercising the receiving Party's rights as set forth in
this Agreement. The receiving Party shall take all reasonable steps to prevent
any

                                       33
<PAGE>

unauthorized use or disclosure of the Confidential Information of the disclosing
Party. The receiving Party may disclose Confidential Information to those of its
Representatives (provided that such parties are bound by confidentiality
provisions) who have a need to have access to such Confidential Information in
connection with such Party's performance of its obligations and exercise of its
rights under this Agreement. Moreover, Genta may disclose Confidential
Information of Avecia to the Principal Genta Partner, provided that such parties
are bound by confidentiality obligations relating thereto. If the receiving
Party so discloses any Confidential Information pursuant to this Section 14.3,
such Party shall (1) inform the Persons to whom such Confidential Information is
disclosed of the confidential nature of such Confidential Information, and (2)
direct those Persons to keep such Confidential Information confidential. The
provisions of this Section 14.3 shall survive termination or expiration of this
Agreement and shall continue for five (5) years after the date thereof.

            14.3.3 Genta On-Site Employees. From time to time during the Term,
Genta may have employees assigned (*) at the Manufacturing Facilities. For
clarification purposes, Genta shall treat all Confidential Information disclosed
to or learned by such employees at the Manufacturing Facilities as Confidential
Information of Avecia for purposes of this Article 14. Furthermore, Genta shall
require that such Genta employees review and sign an employee acknowledgement of
confidentiality agreement in the form attached to this Agreement as Schedule
14.3.3.

            14.3.4 Disclosures Required By Law. The terms of this Section 14.3
shall not be construed to limit either Party's right to disclose the other
Party's Confidential Information if (i) required in response to a valid order of
a court of competent jurisdiction or other governmental body of a country or any
political subdivision thereof of competent jurisdiction, provided that the
receiving Party shall first have given notice to the disclosing Party and given
the disclosing Party a reasonable opportunity to quash such order and to obtain
a protective order requiring that the Confidential Information that is the
subject of such order be held in confidence by such court or agency and shall
reasonably cooperate with the disclosing Party in seeking to obtain such an
order, or if disclosed, be used only for the purposes for which the order was
issued; and provided further that if a disclosure order is not quashed or a
protective order is not obtained, the Confidential Information disclosed in
response to such court or governmental order shall be limited to that
Confidential Information which is legally required to be disclosed in such
response to such court or governmental order; or (ii) otherwise required by law
to be disclosed.

            14.3.5 General Knowledge. The terms of this Section 14.3 shall not
be construed to limit either Party's right to independently develop or acquire
products, processes or concepts without use of the other Party's Confidential
Information, even if similar. Neither Party shall have any obligation to limit
or restrict the assignment of its employees or consultants as a result of their
having had access to Confidential Information of the other Party. Further,
notwithstanding this Section 14.3, each Party shall be free to use for any
purpose the general knowledge resulting from access to work with or exposure to
the other Party's Confidential Information, provided that such Party shall
maintain the confidentiality of the Confidential Information as provided herein.
The term "general knowledge" means information in non-tangible form which may be
retained by persons who have had access to Confidential Information of the other
Party, including ideas, concepts, know-how or techniques contained therein.

                                       34
<PAGE>

                                   ARTICLE 15

                         REPRESENTATIONS and WARRANTIES

      15.1 Representations and Warranties of Avecia. As of the date of this
Agreement, Avecia represents and warrants to Genta as follows:

            15.1.1 Avecia is a corporation validly existing and in good standing
under the laws of the State of Delaware with the power to own all of its
properties and assets and to carry on its business as it is currently being
conducted.

            15.1.2 Avecia has the power to execute and deliver this Agreement
and to perform its obligations under this Agreement.

            15.1.3 Avecia has obtained all necessary consents and authorizations
to execute and deliver this Agreement and to perform its obligations under this
Agreement, and no other corporate proceedings of Avecia are necessary with
respect thereto.

            15.1.4 Avecia is not required to obtain the consent of any Person,
including, without limitation, the consent of any party to any Contract to which
it is a party, in connection with execution and delivery of this Agreement and
performance of its obligations under this Agreement.

            15.1.5 Avecia's execution and delivery of this Agreement and
performance of its obligations under this Agreement do not and shall not (A)
conflict with, result in a breach of, constitute a default under (or an event
which, with notice or lapse of time or both, would constitute a default under),
accelerate the performance required by, result in the creation of any Lien upon
any of its properties or assets under, or create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under, any
Contract to which it is a party or by which any of its properties or assets are
bound, or (B) to the best of its knowledge, violate any applicable Law or
Judgment currently in effect to which it is subject.

            15.1.6 To the best of Avecia's knowledge, neither Avecia, its
subcontractors or their respective Affiliates, nor any members of their
respective staffs, are, nor shall they be, at the time of performance of any
manufacturing and processing activities hereunder, (i) disqualified or debarred
by the FDA or any other Regulatory Authority for any purpose pursuant to 21
U.S.C. ss. 355a or any foreign counterparts thereof; or (ii) charged with or
convicted under United States federal law, or foreign counterparts thereof, for
conduct relating to the development or approval of, or otherwise relating to the
regulation of, any drug product under the Generic Drug Enforcement Act of 1992
or any other relevant statute, law or regulation.

            15.1.7 Avecia owns or possesses adequate licenses or other rights
necessary to enter into this Agreement, and its fulfillment of its obligations
hereunder shall not violate the rights of any Third Party.

      15.2 Representations and Warranties of Genta. As of the date of this
Agreement, Genta represents and warrants to Avecia as follows:

                                       35
<PAGE>

            15.2.1 Genta is a corporation validly existing and in good standing
under the laws of the State of Delaware with the power to own all of its
properties and assets and to carry on its business as it is currently being
conducted.

            15.2.2 Genta has the power to execute and deliver this Agreement and
to perform its obligations under this Agreement.

            15.2.3 Genta has obtained all necessary consents and authorizations
to execute and deliver this Agreement and to perform its obligations under this
Agreement, and no other corporate proceedings of Genta are necessary with
respect thereto.

            15.2.4 Genta's execution and delivery of this Agreement and
performance of its obligations under this Agreement do not and shall not (A)
conflict with, result in a breach of, constitute a default under (or an event
which, with notice or lapse of time or both, would constitute a default under),
accelerate the performance required by, result in the creation of any Lien upon
any of its properties or assets under, or create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under, any
Contract to which it is a party or by which any of its properties or assets are
bound, or (B) to the best of its knowledge, violate any applicable Law or
Judgment currently in effect to which it is subject.

            15.2.5 Genta owns or possesses adequate licenses or other rights
necessary for Genta to enter into this Agreement and authorize Avecia to
manufacture API and the API does not violate the proprietary rights of any Third
Party.

      15.3 Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO API, THE GENTA PRODUCT AND THE MANUFACTURE
AND SUPPLY THEREOF AND ANY SERVICES PROVIDED BY SUCH PARTY), INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS, ALL OF WHICH WARRANTIES ARE HEREBY DISCLAIMED BY SUCH PARTY.

                                   ARTICLE 16

                                 INDEMNIFICATION

      16.1 Indemnification.

            16.1.1 Subject to the following provisions of this Article 16,
Avecia shall indemnify Genta, the Genta Partner(s), each Affiliate and
Representative of the foregoing, and the heirs, executors, successors and
assigns of any of the foregoing, against the following:

                  (a) Indemnifiable Losses arising out of a material breach by
Avecia of any of its obligations under this Agreement (including, but not
limited to, material breach of any Schedules hereto and of obligations to
deliver Conforming Product or breach of any other obligation hereunder that may
effect the fitness or quality of API);

                                       36
<PAGE>

                  (b) Indemnifiable Losses arising out of a material breach of
any representation or warranty of Avecia contained in Section 15.1 of this
Agreement;

                  (c) Indemnifiable Losses arising by way of claims for personal
injury or death, damage to property, for failure to comply with operating
permits or Regulatory Requirements relating to the operation of the
Manufacturing Facilities during the course of Avecia's manufacturing and
processing activities;

                  (d) Indemnifiable Losses arising out of negligence or willful
misconduct on the part of Avecia or any of its agents or employees; and

                  (e) Indemnifiable Losses arising out of infringement or
violation of a Third Party's intellectual property rights associated with the
manufacturing process that Avecia uses in the manufacture of API hereunder;

provided, however, that Avecia shall have no liability to Genta, the Genta
Partner(s), each Affiliate and Representative thereof for any such Indemnifiable
Losses to the extent that such Indemnifiable Losses were caused by: (x) the
negligence or willful misconduct of Genta, any Genta Partner, Affiliate or any
Representative of the foregoing; (y) a breach by Genta of its representations
and/or warranties contained in Section 15.2 of this Agreement or a material
breach by Genta of its obligations under this Agreement; or (z) (*).

            16.1.2 Subject to the following provisions of this Article 16, Genta
shall indemnify Avecia, each Affiliate of Avecia and each Representative of the
foregoing, and the heirs, executors, successors and assigns of any of the
foregoing, against the following:

                  (a) Indemnifiable Losses arising out of a material breach by
Genta of any of its obligations under this Agreement (including but not limited
to any Schedules hereto);

                  (b) Indemnifiable Losses arising out of a material breach of
any representation or warranty of Genta contained in Section 15.2 of this
Agreement;

                  (c) Indemnifiable Losses arising out of the design,
specification, sale, promotion, distribution, use, fitness for purpose or
quality of the Genta Product;

                  (d) Indemnifiable Losses arising out of negligence or willful
misconduct on the part of Genta or any of its agents or employees; and

                  (e) Indemnifiable Losses arising out of infringement or
violation of a Third Party's intellectual property rights associated with the
design or specification of the API;

provided, however, that Genta shall have no liability to Avecia and each
Affiliate and Representative thereof for any such Indemnifiable Losses to the
extent that such Indemnifiable Losses were caused by: (x) the negligence or
willful misconduct of Avecia or any Person for whose actions or omissions Avecia
is legally liable; (y) a breach by Avecia of its representations and/or
warranties contained in Section 15.1 of this Agreement or a material breach by
Avecia of its obligations under this Agreement; or (z) (*)

                                       37
<PAGE>

      16.2 Procedures Relating to Indemnification.

            16.2.1 In order to be entitled to indemnification under this Article
16 in connection with a claim made or litigation initiated by any Third Party
against any other Person with respect to which that other Person (an
"Indemnified Party") is entitled to indemnification pursuant to this Article 16
(any such claim, a "Third Party Claim"), that Indemnified Party must do the
following:

                  (a) notify the Person or Persons obligated to indemnify it
(the "Indemnifying Party") in writing, and in reasonable detail, of that Third
Party Claim as soon as possible but in any event within thirty (30) days after
receipt of notice of that Third Party Claim, except that any failure to give any
such notification shall only affect the Indemnifying Party's obligation to
indemnify the Indemnified Party if the Indemnifying Party has been prejudiced as
a result of that failure; and

                  (b) deliver to the Indemnifying Party as soon as possible but
in any event within thirty (30) days after the Indemnified Party receives them a
copy of all material notices and documents (including court papers) delivered to
that Indemnified Party relating to that Third Party Claim.

            16.2.2 In the event of a Third Party Claim against one or more
Indemnified Parties, the Indemnifying Party may participate in the defense of
that Third Party Claim and, if it so chooses, assume at its expense the defense
of that Third Party Claim with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party. If the Indemnifying Party
assumes the defense of any Third Party Claim, the Indemnified Party shall be
entitled to participate in the defense of that Third Party Claim and to employ
counsel, at its own expense (subject to the foregoing sentence), separate from
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall be entitled to control that defense except as stated
above. The Indemnifying Party shall be liable for the fees and expenses of
counsel employed by the Indemnified Party for any period during which the
Indemnifying Party did not assume the defense of any Third Party Claim (other
than during any period in which the Indemnified Party failed to give notice of
the Third Party Claim as provided above and a reasonable period after such
notice) or as stated above. If the Indemnifying Party chooses to defend or
prosecute a Third Party Claim, the Parties shall cooperate in the defense or
prosecution of that Third Party Claim, including by retaining and providing to
the Indemnifying Party records and information reasonably relevant to that Third
Party Claim, and making employees available on a reasonably convenient basis. If
the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the
Indemnifying Party shall not agree to any settlement, compromise or discharge of
such Third Party Claim without the Indemnified Party's prior written consent,
which consent shall not be unreasonably withheld. Whether or not the
Indemnifying Party has assumed the defense of a Third Party Claim, the
Indemnified Party shall not admit any liability with respect to, or settle,
compromise or discharge, that Third Party Claim for which indemnification is
sought hereunder without the Indemnifying Party's prior written consent.

                                       38
<PAGE>

      16.3 LIMITATION OF LIABILITY.

            16.3.1 SUBJECT TO SECTION 16.3.3 BELOW, EXCEPT FOR WILLFUL
MISCONDUCT AND RECKLESS DISREGARD, AVECIA'S EXPRESS OBLIGATIONS UNDER SECTIONS
6.9 AND 8.6 AND EACH PARTY'S INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTION
16.1, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY OR ITS
AFFILIATES OR ANY GENTA PARTNER FOR ANY LOSS OF PROFITS, SPECIAL, INDIRECT,
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR INCIDENTAL DAMAGES ARISING OUT OF OR
RELATED TO THIS AGREEMENT HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(INCLUDING NEGLIGENCE), WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION SHALL SURVIVE ANY FAILURE OF THE
ESSENTIAL PURPOSE OF A LIMITED OR EXCLUSIVE REMEDY SET FORTH HEREIN.

            16.3.2 SUBJECT TO SECTION 16.3.3 BELOW BUT OTHERWISE NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT (BUT WITHOUT PREJUDICE TO GENTA'S RIGHTS
TO EXERCISE NON-MONETARY REMEDIES UNDER ARTICLE 13 (INTELLECTUAL PROPERTY AND
STANDBY RIGHTS) AND BOTH PARTIES' RIGHTS TO EXERCISE NON-MONETARY REMEDIES UNDER
ARTICLE 17 (TERM AND TERMINATION)), EXCEPT FOR WILLFUL MISCONDUCT AND RECKLESS
DISREGARD, AVECIA'S MAXIMUM LIABILITY TO GENTA AND/OR THE GENTA PARTNER(S), AND
GENTA'S AND/OR THE GENTA PARTNER(S)' MAXIMUM LIABILITY TO AVECIA, UNDER THIS
AGREEMENT, SHALL, FOR EACH OCCURENCE, BE LIMITED AS FOLLOWS:

                  (a) IN RESPECT OF ANY LIABILITY ON THE PART OF AVECIA (I) FOR
ANY DELAY OR EGREGIOUS DELAY IN DELIVERY OF API (*);

                  (b) IN RESPECT OF ANY LIABILITY ON THE PART OF AVECIA UNDER
SECTION 8.6.2 OR EITHER PARTIES' LIABILITY TO THE OTHER UNDER SECTION 12.5
(RESPONSIBILITY FOR EXPENSES OF RECALL), (*); AND

                  (c) (*).

            16.3.3 FOR CLARIFICATION PURPOSES, THE PARTIES HAVE AGREED ON
CERTAIN MINIMUM VOLUME COMMITMENTS IN SECTION 2.2 AND ON FIRM ORDERS IN ARTICLES
5 AND 6 THAT, SUBJECT TO THE TERMS OF THIS AGREEMENT, MAY REQUIRE GENTA TO
PURCHASE FROM AVECIA CERTAIN AMOUNTS OF API DURING THE TERM OF THIS AGREEMENT
OR, IF APPLICABLE, AFTER TERMINATION OF THIS AGREEMENT AS PROVIDED IN SECTION
17.3. SECTION 16.3.1 AND 16.3.2 SHALL NOT BE CONSTRUED TO REDUCE GENTA'S
FINANCIAL COMMITMENT WITH RESPECT TO THE PURCHASE OF SUCH API (*)

      16.4 Offset of Insurance Proceeds. Any indemnification hereunder shall be
made net of any insurance proceeds recovered by the Indemnified Party; provided,
however, that if, following the payment to the Indemnified Party of any amount
under this Article 16, such Indemnified Party recovers any insurance proceeds in
respect of the claim for which such indemnification payment was made, such
Indemnified Party shall promptly pay an amount equal to the amount of such
insurance proceeds (but not exceeding the amount of such indemnification payment
from the Indemnifying Party) to the Indemnifying Party.

                                       39
<PAGE>

      16.5 Insurance. Avecia shall maintain, during the Term of this Agreement,
Public and Products Liability Insurance with a combined and single limit per
accident or occurrence of not less than $10 million. During the Term of this
Agreement, Avecia shall not permit such insurance to be reduced, expired or
canceled without reasonable prior written notice (in no event less than 30 days)
to Genta. Upon request, Avecia shall provide Certificates of Insurance
evidencing the coverage specified herein.

      16.6 Quality Agreement. Those sections of the Quality Agreement headed
"Objective" and "Scope and Approach" shall not be construed as imposing on
Avecia obligations in respect of the design, specification or fitness for
purpose of the API.

                                   ARTICLE 17

                              TERM AND TERMINATION

      17.1 Term. This Agreement shall commence on the Effective Date and, unless
earlier terminated in accordance with the terms and conditions of this
Agreement, shall continue in effect until December 31, 2007 ("Initial Term").
After the Initial Term, this Agreement shall automatically renew for additional
(*) periods (each a "Renewal Term"), unless either Party provides (*) prior
written notice to the other Party prior to the end of the Initial Term or any
Renewal Term of its desire to terminate this Agreement. The Initial Term,
together with all the Renewal Terms, shall be collectively referred to herein as
the "Term".

      17.2 Grounds for Termination.

            17.2.1 Breach by Avecia. Subject to Section 11.5, this Agreement may
be terminated by Genta immediately upon written notice if Avecia has breached
any of its material obligations under this Agreement and has not cured that
breach prior to expiration of a ninety (90) day period from the date of notice
of breach.

            17.2.2 Breach by Genta. This Agreement may be terminated by Avecia
immediately upon written notice if Genta has breached any of its material
obligations under this Agreement and has not cured that breach prior to
expiration of a ninety (90) day period from the date of notice of breach.

            17.2.3 Standby Events. Without limiting the foregoing, this
Agreement may be terminated by Genta immediately upon written notice upon the
occurrence of any Standby Event in Sections 13.5.1, 13.5.2, or 13.5.3,
regardless of whether Genta exercises any Standby Rights, subject to the
limitations of Section 11.5.2.

            17.2.4 Discontinuance of Genta Product. This Agreement may be
terminated by Genta immediately upon written notice to Avecia in the event that:
(a) Genta, in its sole discretion, determines that the Genta Product shall not
be marketed or shall be withdrawn from the market; or (b) the FDA withdraws
approval of or fails to approve the manufacturing or marketing of the Genta
Product or Genta reasonably believes that the FDA will take (or, as context
requires, fail to take) any such action.

                                       40
<PAGE>

            17.2.5 (*). Either Party may terminate this Agreement in accordance
with the terms of Section 9.5.4.

            17.2.6 Force Majeure. Either Party may terminate this Agreement in
accordance with the terms of Section 18.1.2.

            17.2.7 Failure to Successfully Complete Process Validation. Genta
may terminate this Agreement immediately upon written notice if Avecia fails to
successfully complete the initial process validation of the M1 Facility by (*).

            17.2.8 Assignment of this Agreement.

                  (a) Genta may terminate this Agreement in accordance with the
terms of Section 18.4.3; and

                  (b) If, in lieu of terminating this Agreement in its entirety,
Genta nullifies its obligations regarding the Minimum Percentages and minimum
volume commitments set forth in Section 2.2.1, 2.2.2 and 2.2.3 by written notice
to Avecia as set forth in Section 18.4.3, then within ninety (90) days after the
date of such notice, either Party may request to renegotiate this Agreement or
terminate this Agreement, which termination shall take effect no earlier than 12
months after Avecia (or its assignee) has delivered all Firm Orders existing as
of the date Genta notified Avecia of its nullification of the Minimum
Percentages and minimum volume commitments.

      17.3 Effects of Termination.

            17.3.1 Payment of Outstanding Amounts. Upon the termination of this
Agreement for any reason whatsoever, Genta shall pay to Avecia (or, as may be
applicable, Avecia shall return to Genta) all undisputed amounts due and payable
up to the date of expiration or termination but not yet paid or, where any such
amounts become due and payable after expiration or termination in respect of
matters accrued prior to expiration or termination, when such amounts become due
and payable pursuant to the terms of this Agreement.

            17.3.2 (*)

                  (a) (*). If this Agreement is terminated by Genta pursuant (*)
or by Avecia pursuant to (*) then, at Genta's election.

                        (i) Genta shall purchase, and Avecia shall supply, any
outstanding quantities of API specified in any Firm Orders effective as of the
date of such termination and (*) of the API forecasted for months (*)through (*)
in the Rolling Forecast, pursuant to the terms of this Agreement; or

                        (ii) Avecia shall (*) and Genta shall only be required
to pay (*).

                                       41
<PAGE>

                  (b) (*). If this Agreement is terminated by Genta pursuant to
(*) then with respect to any outstanding quantities of API specified in any Firm
Orders as of the date of such termination and (*) of the API forecasted for
months (*) through (*) in the Rolling Forecast, Avecia shall (*), and Genta
shall not be required to pay (*) and shall only be required to pay (*).

                  (c) If this agreement is terminated by Genta for (*), Genta
shall not be obligated to (*).

                  (d) Other Termination By Genta. If this Agreement is
terminated by Genta for any reason other than as set forth above in Section
17.3.2 (a) to (c) above or (*), Genta shall purchase, and Avecia shall supply,
any outstanding quantities of API specified in any Firm Orders as of the date of
such termination and (*)% of the API forecasted for months (*)through (*) in the
Rolling Forecast (pursuant to the terms of this Agreement) provided that Avecia
is able to deliver such quantities within ninety (90) days of the original
delivery date (and, if not, then Genta shall not be obligated to purchase such
quantities).

                  (e) Termination for (*). If this Agreement is terminated
pursuant to Section (*), then (*).

            17.3.3 (*).

                  (a) If this Agreement is terminated by Genta pursuant to (*)
or by Avecia pursuant to (*), then with respect to any remaining minimum volumes
of API set forth in Sections 2.2.2 and 2.2.3 (that, by the terms of such
sections and Sections 13.6.4 and 18.4.3, apply), at Genta's election:

                        (i) Genta shall purchase, and Avecia to supply, (*);
and/or

                        (ii) Avecia shall (*).

                  (b) (*). If this Agreement is terminated by Genta pursuant to
(*) then:

                        (i) with respect to any remaining minimum volumes of API
set forth in Sections 2.2.2 and 2.2.3 applicable to the (*) Kilogram
requirements for 2003 and 2004 (that, by the terms of such sections and Sections
13.6.4 and 18.4.3, apply), at Genta's election:

                              (1) Genta shall purchase, and Avecia shall supply,
(*); and/or

                              (2) Avecia shall (*).

                        (ii) any remaining minimum volumes of API set forth in
Sections 2.2.2 and 2.2.3) applicable to the (*) Kilogram requirements (that, by
the terms of such sections and Sections 13.6.4 and 18.4.3, apply) shall
terminate.

                  (c) Other Termination. If this Agreement is terminated for any
reason whatsoever other than as set forth in (*), then Genta's obligations
regarding the minimum volume commitments set forth in Sections 2.2.2 and 2.2.3
shall terminate.

                                       42
<PAGE>

                  (d) Minimum Percentages. For clarification purposes, upon
termination of this Agreement for any reason, Genta's obligations with respect
to the Minimum Percentages in Section 2.2.1 shall terminate.

      17.4 Exclusive Obligations. Section 17.3 sets forth Genta's sole and
exclusive obligations and liability to Avecia with respect to purchases of API
under this Agreement upon termination of this Agreement.

      17.5 Survival. Termination or expiration of this Agreement shall not
affect the rights and obligations of either Party that may have accrued prior to
the date of termination or expiration, or any obligation contained in Articles
8, 10, and 12 through 18, and Sections 2.4, 3.9, 5.1.6, 6.3.3, 6.4, 6.5,7.5,
11.1 to 11.3, 11.6, and 11.9 to 11.15. Furthermore, in the event that Genta
shall purchase and Avecia shall supply any quantity of API after the termination
of this Agreement pursuant to Sections 17.3, then the following terms and
conditions also shall survive termination of this Agreement until the final
quantity of API is delivered in accordance therewith: Article 4, and Sections
2.5, 3.1, 3.4 to 3.8, 3.10, 6.2, 6.3.1, 6.3.2, 6.6, 6.8 to 6.11, 7.1 to 7.4,
11.4, 11.5, 11.7, and 11.8.

                                   ARTICLE 18

                                  MISCELLANEOUS

      18.1 Force Majeure.

            18.1.1 No Party shall be responsible to the other under this
Agreement for failure or delay in performing any obligations under this
Agreement, other than payment obligations, due to factors beyond its reasonable
control, including, without limitation, war, terrorism, sabotage, revolution,
riot or civil commotion, strikes, lock-outs, failure of supplies of power or
fuel, prohibitions against imports or exports of API, impossibility of obtaining
Key Raw Materials or a force majeure event affecting a supplier of Key Raw
Materials that results in a shortage of supply of Key Raw Materials, explosion,
fire, flood, natural disaster or act of God, each to the extent the same are
beyond the reasonable control of the affected Party (each such factor, an "Event
of Force Majeure"). Upon the occurrence of an Event of Force Majeure, the Party
failing or delaying performance shall promptly notify the other Party in
writing, setting forth the nature of the occurrence, its expected duration, and
how that Party's performance is affected. Any Party subject to an Event of Force
Majeure shall resume performing its obligations under this Agreement as soon as
practicable. Except as otherwise provided herein, if an Event of Force Majeure
occurs, the affected Party shall be excused from performing and the time for
performance shall be extended as long as that Party is unable to perform as a
result of the Event of Force Majeure.

            18.1.2 If any Event of Force Majeure prevents Avecia from delivering
any shipment of API for more than sixty (60) days beyond the scheduled delivery
date, then Genta may cancel its outstanding Rolling Forecasts, Firm Orders
and/or Purchase Orders without incurring any liability to Avecia with respect
thereto. Notwithstanding the foregoing, if an Event of Force Majeure continues,
or is reasonably expected to continue, for a period of one hundred and twenty
(120) days or more, and such Event of Force Majeure substantially impairs the
affected Party's performance of its obligations under this Agreement (including
without

                                       43
<PAGE>

limitation delivery of API), the Party whose performance is not affected by the
Force Majeure Event shall have the right and option to terminate this Agreement
upon written notice thereof to the other Party (and Genta shall additionally
have the right and option to deem the Event of Force Majeure a Standby Event
under Section 13.5).

      18.2 Governing Law. This Agreement shall be deemed to be made under and
shall be construed in accordance with the laws of the State of New York without
regard to its conflict of law provisions.

      18.3 Jurisdiction and waiver of jury trial. Each Party hereby submits to
the exclusive jurisdiction of any state or federal court sitting in New York,
and waives its right to jury trial, in any action, suit, proceeding or
counterclaim of any kind arising out of or relating to this Agreement or the
transactions contemplated herein.

      18.4 Assignment.

            18.4.1 By Genta. Genta may not assign this Agreement without
Avecia's prior written consent, not to be unreasonably withheld, provided that
(A) notwithstanding the foregoing this Agreement may be assigned by Genta
without Avecia's consent (*).

            18.4.2 By Avecia. Avecia may not assign this Agreement nor undertake
any change of control without Genta's prior written consent, not to be
unreasonably withheld, provided that, notwithstanding the foregoing, (*).

            18.4.3 Effect of Assignment. Any purported assignment in
contravention of this Section 18.4 shall, at the option of the nonassigning
Party be null and void and of no effect(*)

            18.4.4 With respect to any assignment in compliance with this
Section 18.4, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and permitted assigns
of the Parties. No assignment shall release either Party from responsibility for
the performance of any accrued obligation of such Party hereunder.

      18.5 Amendment; Approvals. This Agreement may not be amended except by an
instrument in writing referencing this Agreement and signed on behalf of both
Parties. To be deemed effective pursuant to this Agreement, all approvals
required hereunder shall be in writing.

      18.6 Waivers. No term or provision of this Agreement shall be considered
waived by either Party hereto, and no breach consented to by either Party
hereto, unless such waiver or consent is in writing signed on behalf of the
Party against whom the waiver or consent is asserted. No consent to or waiver of
a breach by either Party hereto, whether express or implied, shall constitute a
consent to, waiver of, or excuse for any other, different or subsequent breach
by such Party.

      18.7 Construction. This Agreement shall be construed as if all Parties
prepared this Agreement.

                                       44
<PAGE>

      18.8 Notices.

            18.8.1 Subject to any contrary agreement between the Parties after
the Effective Date, every notice or other communication required or contemplated
by this Agreement must be in writing and sent by one of the following methods:

                  (a) by personal delivery, in which case delivery shall be
deemed to occur the day of delivery; or

                  (b) by facsimile followed by a recognized courier service such
as Federal Express or DHL Worldwide Express, in which case delivery shall be
deemed to occur the day of delivery of the notice or communication by such
courier .

            18.8.2 In each case, a notice or other communication sent to a Party
must be directed to the address for that Party set forth below, or to another
address designated by that Party by written notice.

           If to Genta, to:

           Genta Incorporated
           2 Connell Drive
           Berkeley Heights, NJ 07922 USA
           Attention: General Counsel, Stefan Grant

           Fax no.

           With a copy to:

           Genta Incorporated
           2 Connell Drive
           Berkeley Heights, NJ 07922 USA
           Attention: VP Manufacturing Operations, Bharat M. Mehta

           Fax no.

           If to Avecia, to:

           Avecia Biotechnology Inc.
           155 Fortune Boulevard
           Milford, MA 01757 USA
           Attention: President

           Fax no.

           with a copy to:

           Avecia Limited
           P.O. Box 42 Hexagon House
           Blackley Manchester M9 8ZS UK
           Attention: General Counsel & Company Secretary

           Fax no. +44 161 721 1884

                                       45
<PAGE>

      18.9 Independent Contractor.

            18.9.1 In making and performing this Agreement, the Parties hereto
are acting and shall act as independent contractors. Neither Party is, nor shall
be deemed to be, an agent, legal representative, joint venturer or partner of
the other Party for any purpose. Except as expressly permitted hereunder,
neither Party shall be entitled to (i) enter into any contracts in the name of
or on behalf of the other Party; (ii) pledge the credit of the other Party in
any way or hold itself out as having authority to do so; or (iii) make
commitments or incur any charges or expenses for or in the name of the other
Party.

            18.9.2 Neither Party's personnel are, nor shall they be deemed to be
at any time during the Term of this Agreement, employees of the other Party
hereto. Each Party shall be solely responsible for payment of all compensation
owed to its personnel (and all tax withholding with respect thereto), including
payment, if any, of employment-related taxes and worker's compensation insurance
premiums.

      18.10 Rights of Genta Partner(s). Avecia acknowledges that Genta may allow
the Principal Genta Partner to participate in any decision-making, activities or
other undertakings with respect to which Genta has rights hereunder. Avecia
further acknowledges that the Genta Partners are intended third party
beneficiaries of this Agreement, with the right to enforce its terms directly
against Avecia. Any liability or obligation on the part of Avecia to any Genta
Partner shall be subject to all of the conditions and limitations set forth in
this Agreement with respect to Avecia's liability and obligations and to any
defenses or claims Avecia may have against Genta. The rights provided to the
Genta Partners as intended third party beneficiaries shall not affect the rights
of the Parties under Sections 18.5 or 18.6 of this Agreement to take the actions
authorized thereunder without the consent or approval of the Genta Partners or
any other Person, which rights this Agreement fully reserves for the Parties
themselves. Subject to the foregoing and the express rights of the Affiliates
and Representatives of the Parties under Section 16.1 of this Agreement, nothing
express or referred to in this Agreement shall be construed to give any Person,
other than the Parties and the Genta Partners, any legal or equitable right,
remedy or claim under or with respect to this Agreement or any provision of this
Agreement.

      18.11 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is held invalid or unenforceable in any
jurisdiction, the remainder hereof, and the application of such provision to
such Person or circumstance in any other jurisdiction or to other Persons or
circumstances in any jurisdiction, shall not be affected thereby, and to this
end the provisions of this Agreement shall be severable.

      18.12 Section Headings. Headings contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provisions hereof.

      18.13 Further Assurances. At any time or from time to time from the date
of this Agreement, Avecia and Genta shall, at the request of the other Party, do
the following:

                                       46
<PAGE>

            18.13.1 to the extent consistent with this Agreement, deliver to the
other such records, data or other documents reasonably requested by the other;
and

            18.13.2 take or cause to be taken all such other actions as are
reasonably necessary or desirable in order to permit the other to obtain the
full benefits of this Agreement.

      18.14 Entire Agreement. Except where any other document dated
contemporaneously with this Agreement expressly refers to this Agreement, this
Agreement, the exhibits and schedules attached hereto and the Letter Agreement
from Michael McLean to Robert Klem dated November 5, 2001, regarding Proposal
for Validation Study for Production of Genasense constitute the entire
understanding between the Parties and the Principal Genta Partner with respect
to the subject matter hereof and shall supersede any prior agreements, whether
written or oral, arrangements or understandings, between the Parties relating to
the subject matter hereof.

      18.15 Counterparts. This Agreement may be executed in any number of
multiple counterparts (and may be delivered by facsimile), each of which shall
be deemed to be an original copy and all of which shall constitute one
agreement, binding on all Parties hereto.

                                       47
<PAGE>

      IN WITNESS WHEREOF, the Parties have caused this Manufacture and Supply
Agreement to be executed by their duly authorized officers as of the day first
above written.

                                           GENTA INCORPORATED

                                           By: _________________________________
                                               Name:
                                               Title:

                                           AVECIA BIOTECHNOLOGY INC.

                                           By: _________________________________
                                               Name:
                                               Title:

<PAGE>

                                  SCHEDULE 1.2

                            CHEMICAL STRUCTURE OF API

17 Na+

                               [GRAPHIC OMITTED]
<PAGE>

                                  SCHEDULE 1.19

                              M1 AND M2 FACILITIES

(*) (*) (*)
<PAGE>

                                  SCHEDULE 1.33

                           API RELEASE SPECIFICATIONS

--------------------------------------------------------------------------------
       TEST                        TEST METHOD              ACCEPTANCE CRITERIA
--------------------------------------------------------------------------------
(*)

<PAGE>

                                  SCHEDULE 3.1

                                QUALITY AGREEMENT

                                       (*)
<PAGE>

                                  SCHEDULE 7.1

                                  SUPPLY PRICE

      (*)
<PAGE>

                                 SCHEDULE 14.3.3

                          FORM EMPLOYEE ACKNOWLEDGEMENT
                                       OF
                            CONFIDENTIALITY AGREEMENT

      I, ____________________________________ [employee name], am employed by
Genta Incorporated and hereby agree as follows:

      A. I acknowledge that I have read and understand the confidentiality
provisions set forth in Article 14 of the Manufacturing and Supply Agreement
between Genta Incorporated and Avecia Biotechnology Inc., dated December [--],
2002 (the "Supply Agreement").

      B. I further acknowledge that, in connection with the performance of my
duties involving the Supply Agreement, I may receive, have access to, or become
acquainted with data, specifications, training and other know-how that would be
considered "Confidential Information" under the confidentiality provisions set
forth in Article 14 of the Supply Agreement.

      C. I agree not to disclose or use any Avecia Confidential Information in a
manner inconsistent with Genta Incorporated's obligations in respect of such
Confidential Information under the terms of Article 14 of the Supply Agreement.

      Intending to be legally bound, I hereby execute this Acknowledgement
below.

ACKNOWLEDGED AND AGREED TO:

By: _____________________________
    Employee Signature

Name: ___________________________

Job Title: ______________________

Date: ___________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]