ex-10.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
10.1

    Form
8-K

    Bio-Path
Holdings, Inc.

    File No.
000-53404

    


    Drug
Product Development and Clinical Supply Agreement

    


    


    THIS AGREEMENT is effective as
of the 24th day of
June, 2008 (“Effective Date”).

    


    BY
AND BETWEEN:

    


    Bio-Path
Holdings, Inc., a corporation organized and existing under the laws of the State
of Utah, with its principal offices located at 3293 Harrison Blvd., Suite 230,
Ogden, UT 84403 (hereinafter referred to
as “CLIENT”).

    


    AND:

    


    ALTHEA TECHNOLOGIES, INC., a
Delaware corporation, with a place of business located at 11040 Roselle Street,
San Diego, CA 92121 (hereinafter referred to as “ALTHEA”);

    


    WHEREAS CLIENT has
formulations and/or know-how related to each Drug Product, as defined
below;

    


    WHEREAS ALTHEA has the
expertise and the manufacturing facility suitable for the Production of Drug
Product;

    


    WHEREAS, CLIENT wishes to have
ALTHEA Produce Drug Product and ALTHEA wishes to Produce Drug Product for
CLIENT;

    


    NOW, THEREFORE, in
consideration of the premises and the undertakings, terms, conditions and
covenants set forth below, the parties hereto agree as follows:

    


    


    Article
1, DEFINITIONS.

    


    
      	
               
      

            	
              1.1

            	
              AFFILIATE of a party
      hereto shall mean any entity that controls or is controlled by such party,
      or is under common control with such party.  For purposes of
      this definition, an entity shall be deemed to control another entity if it
      owns or controls, directly or indirectly, at least fifty percent (50%) of
      the voting equity of another entity (or other comparable interest for an
      entity other than a corporation).

            


    

    


    
      	
               
      

            	
              1.2

            	
              ALTHEA SOPs shall mean
      ALTHEA’S Standard Operating Procedures which shall be deemed reviewed and
      approved by CLIENT unless prior to manufacture of CLIENT’s Drug Product
      CLIENT’s representative audits ALTHEA’s SOPS and has modifications deemed
      necessary for the manufacture of CLIENT’s Drug
  Product.

            


    

    


    
      	
               
      

            	
              1.3

            	
              BATCH shall mean a
      specific quantity of a Drug Product comprising a number of units mutually
      agreed upon between CLIENT and ALTHEA, and that (a) is intended to have
      uniform character and quality within specified limits, and (b) is produced
      according to a single manufacturing order during the same cycle of
      manufacture.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              1.4

            	
              BULK DRUG SUBSTANCE
      shall mean the active compound, as set forth in the Project Plan,
      to be supplied by CLIENT for use in Production of Drug
      Product.

            


    

    


    
      	
               
      

            	
              1.5

            	
              cGMP shall mean current
      Good Manufacturing Practices as defined in the FDA rules and regulations,
      21 CFR Parts 210-211.

            


    

    


    
      	
               
      

            	
              1.6

            	
              CANCELLATION FEES shall
      mean the fees payable by CLIENT in the event that CLIENT cancels the
      Production of any Batch of Drug Product set forth in the Project Plan,
      except in the event of a default by ALTHEA as set forth in Section
      3.3.

            


    

    


    
      	
               
      

            	
              1.7

            	
              COMPONENTS shall mean
      all Components used by ALTHEA in Production of Drug Product under this
      Agreement.   Components are listed in the Project Plan,
      such Components identified as Components supplied by CLIENT (“CLIENT
      Supplied Components”) and Components supplied by ALTHEA (“ALTHEA Supplied
      Components”).

            


    

     

    

      
        	
                 
      

              	
                1.8

              	
                CONFIDENTIAL INFORMATION
      shall mean all information and data provided by one party to the other
      party except any portion of such information and data
    which:

              


      

      


      
        	
                 
      

              	
                (i)

              	
                is
      known to the recipient as evidenced by its written records before receipt
      thereof from the disclosing party;

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                is
      disclosed to the recipient by a third person who has the right to make
      such disclosure;

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                is
      or becomes part of the public domain through no fault of the recipient;
      or

              


      

      


      
        	
                 
      

              	
                (iv)

              	
                the
      recipient can reasonably establish has been independently developed by
      recipient without use of the information disclosed by the disclosing
      party.

              


      

       

    

     

    
      	
               
      

            	
              1.9

            	
              DEVELOPMENT shall mean
      studies conducted by ALTHEA to develop a process to Produce Drug Product,
      in accordance with the Specifications and cGMP.  Development
      activities shall be identified in the Project
  Plan.

            


    

    


    
      	
               
      

            	
              1.10

            	
              DRUG PRODUCT shall mean
      each pharmaceutical product set forth in a development & regulatory
      Plan, if applicable, and a Project Plan to be Produced by ALTHEA in bulk
      or finished dosage form for development and/or clinical use
      only.

            


    

    


    
      	
               
      

            	
              1.11

            	
              FDA shall mean the
      United States Food and Drug Administration or any successor entity
      thereto.

            


    

    


    
      	
               
      

            	
              1.12

            	
              FD&C ACT shall mean
      the United States Federal Food, Drug and Cosmetic Act, as may be amended
      from time to time.

            


    

    


    
      	
               
      

            	
              1.13

            	
              IND shall mean an
      Investigational New Drug Application for Drug Product, as defined in the
      United States Food and Drug Administration (FDA) rules and regulations, 21
      CFR.

            


    

    


    
      	
               
      

            	
              1.14

            	
              LABELING shall mean all
      labels and other written, printed, or graphic matter upon: (i) Drug
      Product or any container, carton, or wrapper utilized with Drug Product or
      (ii) any written material accompanying Drug
  Product.

            


    

    



    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              1.15

            	
              MASTER BATCH RECORD (MBR)
      shall mean the formal set of instructions for Production of Drug
      Product.  The MBR shall be developed and maintained in ALTHEA’s
      standard format by ALTHEA, using CLIENT’s master formula and technical
      support.

            


    

    


    
      	
               
      

            	
              1.16

            	
              PRODUCTION or PRODUCE
      shall mean the formulation, filling, packaging, inspection,
      labeling, and testing of Drug Product by
ALTHEA.

            


    

    


    
      	
               
      

            	
              1.17

            	
              PRODUCT SPECIFICATION
      SHEET shall mean a listing of the analytical testing and
      corresponding Specifications, to be performed on the Bulk Drug Substance
      and Drug Product in connection with the stability
  program.

            


    

    


    
      	
               
      

            	
              1.18

            	
              PROJECT PLAN shall mean
      the document containing the parameters for Production of Drug Product
      which shall be developed by ALTHEA and agreed to in writing by CLIENT for
      each Drug Product under this Agreement.  Prior to commencing
      Production of any Drug Product, ALTHEA shall deliver two (2) signed
      originals of the Project Plan to CLIENT.  CLIENT shall sign both
      originals of the Project Plan and return one (1) fully executed original
      to ALTHEA.  Each fully executed Project Plan shall be
      incorporated herein by reference and made a part of this
      Agreement.  ALTHEA shall have no obligation for Production of a
      Drug Product until CLIENT has executed and returned the Project Plan for
      such Drug Product to ALTHEA.

            


    

    


    
      	
               
      

            	
              1.19

            	
              PURCHASE PRICE shall
      mean the amount to be paid by CLIENT as specified in each Project
      Plan.

            


    

    


    
      	
               
      

            	
              1.20

            	
              REGULATORY AUTHORITY
      shall mean those agencies or authorities responsible for regulation
      of Drug Product in the United States and overseas.  ALTHEA shall
      have no obligation to Produce Drug Product in compliance with the
      requirements of a Regulatory Authority not specified in the applicable
      Project Plan.

            


    

    


    
      	
               
      

            	
              1.21

            	
              RELEASED EXECUTED BATCH
      RECORD shall mean the completed batch record and associated
      deviation reports, investigation reports, and Certificates of Analysis
      created for each Batch of Drug
Product.

            


    

    


    
      	
               
      

            	
              1.22

            	
              SPECIFICATIONS shall
      mean those specifications set forth in Product Specification Sheet and the
      Master Batch Record for Drug Product, and to the extent that ALTHEA is
      required to test the Bulk Drug Substance, for the Bulk Drug
      Substance.

            


    

    


    


    Article
2, DEVELOPMENT AND PRODUCTION OF DRUG PRODUCT.

    


    
      	
               
      

            	
              2.1

            	
              Initiation:  Upon
      execution of this Agreement and the corresponding Project Plan for each
      Drug Product, ALTHEA shall commence Development of such Drug Product
      pursuant to the timeline set forth in the Project Plan.  Upon
      execution of this Agreement and the corresponding Project Plan for each
      Drug Product, ALTHEA shall commence Production of such Drug Product
      pursuant to the Project Plan.  ALTHEA shall diligently perform
      the work necessary to complete the Development and Production of such Drug
      Product in accordance with the Project
Plan.

            


    

    



    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              2.2

            	
              Documentation:  The
      Master Batch Record shall be reviewed and approved by ALTHEA and by CLIENT
      prior to commencement of Production.  Any material change to an
      approved Master Batch Record will be reviewed and approved by ALTHEA and
      by CLIENT prior to said change being implemented.  Each Batch of
      Drug Product shall be Produced by using a copy of the Master Batch
      Record.  Each copy of the Master Batch Record for such Batch of
      Drug Product shall be assigned a unique batch number.  Any
      deviation from the manufacturing process specified in the Master Batch
      Record must be documented in the copy of the Master Batch Record for that
      Batch.  ALTHEA shall provide CLIENT with required supporting
      Development and Production documentation in a form reasonably suitable for
      CLIENT's submission to the FDA.

            


    

    


    
      	
               
      

            	
              2.3

            	
              Bulk Drug Substance and
      Components Supply:

            


    

    


    
      	
               
      

            	
              2.3.1 CLIENT
      Responsibilities: CLIENT, at its sole cost and expense (including,
      without limitation, shipping costs), shall supply to ALTHEA, in a timely
      manner, (a) all Bulk Drug Substance required to satisfy the terms of this
      Agreement and (b) all other CLIENT Supplied Components, all to be
      delivered to ALTHEA as set forth in the applicable Project Plan for
      Production of such Drug Product.  Except as may specifically be
      set forth in the Project Plan, on receipt of the Bulk Drug Substance and
      CLIENT Supplied Components as set forth above, ALTHEA’s sole obligation
      with respect to evaluation of the Bulk Drug Substance and CLIENT Supplied
      Components shall be to review the accompanying certificate of analysis to
      confirm that the Bulk Drug Substance and CLIENT Supplied Components (if
      applicable) conform with the Specifications and component specifications,
      respectively.

            


    

    


    
      	
               
      

            	
              2.3.2  ALTHEA
      Responsibilities: ALTHEA, at its sole cost and expense (including,
      without limitation, shipping costs), shall supply, in a timely manner, all
      ALTHEA Supplied Components as set forth in the applicable Project Plan for
      Production of such Drug Product.

            


    

    


    
      	
               
      

            	
              2.4

            	
              Bulk Drug Substance and
      Component Delivery Delays:  ALTHEA shall have no
      responsibility for delays in delivery of Drug Product caused by delays in
      receipt of Bulk Drug Substance or CLIENT Supplied Components.
      Notwithstanding anything in this Agreement to the contrary, in the event
      that ALTHEA receives the Bulk Drug Substance for Production of Drug
      Product from CLIENT with less time than requested in the applicable
      Project Plan prior to the scheduled date of Production of such Drug
      Product, but within sufficient time to Produce such Drug Product on such
      scheduled date as determined by ALTHEA in its sole discretion, ALTHEA
      shall Produce such Drug Product as per the original
      schedule.  Notwithstanding anything in this Agreement to the
      contrary, in the event that ALTHEA receives the Bulk Drug Substance for
      Production of Drug Product from CLIENT with less time than requested in
      the applicable Project Plan prior to the scheduled date of Production of
      such Drug Product, and without sufficient time to Produce such Drug
      Product on the scheduled date as determined by ALTHEA in its sole
      discretion, ALTHEA shall reschedule Production of such Drug Product and
      shall charge CLIENT the applicable Cancellation Fee, provided, however, in
      the event CLIENT has provided notice to ALTHEA a minimum of forty five
      (45) days prior to the date scheduled for Production that delivery of the
      Bulk Drug Substance to Althea will be delayed, Althea shall reschedule the
      date for Production based on the new date for delivery of the drug
      substance and no fees will be owed by
CLIENT.

            


    

    



    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              2.5

            	
              Importer of
      Record:  In the event any material or equipment to be
      supplied by CLIENT, including without limitation CLIENT Supplied
      Components and Bulk Drug Substance, is imported into the United States for
      delivery to ALTHEA ("Imported Goods"), CLIENT shall be the “Importer of
      Record” of such Imported Goods.   As the Importer of
      Record, CLIENT shall be responsible for all aspects of the Imported Goods
      including, without limitation (a) customs and other regulatory clearance
      of Imported Goods, (b) payment of all tariffs, duties, customs, fees,
      expenses and charges payable in connection with the importation and
      delivery of the Imported Goods, and (c) keeping all records, documents,
      correspondence and tracking information required by applicable laws, rules
      and regulations arising out of or in connection with the importation or
      delivery of the Imported Goods.

            


    

    


    
      	
               
      

            	
              2.6

            	
              Material Safety Data
      Sheet:  CLIENT shall provide ALTHEA a Material Safety
      Data Sheet for Bulk Drug Substance and for each Drug
      Product.  ALTHEA shall immediately notify CLIENT of any unusual
      health or environmental occurrence relating to Drug Product, including,
      but not limited to any claim or complaint by any employee of ALTHEA or any
      of its Affiliates or third party that the operations of ALTHEA pursuant to
      this Agreement have resulted in any adverse health or safety effect on an
      employee or third party.  ALTHEA agrees to advise CLIENT
      immediately of any safety or toxicity problems of which it becomes aware
      regarding the Drug Product.

            


    

    


    
      	
               
      

            	
              2.7

            	
              Vendor and Supplier Audit and
      Certification:  CLIENT shall certify and audit all Drug
      Product- related vendors and suppliers, or approve ALTHEA’S selection of
      vendors and suppliers by way of signing this
  agreement.

            


    

    


    
      	
               
      

            	
              2.8

            	
              ALTHEA Progress
      Reports:   ALTHEA shall provide CLIENT with at least
      monthly written Microsoft Project reports on the progress of the
      Development and Production of a Drug Product, comparing actual
      accomplishments to the objectives set forth in the applicable Project
      Plan..

            


    

    


    
      	
               
      

            	
              2.9

            	
              Delivery
      Terms:  ALTHEA shall ship all Drug Product to CLIENT or
      to CLIENT's designated consignee.  All shipments shall be
      shipped FOB ALTHEA, by a common carrier designated by CLIENT, at CLIENT’s
      expense; provided, however, ALTHEA shall be responsible for the loading of
      the Drug Product on departure and shall bear risk of loss and all costs of
      such loading. CLIENT shall procure, at its cost, insurance covering damage
      or loss of Drug Product during shipping.  All shipping
      instructions of CLIENT shall be accompanied by the name and address of the
      recipient and the shipping date.

            


    

    


    
      	
               
      

            	
              2.10

            	
              Exporter of
      Record:  CLIENT shall be the exporter of record for any
      Product shipped out of the United States, as CLIENT remains the owner of
      the Product.  CLIENT warrants that all shipments of Product
      exported from the United States will be made in compliance
      with all applicable United States export laws and regulations and all
      applicable import laws and regulations into the country of
      deportation.

            


    

    


    CLIENT
shall be responsible for obtaining and paying for any licenses or other
governmental authorization(s) necessary for the exportation from the United
States.  CLIENT shall select and pay the freight forwarder who shall
solely be CLIENT’s agent.  CLIENT and its freight forwarder shall be
solely responsible for preparing and filing the Shipper’s Export Declaration and
any other documentation required for the export.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              2.11

            	
              Foreign Corrupt Practices
      Act.  CLIENT acknowledges that it is not the agent of
      ALTHEA and represents and warrants that it has not, and covenants that it
      will not, pay anything of value to any government employee in connection
      with the resale of the Product.

            


    

    


    
      	
               
      

            	
              2.12

            	
              Deposits and Payment for Drug
      Product and Development: Promptly upon execution of each Project
      Plan, CLIENT shall pay to ALTHEA forty percent (40%) of the total fees of
      this agreement, and thereafter will be invoiced monthly based on the
      specific services completed during the month.  The final invoice
      for the Drug Product will be issued upon the delivery of released Drug
      Product to CLIENT by ALTHEA CLIENT shall pay all invoices within thirty
      (30) days of the invoice date therefore.  Any payment due under
      this Agreement not received within the times noted above shall bear
      interest at the lesser of (a) the maximum rate permitted by law, and (b)
      1.5% per month on the outstanding balance compounded
    monthly.

            


    

    


    
      	
               
      

            	
              2.13

            	
              Default in Payment Obligations:
      In addition to all other remedies available to ALTHEA in the event
      of a CLIENT default, if CLIENT fails to make payments as required
      hereunder, ALTHEA may take appropriate measures to assure prompt and full
      payment, including refusal to Produce any Drug Product until CLIENT’s
      account is paid in full, modify the foregoing terms of payment, place the
      account on a letter of credit basis, require full or partial payment in
      advance, suspend deliveries of Drug Product until CLIENT provides
      assurance of performance reasonably satisfactory to ALTHEA, and/or take
      other reasonable means as ALTHEA may
determine.

            


    

    


    
      	
               
      

            	
              2.14

            	
              Returns: Drug Product
      returned by third parties is the responsibility of
  CLIENT.

            


    

    


    


    Article
3, TERM AND TERMINATION.

    


    
      	
               
      

            	
              3.1

            	
              Term:  This Agreement shall commence
      on the date first above written and will continue until the Development
      and Production, as described in the Project Plan, have been completed,
      unless sooner terminated pursuant to Section 3.2 herein (the
      “Term”).

            


    

    


    
      	
               
      

            	
              3.2

            	
              Termination:  This
      Agreement may be terminated at any time upon the occurrence of any of the
      following events:

            


    

    


    
      	
               
      

            	
              3.2.1

            	
              Termination for
      Breach:  Either party may terminate this Agreement upon
      the breach of any provision of this Agreement by the other party if such
      breach is not cured by the breaching party within thirty (30) calendar
      days (or such additional time not to exceed ninety (90) days reasonably
      necessary to cure such default provided the breaching party has commenced
      a cure within the thirty (30) day period and is diligently pursuing
      completion of such cure) after receipt by the breaching party of written
      notice of such default.  At the option of the non-breaching
      party, such termination may be with respect to the entire Agreement, or
      only with respect to the Drug Product that is subject to the
      breach.

            


    

    


    
      	
               
      

            	
              3.2.2

            	
              Termination for Financial
      Matters:  This Agreement may be terminated immediately by
      either party by giving the other party written notice thereof in the event
      such other party makes a general assignment for the benefit of its
      creditors, or proceedings of a case are commenced in any court of
      competent jurisdiction by or against such party seeking (a) such party’s
      reorganization, liquidation, dissolution, arrangement or winding up, or
      the composition or readjustment of its debts, (b) the appointment of a
      receiver or trustee for or over such party’s property,
  or

            


    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    (c)
similar relief in respect of such party under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of debt, and
such proceedings shall continue undismissed, or an order with respect to the
foregoing shall be entered and continue unstated, for a period of more than
sixty (60) days.

    


    
      	
               
      

            	
              3.2.3

            	
              Termination by
      Client:  This Agreement may be terminated by CLIENT at
      any time by giving ALTHEA notice thereof and payment to ALTHEA of the
      Cancellation Fee set forth in Section
3.3.

            


    

    


    
      	
               
      

            	
              3.3

            	
              Payment on
      Termination:  In the event of the termination of this
      Agreement by ALTHEA pursuant to Section 3.2.1, CLIENT shall reimburse
      ALTHEA for (a) all Components ordered prior to termination and not
      cancelable at no cost to ALTHEA, (b) all work-in-process commenced by
      ALTHEA, and (c) all finished Drug Product.  In the event of
      cancellation by CLIENT of the Production of any Batch set forth in a
      Project Plan or in the event of termination of this Agreement, except for
      termination in the event of a default by ALTHEA pursuant to Section 3.2.1,
      CLIENT shall pay  the Cancellation Fees as hereinafter set
      forth:  (i) CLIENT is subject to a 20% charge if the Batch is
      canceled less than nine (9) weeks from the scheduled fill date, (ii) a 30%
      charge if the Batch is canceled less than six (6) weeks from the scheduled
      fill date, and (iii) a 50% charge if the Batch is canceled less than three
      (3) weeks from the scheduled fill date.  In addition, CLIENT
      must compensate ALTHEA for any materials ordered or testing
      completed.  For purposes of the foregoing, one (1) week is
      equivalent to seven (7) days.  Following expiration or
      termination, ALTHEA shall ship such materials to CLIENT at CLIENT's cost
      and per CLIENT's instructions.  CLIENT shall make payment for
      all expenses described in Section 3.3 thirty (30) days from the invoice
      date.  In the event of termination by CLIENT for a breach by
      ALTHEA pursuant to Section 3.2.1, CLIENT shall not owe any Cancellation
      Fees.

            


    

    


    
      	
               
      

            	
              3.4

            	
              Survival:  Termination,
      expiration, cancellation or abandonment of this Agreement through any
      means or for any reason, except as set forth in Section 12.1, shall be
      without prejudice to the rights and remedies of either party with respect
      to any antecedent breach of any of the provisions of this
      Agreement.  The provisions of Sections 3, 6, 9, 10, 11, 12, 13,
      14, and 15 hereof shall survive expiration or termination of this
      Agreement.

            


    

    


    


    Article
4, CERTIFICATES OF ANALYSIS AND MANUFACTURING COMPLIANCE.

    


    
      	
               
      

            	
              4.1

            	
              Certificates of
      Analysis:  At CLIENT’s cost and expense, ALTHEA shall
      test, or cause to be tested by third parties, in accordance with the
      Specifications, each Batch of Drug Product Produced pursuant to this
      Agreement before delivery to CLIENT.  A certificate of analysis
      for each Batch delivered shall set forth the items tested, Specifications,
      and test results.  ALTHEA shall also indicate on the final page
      of the Executed Batch Record that all batch Production and control records
      have been reviewed and approved by the appropriate quality control
      unit.  ALTHEA shall send, or cause to be sent, such certificates
      to CLIENT prior to the shipment of Drug Product (unless Drug Product is
      shipped under quarantine).  CLIENT shall test, or cause to be
      tested, for final release, each Batch of Drug Product as meeting the
      Specifications.  As required by the FDA (see Section 5.2 below),
      CLIENT assumes full responsibility for final release of each Batch of Drug
      Product.

            


    

    



    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              4.2

            	
              Manufacturing
      Compliance:  ALTHEA shall advise CLIENT immediately if an
      authorized agent of any Regulatory Authority visits ALTHEA's manufacturing
      facility and makes an inquiry or inspection regarding ALTHEA's Production
      of Drug Product for CLIENT.  ALTHEA will also forward to CLIENT
      any documents of findings of violations, including but not limited to FDA
      Form 483.  Manufacturing deviations and investigations which
      occur during Production of Drug Product and which do not cause the
      Production to be non-compliant with cGMP, shall not be deemed to cause
      such Drug Product to be non-conforming as set forth in Section
      5.1.

            


    

    


    
      	
               
      

            	
              4.3

            	
              Reserve
      Samples:  CLIENT shall be responsible for obtaining and
      maintaining sufficient quantities of Bulk Drug Substance and Drug Product
      reserve samples pursuant to cGMP.

            


    

    


    
      	
               
      

            	
              4.4

            	
              Annual Quality
      Review:  CLIENT shall be responsible for evaluating, at
      least annually, the quality standards of Drug Product to determine the
      need for changes in Specifications, manufacturing processes, and/or
      controlled documents.  CLIENT shall supply ALTHEA a copy of the
      evaluation and recommendations, if
any.

            


    

    


    
      	
               
      

            	
              4.5

            	
              Distribution
      Records:  ALTHEA shall maintain distribution records that
      contain all of the appropriate information as specified in
      cGMP.

            


    

    


    
      	
               
      

            	
              4.6

            	
              Customer
      Complaints:  CLIENT, as required by cGMP, shall maintain
      complaint files.  All specific CLIENT Drug Product-related
      complaints received by ALTHEA shall be forwarded to
      CLIENT.  CLIENT shall be responsible for the review of the
      complaint to determine the need for an investigation or the need to report
      to the FDA as required by cGMP.  CLIENT shall send to ALTHEA all
      Drug Product performance or manufacturing-related complaints which require
      investigation.  ALTHEA shall conduct an investigation for each
      Drug Product performance or manufacturing-related complaint and shall
      report findings and follow-up of each investigation to
      CLIENT.  CLIENT shall make these complaint files available to
      ALTHEA in the event they are required during an FDA
      inspection.

            


    

    


    
      	
               
      

            	
              4.7

            	
              Audits: CLIENT, upon
      prior written notice and during normal business hours, shall have the
      right to inspect, once annually for not more than two (2) days, ALTHEA
      batch records and the portions of ALTHEA’s facility used for Production of
      Drug Product.  If CLIENT chooses to audit ALTHEA more than one
      (1) time in a calendar year or for more than two (2) days, CLIENT agrees
      to reimburse ALTHEA for ALTHEA’s reasonable expenses incurred in hosting
      the audit.  All audited data will be treated as Confidential
      Information of ALTHEA and CLIENT shall not be permitted to remove or copy
      data without ALTHEA’s prior
consent.

            


    

    


    
      	
               
      

            	
              4.8

            	
              Regulatory
      Compliance:  Unless otherwise stated, ALTHEA is
      responsible for compliance with all Federal, State and local laws and
      regulations (“Regulations”) as they apply generally to Production, quality
      and specifications of pharmaceutical products.  CLIENT shall be
      responsible for compliance with all Regulations as they apply to all other
      aspects of the Production, use, and sale of Drug Product, which
      responsibility shall include, without limitation, all contact and
      communications with the FDA regarding the
  foregoing.

            


    

    


    



    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    Article
5, ACCEPTANCE OF DRUG PRODUCT.

    


    
      	
               
      

            	
              5.1

            	
              Non-Conforming Drug
      Product: Within fifteen
      (15) calendar days from the date of Production of any Batch pursuant to
      the Project Plan, ALTHEA shall promptly forward to CLIENT, or CLIENT’s
      designee, samples of such Batch. Within thirty (30) calendar days after
      receipt by CLIENT of the samples or fifteen (15) calendar days after
      receipt by CLIENT of the Released Executed Batch Record, whichever is
      later, CLIENT shall determine whether Drug Product conforms to ALTHEA’s
      Drug Product Specifications, Master Batch Record, ALTHEA’s current SOPs,
      and the Project Plan (collectively the “Product
      Requirements”).

            


    

    


    
      	
               
      

            	
              5.1.1

            	
              If
      (a) any Batch of Drug Product conforms to the Product Requirements, or (b)
      CLIENT fails to notify ALTHEA within the applicable time period that any
      Batch of Drug Product does not conform to the Product Requirements, then
      CLIENT shall be deemed to have accepted the Drug Product and waived its
      right to revoke acceptance.

            


    

    


    
      	
               
      

            	
              5.1.2

            	
              If
      CLIENT believes any Batch of Drug Product does not conform to the Product
      Requirements, it shall notify ALTHEA by telephone, including a detailed
      explanation of the non-conformity, and shall confirm such notice in
      writing via overnight delivery to ALTHEA.  Upon receipt of such
      notice, ALTHEA will investigate such alleged non-conformity, and (i) if
      ALTHEA agrees such Drug Product is non-conforming, deliver to CLIENT a
      corrective action plan within thirty (30) calendar days after receipt of
      CLIENT’s written notice of non-conformity, or such additional time as is
      reasonably required if such investigation or plan requires data from
      sources other than CLIENT or ALTHEA, or (ii) if ALTHEA disagrees with
      CLIENT’s determination that the Batch of Drug Product is
      non-conforming,  ALTHEA shall so notify CLIENT by telephone
      within the thirty (30) calendar day period and confirm such notice in
      writing by overnight delivery.

            


    

    


    
      	
               
      

            	
              5.1.3

            	
              If
      the parties dispute whether Batch of Drug Product is conforming or
      non-conforming, samples of the Batch of Drug Product will be submitted to
      a mutually acceptable laboratory or consultant for resolution, whose
      determination of conformity or non-conformity, and the cause thereof if
      non-conforming, shall be binding upon the parties.   CLIENT
      shall bear the costs of such laboratory or consultant, except as set forth
      in Section 5.2.

            


    

    


    
      	
               
      

            	
              5.2

            	
              Remedies for Non Conforming
      Product:  In the event ALTHEA agrees that the Batch of
      Drug Product is non-conforming solely as a result of the negligence or any
      other fault of ALTHEA or the laboratory determines that the shipment of
      Drug Product is non-conforming solely as a result of the negligence or any
      other fault of ALTHEA, then ALTHEA, at its option, shall either (i) at its
      expense, and subject to CLIENT, at its expense, supplying the replacement
      Bulk Drug Substance and upon payment for the non-conforming Drug Product
      by CLIENT, replace such non-conforming Drug Product within sixty (60)
      calendar days from receipt of replacement Bulk Drug Substance from CLIENT,
      or (ii) refund the Purchase Price of the non-conforming Drug
      Product.

            


    

    


    
      	
               
      

            	
              5.3

            	
              Non-conforming Bulk Drug
      Substance:  If Drug Product is rejected by CLIENT, and
      such Drug Product’s failure to meet the Product Requirements is the result
      of non-conforming Bulk Drug Substance, then such non-conformity shall be
      deemed not to be non-conforming solely as a result of the negligence of
      ALTHEA.

            


    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    Article
6, DRUG PRODUCT RECALLS.

    


    
      	
               
      

            	
              6.1

            	
              Drug Product
      Recalls:  In the event CLIENT shall be required to recall
      any Drug Product because such Drug Product may violate local, state or
      federal laws or regulations, the laws or regulations of any applicable
      foreign government or agency or the Drug Product Specifications, or in the
      event that CLIENT elects to institute a voluntary recall, CLIENT shall be
      responsible for coordinating such recall.  CLIENT promptly shall
      notify ALTHEA if any Drug Product is the subject of a recall and provide
      ALTHEA with a copy of all documents relating to such
      recall.  ALTHEA shall cooperate with CLIENT in connection with
      any recall, at CLIENT’s expense. CLIENT shall be responsible for all of
      the costs and expenses of such
recall.

            


    

    


    


    Article
7, FORCE MAJEURE; FAILURE TO SUPPLY.

    


    
      	
               
      

            	
              7.1

            	
              Force Majeure
      Events:  Failure of either party to perform under this
      Agreement (except the obligation to make payments) shall not subject such
      party to any liability to the other if such failure is caused by acts of
      God, acts of terrorism, fire, explosion, flood, drought, war, riot,
      sabotage, embargo, strikes or other labor trouble, compliance with any
      order or regulation of any government entity, or by any cause beyond the
      reasonable control of the affected party, whether or not foreseeable,
      provided that written notice of such event is promptly given to the other
      party.

            


    

    


    
      	
               
      

            	
              7.2

            	
              Failure to
      Supply:  If ALTHEA fails to supply all or any material
      part of Drug Product ordered by CLIENT, CLIENT may require ALTHEA to
      supply the undelivered Drug Product or a lesser quantity at a future date
      agreed upon by ALTHEA and CLIENT.  The provisions of this
      Section 7.2 shall be without prejudice to CLIENT's rights under Section
      3.2 and remedies provided for
thereunder.

            


    

    


    


    Article
8, CHANGES IN PRODUCTION.

    


    
      	
               
      

            	
              8.1

            	
              Changes to Master Batch Records
      and Product Specifications:  ALTHEA agrees to inform
      CLIENT within fifteen (15) days of the result of any regulatory
      development or changes to Drug Product-specific SOPs that materially
      affect the Production of Drug Product.  ALTHEA shall notify
      CLIENT of and require written approval from CLIENT for changes to Master
      Batch Records and Drug Product Specifications prior to the Production of
      subsequent Batches of Drug Product.

            


    

    
      	
               
      

            	
              8.2

            	
              Facility
      Changes

            


    

    


    
      	
               
      

            	
              8.2.1

            	
              Product-Specific
      Changes:  If facility, equipment, process or system
      changes are required of ALTHEA as a result of requirements set forth by
      the FDA or any other Regulatory Authority, and such regulatory changes
      apply primarily to the Production and supply of one or more Drug Products,
      then CLIENT and ALTHEA will review such requirements and agree in writing
      to such regulatory changes, and CLIENT shall bear 100% of the reasonable
      costs thereof.

            


    

    


    
      	
               
      

            	
              8.2.2

            	
              General
      Changes:  If such regulatory changes apply generally to
      one or more Drug Products as well as to other products Produced by ALTHEA
      for itself or for third parties, then CLIENT shall pay a pro rata amount
      of the reasonable cost of such regulatory changes based upon the
      proportion of time that such facility is dedicated to the Production of
      Drug Products relative to the Production of such other
      products.

            


    


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    Article
9, CONFIDENTIALITY.

    


    
      	
               
      

            	
              9.1

            	
              Confidentiality:  It
      is contemplated that in the course of the performance of this Agreement
      each party may, from time to time, disclose Confidential Information to
      the other.  Each party agrees to take all reasonable steps to
      prevent disclosure of Confidential Information to third
      parties.  No provision of this Agreement shall be construed so
      as to preclude disclosure of Confidential Information as may be reasonably
      necessary to secure from any governmental agency necessary approvals or
      licenses or to obtain patents with respect to the Drug
      Product.

            


    

    


    
      	
               
      

            	
              9.2

            	
              Prior Confidentiality
      Agreement:  This Agreement, by reference, incorporates
      the Confidentiality Agreement signed by CLIENT and ALTHEA on February
      12th,
      2008, and is made a part hereof as though fully set forth
      herein.

            


    

    


    
      	
               
      

            	
              9.3

            	
              Third Party
      Disclosure:  ALTHEA shall be permitted to disclose Drug
      Product information to third party developmental and analytical service
      providers in connection with performance of its obligations hereunder
      provided such providers shall be subject to confidentiality
      agreements.  Either party may disclose Confidential Information
      of the disclosing party to those Affiliates, agents and consultants who
      need to know such information to accomplish the purposes of this Agreement
      (collectively, “Permitted Recipients”); provided such Permitted Recipients
      are bound to maintain such Confidential Information in
      confidence.

            


    

    


    
      	
               
      

            	
              9.4

            	
              Litigation and Governmental
      Disclosure:  Each party may disclose Confidential
      Information hereunder to the extent such disclosure is reasonably
      necessary for prosecuting or defending litigation, complying with
      applicable governmental regulations or conducting pre-clinical or clinical
      trials, provided that if a party is required by law or regulation to make
      any such disclosure of the other party’s Confidential Information it will,
      except where impractical for necessary disclosures, for example in the
      event of a medical emergency, give reasonable advance notice to the other
      party of such disclosure requirement and will use good faith efforts to
      assist such other party to secure a protective order or confidential
      treatment of such Confidential Information required to be
      disclosed.

            


    

    


    
      	
               
      

            	
              9.5

            	
              Limitation of
      Disclosure:  The parties agree that, except as otherwise
      may be required by applicable laws, regulations, rules or orders,
      including without limitation the rules and regulations promulgated by the
      United States Securities and Exchange Commission, and except as may be
      authorized in Section 9.4, no information concerning this Agreement and
      the transactions contemplated herein shall be made public by either party
      without the prior written consent of the
other.

            


    

    


    
      	
               
      

            	
              9.6

            	
              Publicity and SEC
      Filings.  The parties agree that the public announcement
      of the execution of this Agreement shall only be by one or more press
      releases mutually agreed to by the parties.  The failure of a
      party to return a draft of a press release with its proposed amendments or
      modifications to such press release to the other party within five (5)
      days of such party’s receipt of such press release shall be deemed as such
      party’s approval of such press release as received by such
      party.  Each party agrees that it shall cooperate fully and in a
      timely manner with the other with respect to all disclosures to the
      Securities and Exchange Commission and any other governmental or
      regulatory agencies, including requests for confidential treatment of
      Confidential Information of either party included in any such
      disclosure.

            


    


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              9.7

            	
              Duration of
      Confidentiality:  All obligations of confidentiality and
      non-use imposed upon the parties under this Agreement shall expire ten
      (10) years after the expiration or earlier termination of this Agreement;
      provided, however, that Confidential Information which constitutes the
      trade secrets of a party shall be kept confidential indefinitely, subject
      to the limitations set forth in Sections 9.4 through
  9.5.

            


    

    


    


    Article
10, INVENTIONS.

    


    
      	
               
      

            	
              10.1

            	
              Existing Intellectual
      Property:  Except as the parties may otherwise expressly
      agree in writing, each party shall continue to own its existing patents,
      trademarks, copyrights, trade secrets and other intellectual property,
      without conferring any interests therein on the other party. Without
      limiting the generality of the preceding sentence, CLIENT shall retain all
      right, title and interest arising under the United States Patent Act, the
      United States Trademark Act, the United States Copyright Act and all other
      applicable laws, rules and regulations in and to all Drug Products, Bulk
      Drug Substance, Labeling and trademarks associated therewith
      (collectively, “CLIENT’s Intellectual Property”).   Neither
      ALTHEA nor any third party shall acquire any right, title or interest in
      CLIENT’s Intellectual Property by virtue of this Agreement or otherwise,
      except to the extent expressly provided
herein.

            


    

    


    
      	
               
      

            	
              10.2

            	
              Individually Owned Inventions:
      Except as the parties may otherwise agree in writing, all
      Inventions (as defined herein) which are conceived, reduced to practice,
      or created by a party in the course of performing its obligations under
      this Agreement shall be solely owned and subject to use and exploitation
      by the inventing party without a duty to account to the other party,
      provided, however, any Inventions or changes to CLIENT’s Drug Product
      formulation shall be owned solely by CLIENT.  For purposes of
      this Agreement, “Invention” shall mean information relating to any
      innovation, improvement, development, discovery, computer program, device,
      trade secret, method, know-how, process, technique or the like, whether or
      not written or otherwise fixed in any form or medium, regardless of the
      media on which contained and whether or not patentable or
      copyrightable.

            


    

    


    
      	
               
      

            	
              10.3

            	
              Jointly Owned Inventions:
      All Inventions which are conceived, reduced to practice, or created
      jointly by the parties and/or their respective agents (i.e., employees or
      agents who would be or are properly named as co-inventors under the laws
      of the United States on any patent application claiming such inventions)
      in the course of the performance of this Agreement shall be owned jointly
      by the parties. Each party shall have full rights to exploit such
      Inventions for its own commercial purposes without any obligation to the
      other. The parties shall share equally in the cost of mutually agreed
      patent filings with respect to all such jointly owned Inventions. The
      decision to file for patent coverage on jointly owned Inventions shall be
      mutually agreed upon, and the Parties shall select a mutually acceptable
      patent counsel to file and prosecute patent applications based on such
      joint Inventions.

            


    

    


    
      	
               
      

            	
              10.4

            	
              Disclaimer:  Except
      as otherwise expressly provided herein, nothing contained in this
      Agreement shall be construed or interpreted, either expressly or by
      implication, estoppel or otherwise, as: (i) a grant, transfer or other
      conveyance by either party to the other of any right, title, license or
      other interest of any kind in any of its Inventions or other intellectual
      property, (ii) creating an obligation on the part of either party to make
      any such grant, transfer or other conveyance or (iii) requiring either
      party to participate with the other party in any cooperative development
      program or project of any kind or to continue with any such program or
      project.

            


    


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              10.5

            	
              Rights in
      IP:  The party owning any IP shall have the world wide
      right to control the drafting, filing, prosecution and maintenance of
      patents covering the Inventions relating to such IP, including decisions
      about the countries in which to file patent
      applications.  Patent costs associated with the patent
      activities described in this Section shall be borne by the sole
      owner.  Each party will cooperate with the other party in the
      filing and prosecution of patent applications. Such cooperation will
      include, but not be limited to, furnishing supporting data and affidavits
      for the prosecution of patent applications and completing and signing
      forms needed for the prosecution, assignment and maintenance of patent
      applications.

            


    

    


    
      	
               
      

            	
              10.6

            	
              Confidentiality of
      IP:  IP shall be deemed to be the Confidential
      Information of the party owning such IP.  The protection of each
      party’s Confidential Information is described in Article 9.  Any
      disclosure of information by one party to the other under the provisions
      of this Section 10 shall be treated as the disclosing party’s Confidential
      Information under this Agreement.  It shall be the
      responsibility of the party preparing a patent application to obtain the
      written permission of the other party to use or disclose the other party’s
      Confidential Information in the patent application before the application
      is filed and for other disclosures made during the prosecution of the
      patent application.

            


    

    


    


    Article
11, REPRESENTATIONS AND WARRANTIES.

    


    
      	
               
      

            	
              11.1

            	
              Mutual
      Representations:  Each party hereby represents and
      warrants to the other party that (a) the person executing this Agreement
      is authorized to execute this Agreement; (b) this Agreement is legal and
      valid and the obligations binding upon such party are enforceable by their
      terms; and (c) the execution, delivery and performance of this Agreement
      does not conflict with any agreement, instrument or understanding, oral or
      written, to which such party may be bound, nor violate any law or
      regulation of any court, governmental body or administrative or other
      agency having jurisdiction over it.

            


    

    


    
      	
               
      

            	
              11.2

            	
              ALTHEA
      Warranty:  ALTHEA represents and warrants that Drug
      Product shall be Produced in accordance with cGMP and the Drug Product
      Specifications at the time of release.  ALTHEA represents and
      warrants that it has obtained (or will obtain prior to Producing Drug
      Product), and will remain in compliance with during the term of this
      Agreement, all permits, licenses and other authorizations (the “Permits”)
      which are required under federal, state and local laws, rules and
      regulations applicable to the Production only of Drug Product as specified
      in the Project Plan; provided, however, ALTHEA shall have no obligation to
      obtain Permits relating to the sale, marketing, distribution or use of
      Bulk Drug Substance or Drug Product or with respect to the Labeling
      of  Drug Product.  ALTHEA makes no representation or
      warranty with respect to the sale, marketing, distribution or use of the
      Bulk Drug Substance or as to printed materials supplied by CLIENT or its
      consignee.  At the time of release, of the Drug Product, ALTHEA
      represents and warrants that such Drug Product shall be free from defects
      in design and workmanship.

            


    

    


    
      	
               
      

            	
              11.3

            	
              Disclaimer of
      Warranties:  Except for those warranties set forth in
      Sections 11.1 and 11.2 of this Agreement, ALTHEA makes no warranties,
      written, oral, express or implied, with respect to Drug Product or the
      Development and Production of Drug Product.  ALL OTHER
      WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
      WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND
      NONINFRINGEMENT HEREBY ARE DISCLAIMED BY ALTHEA.  NO WARRANTIES
      OF ALTHEA MAY BE CHANGED BY ANY REPRESENTATIVES OF
      ALTHEA.  CLIENT accepts Drug Product subject to the terms
      hereof.

            


    


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              11.4

            	
              CLIENT
      Warranties:  CLIENT warrants that (a) it has the right to
      give ALTHEA any information provided by CLIENT hereunder, and that ALTHEA
      has the right to use such information for the Production of Drug Product,
      and (b) CLIENT has no knowledge of any (i) patents or other intellectual
      rights that would be infringed by ALTHEA’s Production of Drug Product
      under this Agreement, or (ii) proprietary rights of third parties which
      would be violated by ALTHEA’s performance hereunder.  CLIENT
      further warrants that the Bulk Drug Substance provided to ALTHEA hereunder
      (1) conforms to the Bulk Drug Substance Specifications and (2) is not
      adulterated or misbranded within the meaning of the FD&C
      Act.

            


    

    


    


    Article
12,  LIMITATION OF LIABILITY AND WAIVER OF SUBROGATION.

    


    
      	
               
      

            	
              12.1

            	
              Limitation of
      Liability:  CLIENT’s sole and exclusive remedy for breach
      of this Agreement is limited to those remedies set forth in Article 5 and
      at ALTHEA’s decision, in ALTHEA’s sole discretion, to either replace the
      non-conforming Drug Product or reimburse CLIENT for the Purchase Price for
      the non-conforming Drug Product.  Under no circumstances shall
      ALTHEA be liable for loss of use or profits or other collateral, special,
      consequential or other damages, losses, or expenses, including but not
      limited to the cost of cover or the cost of a recall in connection with,
      or by reason of the Production and delivery of Drug Product under this
      Agreement whether such claims are founded in tort or
      contract.  The foregoing constitutes the sole and exclusive
      remedy of CLIENT and the sole and exclusive liability of
      ALTHEA.  All claims by CLIENT for breach or default under this
      Agreement shall be brought within one (1) year after the cause of action
      accrued or shall be deemed waived.

            


    

    


    
      	
               
      

            	
              12.2

            	
              Waiver of
      Subrogation:  All ALTHEA Supplied Components and
      equipment used by ALTHEA in the Production of Drug Product (collectively,
      “ALTHEA Property”) shall at all times remain the property of ALTHEA and
      ALTHEA assumes risk of loss for such property until delivery of Drug
      Product to a common carrier as specified under Section
      2.10.  ALTHEA hereby waives any and all rights of recovery
      against CLIENT and its Affiliates, and against any of their respective
      directors, officers, employees, agents or representatives, for any loss or
      damage to ALTHEA Property to the extent the loss of damage is covered or
      could be covered by insurance (whether or not such insurance is described
      in this Agreement). CLIENT assumes all risk of loss for all CLIENT
      Supplied Components, all Bulk Drug Substance supplied by CLIENT, and all
      Drug Product (collectively, “CLIENT Property”).  CLIENT hereby
      waives any and all rights of recovery against ALTHEA and its Affiliates,
      and against any of their respective directors, officers, employees, agents
      or representatives, for any loss or damage to the CLIENT Property to the
      extent the loss of damage is covered or could be covered by insurance
      (whether or not such insurance is described in this
      Agreement).

            


    

    


    
      	
               
      

            	
              12.3

            	
              Waiver of
      Claims:  In connection with providing Development
      services, ALTHEA represents only that it will use reasonable care in
      providing such information solely as it relates to development studies,
      formulation, primary packaging and manufacturing process
      development.  ALTHEA makes no representation or warranty, and
      CLIENT expressly waives all claims against ALTHEA and its Affiliates, and
      any of their respective agents or employees, arising out of or in
      connection with any claims relating to the stability, efficacy, safety, or
      toxicity of Drug Product developed, formulated, packaged or manufactured
      in accordance with the Development services provided by
      ALTHEA.

            


    


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              Article
      13, INDEMNIFICATION.

            


    

    


    
      	
               
      

            	
              13.1

            	
              CLIENT
      Indemnification:  CLIENT shall indemnify, defend and hold
      harmless ALTHEA and its Affiliates, and any of their respective directors,
      officers, employees, subcontractors and agents (collectively the
      “Indemnified Parties”) from and against any and all liabilities,
      obligations, penalties, claims, judgments, demands, actions, disbursements
      of any kind and nature, suits, losses, damages, costs and expenses
      (including, without limitation, reasonable attorney’s fees) arising out of
      or in connection with property damage or personal injury (including
      without limitation death) of third parties (collectively “Claims”)
      including without limitation Claims allegedly resulting in whole or in
      part by the negligent acts or omission of the Indemnified Parties or for
      acts or omissions for which the Indemnified Parties otherwise would be
      strictly liable,  in connection with (a) CLIENT’s storage,
      promotion, labeling, marketing, distribution, use or sale of Bulk Drug
      Substance or Drug Product, (b) CLIENT’s negligence or willful misconduct,
      (c) CLIENT’s breach of this Agreement, or (d) any claim that the use,
      sale, Production, marketing or distribution of Bulk Drug Substance or Drug
      Product by ALTHEA or CLIENT violates the patent, trademark, copyright or
      other proprietary rights of any third party, except to the extent any of
      the foregoing (a) or (d) is caused solely by the negligence or willful
      misconduct of the Indemnified Parties or solely by the breach by ALTHEA of
      its obligations under this
Agreement.

            


    

    


    
      	
               
      

            	
              13.2

            	
              ALTHEA
      Indemnification:  ALTHEA shall indemnify, defend and hold
      harmless CLIENT and its Affiliates and any of their respective directors,
      officers, employees, subcontractors and agents from and against any and
      all Claims resulting solely from the Indemnified Parties’ negligence or
      willful misconduct or solely from the ALTHEA’s breach of its obligations
      under this Agreement.

            


    

    


    
      	
               
      

            	
              13.3

            	
              Indemnitee
      Obligations:  A party (the “Indemnitee”) which intends to
      claim indemnification under this Article 13 shall promptly notify the
      other party (the “Indemnitor”) in writing of any action, claim or other
      matter in respect of which the Indemnitee or any of its Affiliates, or any
      of their respective directors, officers, employees, subcontractors, or
      agents, intend to claim such indemnification; provided, however, that
      failure to provide such notice within a reasonable period of time shall
      not relieve the Indemnitor of any of its obligations hereunder except to
      the extent the Indemnitor is prejudiced by such failure.  The
      Indemnitee shall permit, and shall cause its Affiliates, and their
      respective directors, officers, employees, subcontractors and agents to
      permit, the Indemnitor, at its discretion, to settle any such action,
      claim or other matter, and the Indemnitee agrees to the complete control
      of such defense or settlement by the
      Indemnitor.  Notwithstanding the foregoing, the Indemnitor shall
      not enter into any settlement that would adversely affect the Indemnitee’s
      rights hereunder, or impose any obligations on the Indemnitee in addition
      to those set forth herein, in order for it to exercise such rights,
      without Indemnitee’s prior written consent, which shall not be
      unreasonably withheld or delayed.  No such action, claim or
      other matter shall be settled without the prior written consent of the
      Indemnitor, which shall not be unreasonably withheld or
      delayed.  The Indemnitee, its Affiliates, and their respective
      directors, officers, employees, subcontractors and agents shall fully
      cooperate with the Indemnitor and its legal representatives in the
      investigation and defense of any action, claim or other matter covered by
      the indemnification obligations of this Article 13.  The
      Indemnitee shall have the right, but not the obligation, to be represented
      in such defense by counsel of its own selection and at its own
      expense.

            


    

    



    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              13.4

            	
              Injunction:  In
      the event that the Production or sale of a Drug Product is enjoined due to
      alleged infringement by either party of the proprietary rights of a third
      party, such action shall be deemed a breach of this Agreement by CLIENT
      and subject to the terms of Article
3.

            


    

    


    


    Article
14, INSURANCE.

    


    
      	
               
      

            	
              14.1

            	
              CLIENT
      Insurance:  CLIENT shall procure and maintain, during the
      Term of this Agreement and for a period one (1) year beyond the expiration
      date of Drug Product, Commercial General Liability Insurance, including
      without limitation, Product Liability and Contractual Liability coverage
      (the “CLIENT Insurance”).  The CLIENT Insurance shall cover
      amounts not less than one million dollars ($1,000,000) combined single
      limit and shall be with an insurance carrier reasonably acceptable to
      ALTHEA.  ALTHEA shall be named as an additional insured on the
      CLIENT Insurance and CLIENT promptly shall deliver a certificate of CLIENT
      Insurance and endorsement of additional insured to ALTHEA evidencing such
      coverage.  If CLIENT fails to furnish such certificates or
      endorsements, or if at any time during the Term of this Agreement ALTHEA
      is notified of the cancellation or lapse of the CLIENT Insurance, and
      CLIENT fails to rectify the same within ten (10) calendar days after
      notice from ALTHEA, in addition to all other remedies available to ALTHEA
      hereunder, ALTHEA, at its option, may obtain the CLIENT Insurance and
      CLIENT promptly shall reimburse ALTHEA for the cost of the same. Any
      deductible and/or self insurance retention shall be the sole
      responsibility of CLIENT.

            


    

    


    
      	
               
      

            	
              14.2

            	
              ALTHEA
      Insurance:  ALTHEA shall procure and maintain, during the
      Term of this Agreement and for a period of one (1) year beyond the
      expiration date of Drug Product, Commercial General Liability Insurance,
      including without limitation, Product Liability and Contractual Liability
      coverage (the “ALTHEA Insurance”).  The ALTHEA Insurance shall
      cover amounts not less than one million dollars ($1,000,000) combined
      single limit.  CLIENT shall be named as an additional insured on
      the ALTHEA Insurance.

            


    

    


    


    Article
15, GENERAL PROVISIONS.

    


    
      	
               
      

            	
              15.1

            	
              Notices:  All
      notices hereunder shall be delivered by facsimile (confirmed by overnight
      delivery), or by overnight delivery with a reputable overnight delivery
      service, to the following address of the respective
    parties:

            


    

    


    
      	
               
      

            	
              If
      to CLIENT:

            	
              Bio-Path
      Holdings, Inc.

            


    

    12
Greenway Plaza, Suite 1100

    Houston,
TX 77046

    Attn:  Peter
Nielsen

    President
and Chief Executive Officer

    


    
      	
               
      

            	
              Telephone:

            	
              (832)
      971-6616

            


    

    
      	
               
      

            	
              Facsimile:

            	
              (713)
      425-4999

            


    

    


    


    If to
ALTHEA:                      Althea
Technologies, Inc.

    11040
Roselle Street

    San
Diego, CA  92121

    Attn:  Alan
Moore

    Executive
Vice President and Chief Business Officer

    


    
      	
               
      

            	
              Telephone:

            	
              (858)
      882-0123

            


    

    
      	
               
      

            	
              Facsimile:

            	
              (858)
      882-0133

            


    

    


    


    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    For
specific inquiries, the following ALTHEA responsible parties may be contacted
directly:

    


    
      	 
      	
              Project
      Manager

            	
              Chris
      Duffy

            	 
      
	 
      	
              Quality
      Control Manager

            	
              Niels
      King

            	 
      
	 
      	
              Quality
      Assurance Manager

            	
              Elaine
      Sapinoso

            	 
      
	 
      	
              Materials
      Manager

            	
              Melissa
      Rosness

            	 
      


    

    


    For
specific inquiries, the following CLIENT responsible parties may be contacted
directly:

    


    Quality
Assurance/Regulatory Director: Dai-Shan Wong

    


    Notices
shall be effective on the day following the date of transmission if sent by
facsimile, and on the second business day following the date of delivery to the
overnight delivery service if sent by overnight delivery.  A party may
change its address listed above by notice to the other party given in accordance
with this section.

    


    
      	
               
      

            	
              15.2

            	
              Entire Agreement;
      Amendment:  The parties hereto acknowledge that this
      Agreement sets forth the entire agreement and understanding of the parties
      and supercedes all prior written or oral agreements or understandings with
      respect to the subject matter hereof.  No modification of any of
      the terms of this Agreement, or any amendments thereto, shall be deemed to
      be valid unless in writing and signed by an authorized agent or
      representative of both parties hereto.  No course of dealing or
      usage of trade shall be used to modify the terms and conditions
      herein.

            


    

    


    
      	
               
      

            	
              15.3

            	
              Waiver:  None
      of the provisions of this Agreement shall be considered waived by any
      party hereto unless such waiver is agreed to, in writing, by authorized
      agents of both parties.  The failure of a party to insist upon
      strict conformance to any of the terms and conditions hereof, or failure
      or delay to exercise any rights provided herein or by law shall not be
      deemed a waiver of any rights of any party
  hereto.

            


    

    


    
      	
               
      

            	
              15.4

            	
              Obligations to Third
      Parties:  Each party warrants and represents that this
      Agreement is not inconsistent with any contractual obligations, expressed
      or implied, undertaken with any third
party.

            


    

    


    
      	
               
      

            	
              15.5

            	
              Assignment:  This
      Agreement shall be binding upon and inure to the benefit of the successors
      or permitted assigns of each of the parties and may not be assigned or
      transferred by either party without the prior written consent of the
      other, which consent will not be unreasonably withheld or delayed, except
      that no consent shall be required in the case of a transfer to a
      wholly-owned subsidiary or transaction involving the merger, consolidation
      or sale of substantially all of the assets of the party seeking such
      assignment or transfer and such transaction relates to the business
      covered by this Agreement and the resulting entity assumes all the
      obligations under this Agreement.  ALTHEA may, without such
      consent, assign this Agreement to an Affiliate of ALTHEA, provided that
      the assignee assumes all obligations of ALTHEA under this
      Agreement.  No assignment shall relieve any party of
      responsibility for the performance of its obligations
      hereunder.

            


    


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              15.6

            	
              Successors and
      Assigns:  This Agreement shall be binding upon and shall
      inure to the benefit of the parties hereto, their successors and permitted
      assigns.

            


    

    


    
      	
               
      

            	
              15.7

            	
              Taxes:  CLIENT
      shall pay all national, state, municipal or other sales, use excise,
      import, property, value added, or other similar taxes, assessments or
      tariffs assessed upon or levied against the sale of Drug Product to CLIENT
      pursuant to this Agreement or the sale or distribution of Drug Product by
      CLIENT (or at CLIENT’s sole expense, defend against the imposition of such
      taxes and expenses).  ALTHEA shall notify CLIENT of any such
      taxes that any governmental authority is seeking to collect from ALTHEA,
      and CLIENT may assume the defense thereof in ALTHEA’s name, if necessary,
      and ALTHEA agrees to fully cooperate in such defense to the extent of the
      capacity of ALTHEA, at CLIENT’s expense.  ALTHEA shall pay all
      national, state, municipal or other taxes on the income resulting from the
      sale by ALTHEA of the Drug Product to CLIENT under this Agreement,
      including but not limited to, gross income, adjusted gross income,
      supplemental net income, gross receipts, excess profit taxes, or other
      similar taxes.

            


    

    


    
      	
               
      

            	
              15.8

            	
              Independent
      Contractor:  ALTHEA shall act as an independent
      contractor for CLIENT in providing the services required hereunder and
      shall not be considered an agent of, or joint venturer with,
      CLIENT.  Unless otherwise provided herein to the contrary,
      ALTHEA shall furnish all expertise, labor, supervision, machining and
      equipment necessary for performance hereunder and shall obtain and
      maintain all building and other permits and licenses required by public
      authorities.

            


    

    


    
      	
               
      

            	
              15.9

            	
              Governing
      Law:  This Agreement is being delivered and executed in
      the State of California. In any action brought regarding the validity,
      construction and enforcement of this Agreement, it shall be governed in
      all respects by the laws of the State of California, without regard to the
      principals of conflicts of laws.  The courts of the State of
      California shall have personal jurisdiction over the parties hereto in all
      matters arising hereunder, and venue for such suit will be in a state or
      federal court for the City of San Francisco,
  California.

            


    

     

    
       

      
        	 	
                15.10

              	
                Attorney’s
      Fees:  The successful party in any litigation or other
      dispute resolution proceeding to enforce the terms and conditions of this
      Agreement shall be entitled to recover from the other party reasonable
      attorney’s fees and related costs involved in connection with such
      litigation or dispute resolution
proceeding.

              


      

       

      


      
        	 	
                15.11

              	
                Severability:  In
      the event that any term or provision of this Agreement shall violate any
      applicable statute, ordinance, or rule of law in any jurisdiction in which
      it is used, or otherwise be unenforceable, such provision shall be
      ineffective to the extent of such violation without invalidating any other
      provision hereof.

              


      

      


      
        	 	
                15.11

              	
                Headings,
      Interpretation:  The headings used in this Agreement are
      for convenience only and are not part of this
  Agreement.

              


      

      





    
      
         


      

      
        18

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
parties hereto have each caused this Drug Product Development and Clinical
Supply Agreement to be executed by their duly-authorized representatives as of
the Effective Date above written.

    


    
      	
              BIO-PATH
      HOLDINGS, INC.

               

              By:           /s/
      Peter H. Nielsen

               

              Name:                      Peter
      H. Nielsen

               

              Title:                      CEO
      and President

            	
              ALTHEA
      TECHNOLOGIES, INC.

               

              By:           /s/
      W. Alan Moore

               

              Name:                      W.
      Alan Moore

               

              Title:                      Executive
      Vice President and CBO

            


    

    


    


    


    


     


    
      
         


      

      
        19