**EXHIBIT 10.01**

 

----

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

**MANUFACTURING AGREEMENT**

 

**THIS MANUFACTURING AGREEMENT**(“**Agreement**”) is entered into as of May 30,2005 (the “**Effective Date**”) by andbetween Allos Therapeutics, Inc., a corporation duly organized andexisting under the laws of the State of Delaware, having an address at 11080Circle Point Road, Suite 200 Westminster, CO 80020-2778 (“**Allos**”), and Hovione Inter Limited, a SwissCorporation, with its principal place of business in Luzern, Switzerland  (“**Hovione**”).Allos and Hovione are sometimes hereinafter each referred to as a Party(collectively “**Parties**”) to thisAgreement.

 

**BACKGROUND**

 

**A.****                                 **Hovionepossesses the necessary facilities, equipment, manufacturing technology,professional expertise, personnel, and capacity to manufacture API and tofurnish Allos with a continuing API supply, and desires to undertake APImanufacturing for Allos and Allos desires to have Hovione manufacture the APIfor Allos.  

 

**B.****                                 **TheParties executed a term sheet on March 25, 1999 providing the principalterms under which Hovione would manufacture and supply certain of Allos’srequirements of API (the “**Term Sheet**”).  By a letter dated January 11, 2000 theParties confirmed their understanding set forth in the Term Sheet and agreedthat the Term Sheet would serve as an interim supply agreement.  The Term Sheet was entered into by theParties with the understanding that such principal terms would be subject tothe negotiation and preparation of a final agreement of the complete and definitiveterms.  

 

**C.****                                 **TheParties have now negotiated such definitive terms under which Hovione willManufacture API for Allos.  The terms andconditions of this Agreement shall govern the supply of API from and after theEffective Date.

 

**NOW, THEREFORE**,****the Parties hereto, intending to belegally bound, hereby agree as follows:

 

**1.****                                      DEFINITIONS**

 

Allcapitalized words and phrases used in this Agreement shall have the meaningprovided in this **Article 1**.

 

**1.1****                              **“**AAA**” means the American ArbitrationAssociation.

 

**1.2****                              **“**Affiliate**” means any person, organization,or entity that is, directly or indirectly, controlling, controlled by, or undercommon control with a Party. The term “control” (including, with correlativemeaning, the terms “controlled by” and “under common control with”), as usedwith respect to any person or entity, means the possession, directly orindirectly, of the power to direct, or cause the direction of, the managementand policies of such person, organization, or entity, whether through theownership or control of voting securities (or their voting power) or bycontract, or court order, or otherwise. The ownership of voting securities of aperson, organization, or entity shall not, in and of itself, constitute “control”for purposes of this

 

----

 

definition, unless saidownership is of a majority of the outstanding securities entitled to vote ofsuch person, organization, or entity.

 

**1.3****                              **“**Allos Indemnitees**” has the meaning setforth in **Section 13.1**.

 

**1.4****                              **“**API Improvements**” means inventions,discoveries or improvements related to the API (including API RelatedCompounds) or API Manufacturing (including analytical methods, manufacturingprocesses, API formulations and packaging) that Hovione invents, develops ordiscovers, conceives, reduces to practice, in connection with or arising fromits activities under this Agreement (including during the period since theeffective date of the Term Sheet) or from its access to the Allos ConfidentialInformation, whether patentable or not and whether alone or jointly withothers.

 

**1.5****                              **“**API Related Compound(s)**” means the API andany other compound covered by patents owned or licensed to Allos, includingtheir salts, acids, esters, and non-covalent derivative (*e.g.,* complex, chelate, or clathrate ofsuch compound).

 

**1.6****                              **“**API**” means the proprietary compound knownas RSR-13 (efaproxiral), Chemical Name:  2-[-[[(3,5-Dimethylanilino)carbonyl]methyl]phenoxy]-2-methylpropionicacid] and its sodium salt.

 

**1.7****                              **“**Applicable Laws and Regulations**” meanscollectively all laws, regulations, ordinances, decrees, judicial and administrativeorders, policies and other requirements of each of the Regulatory Authoritiesapplicable to the manufacture, sale, labeling, use, marketing, distribution,import, export, price or reimbursement of the Services or API.  Applicable Laws and Regulations shallinclude, but are not limited to, the U.S. Federal Food, Drug &Cosmetic Act and regulations administered by the FDA (specifically including,but not limited to 21 C.F.R. Parts 11, 210 and 211) and the following to theextent not in conflict with any laws or regulations that are issued or enforcedby the FDA and other Regulatory Authorities as in effect during the provisionof and applicable to API Manufacturing and Services:  (a) USP/NF/EP and other applicablecompendia standards; (b) guidance documents (including Guidelines, Pointsto Consider, Inspection Technical Guides, International Conference onHarmonization “Step 4 and 5” documents), and (c) current goodmanufacturing practices as accepted without object in the pharmaceuticalindustry for the manufacture of a sterile API.

 

**1.8****                              **“**Benchmark Rate**” means **[ * ]** Euro per 1.00 U.S. dollar.

 

**1.9****                              **“**Campaign Plan**” has the meaning set forth in**Section 4.1**.

 

**1.10****                       **“**CIF**” means “Cost, Insurance and Freight” as provided for underIncoterms 2000 promulgated by the International Chamber of Commerce.

 

**1.11****                        “CMC”**means the Chemistry,Manufacturing and Controls portion of an IND, NDA or Drug Master File.

 

**1.12****                       **“**Commercial Supply Phase**” means all activities and API lotsmanufactured after the Launch Phase.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

2

----

 

**1.13**                        **“****Confidential Information”**has the meaning set forth in the Nondisclosure Agreement.

 

**1.14**                        “**Corporate Partner**”****means any organization to whom Allos grantsthe right, whether by license or otherwise, to manufacture and sell theProduct. 

 

**1.15****                       **“**Delivery Failure**” has the meaning set forth in **Section 6.1(e)**.

 

**1.16****                       **“**Delivery Forecast**” has the meaning set forth in **Section 4.2**.

 

**1.17****                       **“**Drug Master File**” means a confidential submission by one Partydescribing the Specifications (including composition and methods ofmanufacture) for a product or activity made or performed by one Party that ismade available for confidential review by a Regulatory Authority in connectionwith its review or approval of a Regulatory Submission for the other Partywhere disclosure of such information in the Regulatory Submission of that Partyis undesired.

 

**1.18****                       **“**Effective Date**” has the meaning assigned to such term in thepreamble.

 

**1.19****                       **“**Equivalent Third Party**” means a third party contractmanufacturer that:  (a) isregistered with the FDA as an Active Pharmaceutical Ingredient manufacturingfacility; (b) has had experience in the manufacture of injectable gradeActive Pharmaceutical Ingredients; and (c) has successfully completed apre-approval inspection with the FDA for an injectable grade ActivePharmaceutical Ingredient.

 

**1.20****                       **“**Exchange Rate**” means the three (3) month average exchangerate of the Euro per U.S. dollar, as published in *The Wall Street Journal* on the last business day of eachcalendar quarter.

 

**1.21****                       **“**Exclusivity Period**” has the meaning set forth in **Section 12.5**.

 

**1.22****                       **“**Facility**” means the specific premises identified in ***Attachment B***under “*8. Facilities*.”

 

**1.23****                       **“**FDA**” means the United States Food and Drug Administration, orany successor thereto.

 

**1.24****                       **“**FD&C Act**” means the United States Food, Drug and CosmeticAct, as amended from time to time.

 

**1.25****                       **“**Force Majeure**” has the meaning set forth in **Section 16.4**.

 

**1.26****                       **“**Forecast**” means a written statement of Allos’s anticipatedpurchase requirements prepared and delivered to Hovione as provided in **Sections 3.1**, **4.1** or **4.2(a)**.

 

**1.27****                       **“**Generic Methods**” has the meaning set forth in **Section 12.5**.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

3

----

 

**1.28****                       **“**Hovione Indemnitees**” has the meaning set forth in **Section 13.2**.

 

**1.29****                       **“**Hovione Quality System**” means the procedures and controlleddocumentation that HOVIONE has in place at its Facility during the Term that arenecessary to evidence compliance with FDA current good manufacturing Practices requirements and all ICH guidelines, as well as any other requirements necessary to Manufacture API.

 

**1.30****                       **“**Hovione References**” has the meaning set forth in **Section 9.5**.

 

**1.31****                       **“**Hovione Regulatory Documents**” has the meaning set forth in **Section 9.5**.

 

**1.32****                       **“**IND**” means an investigational new drug application filed withthe FDA, in order to commence human clinical testing of a drug.  

 

**1.33****                       **“**In-Process API**” means partially synthesized API, whichincludes compounds in the intermediate manufacturing steps subsequent to thefirst modification of the Raw Materials and before the final modification tothe API.

 

**1.34****                       **“**Intellectual Property Rights**” means without limitation allproprietary rights under any and all patent, patent applications, trade secret,copyright, trademark trade dress, and other proprietary rights, in anydiscoveries, inventions, ideas, improvements, works, compilations and allinterests and title in the materials, information, technology, methods,processes, specifications, data, records, results, and documentation.

 

**1.35****                       **“**Launch Phase**” means all activities and API lots manufacturedafter the Effective Date and prior to the **[ *]** of Allos’ receipt of Marketing Approval by the FDA or EuropeanMedicines Agency.

 

**1.36****                       **“**Loss**” and “**Losses**”means any and all claims, liabilities, losses, costs, damages and expenses(including, without limitation, reasonable attorneys’ fees and legal and courtcosts) together with any related interest, fines and penalties.

 

**1.37****                       **“**Lot**” means one (1) discrete quantity of API as that termis defined under 21 CFR §210(b)(10).

 

**1.38****                       **“**Manufacturing**” means any pharmaceutical procedures conductedto produce the API, including processing, packing, labeling, holding, testing,and quality control of the API, the Raw Materials and In-Process API, andactions taken to comply with Applicable Laws and Regulations and this Agreement(*e.g.,* validation of process,facilities, equipment, methods and operations).

 

**1.39****                       **“**Manufacturing Forecast**” has the meaning set forth in **Section 4.1**.

 

**1.40****                       **“**Marketing****Approval**”means an approval by the FDA to commence commercial marketing and distributionfor the Product, and comparable foreign equivalents, including amendments andsupplements to such Marketing Approvals.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

4

----

 

**1.41****                       **“**Master Batch Record**” means the then-current procedures to befollowed by Hovione with respect to the manufacture of API, and the handlingand storage of API, as separately set forth and agreed upon by the parties fromtime to time during the term of this Agreement.

 

**1.42****                       **“**Material Safety Data Sheet**” or “**MSDS**” means the written description of safety information onthe API for use by persons engaged in API Manufacturing.

 

**1.43****                       **“**Methods of Analysis**” means the analytical methods to be usedin testing API for compliance with the API Specifications as set forth in theQuality Agreement, as amended from time to time.

 

**1.44****                       **“**NDA**” means a New Drug Application for Marketing Approval filedin the United States.

 

**1.45****                       **“**NondisclosureAgreement”** has the meaning set forth in******Section** **12.1.**

 

**1.46****                       **“**Out of Specification**” or “**OOS**”means failure of the API to meet the Specifications.

 

**1.47****                       **“**Planning Forecast**” has the meaning set forth in **Section 4.1**.

 

**1.48****                       **“**Product**” means the human pharmaceutical product containing theAPI.

 

**1.49****                       **“**Production****Fee**”means the fees charged by Hovione in connection with API Manufacturing andServices, including, without limitation, the disposal of Wastes.

 

**1.50****                       **“**Production Materials**” has the meaning set forth in **Section 9.3**.

 

**1.51****                       **“**Project Manager”**means the individuals identified in ***Attachment A*** asthe Project Managers for Hovione and Allos.

 

**1.52****                       **“**Purchase Order**” means a written order for Hovione tomanufacture and/or deliver and Allos to purchase a specific quantity of API. 

 

**1.53****                       **“**Quality Agreement**” means the document mutually agreed upon bythe Parties, pursuant to **Section 9.2**,as may be amended from time to time, containing the policies, procedures, andstandards by which the Parties will coordinate and implement the operationaland quality assurance activities needed to efficiently achieve regulatorycompliance objectives.  

 

**1.54****                       **“**Quality Control Release Date**” has the meaning set forth in **Section 7.3**.

 

**1.55****                       **“**Raw Material**” means the compounds, water, solvents, reagentsand other materials and supplies, including disposable manufacturing equipmentand labeling and packaging materials used in Manufacturing.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, ASAMENDED.**

 

5

----

 

**1.56****                       **“**Record**” means all documents, reports, data, data listings,charts, process control/monitoring commands and data summaries, logs, notes,standard operating procedures, Master Batch Records, lot batch records,analyses, correspondence, notes, memorandum, (including, without limitation, productionand quality assurance and quality control documentation) and other itemscontaining information or data related to API Manufacturing and Services,whether in paper or electronic form, including originals and copies, includingwithout limitation all items that would be considered “records” under anyApplicable Laws and Regulations.

 

**1.57****                       **“**Regulatory Authority**” means the multinational, federal,regional, state and local government authorities (including public,quasi-public and private bodies contracted, certified or authorized by suchgovernmental bodies) in a country or other jurisdiction with authority toregulate, approve, license, inspect, review or otherwise control or supervisethe manufacture, sale, labeling, use, marketing, distribution, import, export,price or reimbursement for the Services or API, including but not limited tothe FDA and its counterparts in the European Union and Japan.

 

**1.58****                       **“**Regulatory Submission**” means any document, correspondence,data, article, certifications, physical samples that are, or that are requiredto be, delivered or made available for inspection or review by any RegulatoryAuthority in connection with any Service or otherwise in connection with theactivities carried out by either Party relating to this Agreement, specificallyincluding but not limited to applications, dossiers or reports supporting themanufacture or use of the Product for investigational or commercial use,including any INDs, NDAs, Drug Master Files, field reports, annual reports,adverse event and corrective action reports, and export approvals, change beingeffected reports, information packages for meetings with the RegulatoryAuthorities and any amendments, supplements, corrections, and updates.

 

**1.59****                       **“**Services**” mean, collectively unless context indicatesotherwise, all formulation and process development, regulatory, manufacturing,testing and other services provided, and to be provided by Hovione under thisAgreement.

 

**1.60****                       **“**Specifications**” mean the characteristics and qualitiesestablished by the Parties in writing and with which a API Lot or Service(including reference standards, In-Process API, and Raw Materials) must conformincluding but not limited to all conditions of and procedures to be used in itsManufacture, (*e.g.,* Master BatchRecords, production, sampling, testing, packaging, storage and shipmentstandard operating procedures*,*production environment standards, chemical names, formulas, and otherinstructions, approved vendors/SKUs/grades, release criteria and associatedanalytical methods).  Where noSpecification has been established by the Parties, the Specifications may bethose that that are reasonably established in compliance with Applicable Lawsand Regulations and the Quality Agreement.

 

**1.61****                       **“**Technology Transfer Fee**” means the fees to be paid to Hovionein connection with a technology transfer.

 

**1.62****                       **“**Term**” means the period commencing on the Effective Date andending as provided in this Agreement (unless extended as otherwise provided inthis Agreement).

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

6

----

 

**1.63****                       **“**Term Sheet**” has the meaning assigned to such term in thepreamble.

 

**1.64****                       **“**Waste**” means all waste, as defined by Applicable Laws andRegulations and all non-hazardous waste, to the extent arising out of APIManufacturing and Services, including without limitation, rejected or unusableRaw Materials, In-Process API or API, disposable manufacturing equipment andmaterials (including chromatography matrix, solvents, excess buffers or rinses,filters, gowns and other consumables).

 

**2.****                                      PROJECTMANAGEMENT**

 

**2.1****                               Project Managers.**  Each Party shall designate a representativewith authority as to technical matters to serve as the primary contact for theother Party about the API and the Parties’ relationship under thisAgreement.  Each Project Manager shall beresponsible for obtaining cooperation and input from other individuals withinsuch Project Manager’s organization whose expertise and ability may be requiredfrom time to time to maximize the potential for successful collaboration underthis Agreement.  The Project Managersshall develop procedures to optimize communication and collaboration betweenthe Parties.  The Project Managers willcommunicate regularly during the Term at mutually agreeable times, and, whennecessary, hold meetings at mutually agreeable places, to review projectmanagement and status. The Project Manager shall be a member of the SteeringCommittee described in **Section 2.2**below.

 

**2.2****                               Steering Committee.**  A Steering Committee, consisting of theProject Managers and at least one (1) senior management representativefrom each Party, shall meet periodically during the Term, but on at least anannual basis.  The Steering Committeeshall:  (a) oversee and providemanagement direction for the achievement of the objectives of this Agreement; (b) reviewthe Services to be performed and API to be provided under this Agreement; (c) reviewrequests by Regulatory Authorities, or a Party, to changes in or additions tothe Services to be performed, to the extent not addressed by the ProjectManagers; (d) provide guidance regarding planned or anticipated events ineach Party’s business or operations that might affect the work conducted underthe contract changes; (e) review of any materially adverse regulatorymatters affecting this Agreement, the Services or API; (f) review andresolve all matters not satisfactorily addressed by the Project Managers; and (g) reviewproduction reports periodically prepared by Hovione pursuant to **Section 2.3**, and recommend to theParties corrective actions as necessary. Hovione shall implement in accordance with this Agreement such changesas may be recommended by the Steering Committee following its review of Hovione’speriodic production reports.

 

**2.3****                               Monthly Progress &Budget Reports.**  Each month, Hovioneshall provide Allos with a written production status report describing thefollowing:

 

**(a)****                                 **ActivityProgress.  Progress on completion ofoutstanding obligations (*e.g.,*production runs, process development, validation, stability data, RegulatorySubmissions, and pending corrective actions). The status report shall indicate Hovione’s progress toward task ordelivery milestones relative to planned completion schedules. 

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

7

----

 

**(b)****                                 **Inventories.  Current inventory of API, In-Process API, RawMaterials, safety stock and reference standards.  

 

**(c)****                                 **ComputerAccess.  Notwithstanding Hovione’swritten reporting obligations set forth in subsections (a) and (b) above,Hovione and Allos acknowledge the benefit of and will work towards Allos havingon-going, on-line access to a secure part of Hovione’s computer systems thatshall enable Allos to obtain the information described above under subsections (a) and/or(b).  If computer access is madeavailable to Allos, Hovione will provide reasonable assistance and training toAllos to ensure that:  (i) on-lineaccess is adequately established and maintained at Allos’s facilities; and (ii) theappropriate Allos personnel are able to access such information.

 

**2.4****                               Adverse Issues &Corrective Actions**.  Hovione shallinform Allos promptly of any events that might materially affect the ability ofHovione to timely and fully perform and/or deliver any Services or API orotherwise affect the established schedule or budgets, including anyunexpected adverse final or interim results or data from validation, stabilityor other studies.  The status report alsoshall fully describe all Out of Specification (“**OOS**”) and out of trend events, failure investigations, processdeviations, batch failures and similar matters, as well as the corrective orother actions to be taken by Hovione. Hovione shall conduct periodic review of production records, on at leastan annual basis, including trend analysis of batch production records and otherprocess data, and prepare a report for submission to the Steering Committeesummarizing Hovione’s findings, conclusions and recommendations.  

 

**3.****                                      LAUNCHPHASE**

 

**3.1****                               Forecasts andOrders. **During the Launch Phase,Allos shall provide Hovione with Forecasts of its expected requirements of API,on a regular basis, but in no event updated less frequently than once every **[ * ]** months.  Allos may submit Purchase Orders for suchquantities of API indicated in such Forecasts no less than **[ * ]** months prior to the requesteddelivery date or as may be agreed upon by the Parties.  Within ten (10) days of receipt of aPurchase Order from Allos, Hovione shall notify Allos in writing of Hovione’sacceptance of such Purchase Order.  Theminimum campaign size requirement as set forth in ***Attachment B*** under “*3. Minimum API Lot Sizes for Pricing*,”for the Launch Phase Purchase Orders shall apply. 

 

**3.2****                               Order Fulfillment. **Following payment by Allos of anon-refundable pre-payment amount equal to **[* ]** of the applicable Purchase Order value, Hovione shall beobligated to deliver the required quantity of API indicated in such PurchaseOrder within a **[ * ]** month periodthereafter; *provided* that theamount ordered does not exceed **[ * ]**.  If the amount of API ordered is greater than **[ * ]**, then Hovione shall only be obligatedto deliver an initial **[ * ]** within**[ * ]** months and not less than **[ * ]** thereafter until the total quantityof the Purchase Order has been fulfilled. Allos shall be free to cancel all or part of any outstanding PurchaseOrder prior to Allos’ payment of the **[ * ]**pre-payment amount by providing written notice to Hovione of suchcancellation.  Hovione shall be free toManufacture and deliver the API from any Facility that has been approved byAllos and validated.  If Allos requestsin writing that Hovione use its best efforts to deliver any ordered quantitiesof API earlier than the agreed **[ * ]**delivery delay

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

8

----

 

period, Hovione will beentitled to receive an additional amount equal to **[ * ]** of the invoice value of such quantity for each **[ * ]** that early delivery occurs prior tothe original **[ * ]** lead timedelivery date.

 

**3.3****                               Order Cancellation.**  Allos may cancel all or part of any outstandingPurchase Order submitted under **Section 3.1**by providing Hovione written notice; *provided,however*, that if such cancellation occurs after Allos has paid the **[ * ]** pre-payment amount, Hovione shall beentitled to retain the pre-payment amount. 

 

**4.****                                      COMMERCIALPHASE FORECASTS AND PURCHASE ORDERS**

 

**4.1****                               Planning Forecasts. **On or before July 31 of each yearduring the Commercial Supply Phase, Allos shall submit to Hovione (a) aforecast of Allos’s estimated requirements for API for each of the next **[ * ]** (each, a “**Planning Forecast**”) and (b) **[ * ]** forecast projecting estimated quantities that will beordered by Allos during the following **[ * ]**(each, a “**Manufacturing Forecast**”)split over **[***** ]** calendar quarters.  All estimates set forth in Planning Forecastsand Manufacturing Forecasts shall not constitute a contractual commitment byAllos for such quantities; *however*,such estimates shall constitute Allos’s anticipated maximum level of demand andutilization of capacity for API production, subject to **Section 4.3(c)**, and Hovione may usesuch estimates for facilities, personnel, production and campaign schedulingand budget planning purposes.  TheParties agree that each annual Manufacturing campaign undertaken by Hovioneshall be no smaller than that stated in ***Attachment B*** under “*3. Minimum API Lot Sizes for Pricing*,”and that Hovione may produce a campaign of any amount that is supported byAllos’ Planning and Manufacturing Forecasts. No less than **[ * ]** prior tothe start of the annual campaign, Hovione shall inform Allos of its proposedformat, quantity and calendar (“**Campaign Plan**”).  Should Allos require that the campaign be anydifferent than proposed, it shall notify Hovione in writing no less than **[ * ]** prior to its planned conclusion andHovione will use good faith efforts to adjust the campaign in accordance withAllos’ request.  If requested by Hovione,Allos shall promptly issue Purchase Orders in amounts that justify therequested changes to the Campaign Plan. 

 

**4.2****                               Delivery Forecast.**  **[ * ]**before each **[ * ]** during theCommercial Supply Phase, Allos shall provide Hovione with an **[ * ]** written rolling Forecast of theestimated total amount of API that Allos anticipates it will order from Hovione(“**Delivery Forecast**”).

 

**(a)****                                 **The first **[ * ]** of each Delivery Forecast shall befirm commitments as to quantities and month for delivery.**** The**[ * ]** of a Delivery Forecast shallbe non-binding estimates for informational purposes only.  Allos may revise the estimated portions ofDelivery Forecast **[ * ]** as andwhen it deems appropriate.  Pricing shallbe based on the first **[ * ]** of theDelivery Forecast submitted for the beginning of each **[ * ]**, with corrections made upon thedelivery of the Purchase Order for the **[ * ]**,unless annual pricing thresholds are exceeded by earlier Purchase Orders.

 

**(b)****                                 **Allos shallprovide to Hovione the first Planning Forecast for the Commercial Supply Phasewithin **[ * ]** after the date Allosfirst submits a Regulatory Submission to apply for Marketing Approval in anycountry.  

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

9

----

 

**(c)****                                 **No later than **[ * ]** after receipt of either aManufacturing Forecast or Planning Forecast from Allos, Hovione shall informAllos in writing if it will be able to furnish the estimated quantities of APIin the manner and schedule set forth in said Forecasts, and if unable tofulfill the Forecasts the reasons why the Forecasts cannot be fulfilled.

 

**4.3****                               Purchase Orders.**

 

**(a)****                                 **During the Term,Allos shall purchase and Hovione shall supply at least the percentage of Allos’sannual API requirements stated in ***Attachment B*** under “*1. API Purchase/Supply Minimums*.”

 

**(b)****                                 **During theCommercial Supply Phase, Allos shall provide Hovione with Purchase Orders onAllos’s forms for **[ * ]** at least **[ * ]** before the start of such **[ * ]**. Each Purchase Order shall be formally accepted by Hovione within **[ * ]** of its transmission, and shall not berejected unless Allos has either not observed the **[ * ]** of each Delivery Forecast (subject to **Section 4.3(c)**) or materially breachedthe Agreement and despite written notice from Hovione has failed to cure suchbreach.  Any Purchase Order not rejectedby Hovione within **[ * ]** shall bedeemed accepted.  If there is a conflictbetween the terms contained in this Agreement and the terms contained in any ofAllos’s standard form Purchase Orders, any delivery documents or in Hovione’sacceptance documents, the terms of this Agreement shall govern.

 

**(c)****                                 **Each PurchaseOrder submitted to Hovione by Allos shall state the specific quantities of APIrequested by Allos, which shall be based on API batch sizes, the expectedminimum size of which is provided in ***Attachment B*** under “*3. Minimum API Lot Sizes for Pricing*,”and shall include the expected delivery date(s) for such quantity of API ordered.  Subject to Hovione’s written consent, whichshall not be unreasonably withheld, the aggregate Purchase Orders for a **[ * ]** shall not be less than **[ * ]** nor more than **[ * ]** of the amount estimated for that **[ * ]** in the most recent Delivery Forecastfor that quarter; *provided*, thatHovione shall use its commercially reasonable efforts to timely supply PurchaseOrders in excess of **[ * ]** of theapplicable Delivery Forecast.  Deliveriesagainst Purchase Orders shall be made on the dates specified in the PurchaseOrder.

 

**(d)****                                 **During theCommercial Supply Phase, Allos shall notify Hovione if Allos desires to cancelor reduce the quantities of API ordered in a Purchase Order that has beenaccepted by Hovione.  If suchnotification is provided to Hovione less than **[* ]** prior to the requested delivery date for API contained in suchPurchase Order, Allos shall be solely liable to Hovione for:  (i) losses actually incurred (asevidenced by written documentation) because of the underutilization of theoperational portion of the Facility that would have ordinarily been used in APIManufacturing but could not be rescheduled for other uses, and (ii) thecosts of Raw Materials purchased by Hovione to Manufacture that Purchase Order(including Waste disposal costs) that could not be returned for credit orrefund by Hovione or that could not be used by Hovione for other purposes,including subsequent API Manufacturing. Such losses for each cancelled kilogram of API shall not exceed theamount set forth in ***Attachment B***for that quantity of API.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

10

----

 

**(e)****                                 **If, in Allos’sole discretion, at the time of placing a Purchase Order, Allos pays to Hovionea non-refundable pre-payment equal to **[ * ]**of the value of such Purchase Order, then Hovione will be deemed to haveexpressly waived the Commercial Phase minimum campaign size requirement setforth in ***Attachment B***under “3*. Minimum API Lot Sizes for Pricing*,”in connection with such Purchase Order and Allos shall have the right to cancelall or part of such Purchase Order; *provided,however*, that in no event shall Hovione be required to produce anycampaign smaller than the minimum Launch Phase campaign size requirement setforth in ***Attachment B***under “*3. Minimum API Lot Sizes for Pricing*,”in connection with any other Purchase Order. If Allos cancels the quantities of API ordered in a Purchase Order,Hovione will retain the pre-payment amount and the payment obligationscontained under **Section 4.3(d) **abovewill not apply.  Notwithstanding theforegoing, Hovione retains the right to cancel the terms of this **Section 4.3(e) **upon **[ * ]** prior written notice to Allos.

 

**(f)****                                   **Hovione, on atleast a monthly basis, shall provide Allos with a written schedule of allthen-outstanding accepted Purchase Orders for API, including the expecteddelivery date(s).  If the Partiesestablish access to Hovione’s computer systems as provided in **Section 2.3(c) **above, Allos willalso be able to obtain on-line information on the then-outstanding accepted PurchaseOrders for API, including the expected delivery date(s).  If such computer access is made available toAllos, Hovione will provide reasonable assistance and training to Allos toensure that:  (i) on-line access isadequately established and maintained at Allos’s facilities; and (ii) theappropriate Allos personnel are able to access such information.

 

**5.****                                      FEES,INVOICING & PAYMENT**

 

**5.1****                               Pre-Commercial Projects.**  In satisfaction of Allos’s paymentobligations under the Term Sheet for Services and API provided by Hovione toAllos prior to the Effective Date, Allos shall pay to Hovione a final amountequal to **[ * ]**.  Such payment shall be made by Allos withinfifteen (15) days of the successful response by the Parties to any and allinquiries from the FDA regarding the CMC. 

 

**5.2****                               API Supply.**  During the Launch Phase and Commercial SupplyPhase, Hovione shall be paid for the Services and API Manufacturing inaccordance with the price schedule provided in ***Attachment B*****under “*2.API Pricing*.”  All amountsspecified in ***Attachment B*****are for supply of API by Hovionedelivered pursuant to **Section 6.1(b) **below.  

 

**5.3****                               Invoicing.**                                           Hovionemay invoice Allos for all released API Lots upon shipment as per the deliverydates indicated in the applicable Purchase Order.  Any API Lots Manufactured but not shippedbecause such API Lots are to be maintained as safety stock pursuant to **Section 7.3**, shall be invoiced, atHovione’s option, either on (a) one hundred and eighty (180) days of theQuality Control Release Date or (b) one hundred and eighty (180) daysafter the delivery date(s) set out in the applicable Purchase Order. 

 

**5.4****                               Payment.**  Subject to**Section 5.1**,payment of all Purchase Order pre-payments and undisputed invoices shall bedelivered by wire transfer in U.S. dollars to the accounts provided in ***Attachment B***** under “*7.Wire Instructions*.”  Paymentof undisputed amounts shall be made within thirty (30) days of the invoicedate.  Payment shall be consideredreceived once

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

11

----

 

funds become available toHovione, or Hovione’s agent, at its bank account in a USA located bank.  Except for the fault of Allos, paymentdelivery shall be deemed to occur no later than 24-hours after the transmissionof the Allos payment.  In the case oneinvoice is in dispute, its payment shall not affect settlement of otheroutstanding and due invoices.  Repeateddelay in settlement of invoices will entitle Hovione to only ship againstconfirmed letter of credit terms.

 

**5.5****                               No Liens.**  Hovione shall ensure that all API Lots aredelivered free of any liens.  Hovione hasthe option to arrange invoicing by any company of the Hovione group or by itsagents if Allos first provides its written consent to such invoicingarrangement, which consent shall not be unreasonably withheld.  Any person seeking payment from Allos shallbe subject to all defenses, claims and rights that Allos might have againstHovione, and Hovione shall be responsible for the actions of such otherperson.  Hovione shall have no set-offrights or remedy against Allos in the event that Hovione’s agent fails to remitpayments received from Allos.

 

**5.6****                               Change In Circumstance.**  The costs and fees provided in this Agreementare based on current experience and do not take into account items that areunforeseeable (such as unexpected issues in the API development, materialschanges in the regulations, FDA’s views, toxicity of the API or the process, orlegislation (*e.g.,* health, safetyor environment).  The Parties shallnegotiate in good faith any changes to the pricing set out in ***Attachment B***should unforeseen dramatic changes occur that cause a substantial hardship toeither Party.

 

**5.7****                               Currency &Taxes.**  All shipments of API shall beinvoiced in United States dollars and all payments therefore shall be made inUnited States dollars.  Hovione shall beresponsible for all Portuguese and Macau taxes (including, but not limited to,VAT, sales, income, export duties, income, social security and withholdingtaxes) and workers’ compensation and unemployment insurance with respect to theManufacturing of API and performance of Services in Portugal or in Macau underthis Agreement.  Allos shall beresponsible for all taxes applicable in the USA and in the other markets wherethe API is exported to (including, but not limited to, VAT, sales, income,import duties, income, social security and withholding taxes) with respect tothis Agreement.

 

**5.8****                               Exchange Rate Risk.**  To share the exchange rate risk, Allos andHovione agree that the API prices set forth in ***Attachment B*****under “*2.API Pricing*” shall be subject to adjustment as follows:

 

**(a)****                                 **If the ExchangeRate determined at the end of any calendar quarter and the Benchmark Ratediffer by more than **[ * ]**, the APIprices set forth in ***AttachmentB*** under *“2. API Pricing”*shall be increased or decreased, as appropriate, by an amount equal to **[ * ]** of the percentage increase ordecrease, as appropriate, in the Exchange Rate relative to the Benchmark Rate,and such API prices, as adjusted, shall apply to all invoices issued by Hovionepursuant to **Section 5.3**during the immediately succeeding calendar quarter. 

 

**(b)****                                 **If the ExchangeRate determined at the end of any calendar and the Benchmark Rate differ by **[ * ]** or less, then no adjustment will bemade to the API prices set forth in ***Attachment B*** under “*2. API Pricing*”, and such API prices, asset forth in ***AttachmentB***

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

12

----

 

under *“2. API Pricing”*, shall apply to allinvoices issued by Hovione pursuant to **Section 5.3**during the immediately succeeding calendar quarter.******

 

The following table setsforth representative examples of the impact of various Exchange Rates:

 
| **Exchange Rate** | ** **            | **% Change from Benchmark Rate** | ** ** | **API Price Adjustment** | ** ** |
|-------------------|-----------------------|----------------------------------|------------|--------------------------|------------|
| **$1 =**          | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |
| ** **        | **€ [ * ]** | ** **                       | **[ * ]**  | ** **               | **[ * ]**  | ** ** |

 

**6.****                                      DELIVERYAND ACCEPTANCE**

 

**6.1****                               Delivery Instructions.**

 

**(a)****                                 **ReleaseConfirmation Testing.  Hovione shallbe responsible for conducting all testing required as set forth in the QualityAgreement prior to the release of any API for shipment as provided in this **Section 6.1**.  Allos has the right to review all releasetesting data as provided in the Quality Agreement and to approve the release ofany API for shipment.  

 

**(b)****                                 **Shipment.  Each API Lot shall be shipped by Hovione CIFto Allos’s designated Product manufacturer; *provided,however*, that (i) API Lots shall be shipped in the mode oftransport provided in the delivery instructions included in each PurchaseOrder, which will be air for international and truck for inland shipment, and (ii) Hovioneshall be responsible for all risks and additional normal transport costs thatoccur prior to arrival of any shipment at Allos’s designated Productmanufacturer.  API shall be shipped inaccordance with the shipping conditions and procedures established under theQuality Agreement.  Each API Lot shall beaccompanied by certificates of analysis in a form specified in the QualityAgreement.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

13

----

 

**(c)****                                 **Acceptance.  Allos, or its Product manufacturer, shallpromptly initiate acceptance testing of API Lots upon physical receipt of APILots.  An API Lot shall be deemedaccepted upon successful completion of acceptance testing, subject torevocation upon subsequent determination of any latent defects (*e.g.,* subsequent testing, inspections oraudits, stability data, or failure investigations).  However, if the defect would have beendetected by reasonable physical inspection and acceptance testing, and noticeof the defect is not received within ninety (90) days of physical receipt (asindicated by the airway bill), Hovione will be under no obligation to replacethe Lot.  Allos (and the Productmanufacturer) shall be entitled to rely on the accuracy and validity of Hovionecertificates of analysis and compliance provided with each delivered APILot.  Allos shall notify Hovione inwriting of any deficiencies of a received API Lot within five (5) businessdays of Allos’s receipt of final test reports for all testing performed on suchLot by either Allos or its Product manufacturer.

 

**(d)****                                 **Dispute.  At the request of either Party, unresolveddisputes regarding the conformance of an API Lot with its applicableSpecifications will be referred to a mutually acceptable third party refereelaboratory.  The referee laboratory willconduct testing in accordance with the methods established for testing as setforth in the agreed Master Batch Record for the API as reflected in theapplicable NDA, CMC or Drug Master File filing, if any.  The costs of the referee testing will becharged to the Party in error.  Hovione,if at fault, shall be solely responsible for the prompt replacement of each non-conformingAPI Lot, provided that a replacement lot which meets Allos specificationrequirements is available for prompt shipment. In the event conforming API isnot then available, Allos may, at it election, require Hovione to refund theamounts paid or incurred by Allos on account of such rejected API Lot(s).

 

**(e)****                                 **Delivery Failure.  Following a failure by Hovione to deliver theamounts of API specified in a Purchase Order, where such failure results inAllos incurring additional costs to obtain the undelivered amounts of API froman Equivalent Third Party to cover Allos’ requirements (“**Delivery Failure**”), then, in addition toany of Allos’s other rights and remedies, Hovione shall reimburse Allos in anamount equal to the increased cost incurred by Allos in purchasing suchnon-delivered API from other vendors. The quantity not delivered, and the amount that Allos would have paidHovione if it had been delivered shall be included in determining the annualquantity of API purchased by Allos for purposes of pricing, requirementspurchasing and other matters set forth in ***Attachment B***.

 

**6.2****                               Title to In-Process andFinished API. **Title to allIn-Process API shall at all times remain in Hovione, and title to all finishedAPI shall remain in Hovione until its delivery to Allos’s designated Productmanufacturer pursuant to **Section 6.1(b)**,subject to **Section 7.3**.  Hovione shall keep all In-Process API andfinished API stored in accordance with the applicable Specifications, theQuality Agreement and Applicable Laws and Regulations.  Hovione shall bear the risk of loss,contamination or damage to the API until it is delivered to Allos pursuant to **Section 6.1(b)**.

 

**7.****                                      SUPPLYASSURANCE**

 

**7.1****                               Production Site &Commercial Capacity Assurance.**  AllManufacturing of API (including all testing, filing and packaging activities)shall occur at the Facility, except as

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

14

----

 

approved by the Partiesin writing.  No work shall besubcontracted except with Allos’s written approval, which shall not beunreasonably withheld; *provided, however*,that in the event Allos approves of any subcontracted Services, Hovione shallbe responsible for the work of the subcontractor as if it was performed byHovione directly.  Hovione shall maintainthe ability to deliver at least thirty thousand kilograms (30,000 kg) per yearduring the Commercial Supply Phase, and shall provide assurances of secureprimary and contingent supplies of Raw Materials.

 

**7.2****                               Change Control.**  Without Allos’s prior written consent,Hovione shall make no change to:  (a) theSpecifications of the API (as the Specifications are defined in the applicableRegulatory Submission made by Allos for the Product); (b) any validatedanalytical methods used to test critical Raw Materials, In-Process API, and theAPI; (c) the Manufacturing of the API; (d) any Regulatory Submissionmade by Hovione for the API; or (e) Master Batch Record(s).  In the event a change is requested andapproved by Allos, Hovione will continue to Manufacture the Product inaccordance to Allos’s original Regulatory Submission pending the completion ofre-validation and receipt of approval from the FDA and other RegulatoryAuthorities.  The implementation ofchanges shall be subject to Allos authorization in light of potentialregulatory implications; *however*,Allos (and Allos licensees or other users of the API) recognize that change maybe necessary to enable Hovione to remain efficient and cost-effective and thusshall be fully supportive of the implementation of such changes wherejustified.  The procedures for revisingSpecifications are set forth below.

 

**(a)****                                 **Notice.  A Party proposing a change to theSpecifications shall provide written notice to the other Party.  If the proposed change is required by aRegulatory Authority, then such notice shall include complete and fulldisclosure of the Regulatory Authority request and relevant correspondence, ifany, and the other Party shall have the opportunity to participate in thedialogue with the Regulatory Authority regarding the proposed change.  If the change is proposed by Allos or isrequired by a Regulatory Authority, then within thirty (30) days of suchnotice, Hovione shall notify Allos in writing whether and the extent to whichHovione’s Production Fees will increase or decrease if the proposed revision isimplemented.  Any proposed increase ordecrease in Hovione’s Production Fees shall be supported by documentation, in aform and content satisfactory to, and subject to verification by, Allos.  If Allos rejects the proposed price increase,the Parties agree to negotiate in good faith a mutually acceptable increase ordecrease to such Production Fees.  IfAllos adopts the proposed Specifications revision, the Production Fees for APIwill be adjusted upon its implementation or as otherwise agreed.

 

**(b)****                                 **FeasibilityDetermination.  If Allos, inconsultation with Hovione, determines that Hovione cannot implement therevision in a cost-effective manner, it may withdraw the proposed Specificationrevision.  If the revision is required bya Regulatory Authority, however, then upon reasonable written notice toHovione, Allos may terminate this Agreement in whole or in part or may treatthe circumstance as an “*inadequate supply*”event and take other actions as provided in **Section 7.5**.

 

**(c)****                                 **ImplementationPlan.  Before implementing thechange, the Project Managers shall develop and agree on a writtenimplementation plan, which includes the specific procedures to be used inpreparing for and implementing such change to the Specifications.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

15

----

 

These shall include, butare not limited to the following:  (i) requiredmethods or process development and validation, including stability testingrequirements and validation pass/fail criteria; (ii) RegulatorySubmissions; (iii) Lots, Purchase Orders, or dates for changeimplementation; (iv) further change approval steps; and (v) technologytransfer, if any.

 

**(d)****                                 **RegulatorySubmissions.  Allos will beresponsible for any Regulatory Submission pertaining to the changes to theSpecifications with the FDA and other Regulatory Authorities, except thatHovione will be responsible for updating its Drug Master Files, if any; *provided* that Hovione shall only make suchamendment in consultation with Allos. The Parties shall advise each other of the FDA’s, or other RegulatoryAuthorities’, approval and the effective date of any such changes to suchSpecifications.  Hovione’s responsibilityshall be limited to the documents it prepares in connection with RegulatorySubmissions. 

 

**7.3****                               Safety Stock.**  During the Commercial Supply Phase, Hovioneshall, upon Allos’s request, maintain a **[ * ]**safety stock inventory of all critical Raw Materials or, if requested by Allosthrough the issue of Purchase Orders, finished API based upon the rollingForecasts (in both cases the safety stock shall be turned over as new RawMaterials are received or new API Lots are released to as to maximize the shelflife of the safety stock).  Hovione mayinvoice Allos for unshipped, released and approved API Lots that Hovione isrequired to maintain in its inventory for more than **[ * ]** beyond the date Hovione’s Quality Assurance group givesits written approval for the release of the applicable API Lot (the “**Quality Control Release Date**”).  Allos shall assume title and risk of lossrelating to all API inventoried as set forth in this **Section 7.3** upon its release by Hovione intoinventory.  Hovione shall keep all APIsafety stock stored in accordance with the applicable Specifications, theQuality Agreement and Applicable Laws and Regulations.  Hovione shall provide storage for quantitiesof critical Raw Materials and finished API that is designated as safety stockat no cost to Allos for as long as Hovione has warehousing storage spaceavailable for such purpose.  If at anytime during the Term, Hovione no longer has warehouse storage space availableto store critical Raw Materials or API safety stock, Hovione shall so notifyAllos, the Parties shall discuss reasonable alternatives.

 

**7.4****                               Assured Supply.**  During the Term, Hovione shall assure thatAllos has an uninterrupted API supply. In consideration of this obligation, Allos grants Hovione a “right offirst supply” to supply up to **[ * ]**of Allos’s requirements in excess of **[ * ]**.  Hovione may exercise this right in itsentirety or in part, but must do so at a competitive price that is within **[ * ]** of the written bidsobtained by Allos from Equivalent Third Parties.  In the event that Hovione does not exerciseits right of first supply option, Hovione is obligated to find an alternativesource of API, subject to the written approval of Allos.  Hovione must also ensure that up-to-datetechnology is transferred to such approved alternative supplier(s) asefficiently as possible, and in accordance with a mutually acceptabletechnology transfer procedure, and in compliance with any necessary regulatoryrequirements.  In the event that Hovionecannot find an alternative API supplier that is acceptable to Allos, Hovione,at its expense, shall invest in additional capacity to meet all Allosrequirements and shall remain the primary supplier of **[ * ]** of Allos’s API requirements for anadditional **[ * ]** period at pricesto be negotiated in good faith.

 

**7.5****                               Inadequate Supply.**  In the event that Hovione fails to supply atleast **[ * ]** (by weight) of the APIspecified in a Hovione-accepted Purchase Order for any reason, including

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

16

----

 

Force Majeure, orconditions occur in which Hovione cannot give satisfactory assurances of supplyas provided in **Section 7.1**above (*e.g.,* insolvency, adverseFDA actions, loss of supply), Allos shall (among other remedies such astermination of this Agreement or reduction in its purchase obligation, or both)have the right to require Hovione to initiate technology transfer for API Manufacturingto Allos or any manufacturer designated by Allos in accordance with atechnology transfer procedure established by Allos.  Hovione shall fully assist with suchtransfer, and no Technology Transfer Fees as provided under **Section 12.6(a)**, or any royalties orother obligations shall be due in connection with such transfer or APIManufacturing by this contingent, secondary, or new supplier, as the case maybe.  

 

**8.****                                      REPRESENTATION &WARRANTIES**

 

**8.1****                               Legal Authority.**  Each Party represents and warrants to theother Party that: (a) it has the legal power, authority and right to enterinto this Agreement and to perform all of its respective obligations; (b) itis in good standing under the law of the jurisdiction it is incorporated in orin which it is engaged in business activities; (c) it has no knowledge ofany legal or other restriction, limitation, adverse financial or otherconditions affecting its ability to fully perform under this Agreement; (d) thatit shall not commit any act or fail to take any action that, in any significantway, would be in conflict with its material obligations under this Agreement;and (e) that it shall comply in all material respects with Applicable Lawsand Regulations, and in particular those related to API Manufacturing, and withall requirements under this Agreement.

 

**8.2****                               Non-Infringement.**  Each Party represents and warrants to theother Party that to its knowledge the Manufacture of the API and performance ofthe Services, shall not infringe upon or result from the misappropriation ofany pending or issued patent, trade secret, or other Intellectual PropertyRight, or from the breach of any obligation to any third party.

 

**8.3****                               Ability &Capacity.**  Hovione represents andwarrants that:  (a) it has allpermits, approvals, personnel, professional experience, equipment, facilities,funds, and capacity to fully perform it obligations under this Agreement; and (b) thatit will not use in any manner, employ, engage or utilize the services of anyperson who has been or is threatened with debarment under the Generic DrugEnforcement Act or subject to any other comparable administrative,institutional or other sanction for misconduct.

 

**8.4****                               API Warranty. **Hovione represents and warrants that API,when delivered to Allos hereunder, (i) will be manufactured, tested, andpackaged in accordance with Applicable Laws and Regulations; (ii) willmeet the Specifications; and (iii) will not be adulterated or misbrandedwithin the meaning of the FD&C Act or any similar laws or regulations ofapplicable Regulatory Authorities. ** **Hovione’s sole obligation and Allos’exclusive remedy for breach of the foregoing warranty will be limited to promptreplacement of the API at no additional cost to Allos, subject to Hovione’srecall obligations under **Section 10.2**and indemnification obligation under **Section 13.1**.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

17

----

 

**9.****                                      PROCESSQUALITY & REGULATORY MANAGEMENT**

 

**9.1****                               Compliance withSpecifications and Other Requirements.** Hovione shall Manufacture all API Lots, and carry out all otherServices, in compliance with the applicable Specifications, Applicable Laws andRegulations, and the other requirements under this Agreement, in each case asin effect with respect to that API Lot or Service.  For clarity, the parties agree that the APIis an injectable grade Active Pharmaceutical Ingredient that shall bemanufactured in accordance with 21 CFR Part 211.  In February 2003, Allos audited theFacility located in Loures, Portugal, and as of that date found such Facilityto be adequate to comply with, and to evidence compliance with, suchrequirements.

 

**9.2****                               Quality Agreement. **Within ninety (90) days following theEffective Date, the Parties shall mutually agreed upon an initial QualityAgreement, which may be amended by mutual agreement from time to time by theParties.  To the extent that the terms orconditions of the Quality Agreement, or any procedure, specification orrequirement referenced by it, conflicts or is materially inconsistent with theterms of this Agreement (excluding the Quality Agreement), the terms of thisAgreement shall prevail.

 

**9.3****                               Raw Materials and OtherComponents.**  Hovione shall purchase,for its own account, all Raw Materials and other components and equipmentrequired for API Manufacturing (“**ProductionMaterials**”).  Hovione shallprocure all Production Materials, including acceptance testing of each lot orbatch of the Production Materials in accordance with the Specifications,Applicable Laws and Regulations, and the Quality Agreement.

 

**9.4****                               Regulatory Submissions.**  All Regulatory Submissions related to the APIshall be made, owned, and controlled by Allos in its sole discretion.  Hovione, in consultation with Allos, shallprepare at its expense the description of the API Manufacturing operations andrelated information (*e.g.,*methods validation package, stability, representative data and batch records)as required for inclusion in the Allos Regulatory Submissions to the FDA andother Regulatory Authorities, which will contain all of the Manufacturinginformation.  Hovione will assist Allosin the preparation of annual updates and other required or requested RegulatorySubmissions, and in promptly responding to any questions from RegulatoryAuthorities.  Hovione shall providequalified technical representatives to attend meetings and/or teleconferenceswith the FDA and other Regulatory Authorities as needed.  

 

**9.5****                               Hovione Pre-Review ofRegulatory Submission.**  Hovioneaccepts responsibility for the accuracy, integrity and completeness of all documentationprepared by Hovione that is filed with Regulatory Authorities (“**Hovione Regulatory Documents**”).  Allos will provide Hovione with a certifiedtrue copy of the portions of each Allos Regulatory Submission that contains ordirectly addresses the information in Hovione Regulatory Documents (other thanincidental abstracts or cross-references, or copies of previously submittedinformation) (“**Hovione References**”).  The certified copy will be provided toHovione for its review at least **[ * ]**before the filing by Allos of the relevant Regulatory Submission; *provided*, that if  **[ * ]**pre-review by Hovione of the Hovione References is not reasonably feasible,then the Allos shall provide the Hovione References as soon as possible,Hovione shall immediately review and provide Allos with any objections and/orcomments to the Hovione References no

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

18

----

 

later than **[ * ]** of its receipt and the Allos ProjectManager and Hovione’s Regulatory Affairs Unit shall discuss and resolve anydifferences prior to submitting the Regulatory Submission. 

 

**9.6****                               OOS and Other Events andRework.**  Hovione shall immediatelyinform Allos in writing of all OOS and out-of-trend events (provided such trendconstitutes a deviation), failure investigations, process deviations, batchfailures and similar matters (including any unexpected adverse final or interimresults or data from validation, stability or other studies) and provide Alloswith the applicable investigation report and corrective action plans prior torelease of the in-process or finished Lots that are subject to the OOSevent.  All OOS and other investigations,and all corrective actions, shall be performed in accordance with a writtenprocedure acceptable to the Parties.  Except as specifically provided in the NDA orother Marketing Approval and in the manner specifically described in theapproved Master Batch Record, Hovione shall not carry out any reworking,in-process or batch blending (including recrystallization or recycling ofmother liquors or solvents) without prior written authorization from Allos.

 

**9.7****                               Pre-Approval Inspectionsand Other Inspections.**  Hovione shalluse its best efforts to successfully pass the FDA pre-approval inspection andall other regulatory inspections by the Regulatory Authorities, and Allosaudits, without material objection. Should Hovione fail FDA or EU pre-approval inspection or review ofRegulatory Submissions results in materially adverse actions (e.g., delay ofMarketing Approval or requirement for corrective actions), in any event due toHovione’s negligence, inadequate planning or implementation or failure tocomply with Applicable Laws and Regulation or other requirements under thisAgreement, it shall refund **[ * ]**of amount paid for validation batches and amounts charged to Allos in preparingthe Regulatory Submissions related to API Manufacturing and other Services ofHovione.  Except as specifically providedotherwise in this Agreement, Hovione shall bear the expense of establishing andmaintaining its compliance with Applicable Laws and Regulations and otherrequirements in their Agreement, including implementation of any corrective orother actions needed to bring about such compliance. 

 

**9.8****                               Records.**  Hovione shall prepare and maintain allRecords relating to this Agreement. Records shall be prepared and maintained in compliance with ApplicableLaws and Regulations and other requirements under this Agreement.  All Records shall be complete, accurate,legible, valid, verifiable and contemporaneous with the events or activitiesdescribed.  All Records shall beavailable for Allos’s inspection upon advance notice during business hours, andAllos shall have the right to make copies thereof, during the Term and for upto four (4) years following the later of: (a) the expiration date ofthe last batch of API or Product; or (b) the expiration or termination ofthis Agreement.  Notwithstanding theforegoing, Allos and its representative may at any time have access to theRecords during business hours, and the right to make copies thereof, inconnection with investigation of any complaint or injury related to the API orthe Product or any dispute between the Parties. Hovione shall not destroy, alter (except for corrections as and in themanner permitted by Applicable Laws and Regulations), remove or dispose of anyRecords without Allos’s prior written consent and in which case Allos may takepossession and custody of such Records.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

19

----

 

**9.9****                              ****Retention Samples, AnalyticalVerification & Qualification.**  Hovioneshall collect and retain samples as required by the Specifications andApplicable Laws and Regulations.  Inaddition, as directed by Allos, Hovione also shall retain sufficient quantitiesof samples of API (including production samples taken during the Manufacturingprocess) to twice replicate the quality control and release testing applicableto the sample.  These additional samplesshall be maintained by Hovione for the longer of two (2) years fromexpiration date or four (4) years after the Manufacture of each API Lotand, upon request, furnished to Allos CIF its designated testing facility.  There shall be no charge for preparing theseadditional samples, other than any costs incurred with special packingrequirements or courier services.

 

**9.10****                        Notice of Adverse Discovery.**  During the Term and for a period of four (4) yearsfollowing the Manufacture of a API Lot, Hovione shall notify Allos immediatelyin writing in the event Hovione discovers or has reason to believe that theremay be defects or deviations of any kind whatsoever in such API Lot, includingany non-conformance with Specifications or any requirements applicable to itsManufacture. 

 

**9.11****                        Inspections of Hovione’sFacility.**

 

**(a)****                                 **Observation &Audits.  Upon reasonable notice,Hovione shall permit Allos’s authorized representatives (who shall be eitherfull-time employees or appointed experts) to enter its Facility and otherpremises during any or all parts of Manufacturing activities.  During the audits, the Allos representativesmay observe and audit all Manufacturing, including all equipment, facilities,operations, procedures, materials and Records relating to the activitiesperformed under this Agreement.  Allosrepresentatives also may audit Hovione’s laboratory where quality controltesting of Raw Materials and API is conducted. During the Commercial Supply Phase, at no cost to Allos, Allos mayconduct **[ * ]** of eachmanufacturing location per year during the performance of Manufacturingoperations upon **[ * ]** priornotice, and additional audits (with no fewer than **[ * ]** notice) upon the occurrences of any product problems, orchanges in Manufacturing.  Allos willprovide a clear identification of the individuals it wishes to have present atHovione facilities.  For good cause,Hovione may reasonably refuse entry to individuals, other than the AllosDirectors of Manufacturing, Operations or Quality Assurance, and to limit Allosto two (2) representatives present at any single part of the Manufacturingwhere more persons might reasonably disrupt such Manufacturing.  Allos shall be responsible for any expensesit incurs in connection with the audits it is permitted to conduct pursuant tothis **Section 9.11(a)**.  Upon Allos’s reasonable request and uponreasonable notice, Hovione shall permit Allos licensees or partners to conducta quality assurance audit of the Facility for due diligence purposes.  In connection with any such audit conductedby an Allos licensee or partner, Hovione shall be entitled to charge the feesset forth in ***Attachment B*****under *9.Fees for Due Diligence Audits*.

 

**(b)****                                 **RegulatoryInspections.  Hovione, at its ownexpense, shall allow representatives of the FDA and other RegulatoryAuthorities to inspect its Facility. Hovione shall notify Allos immediately of an inspection by the FDA orother Regulatory Authorities that may pertain to API Manufacturing or otherServices, and Allos may have its representatives present at suchinspections.  If representatives of Allosare not present at an inspection or audit, Hovione shall notify Allos inwriting of the results of such inspection, immediately after such

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

20

----

 

inspection or audit hasoccurred (but in no event later than two (2) days after such inspection oraudit has occurred).  Hovione shallprovide Allos with copies of any documents or other communications provided toor received from the Regulatory Authorities in connection with the inspectionor resulting actions, including FDA Form 483 reports, EIRs, WarningLetters, or equivalents.  In addition,Hovione shall furnish Allos promptly any Warning Letter or FDA-483 from the FDA(or similar documents from other Regulatory Authorities) that pertains toproducts and activities unrelated to this Agreement; *however*, Hovione may redact the customer identity and otherconfidential information disclosed in such correspondence.

 

**(c)****                                 **OtherConditions of Audits & Inspections.  There shall be no charge for any inspectionsor audits as described in **Section 9.11(a) **above,and Hovione shall cooperate with both, including providing of reasonable spacefor review and copying of Records and assistance of key personnel.  Allos representatives, when on Hovione’spremises, shall at all times comply with Hovione’s internal policies.  It is agreed that the audits and observationby Allos representatives or access to the computer system as set forth in **Section 2.3(c) **shall not in anyway serve as a limitation on any of Hovione’s obligations or liabilities underthis Agreement; although Allos has a duty of care to annually audit theFacility and will provide Hovione with the results of any quality auditperformed by Allos.  All other audits,inspections or technical visits by Allos, which are not necessary for thenormal course of Hovione’s production of the API shall be charged at Hovione’sstandard unit rates in ***Attachment B*****under*9. Fees for Due Diligence Audits*. 

 

**9.12****                        Hovione’s Right to Audit.** Upon thirty (30) days written notice, Hovioneshall have the right to audit, or to have audited by a mutually acceptable andreputable auditor, the good manufacturing practices and materials managementrelated documentation of Allos in order to verify the quantities of APIpurchased from third party suppliers. Any such audit will be performed during Allos’ normal businesshours.  The auditor shall be instructedto provide to Hovione a report on the findings during the audited period, butshall not disclose to Hovione any Confidential Information of Allos notnecessary therefore.  The costs of theaudit will be paid by Hovione and may be conducted no more than once in anyperiod of twelve (12) consecutive months.

 

**10.****                               RECALLS &RECALL COSTS**

 

**10.1****                        Recall Procedures.**  If the API or Product are recalled (includingproduct in inventory that must be destroyed or reprocessed), for any reasonwhether voluntarily or governmentally imposed, Allos shall be responsible foreffecting such recall.  Any voluntarydecision to recall the Product shall be made by Allos in its sole discretion**,**but in consultation with Hovione.  Notwithstanding the foregoing, Hovione shallcooperate with Allos in carrying out any recall, including identifying thelocations to which API was shipped, providing access to applicable Records andretention samples, conducting testing, and the like and, if applicable, inidentifying and correcting any deficiency in API Manufacturing.  All recalls shall be carried out in theprocedure set forth in the Quality Agreement, or as later agreed by theParties.  Hovione will provide assistancein responding to API and Product complaints and similar events, includingRecords review and retained sample testing.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

21

----

 

**10.2****                        Responsibility for Recall Costs.**  In the event that it is ruled by arbitrationor in a court of Law, or as otherwise agreed by the Parties, that a recallresulted from, arose out of, or is connected with any inaccuracy in, breach of,or non-fulfillment of, any representation, warranty, covenant or otherobligation of Hovione, or any negligent, reckless or willful misconduct oromissions of Hovione, its directors, officers, employees, vendors or agents,Hovione shall reimburse Allos for:  (a) anycosts expended by Allos to effect the recall, including, but not limited to,all notification letters, all direct shipping expenses, and the costs ofdisposal and/or destruction of the recalled items; (b) any Production Feesfor API involved in such recall and for any other API that cannot be shippeddue to the recall; (c) shipping fees paid for the Product and/or APIinvolved in such recall.  Hovione’sobligation to reimburse Allos shall be subject to the arbitration and otherdispute procedures set forth in **Article 15**.  Hovione’s total aggregate liability forrecalls costs associated with a recall shall not exceed a value equal to **[ * ]**.

 

**10.3****                        Traceability.**  If during any calendar year Allosincorporates into Product API obtained from another third party manufacturer,then Allos shall provide Hovione, within thirty (30) days of the end of suchcalendar year, with written documents tracing Hovione batch numbers to theProduct batch numbers that have been released to the market. 

 

**11.****                               TERMAND TERMINATION**

 

**11.1****                        Term.**  Unless sooner terminated as provided forherein, this Agreement shall remain in full force and effect for an initialTerm commencing on the Effective Date and ending upon the seventh (7th)anniversary of the date Allos obtains a Marketing Approval from the FDA for aProduct.  This Agreement shall beautomatically extended for successive two (2) year terms unless a Partyprovides written notice of non-extension at least twenty-four (24) monthsbefore the date when the new extension period is to begin.

 

**11.2****                        Termination. **

 

**(a)****                                 **Mutual Consent.  The Parties may at any time terminate thisAgreement, in part or in its entirety, by mutual written agreement.

 

**(b)****                                 **MaterialBreaches. 

 

**(i)****                                   **Either Partyshall have the right to terminate this Agreement on ninety (90) days writtennotice in the event the other commits a material breach of its obligationshereunder and fails to remedy it within ninety (90) days after notice of suchbreach.  After the end of the applicablecure period, if the breach has not been cured, the Party having the right to terminationmay terminate in whole or in part immediately upon notifying the breachingParty in writing.  Any termination ofthis Agreement shall not release the breaching Party from its obligations orotherwise affect or limit the Parties’ rights and remedies.

 

**(ii)****                               **This Agreement maybe terminated immediately on account of a material breach upon written noticeif such breach cannot be reasonably remedied within a ninety (90) day periodfollowing notice, or if continuing would subject the non-breaching Party to asubstantial risk of material Loss, civil or criminal liability (including theimposition of a Warning

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

22

----

 

Letter, Import Detentionor other official sanction by a Regulatory Authority on the manufacture orimport of the API or operations of a Party).

 

**(c)****                                 **Insolvency.  Each Party shall have the right to terminatethis Agreement effective upon written notice to the other Party in the eventthat: (i) the other Party becomes insolvent; (ii) a receiver isappointed for the other Party; or (iii) bankruptcy proceedings areinstituted by or against the other Party or on the other Party’s behalf.

 

**(d)****                                 **ProductFailure.  This Agreement may beterminated immediately by Allos on written notice if no Product will bemarketed or further developed, or if in Allos’s opinion the supply or use ofthe API might result in liability for infringement of patents or otherIntellectual Property Right.  Ifterminated by Allos for such causes, then unless agreed otherwise, all PurchaseOrders accepted by Hovione by the date the termination notice is provided andnot subject to cancellation shall be fulfilled; *provided* that Allos may “buy-out” the purchase of those Lotsby paying Hovione an amount determined by the manner provided under **Section 11.3(a)(i) **below, plusthe amount of gross profit Hovione would have realized on the those Lots of APIif they had been purchased by Allos.

 

**(e)****                                 **Failure toMeet Minimum.  Hovione may terminatethis Agreement on three (3) months written notice if Allos does not buy atleast the applicable amount of API set forth in ***Attachment B*** under “*4.  Annual APIPurchase Base*” in the applicable year, unless such failure is due toHovione’s fault.  Notwithstanding theforegoing, Allos shall have the right to obtain three extensions to the datesset forth in ***Attachment B***;*provided* that Allos shall pay Hovione theamount set forth in ***Attachment B***under “*5. Extension Fees*” for each extension on or before December 31stof the year in which the minimum purchase obligation was not met.  Each extension moves the Annual API PurchaseBase by one year.  In each casetermination shall not occur if Allos has cured such fault within three (3) monthsof Hovione’s notice.

 

**11.3****                        Effect of Termination.**

 

**(a)****                                 **Purchase of Inventories.  In the event of the Agreement’s termination,Hovione shall ship in the manner provided for under the Quality Agreement, allinventory of API purchased by Allos and held by Hovione as safety stockpursuant to **Section 7.3**.  Allos may at its election purchase allremaining API in Hovione’s inventory that it would not otherwise be obligatedto purchase under this Agreement at the lowest price indicated in ***Attachment B***.  In addition, at Allos’s election, it mayeither: (i) purchase, at Hovione’s documented purchase cost, its RawMaterials or In-Process API (valued on a pro-rata basis to manufacturingcycle-time) reasonably purchased or produced for API Manufacturing that cannotbe returned for credit or used for producing products for its other customers,plus shipping costs; or (ii) pay for such Raw Materials or In-Process APIto be Manufactured into API in accordance with the Agreement.  In no event shall Allos be charged for RawMaterials or In-Process API with an amount that exceeds the value of thecorresponding amounts of API specified by Allos’ relevant Purchase Orders ineffect at the termination date.

 

**(b)****                                 **Return ofMaterials.  Hovione shall immediatelyreturn to Allos copies of all documentation and information and materialsrelating to API Manufacturing (including

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

23

----

 

copies of developmentreports and Master Batch Records), the Product, and the Specifications, andHovione shall make no further use of such documentation, information and materialsunless required by a Regulatory Authority. Any original documents provided by Allos to Hovione during the Termshall be returned to Allos, along with any copies thereof, provided thatHovione may keep one archival copy if required by a Regulatory Authority.  Documents and materials shall be packaged andshipped in the manner reasonably requested by Allos as needed to preserve theirintegrity and acceptability to Regulatory Authorities.  

 

**(c)****                                 **Survival.  Termination of this Agreement shall not operateto release any Party from any obligation or liability incurred under the termsof this Agreement before or upon termination hereof, nor shall it relieve theParties of their obligations with respect to API supplied by Hovione hereunder.  In addition **Sections 9.8**,**9.9**, **9.10**,**10.2** (withrespect to claims relating to activities occurring during the Term) and **11.3** and**Articles 1,****12**(excluding**Section 12.6**), **13**(with respect to claims relating toactivities occurring during the Term), **14**and **16** shall survive theexpiration or termination of this Agreement on account of any cause.

 

**12.****                               CONFIDENTIALITY &INTELLECTUAL PROPERTY**

 

**12.1****                        Non-Disclosure Agreement.**  The Parties each agree that the obligationsof confidentiality, non-use and non-disclosure set forth in the MutualNon-disclosure Agreement executed by them concurrently with this Agreement (the“**Nondisclosure Agreement**”) areincorporated into this Agreement for purposes of determining the Parties rightsand obligations with respect to Confidential Information disclosed by eachParty under this Agreement.

 

**12.2****                        Disclosure of Agreement.**  Neither Allos nor Hovione shall release anyinformation to any other person regarding the terms of this Agreement withoutthe prior written consent of the other, which consent shall not be withheldunreasonably.  The foregoing consentrequirement includes, but is not limited to, press releases, educational andscientific conferences, promotional materials and discussions with the media.  If a Party determines that it is required bylaw to release information regarding this Agreement to any another person, itshall notify the other Party of this fact before releasing theinformation.  The notice to the otherParty shall include the text of the information proposed for release.  The other Party shall have the right to conferwith the notifying Party regarding the necessity for the disclosure and thetext of the information proposed for release. Hovione acknowledges that as a public company Allos is required todisclose its material business relationships and principal terms, subject tocertain rights to redact Confidential Information.  Allos shall confer with Hovione before makingsuch disclosures; *however*, Allosshall have sole discretion in the contents of the disclosure.  Hovione and Allos shall each have the rightto disclose the terms of this Agreement to persons engaged or proposingengagement in fiduciary relationships, such as banks extending credit with theParty and bona fide investors and legal counsel, if such persons are subject toreasonable confidentiality and non-use obligations.  

 

**12.3****                        No Implied Licenses.**  Only the licenses granted pursuant to theexpress terms of this Agreement shall be of any legal force and effect.  No license or any other proprietary rights shallbe created by implication or estoppel, in the patents, know-how, trade-secrets,copyrights,

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

24

----

 

trade and other marks, orother Intellectual Property Rights, owned or licensed to the respective Parties

 

**12.4****                        Ownership of Improvement to theAPI or API Manufacturing Process.** Hovione shall disclose to Allos promptly and in writing all APIImprovements, and hereby assigns all API Improvements to Allos and shallexecute and provide, and to cause its employees, officers and agents to executeand provide all documents, affidavits, evidence and testimony, and take suchother actions as are reasonably requested by Allos to perfect its ownership ofthe API Improvements and to seek, defend and enforce patents and otherIntellectual Property Rights related to the API Improvements.  Allos shall have sole discretion over themanagement of Intellectual Property Rights issues, but shall reimburse Hovionefor the reasonable costs incurred by its employees for their assistance inconnection with Allos’s efforts to seek, defend and enforce patents and otherIntellectual Property Rights related to the API Improvements.  Allos makes no claim to any of Hovione’sproprietary technology existing before the Effective Date.

 

**12.5****                        Hovione License.**  Allos shall grant Hovione a non-exclusive,non-transferable license under Allos’s Intellectual Property Rights to use (butnot sublicense or disclose to or authorize others to use on Hovione’s behalf)generically applicable process improvements and analytical methods within theAPI Improvements (“**Generic Methods**”).  Such license shall fully exclude any right touse, and Hovione hereby covenants that it shall not use, the Generic Methods tomanufacture or test the API or any API Related Compound for any third partyuntil the end of later of the following three periods (“**Exclusivity Period**”):

 

**(a)****                                 **The expiration ofall United States and European patents covering the API Related Compounds orProducts containing any API Related Compounds (including any term extensionsand non-patent market exclusivity periods);

 

**(b)****                                  [ * ]** from theapproval by the FDA of the NDA for the Product; and

 

**(c)****                                  [ * ]** followingthe last full calendar year during which Hovione supplied Allos with at least **[ * ]** of any of its API requirements.

 

#### In order to protect theconfidentiality and other Intellectual Property Rights of Allos, except asdirected by Allos, neither Hovione nor any of its Affiliates shall manufacturethe API or any API Related Compound during the Term and the Exclusivity Period.

####  

**12.6****                        Hovione Compensation.**  In order to provide Hovione with an incentiveto explore API Improvements; and in order to assure that Hovione acts in thebest interests of Allos and its other manufacturers, Hovione shall be entitledto the good consideration set forth below for as long as it is not in breach ofthe Agreement:

 

**(a)****                                 **TechnologyTransfer Fee.  For every new APImanufacturer that practices any API Improvement, Allos shall pay Hovione aTechnology Transfer Fee for the successful, complete and prompt transfer of theAPI Manufacturing process and API Improvements to that API manufacturer, in theamount set forth in ***Attachment B***under “*6. Technology Transfer Fee–*

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

25

----

 

*TransferFee*,” fifty percent (50%) of which shall be paid when Allosdirects Hovione to initiate technology transfer, and the balance uponcompletion of technology transfer as demonstrated by successful manufacture ofthree (3) API “Process Validation Batches” meeting all Specifications.

 

**(b)****                                 **Production Fee.  For every new API manufacturer that practicesany API Improvement, Allos shall pay Hovione a Technology Transfer Fee for itssuccessful, complete and prompt transfer of the API Manufacturing process andAPI Improvements, in the amount set forth in ***Attachment B*** under “*6. Technology Transfer Fee–Production Fee*”on **[ * ]** manufactured by each suchnew API manufacturer.

 

**(c)****                                 **DividedManufacturing.  For purposes of this **Section 12.6**, “Manufacturing” by a newAPI producer shall only include the API synthesis and purification and not theperformance of incidental services such as testing and processing, and in thecase that synthesis and or purification are divided between manufacturers, thenmultiple Technology Transfer Fees shall not be due, but they shall be treatedas a single new manufacturer.

 

**12.7****                        Trade Names and Trademarks.**  Allos hereby acknowledges that except asotherwise set forth in this Agreement, it does not have, and shall not acquireby virtue of this Agreement, any rights to or under any goodwill, trademark ortrade name of Hovione, nor in any of Hovione’s trademark or trade namesappearing on the label or packaging materials of API.  Hovione hereby acknowledges that it does nothave, and shall not acquire by virtue of this Agreement, any rights to or underany goodwill, trademark or trade name of Allos, nor in any of Allos’strademarks or trade names appearing on the label or packaging materials of APIor Product.  Neither Party shall use thetrademarks or trade names owned by the other under which API is manufactured onany other goods or products, except as provided hereunder.  Each Party further agrees not to contest,deny or dispute the validity of any trademarks or trade names owned by theother Party appearing on the labels or packaging materials of API or the titleof such other Party, and not to assist others in doing so, and not to take anyaction of any kind inconsistent with the holding of all such rights by suchother Party.

 

**13.****                               INDEMNIFICATION**

 

**13.1****                        Hovione’s Obligation toIndemnify.**  Hovione shall indemnify,defend and hold Allos and its directors, officers, employees and agents (“**Allos Indemnitees**”) harmless against anyand all Losses incurred by any of them as a result of any third party claim,demand, suit, action or proceeding resulting from, arising out of, or connectedwith:  (a) liability claims arisingdirectly and exclusively from the manufacture of the API to the extent causedby Hovione’s breach of any obligation under the Agreement; (b) infringementclaims arising from a breach of any of Hovione’s warranties or a breach of itsother obligations; and (c) the clean-up, remediation and restorationarising out of or related to Hovione’s storage, handling, transportation, incinerationor disposal of any Waste that may be generated by API Manufacturing.  Hovione’s obligations set forth in this **Section 13.1** shall not include Losseson such claims to the extent that they are caused by the (y) breach by anyAllos Indemnitee of its obligations under the Agreement, or (z) anynegligent or otherwise wrongful act or omission of any Allos Indemnitee orAffiliate.  

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

26

----

 

**13.2****                        Allos’s Obligation toIndemnify.**  Allos shall indemnify, defendand hold harmless Hovione and its directors, officers, employees and agents (“**Hovione Indemnitees**”) against any and allLosses incurred by any of them as a result of any third party claim, demand,suit, action or proceeding resulting from, arising out of, or connectedwith:  (a) product liability claimsarising from the testing, sale or use of the API or the Product, including theeffects of the intrinsic properties of the API and (b) infringement claimsarising from a breach of any of Allos’s warranties or a breach of its otherobligations.  Allos obligations set forthin this **Section 13.2** shallnot include Losses on such claims to the extent that they arise from the(y) breach by any Hovione Indemnitee of its obligations under theAgreement, or (z) any negligent or otherwise wrongful act or omission byany Hovione Indemnitee or Affiliate.

 

**13.3****                        Obligations of the PartySeeking to be Indemnified.**  EachParty’s indemnification obligations shall be conditioned on compliance with theprocedure outlined below by that person and other persons associated with thesame Party.  The Party providing theindemnification is the “**Indemnifying Party**,”and the Party or other person seeking or receiving such indemnification is the “**Indemnified Party**.”

 

**(a)****                                 **Notice.  Upon receipt or occurrence of any writtenclaim, demand or other event that the Indemnified Party believes might giverise to the indemnification obligations, the Indemnified Party shall, as soonas reasonably practicable after forming such belief, give written notice to theIndemnifying Party; *provided*,that the failure to give timely notice to the Indemnifying Party shall notrelieve the Indemnifying Party from any liability to the Indemnified Partyunless the Indemnifying Party demonstrates that the investigation, defense,settlement or mitigation of such claim is prejudiced by such failure.

 

**(b)****                                 **Control.  The Indemnifying Party shall have the right,by prompt notice to the Indemnified Party, to assume, at its cost, theinvestigation, defense and settlement of such claim.  If the Indemnifying Party does not so assumethe defense of such claim or, having done so, does not diligently pursue suchdefense, the Indemnified Party may, but will not be obligated to, assume suchdefense, with counsel of its choice, but at the cost of the IndemnifyingParty.  If the Indemnifying Party assumessuch defense, it shall have absolute control of the conduct of the litigation,including settlement and investigation, unless the Indemnified Party hasrelieved the Indemnifying Party from indemnification liability with respect tothe particular claim; the Indemnified Party may, nevertheless, participatetherein through counsel of its choice and at its cost.

 

**(c)****                                 **Assistance.  The Party not assuming the defense of anyclaim shall cooperate and render all reasonable assistance to the Partyassuming the defense, and all out-of-pocket costs of such assistance shall paidby the Indemnifying Party.  No such claimshall be settled other than by the Party defending such claim, and then onlywith the prior written consent of the other Party, which shall not beunreasonably withheld.

 

**13.4****                        Limitation on Liability.**  Hovione’s total aggregate liability (whetherfor breach of contract, negligence, breach of statutory duty and/or other tort,or otherwise) in connection with or as a result of the work carried out ormaterials provided under this Agreement shall not

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

27

----

 

exceed a value equal to **[ * ]**. Notwithstanding the foregoing, the limitation on liability shall notapply in respect of Hovione’s indemnification obligation under **Section 13.1**.

 

**14.****                               INSURANCE**

 

**14.1****                        Coverage.**  During the Term of the Agreement and for **[ * ]** years thereafter, if issued on aclaims made basis, Hovione shall maintain Commercial General Liabilityinsurance providing not less than **[ * ]**per occurrence, excluding product liability insurance on a worldwide basis andcontractual liability coverage.  Allcoverage shall be underwritten by reputable underwriters.  Promptly after the Effective Date, Hovioneshall add Allos as an additional insured under Hovione’s policy.  Hovione shall provide Allos with acertificate of insurance upon request. Hovione shall provide Allos with at least thirty (30) days prior writtennotice of any material change, cancellation or expiration of the above-requiredinsurance.

 

**14.2****                        Review.**  On an annual basis, Hovione shall provideAllos with a current certificate of coverage demonstrating that the coveragespecified in **Section 14.1**isin force and shall immediately notify Allos of any actual or threatenedreduction, termination, non-renewal or materially adverse change in terms ofcoverage.  Hovione shall provide Alloswith thirty (30) days’ written notice of any cancellation or material change inthe coverage specified in **Section 14.1**.  Hovione represents and warrants that it hasobtained and shall maintain all coverage, including its preparation of anyapplications and endorsements in compliance with its obligations under theterms of coverage of such polices and shall otherwise comply with allrequirements under such policies. Failure to maintain the insurance coverage as set forth in this **Article 14** shall be deemed a materialbreach of the Agreement.  

 

**15.****                               DISPUTERESOLUTION**

 

**15.1****                        Internal Mediation of Dispute.**  In the event of any controversy or claimarising out of or relating to any provision of this Agreement or otherwisebetween the Parties or their Affiliates, the Parties shall try to settle thedifferences amicably through the Project Managers, and if necessary theSteering Committee.  If the SteeringCommittee is unable to resolve the matter, the issue shall be addressed by theChief Executive Officers of each Party or their respective designees.  The designees shall be individuals who possessthe authority to settle the dispute but who do not have direct responsibilityfor administration of this Agreement.  **ANY DISPUTES NOT RESOLVED BY THE DESIGNEES SHALL BEFINALLY AND EXCLUSIVELY RESOLVED BY CONFIDENTIAL BINDING ARBITRATION ASPROVIDED IN SECTION 15.2.**

 

**15.2****                        Arbitration.**  Whenever a Party shall decide to institutearbitration proceedings, it shall give written notice to that effect to theother Party. The Party giving such notice shall refrain from instituting thearbitration proceedings for a period of sixty (60) days following suchnotice.  The arbitration shall be held inNew York, New York according to the rules of the American ArbitrationAssociation (“**AAA**”).  A single arbitrator mutually chosen by theParties shall conduct the arbitration. If the Parties cannot agree upon a single arbitrator within fifteen (15)days after the institution of the arbitration proceeding, then the arbitrationshall be conducted by a panel of three (3) arbitrators appointed inaccordance with AAA rules; *provided*,however, that each Party shall, within thirty (30) days after the institutionof the arbitration

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

28

----

 

proceedings, appoint onearbitrator with the third arbitrator being chosen by the other twoarbitrators.  If only one Party appointsan arbitrator, then such arbitrator shall be entitled to act as the solearbitrator to resolve the controversy. All arbitrators eligible to conduct the arbitration must agree to rendertheir opinion(s) within thirty (30) days of the final arbitration hearing. Thearbitrator(s) shall have the authority to grant injunctive relief and specificperformance and to allocate between the Parties the costs of arbitration insuch equitable manner as he determines; *provided,however*, that each Party shall bear its own costs and attorneys’ andwitness’ fees.  The arbitrator(s) shall,upon the request of either Party, issue a written opinion of the findings offact and conclusions of law and shall deliver a copy to each of theParties.  Decisions of the arbitrator(s)shall be final and binding on all of the Parties. Judgment on the award sorendered may be entered in any court having jurisdiction thereof.

 

**15.3****                        Injunctions.**  Notwithstanding anything to the contrary, aParty also shall have the right to obtain provisional remedies, includingpreliminary and temporary injunctive relief or/and specific performance, from acourt having jurisdiction, as well as such equitable remedies as needed toenforce an arbitration decision.  A Partyseeking and/or obtaining injunctions shall not be required to prove the amount,irreparability, immediacy or likelihood of damages, nor shall it be required topost any bond (the posting of which is irrevocably waived).

 

**15.4****                        Choice of Law & Venue.** This Agreement shall be construed andthe rights of the Parties shall be determined in accordance with the laws ofthe State of New York, USA, without regard to its conflict of law provisions; *provided, however*, that patents and otherintellectual property rights shall be construed and determined in accordancewith the laws of the country under which such rights are granted.  In no event shall the provisions of thisAgreement be governed by the United Nations Convention on Contracts for theInternational Sale of Goods.  **THE PARTIES ALSO HEREBY AGREE AND FOREVER WAIVE ANYOBJECTION TO THE PERSONAL JURISDICTION AND VENUE OF THE ARBITRAL AND JUDICIALBODIES PROVIDED IN THIS ARTICLE 15, AND TO SERVICE OF PROCESS BY NOTICE ASPROVIDED BY SECTION 16.5 BELOW.**

 

**16.****                               GENERALPROVISIONS**

 

**16.1****                        Integration &Severability. **This Agreement,together with its Attachments, the Quality Agreement and the NondisclosureAgreement, is the full and final negotiated contract between the Parties andall prior and contemporaneous written and oral understandings, contracts,purchase orders, and agreements (including the Term Sheet) are merged into, andshall be deemed as if performed under this Agreement.  This Agreement may be executed in any numberof counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute a single agreement. In the event that any provision of this Agreement is judiciallydetermined to be unenforceable, in part or in whole, the remaining provisionsor portions of this Agreement shall be valid and binding to the fullest extentpossible, and the Parties shall endeavor to negotiate modified or additionalterms, as feasible, in a timely manner so as to fully effectuate the originalintent of the Parties to the extent possible, and in the event they are unableto reach an agreement then the arbitrator or court may establish such modifiedprovision.

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

29

----

 

**16.2****                        Waivers & Amendment.**  Any failure by a Party to enforce any rightwhich it may have hereunder in any instance shall not be deemed to waive anyright which it or the other Party may have with respect to any provision ofthis Agreement, including the provision which such Party has failed to enforce.  A waiver of a breach shall not act as awaiver or release of any other breach, regardless if prior, contemporaneous orsubsequent, known or unknown or of the same or different nature, cause, effector provision of this Agreement.  Noprovision of this Agreement shall be waived, amended, supplemented or otherwisemodified except in a in writing signed by a duly authorized officer of eachParty.

 

**16.3****                        Legal Relationship.**  The Parties acknowledge, agree, and declarethat the relationship hereby established between them is solely that ofprovider and recipient of manufacturing services and that each Party hereto isan independent contractor with respect to the other, and not as a jointventurer, partner, distributor or any other type of relationship, and shall notbe construed as an authorization of either Party to act as an agent of theother.  Nothing in this Agreement shallbe construed as to create an exclusive relationship between the Partieshereto.  Each may enter into similar ordissimilar arrangements with others and engage in activities for its ownaccount, subject to their compliance with confidentiality and other provisionsof this Agreement. The Parties agree that they have and shall at all timesperform this Agreement in good faith.

 

**16.4****                       ****Force Majeure. **

 

**(a)****                                 **Occurrences.  NeitherParty shall be responsible to the other Party for any failure, delay orinterruption in the performance of any of its obligations under this Agreementif such failure, delay or interruption is caused, directly or indirectly, byaccident, casualty, fire, flood, weather, typhoon, act of God, earthquake,epidemic, riot, terrorist act, insurrection, war, failure or delay of normalsources of supply of materials, failure or delay of public utilities orcarriers, act, exercise, assertion or requirement of a governmental authority,or other cause beyond the reasonable control of the Party affected (“**Force Majeure**”) if the Party affected hasused its best efforts to avoid such occurrence and such occurrence is not dueto any fault or neglect of such Party.  If either Party believes that the performanceof any of its obligations under this Agreement will be delayed or interruptedas a result of any of the reasons stated in this **Section 16.4(a) **and provided it is able to do so,then it shall promptly notify the other Party of the delay or interruption andthe cause, and also provide the other Party with a good faith estimate of whenperformance of its obligations will resume.

 

**(b)****                                 **ProductionAssurance.  When the Party affectedis able to recommence the performance of obligations delayed or interrupted asa result of any of the reasons stated in **Section 16.4(a)**,it shall notify the other Party and, except as otherwise provided in thisAgreement, it shall promptly resume performing its obligations.  Hovione shall not be entitled to invoke theprovisions of this **Section 16.4**as an excuse for default or delay in performance based upon its need to do workfor others or on its own behalf resulting in constraints upon the availabilityof its manufacturing and packaging capacity, unless such constraints resultedfrom an event of Force Majeure as defined herein.  In such an event, Hovione shall equitablyallocate its resources among its various customers, including Allos.  Additionally, in the event Hovione cannotprovide Allos with API for more than **[ * ]**,Hovione will notify Allos and Allos may, at

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, ASAMENDED.**

 

30

----

 

its option, terminate orsuspend this Agreement in whole or in part upon written notice to Hovione.  Should this Agreement be suspended orterminated pursuant to this **Section 16.4(b)**,Hovione agrees to give Allos, or a third party designated by Allos, suchtechnical assistance as Allos or its designee may reasonably require to enableAllos or its designee to Manufacture API, including, without limitation, thetransfer of know-how, technical data, documentation and the provision ofmaterial support and training at the manufacturing site or sites designated byAllos.  No Technology Transfer Fees asset forth under **Section 12.6**above shall be due in connection with the technology transfer to and APImanufacture by such third parties, and Allos’s purchase obligations shall besuspended.

 

**16.5****                        Notice.**  Any notice required or permitted to be givenunder this Agreement shall be in writing and shall be given in person,delivered by recognized overnight delivery service, sent by mail (certified orregistered or air mail for addresses outside of the continental United States),or by telefax (or other similar means of electronic communication), the receiptof which is confirmed by confirming telefax, and addressed as indicated in ***Attachment A***(Notices,Project Managers and Other Key Personnel), or such other person and/or addressas may have been furnished in writing to the notifying Party of the change tosuch Attachment.  Except as otherwiseprovided herein, any notice shall be deemed delivered upon the earlier of: (a) actualreceipt; (b) three (3) business days after delivery to suchrecognized overnight delivery service; (c) five (5) business daysafter deposit in the mail (ten (10) days for international mail); or (d) thedate of receipt of the confirming telefax.

 

**16.6****                        Assignment. **This Agreement shall not be assigned byeither Party, except to an Affiliate, without the prior written consent of theother Party, and any such assignment without such prior written consent shallbe void.  If this Agreement is assignedto an Affiliate of a Party, the assigning Party shall remain responsible for allof its obligations specified in this Agreement. Notwithstanding the preceding, in the event of: (a) a sale ortransfer of all or substantially all of a Party’s assets related to APIManufacturing or developing and/or marketing Products; or (b) the mergeror consolidation of a Party with another company, this Agreement shall beassignable to the transferee or successor company of the assigning Party,without the need of the prior written consent of the other Party.  This Agreement shall be binding upon allpermitted successors in interest, assigns, trustees and other legalrepresentatives of the Parties.

 

**16.7****                        Further Assurances RegardingCorporate Partnerships. **During theTerm, Allos shall not enter into any agreement with a Corporate Partner thatwould conflict with Allos’ obligations under this Agreement or result in amaterial adverse change in Hovione’s economic rights under this Agreement.  Allos will provide a copy of this Agreementto any Corporate Partner to whom Allos may supply API manufactured by Hovionepursuant to this Agreement.  At Hovione’srequest, Allos shall obtain from such Corporate Partner a letter signed by anofficer of the Corporate Partner acknowledging receipt of a copy of thisAgreement.  Allos further assures thatHovione’s interests will be taken into consideration and defended when Allosnegotiates the Corporate Partnership.

 

**16.8****                        Interpretation.**  All references to Articles shall refer to theArticles contained in this Agreement. All references to Attachments shall, except as otherwise explicitlyprovided, refer to the Attachments appended to this Agreement, all of which areincorporated herein by

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, ASAMENDED.**

 

31

----

 

reference.  The captions of the Articles of thisAgreement are for general information and reference only and shall not affectthe interpretation of this Agreement. Where applicable in this Agreement, the singular includes the plural andvice versa.  English shall be theofficial language of this Agreement and all communications between the Partieshereto shall be conducted in that language. Both Parties acknowledge that they were represented by competent legalcounsel and advisors, and fully negotiated the contract and each of its terms,and that ambiguities, if any, in this Agreement shall not be construed againstany Party, irrespective of which Party may be deemed to have authored theambiguous provision.

 

**«Signatures on Next Page»**

 

----

**CONFIDENTIAL**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

32

----

 

**IN WITNESS WHEREOF**, the Parties hereto havecaused this Agreement to be executed as of the Effective Date.

 
| **Hovione  Inter Limited** | **Allos  Therapeutics, Inc.** |   |
|----------------------------|------------------------------------|--------|
|                       |                               |   |
|                       |                               |   |
| By:                        | /s/Guy Villax                      |   | By: | /s/Michael E.  Hart |   |   |
|                       |                               |   |   |   |   |   |
| Name:                      | Guy Villax                         |   | Name: | Michael E. Hart |   |   |
|                       |                               |   |   |   |   |   |
| Title:                     | Chief Executive                    |   | Title: | President and  CEO |   |   |
|                       |                               |   |   |   |   |   |
| Date:                      |                               |   | Date: | June 16,  2005 |   |   |
|                            |                                    |        |  |  |  |  |  |  |

 

----

**CONFIDENTIAL**

 

**MANUFACTURING AGREEMENT**

**SIGNATURE PAGE**

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

----

 

**ATTACHMENT A**

 

**Notices, Project Managers and OtherKey Personnel**

 
| **To  Allos.**: | ** **                                                                                                                                                                                                                                                                                                                                                                                                                | **To  Hovione** |                                                                                                                                                                                                                 |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            | Vice  President of Manufacturing****Attn: Douglas Johnson  Allos Therapeutics, Inc.  11080 Circle Point Road, Suite 200  Westminster, CO 80020  (phone) 303-426-6262  (fax) 303-412-9160  (email) djohnson@allos.com                                                                                                                                                                                            |            | Attn:  Peter Villax  Hovione Inter Limited  C/O Hovione FarmaCiencia SA  Seta Casas 2674-506 Loures, Portugal  (phone) 011-351-21-982-9361  (fax) 011-351-21-982-9363  (email) pvillax@hovione..com                  |
|            | ** **                                                                                                                                                                                                                                                                                                                                                                                                                | ** **      | ** **                                                                                                                                                                                                           |
|            | *And copied to:*                                                                                                                                                                                                                                                                                                                                                                                                          | * *        | *And copied to:*                                                                                                                                                                                                     |
|            | ** **                                                                                                                                                                                                                                                                                                                                                                                                                | ** **      | ** **                                                                                                                                                                                                           |
|            | Attn:  General Counsel****Allos Therapeutics, Inc.  11080 Circle Point Road, Suite 200  Westminster, CO 80020  (phone) 303-426-6262  (fax) 303-412-9160                                                                                                                                                                                                                                                         |            | Managing  Director****Sofia Lee  11 Aubin House  171 Gloucester Road  Hong Kong  (phone) +852 8911836  (fax) +852 8910943  (email) slee@hovione.com                                                                  |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                      |            |                                                                                                                                                                                                                 |
|            | **Project  Managers:**                                                                                                                                                                                                                                                                                                                                                                                                    |            |                                                                                                                                                                                                                 |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                      |            |                                                                                                                                                                                                                 |
|            | **For  Allos**:                                                                                                                                                                                                                                                                                                                                                                                                           |            | **For  Hovione**:                                                                                                                                                                                                    |
|            | Vice  President of Manufacturing****Attn:  Douglas Johnson  Allos Therapeutics, Inc.  11080 Circle Point Road, Suite 200  Westminster, CO  80020  (phone) 303-426-6262  (fax)  303-412-9160                              (email)  djohnson@allos.com |            | Industrial  Director** **Attention: Eddy Leong   Hovione PharmaScience Limited   Estrada Coronel Mesquita  Ilha da Taipa   Macau   (phone) +853 82 75 44  (fax) +853 82 77 14  (email)  eleong@hovione.com |
|            |                                                                                                                                                                                                                                                                                                                                                                                                                      |            |                                                                                                                                                                                                                 |
|            | **For  Hovione Inter Limited**:                                                                                                                                                                                                                                                                                                                                                                                           |            | **For  Hovione FarmaCiencia S.A.**:                                                                                                                                                                                  |
|            | Dave  Hoffman  President, US Operations  Hovione LLC, as agent  40 Lake Drive  East Windsor, NJ 08520  (phone) 609-918-2420  (fax)  609-918-2615  (e-mail) dhoffman@hovione.com                                                                                                                                                                                                                                      |            | Antonio  Gomes  Production Engineer - B15****Sete Casas  2674-506 Loures   (phone) +351 21 9829349  (fax)+351 21 9829244  (email)      agomes@hovione.com                              |
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                           |                 |                                                                                                                                                                                                                      |  |  |  |

 

----

**CONFIDENTIAL**

 

**Attachment A-**1

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

----

 
| **Other  Key Personnel:** |   |                                                                                                                                                                                                              |
|---------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |   | **For Hovione**:

Hovione  FarmaCiencia S.A.  Graça Mata  Head of Regulatory Affairs Department**Sete Casas**2674-506 Loures  (phone) +351 21 9829243  (fax)+351 21 9829388  (email)  gmata@hovione.com |

 

**CONFIDENTIAL**

 

**Attachment A-**2

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

----

 

**ATTACHMENT B**

 

**Pricing and Other Terms forCommercial Supply**

 
| **1.  API Purchase/Supply Minimums**                                                                  | ** **                     | **Allos  Annual**                                                                                            | ** **                                                                                                                                                                                | **Purchase/Supply**         | ** ** |   |
|-------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|------------|--------|
| ** **                                                                                            | ** **                     | **Volume  Requirements**                                                                                     | ** **                                                                                                                                                                                | **Obligations**             | ** ** |   |
| ** **                                                                                            | ** **                     | ** **                                                                                                   | ** **                                                                                                                                                                                | ** **                  | ** ** |   |
|                                                                                                  | ** **                     | **[ * ]** Metric Tons                                                                                        |                                                                                                                                                                                      | **[ * ]** of  Requirements  |       |   |
|                                                                                                  | ** **                     | **[ * ]** Metric Tons                                                                                        |                                                                                                                                                                                      | **[ * ]** of  Requirements  |       |   |
|                                                                                                  | ** **                     | **[ * ]** Metric Tons                                                                                        |                                                                                                                                                                                      | **[ * ]** of  Requirements  |       |   |
|                                                                                                  | ** **                     | **[ * ]** Metric Tons                                                                                        |                                                                                                                                                                                      | **[ * ]** of  Requirements* |       |   |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |
|                                                                                                  |                           |                                                                                                         | (*provided that  Hovione exercises its right of first refusal set forth in Section 7.4 of  the Agreement)                                                                            |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |
| ***Note****: Requirements/supply obligations are subject to  exceptions as provided in the Agreement* |                           |
| * *                                                                                              | * *                       | * *                                                                                                     |                                                                                                                                                                                      |
| **2.  API Pricing**                                                                                   | ** **                     | **Annual  Purchase**                                                                                         | ** **                                                                                                                                                                                | **API Price**               |       |   |   |
|                                                                                                  |                           | **[  * ]**                                                                                                   |                                                                                                                                                                                      | **$**                       | **[ * ]**  |   |   |   |
|                                                                                                  |                           | **[  * ]**                                                                                                   |                                                                                                                                                                                      | **$**                       | **[ * ]**  |   |   |   |
|                                                                                                  |                           | **[  * ]**                                                                                                   |                                                                                                                                                                                      | **$**                       | **[ * ]**  |   |   |   |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |
|                                                                                                  |                           |                                                                                                         | All prices are  CIF Allos’s designated Product manufacturer location.                                                                                                                |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |
|                                                                                                  | * *                       | * *                                                                                                     | *Note:  Although CIF is used, API shall be shipped in the mode of transport provided  in the delivery instructions, which will be air for international and truck  for inland shipment.*  |
|                                                                                                  | * *                       | * *                                                                                                     | * *                                                                                                                                                                                  |
|                                                                                                  | **3.  Minimum API Lot Sizes,** | ** **                                                                                                   | ** **                                                                                                                                                                                |
| **Campaign  Size and Frequency for Pricing**:                                                         | ** **                     | **[  * ]**/Lot                                                                                               | ** **                                                                                                                                                                                | ** **                  |       |
|                                                                                                  | ** **                     | * *                                                                                                     |                                                                                                                                                                                      |
|                                                                                                  | * *                       | * *                                                                                                     | *Launch  Phase: Hovione is not required to run more than***[ * ]***production campaign of the API per every***[ * ]***and to produce less than***[ * ]***of API per  campaign.* |
| * *                                                                                              | * *                       | * *                                                                                                     | * *                                                                                                                                                                                  | * *                    |       |
| *** ***                                                                                          | *** ***                   | *Commercial  Phase: Hovione is not required to produce less than***[ * ]***metric tons of API per campaign.* |                                                                                                                                                                                      |
| *** ***                                                                                          | *** ***                   | *** ***                                                                                                 | *** ***                                                                                                                                                                              | *** ***                |       |
| **4.  Annual API Purchase Base**:                                                                     |                           | 2006                                                                                                         |                                                                                                                                                                                      | $                           | 2,000,000  |   |   |   |
|                                                                                                  |                           | 2007                                                                                                         |                                                                                                                                                                                      | $                           | 3,500,000  |   |   |   |
|                                                                                                  |                           | To End of Term                                                                                               |                                                                                                                                                                                      | $                           | 5,000,000  |   |   |   |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |                        |       |   |   |
| **5**.** Extension Fees**:                                                                       |                           | First                                                                                                        |                                                                                                                                                                                      | $                           | 100,00     |   |   |   |
|                                                                                                  |                           | Second                                                                                                       |                                                                                                                                                                                      | $                           | 150,000    |   |   |   |
|                                                                                                  |                           | Third                                                                                                        |                                                                                                                                                                                      | $                           | 200,000    |   |   |   |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |                        |       |   |   |
| **6.  Technology Transfer Fees:**                                                                     |                           | Transfer Fee                                                                                                 |                                                                                                                                                                                      | $                           | [ * ]      |   |   |   |
|                                                                                                  |                           | Production Fee                                                                                               |                                                                                                                                                                                      | $                           | [ * ]      |   |   |   |
|                                                                                                  |                           |                                                                                                         |                                                                                                                                                                                      |
| **7**.** Wire Instructions**                                                                     | ** **                     | **[  * ]**.                                                                                                  |                                                                                                                                                                                      |                        |       |
|                                                                                                       |                                |                                                                                                              |                                                                                                                                                                                           |                             |            |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

**CONFIDENTIAL**

 

**Attachment B-**1

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

----

 
| **8**.** Facilities**              |   | Hovione’s campus  at Loures, Portugal and/or Taipa, Macau.                                                                                                                                                                                                                                                                                                                                         |
|-----------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| **9.  Fees for Due Diligence Audits**   |   | Audits conducted  by Allos licensees or partners for due diligence purposes shall be charged at  a rate of **[ * ]** per  day for each member of the licensee or partner team participating in such  audit.                                                                                                                                                                                   |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |
| **10.  Reimbursement for Sundry Costs** |   | During the Term  of this Agreement it may become necessary for Hovione to carry out tasks,  technical, scientific or otherwise, that may give rise to the incurring by  Hovione of the use of its resources and for out-of-pocket expenses. Allos  will accept debit notes for pre-approved, documented, reasonable in-house and  out-of-pocket expenses and will reimburse Hovione promptly for these. |

 

**CONFIDENTIAL**

 

**Attachment B-**2

 

**[* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BYBRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES ANDEXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF1934, AS AMENDED.**

 

----