Document:

<PAGE>   1
                                                                   EXHIBIT 10.20

                         [TAYLOR PHARMACEUTICALS LOGO]

                 DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
                              [ * ] IN 500ML VIALS
                          FOR ALLOS THERAPEUTICS, INC.

PROJECT SCOPE:

Pursuant to a Request for Proposal from Allos Therapeutics, Inc., Taylor
Pharmaceuticals has defined the Scope of Work as follows:

The [ * ] is a clinical product that is currently being manufactured by Taylor
Pharmaceuticals for Allos Therapeutics. [ * ] and is filled into a 100mL bottle.
[ * ] The fill volume has also been adjusted to 500mL from the original size of
100mL.

     FINALIZE FORMULATION DEVELOPMENT

     Based on information provided from Allos Therapeutics, the new formulation
     will likely be:

       1. [ * ]

       2. [ * ]

       3. [ * ]

       4. [ * ]

     Taylor will begin with the existing formulation and determine the
     appropriate buffer concentration and pH target. Taylor will also perform
     the following:

          1. [ * ]

          2. [ * ]

          3. [ * ]

          4. [ * ]

          5. [ * ]

     ANALYTICAL METHODS DEVELOPMENT

     Stability indicating (as required) methods will optimized and validated
     (per current ICH guidelines), [ * ]:

          1. [ * ]

          2. [ * ]

          3. [ * ]

          4. [ * ]
<PAGE>   2
                                   Development & Investigational Supply Proposal
                                                Allos Therapeutics, Inc. - [ * ]
                                                                28 December 1998
                                                                     Page 2 of 6

LABORATORY SCALE STABILITY PROGRAM

[ * ]

CLINICAL BATCH MANUFACTURING

Taylor will manufacture the clinical batches and placebo using production
equipment under cGMP controls. All components and ingredients will be released
by Quality Assurance and tested by the QC or Product Development laboratories.
All Products will be filled under aseptic conditions. Terminal sterilization, as
appropriate, will be done by autoclave. Taylor will supply clinical labeling and
packaging support as needed.

NDA STABILITY EXHIBIT BATCH MANUFACTURING

Note: Typically clients will manufacture clinical and registration batches as a
single activity in order to minimize manufacturing charges.

Taylor will manufacture stability batches using Production equipment under cGMP
controls. All components and ingredients will be released by Quality Assurance
and tested by the QC or Product Development laboratories. Production controls
shall be the same as the clinical batches. Pilot scale to full size production
size batches can be produced.

STABILITY STUDIES

Taylor Product Development will support full release and stability testing
including chemical and microbiological testing. [ * ] All stability reports are
reviewed by Taylor Quality Assurance. Interim reports will be published to Allos
Therapeutics, Inc. upon the completion of each test station.

PROCESS VALIDATION

Taylor process validation includes, but is not limited to:

     o    [ * ]

     o    [ * ]

     o    [ * ]

     o    [ * ]

     o    [ * ]

     o    [ * ]
<PAGE>   3
                                   DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
                                                ALLOS THERAPEUTICS, INC. - [ * ]
                                                                28 DECEMBER 1998
                                                                     PAGE 3 OF 6

     PRODUCT DEVELOPMENT REPORT AND REGULATORY SUPPORT

     Taylor will provide a Product Development Report in support of a typical
     CMC section for regulatory filing.

To better define our quotation, we have outlined the Allos Therapeutics, Inc.'s
responsibilities.

ALLOS THERAPEUTICS, INC. WILL BE RESPONSIBLE FOR THE FOLLOWING:

     1.  Reviewing and, if acceptable, approving all Master Formula Batch
         Records.

     2.  Providing on-site presence during the manufacture of
         clinical/registration batch manufacture (preferred but can be waived at
         Allos Therapeutics, Inc.'s request).

     3.  Providing release specifications for active drug substance and
         excipients.

     4.  Furnishing released and certified active substance for development and
         manufacture of at least 1 pilot formulation and the required exhibit
         batches).

     5.  Providing a current MSDS for the active drug substance and product.

     6.  Providing camera-ready artwork for labeling.

     7.  Providing shipping instructions, addresses, preferred carrier and
         carrier account number.

     8.  [ * ]

     9.  Preparing any applicable product import/export registrations.

     10. Preparing and filing applicable regulatory submissions.

ITEMS NOT INCLUDED AS PART OF THE PROPOSAL:

     1.  Third Party Laboratory charges which are necessary for Taylor to
         execute this agreement.

     2.  Analytical columns and standards that are not commonly available.

     3.  Capital equipment or change parts except those that are explicitly
         stated herein.

     4.  Import/export duties.

     5.  FDA User Fees, establishment fees or other expenses necessary to
         register the product with the appropriate regulatory agency.

     6.  Preparing product submissions.

     7.  Shipping and shipping insurance for product/placebo, samples,
         documentation, etc.

     8.  Travel and travel related expenses, including labor. Required only if
         travel to another site is requested by Allos Therapeutics, Inc.

                                                                    CONFIDENTIAL
                                                                 REF: ALLOS1098C

<PAGE>   4
                                   DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
                                                 ALLOS THERAPEUTICS, INC.- [ * ]
                                                                28 DECEMBER 1998
                                                                     PAGE 4 OF 6

QUOTATION:

The following is our current price quotation for manufacture of [ * ] in 500mL
vials for Investigational and Stability Batch Protocols:

DEVELOPMENT ACTIVITIES:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
              ACTIVITY                     BATCH SIZE                       PRICE
---------------------------------------------------------------------------------------------
                                             PHASE I
---------------------------------------------------------------------------------------------
<S>                                            <C>                         <C>
Finalize Formulation                           N/A                          [ * ]
                                                                            Total
---------------------------------------------------------------------------------------------
Perform stopper compatibility                  N/A                          [ * ]
study                                                                       Total
---------------------------------------------------------------------------------------------
Perform photostability study per               N/A                          [ * ]
ICH guidelines                                                              Total
---------------------------------------------------------------------------------------------
Analytical Method Optimization                 N/A                          [ * ]
and validation                                                              Total
(Active Drug Substance)
---------------------------------------------------------------------------------------------
Analytical Method Development                  N/A                          [ * ]
(B/F and LAL)                                                               Total
---------------------------------------------------------------------------------------------
                                             PHASE II
---------------------------------------------------------------------------------------------
Batch Manufacture - 500mL vials         2,500 units or less                 [ * ]
(clinical/registration lots)              (split batch)(1)                 per lot
-product-                         ----------------------------------------------------------
                                        2,500 units or less                 [ * ]
                                           (single batch)                  per lot
                                  -----------------------------------------------------------
                                        2,501 to 4,000 units                [ * ]
                                           (single batch)                  per lot
                                  -----------------------------------------------------------
                                        4,001 to 6,500 units                [ * ]
                                           (single batch)                  per lot
---------------------------------------------------------------------------------------------
Stability Studies                              N/A                          [ * ]
(including container closure                                   for split lot with two sublots
integrity throughout study)       -----------------------------------------------------------
                                               N/A                          [ * ]
                                                                           per lot
---------------------------------------------------------------------------------------------
                                   PHASE III AND MISCELLANEOUS
---------------------------------------------------------------------------------------------
Process Validation                             N/A                          [ * ]
(excluding media fills)                                          Per product and dosage form
---------------------------------------------------------------------------------------------
Distribution of product to clinical            N/A                   [ * ] per shipment
sites                                                            (up to 500 units, excludes
                                                                   transportation charges)
---------------------------------------------------------------------------------------------
Preparing CMC data Package                     N/A                       [ * ]/hour
                                                                 Not to exceed [ * ] total
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   5

                                   DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
                                                ALLOS THERAPEUTICS, INC. - [ * ]
                                                                28 DECEMBER 1998
                                                                     PAGE 5 OF 6

(1)Split batch = Batch will be evenly split in two sublots.  One sublot will use
4432 stoppers.  The other group will use Fluorotech stoppers.  Both lots will
be placed on stability.  The batch price includes line purge between stopper
type, additional batch record generation and all materials.

ESTIMATE FOR COMMERCIAL MANUFACTURING:

(NOTE:    Commercial estimates are based on information exchanged as of the
above date and may need to be revised upon the completion of development
activities)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
               ACTIVITY                                PRICE ESTIMATE
---------------------------------------------------------------------------------------------------
<S>                                                    <C>
Price per unit [ * ] in                                [ * ]
500 mL vials)                                          [ * ]
Commercial Batch Size: [ * ]                           [ * ]
                                                       [ * ]
                                                           [ * ]
                                                           [ * ]

Routine shelf life surveillance program per                      [ * ]
ICH guidelines
(one commercial lot, per strength, per
dosage form, per year)

Regulatory Assistance, as necessary                                  [ * ]
---------------------------------------------------------------------------------------------------
</TABLE>

PAYMENT SCHEDULE    [ * ]
    o    [ * ]
    o    [ * ]
    o    [ * ]

CANCELLATION CHARGES AND LATE PAYMENT CHARGES.    [ * ]

CHANGES TO SCOPE OF WORK.     With any development program, changes from the
original scope or work will be deemed necessary from time to time.  It is
essential, for both parties, that these periodic and potentially critical
changes be properly documented.  Before Taylor Pharmaceuticals will initiate
and work outside of this proposal a Project Change Authorization will be
generated and submitted to Allos Therapeutics, Inc. for approval.  This document
ensures that both parties agree to the work to be performed, the timing of the
work and any additional charges incurred by the deviation from the original
scope of work.

<PAGE>   6
                                   DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
                                                 ALLOS THERAPEUTICS, INC.- [ * ]
                                                                28 DECEMBER 1998
                                                                     PAGE 6 OF 6

LIMIT OF LIABILITY. Taylor will not be responsible for Active Drug Substance
that is lost or damaged prior to receipt at Taylor. Taylor will not be
responsible for batch rejections that are not the result of gross negligence. If
any lot of product fails to achieve analytical or microbiological limits that
have been agreed to by both companies, Taylor will maintain a limit of liability
of $25,000 per process lot or the cost of customer supplied materials, whichever
is less.

FORCE MAJEURE. The period for which performance (other than the payment of
money) is required by a party shall be extended by the period during which such
party is unable to perform due to strikes, acts of God, war shortages or
unavailability of supplies, or other causes beyond the party's reasonable
control.

TERM. [ * ]

Please submit purchase orders and shipping documentation to:
                                 Thomas Handel
                   Executive Director - Business Development
                             Taylor Pharmaceuticals
                               150 S. Wyckles Rd.
                               Decatur, IL 62522

If this proposal is acceptable, please complete both forms in Attachment I. Keep
one form for your file and return the second approved form to the attention of
Thomas Handel at the above address.

Taylor Pharmaceuticals thanks you for your interest in our Contract
Pharmaceutical Services and the opportunity to provide Allos Therapeutics, Inc.
with this proposal. I hope that we have adequately responded to your request and
look forward to working with Allos Therapeutics, Inc.

                                                                    CONFIDENTIAL
                                                                 REF: allos1098c
<PAGE>   7
                                  ATTACHMENT I

PROPOSAL ACCEPTANCE SHEET                      FOR TAYLOR PHARMACEUTICALS, INC.
-------------------------------------------------------------------------------

This is to confirm the acceptance of Taylor Pharmaceuticals, Inc., Development
Proposal number allos1098c, to Allos Therapeutics, Inc., dated 28 December
1998, for RSR13 (New Formulation) in vials.

All invoicing for this contract is to be referenced against Allos Therapeutics,
Inc. Purchase Number: ALLOS-12

All invoicing is to be sent directly to:
     [X] Accounts Payable
     [ ] Other (please specify)

     -------------------------------------------------------

     -------------------------------------------------------

Accepted By:

/s/ S. J. HOFFMAN     30-DEC-98
-------------------------------
Signature      Date

STEPHEN HOFFMAN
-------------------------------
Name (Type or Print)

President
-------------------------------
Title

                                       of
                            Allos Therapeutics, Inc.

     Please sign both acceptance sheets; returning one signed original to:
                                 Thomas Handel
                    Executive Director-Business Development
                             Taylor Pharmaceuticals
                              150 S. Wyckles Road
                               Decatur, IL 62522MEMORANDUM OF UNDERSTANDING

THIS MEMORANDUM OF  UNDERSTANDING  ("MOU") is made and entered into as of this 3
day of  February,  1999 by and between  Empire State  Newsprint  LLC ("ESN") and
Besicorp Development, Inc. ("Besicorp").

WHEREAS ESN intends to develop a newspaper  recycling  plant  ("Paper  Mill") in
Kingston, New York, and

WHEREAS  Besicorp intends to develop a power plant (Power Plant) adjacent to the
Paper Mill, and

WHEREAS  ESN has an option to purchase  from  Tilcom 750 acres of real  property
("Real Property") in the City of Kingston and Town of Ulster.

NOW THEREFORE:

1. ESN  and  Besicorp  agree  to enter  into a formal agreement ("Agreement") to
     form a joint development partnership to mutually pursue both the Paper Mill
     and Power Plant  projects on a fully combined  and integrated  basis and to
     jointly  purchase  and  develop  the  Real  Property  (all  together,   the
     "Project").  The Parties agree to offer the first right of refusal to joint
     ventures as equal partners with any and all other projects so undertaken on
     the Real Property.

2. ESN and Besicorp hereby  commit to one  another to diligently work to execute
     the Agreement,  which  will incorporate  the terms set forth in  paragraphs
     3 through 20.

3. The  partnership  will  be  on a 50/50 ownership in  a  to-be-formed  special
     purpose  company  (SPC), which  will encompass  both  the paper  and  power
     portions in a truly integrated and common company. Should facility design,
     construction, financing or permitting  circumstances  preclude a successful
     financial  closing  of  a fully  integrated  facility, and  the decision is
     taken to proceed with  only  the paper mill,  or only the power plant,  the
     ownership interest(s) of the  facility being  completed will be on an equal
     ownership  basis for both Parties.

4. The  SPC  in turn will consist of two companies (sub-SPCs), one for executing
     the actual Paper Mill and one for the Power Plant.

5. ESN  shall have  primary  responsibility  for the sub-SPC for  the Paper Mill
     and Besicorp shall have the same for the Power Plant.

6. The profits and/or losses of each sub-SPC shall be rolled up into the SPC.

7.The  SPC  shall  be  jointly  managed  by ESN and  Besicorp  management  under
     a joint-venture management agreement to be established.

<PAGE>

8. The SPC will be responsible for all contracts,  costs and related efforts for
     all work  related to the  development  of the  Project  including,  but not
     limited to, the permitting, EPC contracts,  legal, owner's engineer and PR.
     It is the  intent  that  such 3rd party  contracts  will be  negotiated  to
     maximize the amount of contractor's "at risk" and Adeferred@ expenses.

9. The SPC will execute the land purchase option and make all payments.

10. The SPC will be responsible to raise all debt and equity for the Project.

11. Besicorp shall commit  $750,000 to the  project.  Besicorp agrees to make an
     initial  capital  investment  of $250,000  payable at the  execution of the
     Agreement  and  thereafter  monthly  or more  often as  conditions  require
     pursuant to draw  requests  submitted  by the SPC.  $100,000 of the initial
     capital  investment  of  $250,000  shall  be  directed  to the  SPC and the
     remaining  $150,000  shall be placed in an escrow  account  which  shall be
     irrevocably  committed  to the  business  of the SPC except in the event of
     project  termination,  in which case  residual  funds  shall be returned to
     Besicorp.  The  $750,000  shall  be used to fund  all  Project  development
     expenses  and  working  capital  requirements  not  covered  by  3rd  party
     development  capital and shall be paid to the SPC.  The  monthly  draws may
     include replenishment of working capital for the SPC to a level of $50,000.
     Draws shall be made pursuant to a budget  approved by the management of the
     SPC or for other approved  development expense categories of which shall be
     defined in the Agreement.

     In the event Besicorp fails to fund any draw submitted by the SPC, and such
     failure to fund remains uncured for 30 days after written notice,  Besicorp
     shall forfeit its rights to participate in the SPC as an equal partner.  In
     that event all prior Besicorp funding and billed time shall be converted to
     a development loan to be repaid out of the financial closing.

     Besicorp  reserves the right to terminate such funding with 30 days written
     notice  based on its  sole  and  reasonable  discretion  in the  event of a
     material  adverse change in the Project or it reaches a determination  that
     the  Project  can not be  permitted  or  financed.  If at  financial  close
     Besicorp has  contributed  less than $750,000,  there will be an adjustment
     between ESN and Besicorp to equalize funding levels.

12.   ESN represents that it has made a $750,000  out-of-pocket  cash investment
      in the newsprint project and shall provide documentation upon request.

13.   ESN agrees that it will try to use the matching grant it obtained from the
      Office of Recycling Market  Development and that these funds, if possible,
      will be made available to offset applicable Project development costs.

14.   Besicorp  and/or ESN may from time to time,  as the parties  shall  agree,
      decide to contribute  additional  (over and above that  specified  herein)
      development capital to the SPC.

15.   Besicorp and ESN shall enter into a temporary  loan  agreement in the form
      attached hereto as Exhibit "A," and incorporated herein by this reference,
      whereby Besicorp shall loan to ESN $22,500.00 to make an option payment to
      extend  ESN's  option to purchase  the Real  Property.  This loan shall be
      superceded by the Agreement.

<PAGE>

16.   The SPC may decide to delay or cancel either the paper project  portion or
      the power  project  portion of the Project if the  economic  circumstances
      indicate that it is the proper thing to do.

17.   Either party may at its sole discretion  decide to withdraw from the joint
      partnership if such party  reasonably  determines  that the Project is not
      economically  viable.  If the remaining party completes the Project,  then
      the withdrawing party may recover its development costs in accordance with
      paragraph 19.

18.   If the Paper Mill and/or the Power Plant,  combined and /or independently,
      successfully  reach financial  closure,  the Parties hereby agree that ESN
      and Besicorp  shall retain the full and exclusive  rights to the Sales and
      Marketing  of their  respective  portions of the  facility for a period of
      twenty-five years. Such rights shall be subject to the approval of project
      lenders and subsequent  equity investors.  The arrangements  shall be both
      commercially  reasonable and shall reflect bona fide  requirements for the
      projects to have such third-party  services  provided on a contract basis.
      Rates charged to the SPC for such services  shall be comparable to what an
      arms length party would charge for similar services.

19.   The  parties  shall  structure  the  financing  arrangements  to  maximize
      development  capital and internal cost  reimbursement.  Development  funds
      realized at financial  closure shall be shared prorata between the parties
      according to the total  development  cost incurred by each party, and then
      in accordance  with the ownership % of ESN and Besicorp.  Besicorp and ESN
      additionally commit such internal resources (key personnel,  office space,
      clerical  support  staff,  photocopy  and  fax  machines,   etc.)  as  are
      reasonably  required  for  continued  development  of  the  Project.  Such
      internal  resources  shall be calculated in accordance with Besicorp's and
      ESN's customary rates.  Such internal expenses shall be mutually agreed to
      be budgeted annually with  reimbursement for such internal resources to be
      made at financial closure.

20.   ESN's deferred legal fees in the amount of approximately  $400,000 will be
      transferred to the SPC.

Signatories:     For ESN          /s/ James Hustin
                                      ------------
                                      James Hustin
                                      President
                                                                   Date 2/16/99

                 For Besicorp     /s/ Michael F. Zinn
                                      ---------------             Date  2/16/99
                                      Michael F. Zinn
                                      President

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