COMMERCIAL MANUFACTURING AGREEMENT
This COMMERCIAL MANUFACTURING AGREEMENT (this “Agreement”) is entered into
effective as of __________, 2011 (the “Effective Date”), by and between SIGA
Technologies, Inc., a Delaware corporation (“Customer”), having a place of
business at 35 E. 62nd Street, New York, NY, 10065, and Albemarle Corporation, a
Virginia corporation (“Albemarle”), having a place of business at 451 Florida
Street, Baton Rouge, Louisiana 70801. Each of Customer and Albemarle is
sometimes referred to herein as a “Party” and collectively as the “Parties”.
RECITALS
A.    Customer is in the business of developing and commercializing
pharmaceutical products.
B.    Albemarle is in the business of performing contract manufacturing and
supply of pharmaceutical products.
C.    Customer is developing its proprietary drug candidate, ST-246®, as a
smallpox treatment and is actively engaged in various efforts to commercialize
ST-246®, including but not limited to seeking a contract from the United States
Government (the “USG”) under the Project BioShield Act of 2004 (the “Act”)
pursuant to RFP-BARDA-11-100-SOL-00007 (the “RFP”) to supply, among other
things, 1.7 million courses of FDP (as defined below) to the Strategic National
Stockpile. Customer entered into such a contract with BARDA effective May 13,
2011 (the “BARDA Contract”).
D.    Customer and Albemarle entered into a Mutual Confidential Disclosure
Agreement dated January 23, 2006, as amended December 28, 2006, December 8, 2008
and January 12, 2010 (the “CDA”).
E.    Customer and Albemarle entered into an agreement dated January 23, 2006
pursuant to which Albemarle has manufactured, tested and supplied the API (as
defined below) for FDP, for use in the manufacture of registration batches and
pursuant to which Albemarle continues to conduct stability studies with respect
to such batches (the “Prior Manufacturing Agreement”).
F.    Customer and Albemarle entered in an agreement dated August 24, 2009 to
manufacture, test, and supply ST-246® Monohydrate (Form-I) to Customer for use
as the API for FDP in quantities that are scaled up for the Customer’s
validation batches (“Validation Supply Agreement”).
G.    Customer and Albemarle entered in a memorandum of understanding dated
August 24, 2009 regarding the proposed terms and conditions of this Agreement
(“MOU”).
H.    Customer desires to contract with Albemarle to manufacture, test and
supply the Product (as defined below) to Customer as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, the Parties hereby agree as follows:
1.DEFINITIONS
For purposes of this Agreement, the terms defined in this Section 1 shall have
the respective meanings set forth below:
“API” shall mean active pharmaceutical ingredient.
“Applicable Law” means all laws, ordinances, rules and regulations of the United
States or any other jurisdiction applicable to any aspect of the obligations of
Albemarle or Customer, as the context requires, under this Agreement, as amended
from time to time, including (A) all applicable federal, state and local laws
and regulations of the United States, (B) the U.S. Federal Food, Drug and
Cosmetic Act, as amended (the “FFDCA”), and (C) cGMP, or their respective
equivalents in any other relevant jurisdiction where Product is being
manufactured.
“BARDA” means the U.S. Biomedical Advanced Research and Development Authority.
    
“Base Contract Amount” shall mean the 1.7 million courses requested in CLIN 001
of the RFP, or any subsequent adjustment to the number of courses requested in
CLIN 001 of the RFP.
“Batch Documentation” shall mean complete and accurate copies of all of the
following, as applicable: Albemarle audited production batch records, deviation
reports, investigation reports, a COA, Product release chromatographs and
corresponding calculations for all batches, management of Change (MOCs), cGMP
certificate of compliance, and stability data, when available (including one
chromatograph utilizing one condition for each pull interval from one batch).
For the sake of clarity, originals of the Batch Documentation will be retained
by Albemarle and made available for inspection for all batches produced,
including aborted batches, and a complete copy of Batch Documentation shall be
furnished to Customer in accordance with Section 3.2.
“cGMP” shall mean Good Manufacturing Practices as prescribed from time to time
by the FDA, including within the meaning of 21 C.F.R. Parts 210 and 211, as
amended, and the ICH Q7 guidelines.
“CMC” means Chemistry, Manufacturing and Controls.
“COA” shall mean a certificate of analysis prepared in accordance with the
Quality Agreement that shall include the results of the tests set forth in the
Specifications in Exhibit C, as may be amended in accordance with this
Agreement.
“Facility” shall mean the Albemarle cGMP FDA-approved manufacturing facility at
which the manufacturing and testing services will be performed. This facility is
located at 1421 Kalamazoo Street, South Haven, Michigan 49090.
“FDP” shall mean the final drug product utilizing the Product as its API.
“FDA” shall mean the United States Food and Drug Administration or the successor
thereto.
“Government Contract” shall mean any contract currently existing or hereafter
entered into by a Government Entity and Customer for the supply of the FDP,
including any BARDA Contract.
“Government Entity” shall mean any government entity of any country of the
world, including the USG.
“include(ing)” shall mean “include(ing) without limitation”.
“Lead Time” shall mean (a) with respect to the First Order (as defined below) of
Product, six (6) months, and (b) with respect to each Firm Order (as defined
below) of Product, twelve (12) weeks.
“Product” shall mean the unmicronized form of the active pharmaceutical
ingredient known as, or containing, ST-246® (Form-I, also known as Form B), the
structure of which is attached as Exhibit A hereto, which meets the
Specifications set forth in Exhibit C.
“Regulatory Authority” shall mean, with respect to a country, any governmental
authority (whether federal, state, provincial, municipal or others) regulating
the exportation, importation, use, manufacture, distribution, marketing and/or
sale of pharmaceuticals, which, in the United States, shall include the FDA.
“Specifications” shall mean the specifications for the manufacture of the
Product set forth in Exhibit C, as may be amended in accordance with this
Agreement.
2.MANUFACTURE OF PRODUCT
2.1     Manufacturing Services. Albemarle shall manufacture, sell and deliver to
Customer or its designee all Product ordered by Customer in conformance with
terms and conditions of this Agreement. In addition, Albemarle shall perform an
analysis of samples of the micronized form of the Product as set forth in
Section 2.12 and Exhibit B, and shall perform the stability studies as set forth
in Section 2.11 and Exhibit D. Albemarle will dedicate sufficient manufacturing
capacity to fill Customer’s orders within the applicable Lead Time. Unless
otherwise agreed between Albemarle and Customer, all Product will be
manufactured under cGMP conditions at the Facility. Subject to the provisions of
this Agreement related to subcontracting, Albemarle shall not transfer or
perform any of the work required by this Agreement outside of the United States
without specific written consent by Customer, which shall be subject to the
restrictions on foreign manufacturing contained in Customer’s Government
Contracts, the contents of which, to the extent necessary, shall be made known
to Albemarle by Customer.
2.2    First Order. Albemarle and Customer shall cooperate fully and negotiate
in good faith in estimating and scheduling the first order of commercial
quantities of Product (“First Order”) to be placed by Customer, with the mutual
goal of the Parties that the First Order be scheduled for completion and
delivery to Customer or its designee not later than six (6) months after the
date the First Order is placed by Customer.
2.3    Forecasts and Firm Orders.
2.3.1    Starting after the placement of the First Order, on or before the first
day of each calendar month, Customer shall give Albemarle Customer’s good faith
written estimate of Customer’s projected requirements of the Product for
delivery during the upcoming twelve (12) months. Such forecasts constitute
non-binding, good faith estimates provided solely to assist Albemarle in raw
material procurement, production planning and manufacturing of the Product.
Albemarle shall use these forecasts to procure long leadtime raw materials.
2.3.2    Customer acknowledges that, since Product is a product made exclusively
for Customer, and in order to accommodate Albemarle’s planning, manufacturing,
analytical testing and release of the Product, Customer agrees to place a
binding non-cancelable written purchase order for the delivery of any Product
required in the first three (3) month period of the initial or any updated
forecast (a “Firm Order”). Customer further agrees to place Firm Orders in
one-batch increments, each batch to consist of approximately 1,350 kg. Albemarle
shall, upon receipt of any Firm Order after the First Order, deliver ordered
batches of Product within the Lead Time applicable to such Firm Order, which
period shall be shortened, as much as possible, taking into account the
availability of raw materials.
2.3.3    In the event that Customer does not place binding orders for Product
consistent with the forecasted quantities, then in order to compensate Albemarle
for the actual and full costs of procuring long lead time raw materials,
Customer shall pay Albemarle the documented direct costs associated with any
unused quantity of such raw materials purchased by Albemarle specifically for
the manufacture of the Product, provided that Albemarle has made good faith
efforts to return such raw materials to their manufacturers for credit. Any such
raw materials, for which Customer pays Albemarle the documented direct costs,
shall be deemed to be the property of Customer, and Albemarle shall promptly
assign all right, title and interest in and to such raw materials to Customer.
Albemarle shall store such unused raw materials at the Customer’s request at no
charge for up to one (1) year, and thereafter shall, at Albemarle’s option,
continue to store such raw materials at the Customer’s expense and Albemarle
shall, upon notice to Customer, deliver them to Customer or its designee.
Albemarle shall otherwise, at Customer’s expense, properly dispose of any unused
raw materials, any rejected Product and any waste in accordance with Applicable
Law.
2.4    Purchase Orders. Customer shall issue written purchase orders to
Albemarle for the First Order and each Firm Order. Purchase orders shall be
placed at least the applicable Lead Time before the desired delivery date and
shall be deemed accepted if in accordance with the terms and conditions of this
Agreement. Purchase orders shall specify the quantity of the Product ordered,
the requested delivery date, and the means of shipment (provided, however, that
the means of shipment complies with all Applicable Law and any requirement of
any applicable Government Contract). Purchase orders issued by Customer and
accepted (or deemed accepted) by Albemarle shall constitute the binding
obligation of Albemarle to manufacture, sell and deliver to Customer the
specified quantity of the Product by the specified delivery date (and perform
the post-micronization testing services set forth in Section 2.12 and Exhibit B
for such Product and the stability studies set forth in Section 2.11 and Exhibit
D for such Product) and the binding obligation of Customer to purchase the
specified quantity of the Product therein delivered in conformance with this
Agreement. Purchase orders issued by Customer shall be effective solely with
respect to specifying the quantity, requested delivery date and means of
shipment of the Product being ordered. All other terms and conditions printed or
included on such purchase orders which contradict or would serve to alter the
provisions of this Agreement shall be of no effect or force.
2.5    Purchase Commitments.
2.5.1    Subject to Section 2.5.2, Customer agrees to order from Albemarle at
least seventy-five percent (75%) of Customer’s internal and external
requirements of the Product or any product substantially similar to the Product
which Customer requires during the Term. For clarity, there is no minimum order
requirement imposed on Customer.
2.5.2    Customer’s purchase commitments under Section 2.5.1 of this Agreement
are subject to the following:
(a)    In the event that a contract entered into by Customer for the sale of FDP
requires that the Product used as the API for such FDP be manufactured outside
the United States and Albemarle is unwilling or unable to subcontract such
manufacture to a party or parties that meet the terms of this Agreement and any
relevant contract entered into by Customer for the sale of FDP, the amounts of
Product contemplated by such Customer contract shall not be counted or
considered when calculating Customer’s internal and external requirements or the
amount to be ordered by Customer or the amount to be delivered by Albemarle.
(b)    In the event that a proposed contract to be entered into by Customer for
the sale of FDP in an intravenous formulation requires that the Product used as
the API for such FDP be manufactured to specifications other than the
Specifications, and the Parties are not able to reach agreement on the necessary
changes to the Specifications for such intravenous formulation or to pricing
therefor, the amounts of Product contemplated by such proposed Customer contract
shall not be counted or considered when calculating Customer’s internal and
external requirements or the amount to be ordered by Customer or the amount to
be delivered by Albemarle.
(c)    If either (i) the shipment of any Customer order of Product or any
portion thereof, or the provision of any analytical data for released Product to
be provided to Customer hereunder is late by more than 20 days on more than one
occasion, (ii) Product produced and released by Albemarle is defective or does
not conform to the Specifications or Applicable Law on more than one occasion,
or (iii) Albemarle otherwise fails to perform any of its obligations under this
Agreement and does not cure such failure within thirty (30) days of written
notice from Customer (said notice specifying the nature of the failure),
Customer shall have, in addition to any other rights under this Agreement or in
law, the right to reduce its purchase commitment obligation under Section 2.5.1
hereof.
2.6    Subcontractors.
2.6.1    Subject to approval by the applicable Government Entity if required by
a Government Contract, (a) Customer consents that Albemarle may engage, for the
duration of the Term, Solid State Chemical Information, Inc., 3065 Kent Avenue,
West Lafayette, Indiana, as subcontractor to provide PSD and XRD analytical
services required for testing of micronized and unmicronized Product in
accordance with the Specifications, and (b) Customer also consents that
Albemarle may engage, for the duration of the Term, SGS Northview Laboratories,
1880 Holste Road, Northbrook, IL 60062, as subcontractor to provide
microbiological and bacterial endotoxin testing analytical services required for
analysis of Product in accordance with the Specifications, as long as both such
subcontractors may perform their respective subcontracts in accordance with all
applicable legal requirements and the requirements of this Agreement. Albemarle
may not engage any other subcontractors to perform Albemarle’s obligations under
this Agreement, except upon express prior written consent by Customer, which
consent shall not be unreasonably withheld but which will be subject to the
approval of the applicable Government Entity as necessary.
2.6.2    The Parties agree and acknowledge that, if, in order to meet Customer’s
requirements, it is necessary that a portion of Customer’s Product requirements
be manufactured outside the United States, Albemarle shall be afforded a
reasonable opportunity to subcontract such portion of the manufacture and
testing of the Product to a third party that fulfills the requirements of
Customer, provided that (i) Customer shall have the right to prior approval of
the proposed subcontractor, and the non-commercial terms of such subcontract,
which approval will not be withheld without cause; (ii) any such subcontract
will grant Customer the right to oversee and monitor the performance of any such
subcontractor in the manner to be agreed by the Parties in good faith, but in no
event with less oversight than Customer would have had if the Product had been
manufactured by Albemarle under this Agreement; (iii) any such subcontract will
contain all of the terms and conditions to which Albemarle is obligated under
this Agreement, including any “flow-down” requirements under any Government
Contract for which such Product will be used, and (iv) any such subcontract will
be subject to the approval of the applicable Government Entity as necessary.
2.6.3    Any such permitted appointment of subcontractors pursuant to Sections
2.6.1 and 2.6.2 hereof shall not affect or diminish Albemarle’s responsibilities
and obligations set forth herein and Albemarle shall remain responsible to
Customer for the performance of its subcontractors. Albemarle will cause its
subcontractors to grant Customer the right to perform annual and “for cause”
audits of Albemarle’s subcontractors to evaluate their quality systems and for
compliance with cGMP, Applicable Law, Specifications and applicable product and
establishment standards. Albemarle represents and warrants that the approved
subcontractors are aware of and have agreed to any requirements imposed by
Applicable Law on Customer and its contractors and subcontractors, and such
subcontractors shall also comply with all relevant obligations imposed on
Albemarle under this Agreement, including Customer’s right to place, at
Customer’s option, a person in subcontractor’s facility to observe the
activities of the subcontractor.
2.7    Albemarle’s Responsibilities; Quality Agreement.
2.7.1    Albemarle shall manufacture the Product and perform the other
activities in accordance with this Agreement, the Specifications and Applicable
Law. Albemarle shall bear the full cost of manufacturing the Product and shall
be responsible to manufacture and/or supply, without limitation, all raw
materials, starting materials, source materials, intermediates, labor,
facilities, utilities, and the equipment necessary for the manufacture of the
Product, setting up of the manufacturing process, and assembling and packaging
of the Product, all in accordance with the Specifications. Any materials,
including raw materials, purchased by Albemarle in excess of the volume required
for manufacture of Product under this Agreement shall remain the property of
Albemarle, subject to Section 2.3.3. In addition, Albemarle shall perform the
analysis of the micronized form of the Product as set forth in Section 2.12 and
Exhibit B, and shall perform the stability studies as set forth in Section 2.11
and Exhibit D.
2.7.2    Albemarle shall abide by the terms and conditions of the Quality
Agreement attached hereto as Exhibit E (“Quality Agreement”), the provisions of
which are integral to its performance of its obligations under this Agreement.
In the event of an inconsistency between the terms of the Quality Agreement and
the terms of the body of this Agreement, the terms of this Agreement shall
control. The Quality Agreement may only be amended upon written agreement of the
Parties, provided that, the Quality Agreement shall be deemed to be amended to
the extent necessary to conform with the provisions of any Government Contract,
or a quality agreement with any Government Entity required to be entered into
pursuant to any such Government Contract. Customer shall provide Albemarle a
written notice of any such amendment, and to the extent any such amendment would
require Albemarle to incur more expense or commercial effort for adherence to
the revised Quality Agreement, the Parties agree to negotiate in good faith
revised pricing for the sale of the Product hereunder.
2.8    Specifications and Vendors.
2.8.1    The Specifications for Product may only be revised upon written
agreement of both Parties, except that Albemarle shall provide its prompt
written agreement if the FDA or any other Government Entity requires Customer to
revise the Specifications, whether pursuant to Customer’s Government Contracts,
cGMP requirements, or otherwise (a “Mandated Specification Change”). If any such
Mandated Specification Change or a mutually agreed upon change to the
Specifications requires any material change to the manufacturing process or raw
materials, the Parties shall negotiate in good faith a reasonable adjustment to
the Unit Price to be paid by Customer hereunder and the applicable Lead Time.
Albemarle and Customer agree that a Mandated Specification Change or mutual
agreement to change the Specifications shall not change, effect, modify or alter
any other provision of this Agreement with the exception of the Unit Price and
the Lead Time. Both Parties understand and agree that material changes in
Specifications may affect Unit Price and Lead Time and agree to negotiate in
good faith in such cases to arrive at a revised Unit Price and Lead Time
mutually agreed in writing by both Parties for all subsequent work affected by
such changes in Specifications, provided however, that any Mandated
Specification Change that imposes a more stringent Specification, but which
Specification is within the demonstrated process capability for the manufacture
of the Product, based on relevant available data from all commercial size
batches of Product manufactured prior to the date of such change, shall not be
considered a material change in the Specifications.
2.8.2    Albemarle has qualified the raw material vendors set forth in Exhibit
I. In the event that Albemarle wants to add an alternate raw material vendor, or
wants to supply any raw material itself, it must qualify such vendor (including
Albemarle) in the manner provided in its standard operating procedures, and
provide the results of such qualifying tests to Customer for its approval, which
approval will not be withheld without cause.
2.9    Compliance. Albemarle shall maintain the Facility, and shall manufacture
the Product, in compliance with the Specifications and all Applicable Law.
Albemarle shall allow Customer, at Customer’s option, to place a person in the
Facility to observe the commercial manufacturing process.
2.10    Recalls. In the event of a Product or FDP defect or recall caused by
Albemarle’s failure to manufacture the Product in accordance with the
Specifications and Applicable Law, or its failure to analyze appropriately the
micronized form of the Product, Albemarle shall reimburse Customer for the costs
related to curing the defect and accomplishing the recall, to the extent such
costs result from Albemarle’s failure, provided, that in no event will
Albemarle’s liability pursuant to this Section 2.10 exceed the liability
limitation set forth in Section 7.2 hereof, except as provided in Section 6.1.2
with regard to any claim by a third party. In all other instances, the costs
related to a recall shall be borne by Customer.
2.11    Stability Studies. Albemarle will conduct sixty (60) month stability
studies in accordance with Exhibit D.
2.12    Micronized Product Analysis. Albemarle will accept delivery of test
samples of micronized form of the Product from the micronizer and perform the
analytical testing on each batch in accordance with Exhibit B. Albemarle will
use best efforts to provide Customer with an analytical report containing the
results of such testing within thirty-five (35) days from the receipt of test
samples from the micronizer.
2.13    BARDA Contract Security Corrective Actions Prior to the date of this
Agreement the Parties have participated in a pre-award security audit of the
Facility conducted by BARDA representatives. Such security audit resulted in
BARDA imposing a requirement that certain security corrective actions be
implemented by Albemarle as a condition to commencement of Product manufacturing
for the BARDA Contract, if it is awarded to the Customer. The Parties agree
that, in the event the Customer is awarded the BARDA Contract, at the written
request of the Customer Albemarle will perform the security corrective actions
described in Exhibit G. Albemarle will commence all physical and information
technology security corrective actions described in Exhibit G.2.I within 30 days
of receiving technical direction from Customer, and will take all reasonably
necessary actions to complete all such corrective actions at least 60 days prior
to the start of manufacturing of Product to fill the Base Contract Orders.
Albemarle will be reimbursed for the security corrective actions the amounts set
forth on Exhibit G.2. In addition, Albemarle will implement the corrective
action set forth in Exhibit G.2.II during all manufacturing of Product for the
BARDA Contract and will separately invoice Customer for the actual costs
incurred by Albemarle for such corrective action. In the event that security
corrective actions other than those set forth on Exhibit G are requested by
BARDA after the date of this Agreement, Albemarle agrees to perform such
additional security corrective actions to the extent reasonably practicable. The
Parties agree that in the event such additional security corrective actions are
necessary, they will negotiate in good faith to reach agreement on a
reimbursement amount for each such additional security corrective action.
3. SUPPLY OF PRODUCT
3.1    Shipment. Albemarle shall ship the released Product FCA Facility, Freight
Collect, (per Incoterms 2000) to such location as designated in writing by
Customer. The purchase order shall set forth the transport means and company
selected by Customer for shipping the Product, provided that in the event a
designated carrier is unable to ship Product on schedule, Albemarle will obtain
an alternate carrier designation from Customer. Title and risk of loss and
damages to the Product ordered by Customer hereunder shall pass to Customer upon
delivery of the Product to the transporting carrier.
3.2    Product Release. Subject to the provisions of Sections 3.2.1 and 3.2.2,
batch review and release of Product for shipment to Customer’s shipping point
will be the responsibility of Albemarle’s Quality Assurance department, who will
act in accordance with Albemarle’s standard operating procedures. For each batch
of Product released by Albemarle for shipment, Albemarle will deliver to
Customer, at the same time it ships such batch, (i) a certificate of compliance
that will include a statement that the batch has been manufactured in accordance
with cGMP and the Specifications, and (ii) a copy of the Batch Documentation and
COA.
3.2.4    For the first four (4) batches of Product ordered by the Customer only,
the following additional batch release procedure shall be followed. Upon
completion of each such batch and the review of all Batch Documentation by
Albemarle’s Quality Assurance department, Albemarle shall forward to Customer,
electronically or by overnight mail, completed Batch Documentation. Customer
shall use reasonable efforts to complete its review of the Batch Documentation
within seven (7) working days of receiving it from Albemarle (the “Customer
Review Period”). Subject to the results of its review, Customer will approve the
Product for release and upon receipt of Customer’s approval Albemarle shall
deliver to Customer the final COA, and release and ship the Product to the
Customer’s designated shipping point by the shipping method designated by the
Customer.
3.2.5    Any problem discovered by either Party during its quality assurance
reviews will be communicated to the other Party directly along with any
supporting documentation of the problem. The communication shall occur within
three (3) business days after the discovery of the problem. The Product will be
immediately placed in quarantine until Albemarle and the Customer have met and
determined the final disposition of the Product. The resolution of any such
problem shall be accomplished in accordance with the Quality Agreement.
3.3    Packaging and Labeling. Albemarle shall package the Product in accordance
with the Specifications, and in compliance with the applicable labeling
requirements of FDA and all other Applicable Law regarding the labeling,
materials and containers applicable to the Product. Albemarle shall label the
Product with such labels, trade names, and trademarks as directed by Customer.
3.4    Freight and Insurance. Customer shall pay all freight, insurance charges,
taxes, import and export duties, inspection fees and other charges applicable to
the transport and delivery of the Product.
3.5    Rejection and Cure. Customer shall notify Albemarle within one hundred
twenty (120) days of Albemarle’s shipment of any batch of Product if it believes
that the batch was damaged, defective or did not conform to the Specifications
or Applicable Law. In addition to any remedy available to Customer under
Sections 2.5.2(c), 2.10 or 6.1.2, Customer’s remedy under this Section 3.5
against Albemarle for any failure to supply a batch of conforming Product is
expressly limited to one of the following (as may be elected by Customer at its
sole option):
(i)
Albemarle will provide a replacement batch of conforming Product to Customer at
no additional cost and on a schedule acceptable to Customer and reimburse
Customer for the shipping and micronization costs, if any, incurred by Customer
for the non-conforming batch, or

(ii)
refund within 10 business days to the Customer the full aggregate Price for such
non-conforming batch of Product, plus shipping and micronization costs, if any,
incurred by the Customer with respect to such non-conforming batch of Product.

This limitation shall apply to all claims with respect to non-conforming Product
under this Section 3.5, whether stated in contract, warranty, tort, strict
liability, infringement of third party rights or any other legal or equitable
claim whatsoever. If Albemarle disputes the above referenced notice of rejection
with respect to non-conforming Product, the Parties will each retest the
rejected Product within thirty (30) days of Albemarle’s notice of dispute. If
the Parties, after retesting the rejected Product continue to have conflicting
test results, the matter shall be referred to a laboratory selected by Customer
from the list included on Exhibit H (or other mutually agreed upon laboratory)
to perform tests on representative samples from the rejected portion of the
shipment. The results of such tests will be binding upon Customer and Albemarle.
If the laboratory determines that the Product was non-conforming, Albemarle will
pay for all laboratory charges; if the laboratory determines that Customer
rejected the Product in error, then Customer will pay for all laboratory
charges. Rejected Product will be returned to Albemarle or disposed of at
Albemarle’s expense in accordance with Albemarle’s instructions, in which case
Customer will deliver to Albemarle an appropriate certificate of destruction. If
Albemarle requests, Customer will make its personnel available on a reasonable
basis to work with Albemarle in order to assist Albemarle in determining the
reason for the non-conformity and in developing remedial measures.
3.6    Force Majeure. Neither Party shall be liable to the other for any delay
or failure of performance resulting from any circumstance (other than the
payment of money owed) beyond the reasonable control of such Party (a “Force
Majeure Event”), which may include: fire, storm, flood, act of God, war,
earthquake, explosion, sabotage, epidemic, quarantine restrictions, embargo,
expropriation, strikes or other labor trouble, failure of the usual means of
production or of transportation, or shortage of labor, raw materials, or
shortage of utilities, fuel and/or energy. Subject to Section 3.7, Albemarle
shall not be obligated to make up any deficiencies in delivery due to any such
shortage except by written mutual agreement. In the event Albemarle experiences
a Force Majeure Event that continues for more than one-hundred thirty-five (135)
days, Customer may, in addition to any other rights or remedies it may have
under this Agreement or in law, terminate this Agreement without cost or
penalty, except to pay Albemarle for all work performed and reimburse for all
costs incurred up to the termination date, not to exceed the applicable Price.
3.7    Apportionment. In the case of a shortage or anticipated shortage of
labor, raw materials, utilities, fuel or energy, Albemarle will allocate
equitably the available labor, raw materials, utilities, fuel and energy to use
in the Product, to Albemarle's own internal use, to the use of its affiliates
and to the use in other products.
4.PAYMENT TERMS
4.1    Unit Price; Adjustments. The price to be charged by Albemarle for Product
manufactured and delivered under this Agreement shall be [redacted] per kilogram
of Product actually delivered in each batch (“Unit Price”).
4.2    Unit Price Adjustments. For all Product ordered subsequent to the
eighteenth (18th) month following the Effective Date of this Agreement, the Unit
Price set forth in Section 4.1 shall be adjusted in accordance with Sections
4.2.2 and 4.2.3 below.
4.2.1    “Base Raw Material Cost” means the average invoiced cost of raw
materials used to produce all orders of Product placed by the Customer prior to
the eighteen month anniversary of the Effective Date.
4.2.2    Albemarle may raise or lower the Unit Price set forth in Section 4.1
due to increases or decreases in raw material costs over the Base Raw Material
Cost on the eighteen month anniversary of the Effective Date, and upon each
subsequent twelve month anniversary date thereafter, upon written notice to
Customer provided no less than thirty (30) days prior to the applicable
anniversary date (a “Raw Material Price Adjustment Notice”). Such revised Unit
Price shall be applicable for all batches of Product ordered after the
eighteen-month anniversary of the Effective Date hereof, or any subsequent
anniversary date set forth above. At the request of the Customer Albemarle shall
furnish Customer with documentation demonstrating the raw material cost changes
from the Base Raw Material Cost. If, after receipt of such documentation,
Customer is not in agreement with such adjustment, then Customer shall notify
Albemarle in writing, and the Parties shall agree to an independent, qualified,
third party audit company whose services shall be retained to determine whether
or not such Unit Price increases or decreases meet the terms of this Agreement.
In the event the proposed Unit Price adjustment shall be deemed to have been
warranted by the third party auditor, Customer shall pay for all costs related
to such audit services. In the event the proposed price adjustment shall be
deemed to not have been warranted by the third party auditor, Albemarle shall
pay for all costs related to such audit.
4.2.3    Upon no less than thirty (30) days’ notice prior to the eighteen month
anniversary of the Effective Date, and each twelve month anniversary date
thereafter, Albemarle shall also be entitled, but not obligated, to raise the
Unit Price set forth herein to reflect increases in non raw material costs
incurred in the manufacture of Product. This increase will be limited to the
percentage increase, if any in the final U.S. Department of Labor, Bureau of
Labor Statistics, Producer Price Index for Commodities, Drugs and
Pharmaceuticals (ID: WPU 063) (Base Period 1982=100) as published by the Bureau
of Labor Statistics, U.S. Department of Labor in the PPI Detailed Report for the
month of July of the year in which the calculation is being made, over such
index for the preceding July. All increases in Unit Price shall be applicable
for all batches of Product ordered hereunder after the eighteenth-month
anniversary of the effective date hereof and each twelve month anniversary
thereafter, as applicable.
4.3    Stability Study Fee. Albemarle shall charge a fee of [redacted] for each
5-year stability study described in Section 2.11 that is requested by the
Customer. Such fee will be invoiced by Albemarle quarterly in arrears during the
first year of such study.
4.4    Invoicing. Albemarle shall provide to Customer an invoice with each
delivery of the Product. Each invoice shall reference the purchase order to
which the invoice relates and the quantity of the Product actually shipped.
Payments shall be sent to the “Remit to” address set forth on the invoice.
Should Customer dispute any portion of an invoice, it shall so notify Albemarle
in writing and the Parties shall attempt in good faith to resolve said dispute.
Any terms on any invoice or other purchase documentation issued by Albemarle
which are inconsistent with this Agreement shall be of no effect or force.
4.5    Payment. Customer shall pay all amounts due in U.S. dollars, payable
within forty-five (45) days of the date of the corresponding invoice. If
Customer fails to make payment within forty-five (45) days of the invoice date,
Albemarle shall be entitled to collect from the Customer interest on past due
payments at a rate of interest of one percent (1.0%) per month or the highest
rate permitted by law, whichever is less, as well as any costs incurred by
Albemarle in collecting such past due payments, including but not limited to,
reasonable attorneys’ fees, court costs and the reasonable value of Albemarle’s
time and expenses spent in connection with such collection action, computed at
Albemarle’s prevailing fee schedule and expense policies.
4.6    Taxes. Except as expressly provided elsewhere in the Agreement, Customer
will pay any tax (other than on income), duty or other governmental charge now
or hereafter imposed on any Product or imposed on Albemarle by reason of the
manufacture, sale, use or transportation of such products or raw material.
5.CONFIDENTIALITY
5.1    Confidential Information. The Parties agree and acknowledge that all
disclosures of information between the Parties, whether under this Agreement,
the Validation Supply Agreement, the MOU or the Prior Manufacturing Agreement,
shall be treated as “Proprietary Information” under the CDA and shall be subject
to the terms of the CDA. The Parties hereby amend the CDA as necessary to
protect the relevant disclosures under this Agreement, including by extending
the term of disclosure protected under the CDA through the Term, and the Parties
shall sign a written document memorializing such amendment.
5.1    Confidential Agreement. Neither Party shall disclose any of the terms and
conditions of this Agreement to any person or entity outside such Party
whatsoever (other than to such Party’s affiliates and actual or potential
investors, lenders and acquirers (provided, that such recipients are bound to
maintain the confidentiality of this Agreement to the same extent as if they
were parties hereto) and to any Government Entity that is a purchaser or
potential purchaser of FDP and such Party’s legal counsel without the prior
written consent of the other Party, except as such disclosure may be required
for accounting or tax reporting purposes, for purpose of complying with the
rules of any stock exchange on which the shares of a Party trades, or as
otherwise may be required by law.
5.2    Ownership of Confidential and Proprietary Information. Except as
otherwise agreed upon in writing or required pursuant to Section 11 (Flow down
provisions) below, each Party shall remain the sole owner of the patent rights
(and any other intellectual property rights) which have been or are being
developed by said Party before entering into this Agreement or during this
Agreement but independent of any activities to be carried out under this
Agreement. Notwithstanding the foregoing and for the avoidance of doubt,
Customer is the sole owner of any improvements (including process improvements),
derivations, innovations, developments, works of authorship, know-how or
processes related to the Product developed during the performance of activities
under this Agreement or under the Validation Supply Agreement or the Prior
Manufacturing Agreement and all intellectual property rights therein,
(collectively the “Process Improvements”), and Albemarle hereby assigns to
Customer all right, title and interest in and to all such Process Improvements.
Albemarle shall promptly disclose to Customer all Process Improvements upon
their creation, and shall provide Customer with such other information about
Process Improvements as Customer may reasonably request. Albemarle shall
cooperate with Customer, at Customer’s sole expense, by furnishing supporting
data and signing documents needed for the prosecution and maintenance of patent
applications and patents covering the Process Improvements. Albemarle shall not
use any technology or intellectual property proprietary to Albemarle to
manufacture the Product unless Albemarle first notifies Customer of such
intended use and grants to Customer a license reasonably acceptable to Customer
thereunder.

6.    INDEMNITY; INSURANCE
6.1
Indemnity.

6.1.1    By Customer. Customer shall defend, indemnify and hold Albemarle
harmless from and against all losses, liabilities, damages and expenses
(including reasonable attorneys’ fees and costs) (“Losses”) resulting from all
claims, demands, actions and other proceedings by any third party to the extent
arising from (a) the breach of any representation, warranty or covenant of
Customer under this Agreement, (b) any bodily injury to person (including death)
or damage to real or tangible personal property caused by the Product or the use
thereof (subject to Section 6.1.2(a) or 6.1.2(b)), or (c) the gross negligence
or willful misconduct of Customer in the performance of its obligations under
this Agreement. Notwithstanding the foregoing, in no event will Customer be
liable to Albemarle for its special, consequential, punitive or exemplary
damages or other indirect damages, including, loss of profit or loss of business
goodwill, arising from or relating to damages suffered by Albemarle as a result
of a third party claim for which indemnification is owed. Customer’s obligation
under this Section 6.1.1 is strictly limited to indemnification for amounts due
a third party.
6.1.2    By Albemarle. Albemarle shall defend, indemnify and hold Customer and
its affiliates, and its and their officers, directors, employees and agents,
harmless from and against all losses, liabilities, damages and expenses
(including reasonable attorneys’ fees and costs) resulting from all claims,
demands, actions and other proceedings by any third party (including any
subcontractor of Albemarle) to the extent arising from (a) the breach of any
representation, warranty or covenant of Albemarle under this Agreement,
including any such breach arising as a result of the action or omission of any
Albemarle subcontractor, or (b) the gross negligence or willful misconduct of
Albemarle or any subcontractor in the performance of Albemarle’s obligations
under this Agreement. Notwithstanding the foregoing, in no event will Albemarle
be liable to Customer for its special, consequential, punitive or exemplary
damages or other indirect damages, including, loss of profit or loss of business
goodwill, arising from or relating to damages suffered by Customer as a result
of a third party claim for which indemnification is owed. Albemarle’s obligation
under this Section 6.1.2 is strictly limited to indemnification for amounts due
a third party.
6.1.3    Patents. Except as provided in Section 6.1.2, Customer will hold
Albemarle harmless against expense, judgment or loss, including reasonable
attorneys' fees, (a) if the manufacture or sale of the Product as a staple
article or commodity of commerce infringes a valid patent in the country of
manufacture, or (b) for infringement of any patents or trademarks or other third
party property rights which result from Customer's particular use of the Product
or from Albemarle's compliance with Customer's designs, specifications or
instructions. Albemarle's instructions and recommendations are not intended to
suggest operations which would infringe any patents, and Albemarle assumes no
responsibility for any such infringement. If Albemarle receives a written notice
from a third party claiming that the manufacture, sale or use of the Product
infringes such third party’s patent then (a) Albemarle shall notify Customer
thereof and provide a copy of such notice to Customer, and (b) Albemarle may,
without liability to Customer, decline to continue deliveries of any Product
following Albemarle’s receipt of such notice, unless, within fifteen (15)
business days after Albemarle provides a copy of such notice to Customer,
Customer notifies Albemarle in writing that Customer will defend Albemarle, at
Customer’s cost and expense, and, in accordance with Sections 6.1.3 and 6.1.4,
will indemnify and hold harmless the Albemarle Indemnitees from and against any
and all Losses (as defined in Section 6.1.1) arising from such claim provided
that Customer provides reasonable assurances to Albemarle of its financial
ability to meet the financial obligations related to any such indemnity.
6.1.4    Indemnity Procedure. A Party (the “Indemnitee”) that intends to claim
indemnification under this Section 6 shall promptly notify the other Party (the
“Indemnitor”) of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification. The Indemnitor shall have the
right to assume and control the defense thereof with counsel selected by the
Indemnitor; provided, however, that the Indemnitee shall have the right to
retain its own counsel to participate in the defense at Indemnitee’s own
expense, subject to Indemnitor’s right to control the defense. The indemnity
obligations under this Section 6 shall not apply to amounts paid in settlement
of any claim, demand, action or other proceeding if such settlement is effected
without the prior express written consent of the Indemnitor, which consent shall
not be unreasonably withheld or delayed. The failure to deliver notice to the
Indemnitor within a reasonable time after notice of any such claim or demand, or
the commencement of any such action or other proceeding shall not relieve such
Indemnitor of all liability to the Indemnitee under this Section 6 with respect
thereto, but if such failure is prejudicial to the Indemnitor’s ability to
defend such claim, demand, action or other proceeding, and if such prejudice
results in liabilities that may have been avoided or reduced if timely notice
had been given, then the Indemnitor shall be relieved of said part of the
liabilities. The Indemnitor may not settle or otherwise consent to an adverse
judgment in any such claim, demand, action or other proceeding, that diminishes
the rights or interests of the Indemnitee without the prior express written
consent of the Indemnitee, which consent shall not be unreasonably withheld or
delayed. The Indemnitee, its employees and agents, shall reasonably cooperate
with the Indemnitor and its legal representatives in the investigation of any
claim, demand, action or other proceeding covered by this Section 6.
6.2    Insurance. Each Party shall maintain, at all times during the Term,
adequate and appropriate insurance coverage from one or more reputable insurance
companies, each rated A- or better by AM Best and licensed to do business in the
United States. Such insurance shall include products/completed operations
coverage with limits of liability of no less than [redacted] per
occurrence/claim and in the aggregate. Each Party shall, at the other Party’s
request, furnish to the other Party a certificate of insurance.
6.3    Attorneys’ Fees. If suit is filed to enforce any right granted in this
Agreement, the substantially prevailing Party shall be entitled to recover its
costs, disbursements and reasonable attorneys’ fees from the other Party. The
Party who is awarded a net recovery against the other shall be deemed the
substantially prevailing Party unless such other Party has previously made a
bona fide offer of payment in settlement and the amount of recovery is the same
or less than the amount offered in settlement. Reasonable attorneys’ fees may be
recovered regardless of the forum in which the dispute is heard, including an
appeal.
6.
LIABILITY AND LIMITATIONS

7.1    Actual Damages. EXCEPT WITH RESPECT TO A BREACH OF SECTION 5, IN NO EVENT
OR INSTANCE SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR OTHER INDIRECT DAMAGES,
INCLUDING, LOSS OF PROFIT OR LOSS OF BUSINESS GOODWILL, ARISING FROM OR RELATING
TO THIS AGREEMENT, WHETHER BASED UPON WARRANTY, CONTRACT, TORT, NEGLIGENCE,
STRICT LIABILITY OR OTHERWISE, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING
IN THIS SECTION 7.1 IS INTENDED TO LIMIT OR RESTRICT THE OBLIGATION TO PAY
INDEMNIFICATION CLAIMS OF EITHER PARTY UNDER THIS AGREEMENT RELATED TO AMOUNTS
DUE THIRD PARTIES; HOWEVER, EACH PARTY ACKNOWLEDGES AND UNDERSTANDS THAT NEITHER
PARTY WILL BE LIABLE TO THE OTHER FOR SPECIAL, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES OR OTHER INDIRECT DAMAGES, INCLUDING, LOSS OF PROFIT OR LOSS
OF BUSINESS GOODWILL, ARISING FROM OR RELATING TO DAMAGES SUFFERED BY A PARTY AS
A RESULT OF A THIRD PARTY CLAIM FOR WHICH INDEMNIFICATION IS OWED. .
7.2    Limitations. IN RECOGNITION OF THE RELATIVE RISKS AND BENEFITS ASSOCIATED
WITH THE SERVICES TO BE PROVIDED HEREUNDER, THE RISKS HAVE BEEN ALLOCATED
BETWEEN THE PARTIES SUCH THAT CUSTOMER AGREES, TO THE FULLEST EXTENT PERMITTED
BY LAW, TO LIMIT THE LIABILITY OF ALBEMARLE TO CUSTOMER FOR ANY AND ALL CLAIMS,
LOSSES, COSTS, OR DAMAGES OF ANY NATURE WHATSOEVER, ARISING FROM ANY CAUSE OR
CAUSES WHATSOEVER, OTHER THAN ALBEMARLE’S BREACH OF SECTION 5 AND ALBEMARLE’S
INDEMNIFICATION OBLIGATIONS UNDER SECTION 6 TO PAY THIRD PARTY CLAIMS, SO THAT
THE TOTAL AGGREGATE LIABILITY OF ALBEMARLE HEREUNDER SHALL NOT EXCEED THE PRICE
PAID TO ALBEMARLE FOR THE SPECIFIC SUBJECT BATCH OR BATCHES BASED ON THE PER
KILOGRAM PRICE AND VOLUME OF THE SUBJECT BATCH OR BATCHES OF PRODUCT. SUCH
CLAIMS AND CAUSES INCLUDE NEGLIGENCE, PROFESSIONAL ERRORS OR OMISSIONS, STRICT
LIABILITY, BREACH OF CONTRACT OR WARRANTY.
8.
TERM AND TERMINATION

8.1    Term. Subject to earlier termination as provided herein, the term of this
Agreement (“Term”) shall commence on the Effective Date and continue for an
initial term that is the longer of the period ending on (i) the third
anniversary of the Effective Date or (ii) the date Customer has fulfilled its
delivery obligations under the BARDA Contract for the Base Contract Amount, if
the BARDA Contract is awarded to the Customer prior to the third anniversary of
the Effective Date. Thereafter this Agreement shall renew for successive one (1)
year renewal terms until either Party provides the other Party with advance
written notice of non-renewal at least ninety (90) days prior to the expiration
of the then-current term.
8.2    Applicability of FAR Clauses. Notwithstanding any other terms of this
Agreement, for orders placed under this Agreement that relate to a Government
Contract, the following clauses of the Federal Acquisition Regulation ("FAR"),
as modified to identify the Parties to this Agreement and carry out the purpose
of those clauses, shall govern the rights and obligations of the Parties:
52.242-15 Stop-Work Order, 52.249-2 Termination for Convenience of the
Government (Fixed-Price), 52.249-8 Default (Fixed-Price Supply and Service).
8.3    Termination for Default. Subject to the provisions of Section 8.2, a
Party may terminate this Agreement by written notice to the other Party after
the breach of any provision of this Agreement by the other Party, if the other
Party has not cured such breach within sixty (60) days after written notice
thereof from the non-breaching Party; provided that, if Customer receives a
notice of default from a Government Entity pursuant to a Government Contract,
and such default was caused by Albemarle or its subcontractors, Customer may
terminate this Agreement if Albemarle does not cure the default within the
period required by the Government Contract. Customer shall provide satisfactory
evidence to Albemarle of any such notice of default (promptly when received by
Customer), all information evidencing that any such default was caused by
Albemarle or its subcontractor, and satisfactory evidence of any applicable time
periods within which a cure must be completed.
8.4    Termination for Insolvency. This Agreement may be terminated by a Party
upon written notice to the other Party if (a) the other Party shall make an
assignment for the benefit of its creditors, file a petition in bankruptcy,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets, or shall commence any
proceeding under any bankruptcy, reorganization, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or (b) if there shall have been filed against the other
Party any such bona fide petition or application, or any such proceeding shall
have been commenced against it, in which an order for relief is entered or that
remains undismissed or unstayed for a period of ninety (90) days or more; or (c)
if the other Party consents to, approves of or acquiescences in any such
petition, application or proceeding or order for relief or the appointment of a
custodian, receiver or trustee for it or any substantial part of its assets, or
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged or unstayed for a period of ninety (90) days or more; or (d)
anything analogous to any of the foregoing occurs in any applicable
jurisdiction. Termination shall be effective upon the date specified in such
notice.
8.5    BARDA Approval of Subcontracts; Suspension or Termination by Action of
Government Entity. Under the BARDA Contract, BARDA has the right to approve any
subcontract entered into by Customer for goods or services to be supplied for
the BARDA Contract, including this Agreement. Customer shall supply a copy of
this Agreement to BARDA and endeavor to obtain BARDA’s approval of this
Agreement as a subcontract to the BARDA Contract. In the event that BARDA does
not approve this Agreement, Customer shall so notify Albemarle in writing,
specifying the reasons for BARDA’s rejection of this Agreement.  Albemarle shall
then have ninety (90) days from the receipt of said notice to remedy the
section(s) of this Agreement that were the subject of BARDA’s disapproval.  In
such an event, Customer agrees to use good faith efforts to modify and/or amend
this Agreement with Albemarle for the purpose of meeting BARDA’s approval.  In
the event Albemarle fails to remedy the section(s) of this Agreement that were
the subject of BARDA’s disapproval within said ninety (90) days of its receipt
of written notification from Customer, Customer shall have the right to
terminate this Agreement. In addition, subject to the provisions of Section 8.2,
if any applicable Government Entity issues a stop work order or otherwise
suspends, modifies or terminates Customer’s Government Contract, and such action
affects the scope of work under this Agreement, Customer may require Albemarle
to immediately stop all, or any part, of the work called for by this Agreement
as required by the Government Entity’s stop work order, modification, suspension
or termination, written evidence of which shall be provided to Albemarle
promptly upon receipt of same by Customer. Albemarle shall immediately comply
with the terms of such order as specified by Customer and take all reasonable
steps to minimize the incurrence of costs allocable to the work covered by the
stop work order or termination. Where work has been suspended, but not
terminated, Albemarle shall not resume work unless specifically directed to do
so by Customer. Albemarle shall be paid for work and reimbursed for all
reasonable costs incurred by Albemarle up to the termination of the Agreement,
not to exceed the aggregate Price for the most recent order of Product not yet
delivered. Where the Government Entity orders a termination for convenience,
that work may be terminated for convenience by Customer upon submission to
Albemarle of written evidence of any such termination for convenience. If any
suspension hereunder continues for one hundred eighty (180) days, Albemarle
shall have the right to terminate this Agreement and to be paid for all work
performed and reimbursed for all costs incurred up to the termination date. In
the event of a termination pursuant to this Section 8.5, Customer will reimburse
Albemarle for all costs reasonably related to decommissioning of the Facility,
or its subcontractor’s facility, together with all costs for waste disposal,
cleaning and mothballing incurred by Albemarle or its subcontractor as a result
of said termination.
8.6    Effect of Termination. All rights and obligations under this Agreement
shall terminate immediately upon any termination or expiration of this
Agreement, except however, the rights and obligations set forth in the following
Sections shall survive any termination of this Agreement: 2.3.3, 2.13 (if the
Agreement is terminated pursuant to Section 3.6), 3.5 (with respect to Product
shipped during the Term), 5 (“Confidentiality”), 6 (“Indemnity; Insurance”), 7
(“Liability and Limitations”), 8.2 (“Applicability of FAR Clauses”), 8.5
(“Suspension or Termination by Action of Government Entity”), 8.6 (“Effect of
Termination”), 9 (“Warranty”), 10 (“Regulatory”), 11 (“Flow Down Provisions”)
(to the extent required by Applicable Law) and 12 (“General Provisions”). In
addition, upon termination, Albemarle will immediately deliver to Customer
copies of all records, equipment, and other items or information in its
possession that are the property of Customer, as well as, upon providing
Albemarle with written evidence of the applicable Government Entity’s
requirement, all necessary documentation relating to Albemarle’s work that
Customer may require to perform its Government Contract. Similarly, upon
termination, Customer will immediately deliver to Albemarle copies of all
records, equipment, and other items or information in its possession that are
property of Albemarle.
9.
WARRANTY

Albemarle represents and warrants that (a) the Product sold hereunder shall at
the time of completion of the manufacture of the Product, as well as immediately
prior to shipping to Customer’s micronizing subcontractor, conform to the
Specifications and be manufactured in accordance with Applicable Law and shall
not be adulterated, misbranded or mislabeled within the meaning of Applicable
Law; (b) any other services performed by Albemarle hereunder shall be performed
in accordance with Applicable Law and in a professional and workmanlike manner
in accordance with industry standards; (c) neither Albemarle nor any of its
subcontractors has been debarred, is subject to debarment, suspension, proposed
for debarment, or voluntarily excluded from participation in transactions by the
Federal government nor will use in any capacity, in connection with the
performance of its obligations or the exercise of its rights under this
Agreement, any individual or entity who has been debarred, suspended or proposed
for debarment by the Federal government or pursuant to Section 306 of the FFDCA
or who is the subject of a conviction described in such section; (d) Customer
shall receive good title to the Product, free and clear of liens or other
encumbrances; and (e) Albemarle shall manufacture Product exclusively for
Customer. However, except as provided in this Section 9 and Section 2.6,
Albemarle makes no other warranty of any kind, whether express or implied,
including no warranty of merchantability or fitness for any particular purpose.
Further, to the extent that the Product conforms to its applicable
Specifications, Customer assumes all risk and liability for results obtained by
the use of the Product covered by this Agreement, whether used singly or in
combination with other products, except as provided in Section 6.1.2 with
respect to third party claims.
10.
REGULATORY

10.1    Upon a request by any properly authorized officer or employee of the FDA
or any equivalent state regulatory body or any Regulatory Authority, Albemarle
shall permit such officer or employee, at reasonable times, to have access to,
copy and verify any records and reports in Albemarle’s possession or under
Albemarle’s custody or control relating to the Product, and shall submit such
records or reports (or copies thereof) upon FDA or any other regulatory request,
to the FDA or such Regulatory Authority. Albemarle shall provide the Customer
with prompt notice of any such request. Albemarle shall maintain all records
related to its activities under this Agreement in accordance with Applicable Law
or any record keeping obligation as set forth in a Government Contract of which
Customer informs Albemarle in writing.
10.2    Each Party shall promptly advise the other of any safety or toxicity
problem of which either Party becomes aware regarding the Product. Customer
shall have the sole right to initiate a recall or take any other action with
respect to Product once delivered by Albemarle to Customer or its designee.
10.3    Albemarle shall not file, support or maintain a DMF for the Product
except with Customer’s prior written consent.
10.4    Albemarle shall, upon Customer’s reasonable request, assist Customer
with any regulatory matters related to the Product or this Agreement, which may
include responding to Customer’s reasonable requests, providing all CMC
information, assisting Customer by providing any information reasonably
available to Albemarle, and granting Customer a right of reference or use to
relevant data.
6.
FLOW DOWN PROVISIONS

With regard to any Firm Order under this Agreement that relates to a Government
Contract, Customer and Albemarle agree that the FAR clauses and other provisions
contained in Exhibit F, as well as any other clauses required by law or
regulation, shall be binding on Albemarle and shall be enforceable against
Albemarle by Customer, either directly or acting on behalf of the applicable
Government Entity. Clauses incorporated by reference shall have the same force
and effect as if they were given in full text. The provisions of this Section 11
and such flowdown clauses shall take precedence over any conflicting provision
of this Agreement. In addition, Albemarle agrees that it will use reasonable
effort to supply Customer with information or support from Albemarle required in
order for Customer to comply with its obligations under the relevant Government
Contract. Together with any such request for information submitted to Albemarle,
Customer will provide Albemarle with a copy of the documentation pursuant to
which it believes it requires Albemarle’s assistance in meeting its obligations
under the relevant Government Contract.
7.
GENERAL PROVISIONS

7.3    Notices. Any consent, notice or report required or permitted to be given
or made under this Agreement by one of the Parties to the other shall be in
writing and addressed to such other Party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor, and shall be effective upon receipt by the addressee.
If to SIGA:    If to Albemarle:
SIGA Technologies, Inc.    Albemarle Corporation
35 E. 62nd Street                    451 Florida Street
New York, New York 10065                Baton Rouge, Louisiana 70801
Attention: Chief Executive Officer            Attention: VP Fine Chemicals

With a copy to:                    With a copy to:
SIGA Technologies, Inc.                Albemarle Corporation
4575 SW Research Way, Suite 230            451 Florida Street
Corvallis, Oregon 97333                Baton Rouge, Louisiana 70801
Attention: Dennis E. Hruby, Ph.D.             Attention: General Counsel

7.4    Assignment. Neither Party may assign or otherwise transfer this Agreement
or any right or obligation hereunder (whether voluntarily, by operation of law
or otherwise), without the prior express written consent of the other Party,
which consent shall not be unreasonably withheld or delayed. Any instance of a
Party selling all or substantially all of its assets (including, without
limitation, Customer selling all or substantially all of its rights to the
marketing or production of the Product or the FDP), or all or substantially all
of the assets of all divisions and departments providing or receiving Product or
services (as applicable) hereunder, shall not be construed as an assignment of
this Agreement. Additionally, the sale by a Party’s shareholders of a
controlling interest in the outstanding stock of such Party shall similarly not
be considered an assignment of this Agreement, and in either instance, this
Agreement shall remain in full force and effect and shall be binding upon, and
inure to the benefit of, the successor or assignee of such Party, provided that,
any permitted successor or assignee shall assume all obligations of its assignor
under this Agreement and prior to any such sale of assets or of ownership
interest, such proposed successor or assignee confirms in writing to the
non-assigning Party that it can meet the obligations of the assigning Party
under this Agreement). Any purported assignment or transfer in violation of this
Section 12.2 shall be void.
7.5    Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law principles thereof.
7.6    Construction. This Agreement will be fairly interpreted in accordance
with its terms and without any strict construction in favor of or against any
Party.
7.7    Severability. Whenever possible, each provision of this Agreement, shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Agreement.
7.8    Counterparts; Facsimile. This Agreement may be executed in counterparts,
all of which together shall constitute one and the same instrument. Signing and
delivery of this Agreement may be evidenced by a facsimile/telecopy/PDF
transmission of the signed signature page to the other Party.
7.9    Headings. The captions to the sections hereof are not a part of this
Agreement, but are merely guides or labels to assist in locating and reading the
sections hereof.
7.10    Independent Contractors. Each Party hereby acknowledges that the Parties
shall be independent contractors and that the relationship between the Parties
shall not constitute a partnership, joint venture or agency. Neither Party shall
have the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other Party, without
the prior consent of the other Party to do so.
7.11    Waiver. The waiver by a Party of any right hereunder, or of any failure
to perform or breach by the other Party hereunder, shall not be deemed a waiver
of any other right hereunder or of any other breach or failure by the other
Party hereunder whether of a similar nature or otherwise.
7.12    Entire Agreement. This Agreement (which includes its Exhibits and the
Quality Agreement) contain the entire understanding of the Parties with respect
to the subject matter hereof. All other express or implied representations,
understandings and agreements with respect to the subject matter hereof, either
oral or written, heretofore made, including without limitation the MOU, are
expressly superseded by this Agreement; provided, however, that the CDA (amended
as provided herein), the Validation Supply Agreement and the Prior Manufacturing
Agreement shall expressly survive. This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both Parties.
7.13    Dispute Resolution. In the event there is a dispute between the Parties
with respect to this Agreement, the Parties, prior to instituting any court
action, shall, if requested by either Party in writing, mediate their dispute
before one mutually agreed upon impartial mediator in New Orleans, Louisiana,
within thirty (30) days after such request. Mediation fees, if any, shall be
divided equally between the Parties. If the dispute is not resolved within
thirty (30) days of initiation of mediation, either Party may bring suit in any
court of competent jurisdiction.
 
[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

                        
SIGA TECHNOLOGIES, INC.
By: _________________________________
Name: _______________________________
Title: ________________________________
Date ________________________________

ALBEMARLE CORPORATION
By: _________________________________
Name: _______________________________
Title: _________________________________
Date: ________________________________
EXHIBIT A
PRODUCT CHEMICAL STRUCTURE

[redacted]
EXHIBIT B

Micronized Product Testing
Albemarle will provide post-micronization analytical services of the micronized
Product per the specifications contained below.
Samples of micronized Product provided to Albemarle will be analyzed and data
will be provided to Customer in the form of a COA. The samples of micronized
Product for analysis to be provided by Customer through its micronization
service provider.

Table 2: Micronized Product Specification

[redacted]

EXHIBIT C
Specifications
ST-246 Drug Substance Specification for Commercial Production
PRODUCT SPECIFICATIONS

[redacted]

EXHIBIT D
Stability Study

[redacted]
EXHIBIT E
QUALITY AGREEMENT

[redacted]

EXHIBIT F
Flow-down Provisions

[redacted]

EXHIBIT G
BARDA Security Corrective Actions
The Parties have participated in a pre-award security audit conducted by BARDA
in 2009 that included the Facility (the “Security Audit”). The Security Audit
resulted in several security deficiency findings by the BARDA auditors related
to the Facility (the “Findings”). Following the Security Audit Customer, in
consultation with Albemarle, submitted to BARDA the SIGA Security Revision Plan,
Version Number 1.0 dated November 20, 2009 (the “SIGA Security Plan”). The SIGA
Security Plan has proposed several Corrective Actions to be taken if an award is
made to Customer under the RFP, some of which are to be implemented by Albemarle
at the Facility. Attached as Exhibit G.1 is an excerpt from the SIGA Security
Plan containing those Findings and the Corrective Action for each such Finding.
Attached as Exhibit G.2 is a schedule reflecting the amounts Albemarle will be
reimbursed for implementing the Corrective Actions set forth on Exhibit G.1.

EXHIBIT G.1
BARDA Security Corrective Actions
SIGA Security Plan Excerpt
[redacted]

Exhibit G.2

BARDA Security Corrective Actions Reimbursement

[redacted]

EXHIBIT H
List of Approved Laboratories per Section 3.5

[redacted]

EXHIBIT I
List of Qualified Raw Material Vendors per Section 2.8

[redacted]

1

US1DOCS 7682825v1